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New Clause. — (Limitation on Excessive Rents.)

Orders of the Day — Rent Bill – in the House of Commons at 12:00 am on 26th March 1957.

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1. As respects grant renewal continuance or assignment during the period of three years beginning with the commencement of this Act a tenancy excluded from the application of the Rent Acts by the provisions of this Act shall be treated as one to which the following provisions apply.

2.Where a landlord requires as a condition of the grant renewal continuance or assignment of a tenancy during the period of three years beginning with the commencement of this Act a rental in excess of the amount prescribed in section one of this Act save and except that the multiple contained therein shall be for the purposes of this section two and a half times the 1956 gross value of the dwelling-house instead of twice the 1956 gross value as prescribed in section one, such requirement shall be unlawful and such increase as is required by the landlord shall be irrecoverable.

3.In the event of such requirement a tenant shall be entitled to retain possession of the dwelling-house in like manner and subject to the like terms and conditions as if the Rent Acts had not ceased to apply to the dwelling-house for a period not to exceed three years.

4. In pursuance of the provisions contained in this section either party may apply to the County Court to determine whether any requirement by the landlord infringes the provisions of this section and for an order of the County Court accordingly.—[Mr. Rees-Davies.]

Brought up, and read the First time.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Isle of Thanet

I beg to move, That the Clause be read a Second time.

This Clause, in the name of myself and some of my hon. Friends, provides a limitation against excessive rents. We on this side of the House believe in the aims and principles of the Bill, but many of us view with deep concern the ill-effects which the Bill may have unless further safeguards are included to ensure that owners cannot obtain unjust enrichment at the expense of tenants.

I would remind the House of the words which the Prime Minister wrote in his book, "The Middle Way." in 1938. It was an admirable hook and it expressed fears at that time for the feelings of the middle classes of this country. He said: Insecurity has an adverse effect on health almost equal to the actual endurance of poverty. These are profound words. Many of us in this country are at present concerned with fears of tenants, whether those tenants are right or wrong in the expression of those fears.

No one, I believe, would say that his judgment about the future of the Bill would necessarily be right. I stand here profoundly hoping that what I say will prove to be wrong, but it is because I have a very great conviction that I may be right that I believe that something along the lines of this new Clause, which provides a ceiling rental for a period of three years only, should be included in the Bill.

4.30 p.m.

My hon. Friend the then Parliamentary Secretary to the Ministry of Housing and Local Government, moving the Second Reading of the Bill, said: … decontrol cannot be sudden or immediate. It must allow for necessary readjustments, and the transition must be smoothed."—[OFFICIAL REPORT, 21st November, 1956; Vol. 560, c. 1765.] In all quarters of the House, hon. Members will agree with the sentiments expressed by those words. Since the Second Reading a good deal has been done to provide further safeguards. Whether we think they go far enough or not, it would be idle to deny that the Government have introduced substantial further safeguards for security of tenure. Premiums have been outlawed and I hope and trust that, following the remarks of my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), measures will be taken at a later stage to prevent premiums being obtained.

If we are to deal with premiums, which prevent one type of unjust enrichment, it is only logical to prevent what is an excessive rent, which is another form of unjust enrichment. If one is satisfied that too high a rent will be payable in an open market, it is certainly not against Tory philosophy that we should have control, when it is in the interests of the country that there should be such control. As Tories we set our faces against control only where we regard it as unnecessary. If they are proved to be necessary, then it is vital that we should have safeguards.

There is a fundamental difference of judgment about what the outcome of the level of rents throughout the country will be. The purpose of the new Clause is to prevent rents from rising above a level which all hon Members, even those who do not share the views I am expressing, will none the less regard as not unreasonable.

The gross value of a property is its 1939 pre-letting value. Since 1939, the cost of living has risen two and a half times and to get an equivalent to the pre-war rent we arrive at two and a half times the pre-war value. There was not an acute housing shortage in London in 1939, nor was there a shortage in other cities. It is, therefore, fair that the rent should be allowed to rise to a level of up to two and a half times the gross value, the level that rents would normally find on supply and demand, but that that element should be removed in areas where there is an acute housing shortage. It is my belief, and the belief of those who are associated with me in this new Clause, that rents should not be permitted to rise substantially above such a level, should not be permitted to rise, for example, to three and a half to four times the gross value.

I shall show in a moment that in some cases rents will no doubt rise to three and a half to four times the gross rateable value and it is undeniable that in the London area the overall level of rents may well rise to three times the gross value. Although it may be legitimate as applied to new property, where there are new conversions, that would be too high a level in other cases.

It would be quite useless for an hon. Member to express his own opinion on a matter of this kind. The House would not listen to that and I therefore propose to give the House four questions and answers by men whom I shall not name, because they are professional men in business, but whom I will indicate sufficiently to show at least the subject matter which leads them to their conclusions.

The first and most important question is, "What, in your view, is likely to be the level of rents in London in 18 months' time?" I have chosen London as one of the cities where there is still a housing shortage. I say straight away that the level of rents in the country generally will not exceed two and a half times the gross value. That view is based on the reports of surveyors and estate agents all over the country. In my own constituency, leading men have told me that, beyond doubt, there will not be such rises. I shall, therefore, try to speak objectively in this matter, as one whose own constituency is not affected, whatever people may say on the matter.

The answer to the question is given by one of the leading insurance companies and societies dealing in suburban properties. It said: We deal in the suburban properties mainly, extensively in such areas as Sutton. In these areas in 18 months' time the level will be 3 times G.V. and slightly above for modern, slightly below for old. In a block of Sutton flats G.V. £52 p.a., present rent is £50 8s. 6d. exclusive. We obtain £150 p.a. for the future. That is just over double the present rents, about two and a quarter times the existing amount and is almost exactly three times the gross value of the property.

The second question was, "What would you regard as a fair proposal as a landlord if the rent limit is to be applied?"

That was, assuming that there was to be such a rent limit, what would be a fair one? The answer was: We have no hesitation in saying that 2½ times gross value is a fair proposal for landlords as an investment return for a temporary period. Three years would be a fair period. The Clause refers to a period of three years and it is also the unanimous view of surveyors, leading landlords and others, including three of the most famous names among property surveyors in London, that there will be a pool in three years throughout the country, apart from central London. It is important to make that point, because those who suggest that there will never be a pool are flying in the face of evidence from every corner of the country. I say that as emphatically as I suggest that there should be some limit upon the rents.

The third question was, "Do you object to a temporary rent limit for a period of 3 years being a limit not to exceed 2½ times gross value?" The answer was: Agreeable. The fourth question was, "Are there any objections to 3 above particularly on the ground that the maximum in some areas, e.g., London, might become the minimum in the country?"

The answer to that was: We manage properties outside London as well and do not think that a ceiling rent will raise the level of rents elsewhere. They will find their level in a few months.

In addition to those replies, I will quote another from a firm which is certainly regarded as one of the top five of those who manage property in and around the London area. This firm said: The level of rents is rising in the London area, they will be for old property at least 3 times G.V., for modern 3½. in the past year they were rising fast. Two examples:Coram Street, W.C.2. Bloomsbury, 3 rooms, kitchen and bathroom, £350–400 exclusive. Strutton Ground, Westminster, 12 flats, £60 G.V., rents £325–350 exclusive, over 4 times G.V. In the firm's view, in the short-term rents will rise still further. The firm goes on to say that two and a half times the gross value—— …would be a fair proposal for a temporary period of three years. Pool will be created in 3 years not before.

Photo of Mr Frederick Bellenger Mr Frederick Bellenger , Bassetlaw

Do those rents include services?

Photo of Mr William Rees-Davies Mr William Rees-Davies , Isle of Thanet

They include services, but the basic rental would be about four times the gross value. The firm went on to say that the best proposal would be a rent of not more than two and a half times the gross value for all property, except where it is new property, where three times the gross value would not be excessive. It went on to say that it would be a reasonable return to have two and half times the gross value as the ceiling rent and it was emphatic in saying that that would cause no difference in the valuation of the country generally, because within a few months country districts would find their own levels.

If that be so, and those be the views expressed—no doubt there are contrary views which might be expressed by other surveyors and landlords—we are left with the need to decide what is the best position and the lesser of the two evils. If we take the solution of a free market and that turns out to be wrong, unhappiness may follow. If we apply this solution—I do not suggest for a moment that it is perfect—but if we accept a limited transition period of only three years—it is the same period as the Minister has prescribed with regard to premiums—we shall be going further and saying that it is not only premiums which are wrong, but that the logical outcome of stopping premiums is that we stop excessive rents, too, for a similar period.

I believe that this would enable us to get over the transition period and do it with a longer period of security of tenure. That is to say, the 18-month period of the standstill will lead to an incentive to the landlord to agree to some agreement if he can get his extra rent. If, in fact, he can do that, but he cannot do it at a rent which is not excessive, I believe that we shall get these agreements, and shall get over this short period.

May I say two things, in conclusion? First, I want to deal with why I suggest that this three-year period is so important. There are here four factors integrating one on the other. The first is the 4,500,000 properties coming out of control. The owners will take time to do their conversions and let off their kitchens. Mother will have to make up her mind about what she will do; or it may be a question of moving out grandma, or whatever else it may happen to be. At the end of that time we shall get a great deal more accommodation in the city suburbs out of the existing accommodation, because where there are spare rooms it will pay the owners to make use of them.

My second point relates to the construction of new buildings, particularly blocks of flats, which have not been built anywhere in the big cities since the war, because it has not been worth while for property developers to build them. Now they will do so. They will have laid their plans and this will be the timetable. It takes four months to get through the negotiations with the local authorities and the town planning authorities concerned. It takes three months to deal with the lawyers, as many of us well know. It takes three months to deal with the quantity surveyors, and about three months to negotiate with the architects. It takes nine to 12 months for the building.

Therefore, it takes about two years to develop a block of flats, or other expensive factory or estate development. There is also the question of requisitioned property, and conversions of empty houses, such as in the Seven Sisters Road and other parts of London, and in the major cities. These properties are standing empty because it is not worth while for the owners to let them.

These factors will operate. There will be requisition, conversion, new houses, and the development of the houses which are old and owner-occupied and are coming on to the market. We must also bear in mind that the Ministry has said—I think rightly—that in 12 months it reckons that it will have increased the further output of houses. All the surveyors to whom I, at any rate, have spoken—they number about 30 throughout the London area and elsewhere—have one factor in common, and I challenge anyone to dispute this fact: that the optimum for the United Kingdom will be in the year 1960, three years from now. That will be when supply and demand will take effect.

If that be so—let me say straight away that perhaps I am wrong—a five-year security period is not necessary. It is only three years. But if I am wrong—and it is wise sometimes to be wrong in these matters—clearly, I am not wrong in saying that some safeguard is needed to cover that period. Eighteen months is covered, but it is the other 18 months interregnum which is the difficulty. I believe that this Clause will meet that difficulty. I believe that it does not affect the principles of the Bill as I understand them, which are decontrol and the creation of a flexible market. Provided it is only excessive rents we are preventing, we shall not stop the free play of a reasonable market. It is because I believe this profoundly that I am moving this Motion.

4.45 p.m.

Photo of Mr Robert Jenkins Mr Robert Jenkins , Camberwell Dulwich

I beg to second the Motion.

I think it fair to say that all of my hon. Friends who support this new Clause support the Bill as presented by the Government in its entirety. One of the questions I wish to put to the Minister is whether it is necessary for the total abolition of the controls on property of a rate-able value of over £40 a year in Greater London and £30 a year in the country should take place at the same time.

In the Bill there are other properties which are to be decontrolled, as has been mentioned by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). There are over 4½d million owner-occupied properties which, from the passing of this Bill, will be decontrolled. Secondly, after the passing of the Bill there will, in fact, be other empty property which exists today, and empty property in the future will become decontrolled in the matter of the rate-able value it has. Therefore, throughout the next few years there will come forward a large number of new house units or hereditaments which, over the years, will provide a pool.

The question arises whether in fifteen months there will be a sufficiently large pool in this country, particularly in the built-up areas and outskirts of London and in other large cities. The Minister definitely maintains that there will. On the best advice at his disposal, and on his own judgment, he affirms that there will be this pool. If the Minister be right, in those circumstances the rises in rents are not likely to be more than, say, two-and-a-half times. That is what the Minister has said in the past. Therefore, in order to protect people who are frightened at present, and if the Minister really believes—I know he does—that in fifteen months the increase will not be more than about two-and-a-half times, is there any reason why we should not ensure that it will not be by accepting this new Clause?

From the evidence which I have been able to obtain since the Committee stage, when it will be remembered that I said that I was prepared to vote for the 15-month period, I have reason to suppose that fifteen months will not be sufficient time to create a pool and keep rents down to a reasonable figure as the Minister genuinely believes and hopes will be the fact. I wish to reiterate what has been said by my hon. Friend the Member for the Isle of Thanet. I cannot believe that the owners of unoccupied property will, in a period of fifteen months, have time to produce more than a trickle of new hereditaments to come into the market. I think the period must be longer than that.

There are large numbers of property-owners who will embark on the process of turning old houses into a number of flats now that they can get more or less any rent they like. Therefore, it will take at least the time that my hon. Friend the Member for Isle of Thanet mentioned for all the gyrations to be gone through with local authorities, architects, quantity surveyors and the like. It will be a very considerable time before that trickle becomes a flood or a spate. I therefore submit to the Minister that fifteen months is too short a time.

I am satisfied, having had the privilege of talking to the Minister on one or two occasions, that he really knows where he is going. I believe he is doing absolutely the right thing in bringing forward the Bill, but I am asking him whether at this last moment, the Report stage, he is quite sure about the advice that he has received on the timing. It must be on the advice that he receives that my right hon. Friend makes up his mind. The Royal Institution of Chartered Surveyors sent out a memorandum in which it said that the minimum time for this Bill to operate would be sixteen months, while the Institution of Auctioneers sent out a memorandum in which it said that the very minimum time would be twelve months.

I am informed that the Ministry of Housing and Local Government has not been in touch with either of those bodies for consultation purposes or with any other professional body which will be responsible for working this Bill and for advising landlords what action to take. I shall be glad if that statement can be corrected. My information is the same with regard to the principal societies engaged in property management. In the same way as the Minister of Labour and National Service would consult the T.U.C. on labour problems, so, in a major operation of this kind affecting about 860,000 families, consultation might have gone on with the professional bodies to get advice other than that given in their memoranda.

Completely supporting the Bill, as my hon. Friends and I do—[HON. MEMBERS: "Oh."] We believe that the Bill is a bold and courageous move to take, especially with the modifications that have already been made and a further modification on the line we think should be taken now. Since 1945 many Housing Acts have been passed. That of 1949 has been, in respect of some of its Sections, inoperative or a failure. Some of the Sections of other Housing Acts, such as the Housing Repairs and Rents Act, have been ineffective. In no case where Sections were ineffective did anybody suffer, and certainly not the tenants, who were no worse off than they were before.

In the event of the timing being wrong in the present case and of excessive rents being charged in built-up areas like London and the big cities, grave hardship and damage may ensue. Principally for that reason my hon. Friends and I have put down the proposed new Clause. If my right hon. Friend could have taken powers under Clause 10 (3) not only to increase the number of properties to be decontrolled but to deal with such chaos as might ensue after fifteen months—[HON. MEMBERS: "Oh."]—my hon. Friends and myself would not, I am certain, have put down the proposed new Clause.

Because I do not think the Minister can take that action, and believing that there is a strong possibility of hardship ensuing to scores, if not hundreds, of thousands of nice, pleasant families in fifteen months, I suggest that a stopper of two-and-a-half times the gross value as the top limit of rent would be fair to the landlord and would be just to the tenant.

Photo of Mr Henry Brooke Mr Henry Brooke , Hampstead

I rise now because I feel sure that the House would wish to have views of the Government on the proposed new Clause before coming to a decision upon it.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

I would ask the right hon. Gentleman to remember that on a guillotined Bill the House might conceivably like to hear the views of the Opposition. too.

Photo of Mr Henry Brooke Mr Henry Brooke , Hampstead

If I am not interrupted, I hope to sit down in order that the hon. and learned Member for Kettering (Mr. Mitchison) may rise before the Guillotine falls.

I take a less pessimistic view than does my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) of the way in which the market will work over the coming months and years. I would assure the House that I have informed myself as fully as I am able to do of the views of those who are expert in these matters. So far as I am aware, all the professional organisations and institutions which have any interest in the subject-matter of the Bill have communicated whatever views they may hold to me or my predecessor. We have made our own confidential inquiries where they seemed necessary. We also have at our disposal the wholecorpusof knowledge which is in the possession of the Valuation Office, which consists of people who are very well trained to form their own first-hand judgments of the situation in different parts of the country and are well placed to acquaint themselves with the views that are being taken in the professions concerned.

Photo of Mr John Hynd Mr John Hynd , Sheffield, Attercliffe

Will the right hon. Gentleman permit me to ask a question at this juncture? Was this invaluable information which is at the disposal of the Department used in connection with the 1954 Bill?

5.0 p.m.

Photo of Mr Henry Brooke Mr Henry Brooke , Hampstead

I have fifteen minutes at my disposal, in which I should like to address myself to this Bill. Despite what my hon. Friend the Member for Isle of Thanet has said, I must point out that his new Clause would make a funda- mental change in the concept of the Bill. As he knows, a number of Amendments were made in Committee which, I think he will agree, go far in the direction he has in mind. We have abolished premiums; we have extended the six months' standstill period to one of fifteen months, and—I attach the greatest importance to this—we have provided that if a landlord and his tenant can reach a mutual agreement within that period of fifteen months for a fresh tenancy lasting for at least three years, the new rent payable under the agreement can come into operation forthwith and the landlord will not have to wait until the end of the period to gain the benefit of the increased rent.

My hon. Friend wishes to go further than this and to enact that for the period of three years ahead a house or flat which comes out of control shall have its rent limited to an amount not more than two-and-a-half times the gross value. I presume that my hon. Friend realises that his Clause would render illegal even mutual agreements reached within the period of fifteen months, if those agreements provided for a rent in excess of two-and-a-half times the gross value. [HON. MEMBERS: "Why not?"] In my view it should be the purpose of the House to encourage and stimulate those mutual agreements rather than make them more difficult.

I have only a few minutes in which to speak, and I think that I can help the House best by defining what would be the practical effects of the new Clause. First, we should not do what the Government aim to do by Clause 10 (1), namely, to secure a free market. A free market carries with it all the known advantages in bringing more accommodation into the market. What we want to do above all is to stop this constant drain from the market of accommodation to let. The availability of this accommodation is shrinking all the time. We want to halt that process and reverse it, and the only effective way of doing so is to recreate a free market.

Clause 10 is largely directed at the large amount of under-occupied accommodation which exists—a far larger feature in the housing situation than the House or most of the commentators on the Bill have realised. It needs a free market to bring into full availability all the under-occupied accommodation which is known to exist within the relevant range of rateable value.

I want to be perfectly fair to my hon. Friend's argument. He says that my conception is good in the long run but will not operate sufficiently quickly, and that not enough will have happened within a period of fifteen months to make it safe to decontrol without a rent limit. I disagree with hint. His argument seemed to rest largely upon the expectation that in order to bring the additional accommodation into the field of availability it would be necessary in all cases to carry out full-scale conversions requiring architects' plans, planning permission, extended building operations, and so forth. I agree that a major conversion of a large property might well take a considerable time, but I am certain that an enormous amount of property which is at present under-occupied will be let almost as soon as the market is freed.

Secondly, I would say that I have paid special attention to what my hon. Friend said about the advice he has received. With great respect to his advisers, I do not agree that there will be no risk of a maximum rent limit becoming a minimum limit. I have considered the position over the country as a whole and, in my judgment, there are large areas where the market level of rents for this decontrolled property will quickly settle below a figure of two-and-a-half times the gross value. If we write into the Bill a maximum limit of two-and-a-half times the gross value, it will give everybody the idea that that is a reasonable figure—a figure which the landlord should ask and which the tenant ought to pay. In fact, in seeking to protect a certain number of tenants in the most populous parts of the country from having to pay high rents—as I fully recognise my hon. Friend is doing—he may be penalising a very much greater number of tenants in the rest of the country who, as a result of the new Clause, may have to pay higher rents.

Thirdly, in connection with the agreements which we all want to be reached between landlords and tenants, it will be much less likely that such agreements will be reached if a limit of two-and-a-half times the gross value is laid down in the Bill. It is at the landlord's discretion whether to enter into such an agreement or whether to sacrifice the benefit of the increased rents which he might obtain and allow the tenancy to run out at the end of fifteen months, after which he can do what he likes with the property. If he judges that a limit of two-and-a-half times the gross value will be restrictive, he will not enter into any such agreement; he will decide to wait and see what happens when he is in a position to gain vacant possession of the property.

He may then decide to sell the property with vacant possession, or do what so many landlords have been doing under the iniquitous system of rent control, namely, at such time as he eventually gains vacant possession—especially in the case of flats—to put some furniture into the property and let it furnished. It should be the desire of hon. Members on both sides of the House to remove the incentive to excessive furnished lettings and unnecessary sales and, on the contrary, to try to bring back into the letting market as much unfurnished accommodation as possible.

My hon. Friend quoted cases of rents which would rise to four times the gross value. I am quite sure that in the choicest parts of the country—within the immediate vicinity of this House and in other spots where the mere locality of a dwelling gives it a luxury flavour—dwellings may be so sought after that rents will rise considerably, but I do not think for one moment that they will rise to anything like that magnitude, taking the whole country or even the whole of London.

The real protection against excessive rents is provided by the existence of competition in a free market. All the information that I have been able to gather proves to my satisfaction—and I hope that the House will accept my judgment in this matter—that a free market will be the strongest safeguard against tenants being asked to pay excessive rents.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

It is just like a Tory Government to guillotine a Bill and then to imitate the little rivulet in Tennyson's poem that went babbling on forever so that the views of the Opposition on a matter of this sort could not be heard. I appreciate the difficulties of the Government. They have had to deal with a musical comedy mob of mutineers whose conduct has been very remarkable.

We on this side of the House do not regard this Clause as enough: we do not regard it as perfect, but we do regard it as far better in practice and in principle than the speech which the right hon. Gentleman has just made, and we propose accordingly to divide on it. We expect the Margate mutineers to stalk, carrying their Jolly Roger, into the Lobby with us. They made enough comedy; they might for a change do something serious.

On the merits of the matter, what the right hon. Gentleman called a free market his hon. Friends described a minute or two before as chaos. It is perfectly possible in certain circumstances to have chaos in a free market. The sooner the right hon. Gentleman learns that the better. I will tell him some of the circumstances. One is a grave shortage of a commodity for which at the moment the Government are asking a free market. A large number of people whose lives are dependent on having that commodity—in this case a house—need a home to live in.

Those are people who, as everyone admits, are worried and perplexed, whose security has been destroyed by this Rent Bill. They do not know if they are going to have a house, or at what price, on what terms, or where, when the Government and their supporters have finished this precious piece of legislation. Those are the sort of conditions which turn a free market into chaos. To suppose for a moment that the real difficulties of this Bill are going to be met merely by extending fifteen months to three years and merely by the limited protection given by that is to hope for much too much.

This does at any rate indicate some sense of repentance among hon. Members of the Tory Party, with whose feelings I sympathise, particularly with their feelings when they happen to occupy marginal seats in or around London. That, of course, is the reason for this new Clause and the reason for the whole of the Margate mutiny staged with all this noise and so frequently unsuccessfully. I do not know whether we shall see them coming into the Lobby with us or not. It is going to be very amusing. I hope they will.

Even the slightest sign of repentance on the benches opposite we take note of with pleasure. We do not think it is anything more than that, but at any rate it indicates, and should indicate to the right hon. Gentleman, that his former supporters up and down the country are fed up with the legislation he now proposes. They are fed up with the anxieties which have been worrying them month after month, fed up with the prospects which this Government are inviting them to face, prospects of leaving homes which over the years they have come to consider as their own. They are fed up with the prospect of making a bargain with a landlord—the one thing which the right hon. Gentleman holds out to them—a bargain in which the landlord has the whip hand all the time and in which they cannot make any fair or equitable arrangements because, if they fail, they are going to be kicked out into the street.

That is the position into which the right hon. Gentleman and his friends are putting people all over the country. Why are they doing it? What is the real reason for it? It is not to facilitate exchanges. I do not believe it is to do what the Bill certainly will do—to transfer a very large sum of money from one group of people to another group, from the tenants to the landlords. I believe they are so stupid and so benighted that they honestly think in this year of grace that the solution of every difficulty is to be found in the free market, the free haggling between one person and another, irrespective of the advantages there may be on one side and irrespective of the hardship that might be caused on the other. I believe this ideological race downhill will end in their destruction as a party and their failure, their acknowledged failure, as a Government.

It being a quarter past Five o'clock,Mr. DEPUTY-SPEAKER proceeded, pursuant to Orders, to put forthwith the Question already proposed from the Chair.

Question put,That the Clause be read a Second time:—

The House divided:Ayes 242, Noes 267.

Division No. 81]AYES[5.14 p.m.
Ainsley, J. W.Healey, DenisPearson, A,
Albu, A. H.Henderson, Rt. Hn. A. (Rwty Regis)Peart, T. F.
Allaun, Frank (Salford, E.)Herbison, Miss M.Pentland, N.
Allen, Arthur (Bosworh)Hewitson, Capt. M.Plummer, Sir Leslie
Allen, Scholefield (Crewe)Hobson, C. R. (KeighJey)Popplewell, E.
Awbery, S. S.Holman, P.Price, J. T. (Westhoughton)
Bacon, Miss AliceHolmes, HoracePrice, Philips (Gloucestershire, W)
Baird, J.Holt, A. F.Probert, A. R.
Balfour, A.Houghton, DougalsProctor, W. T.
Bellenger, Rt. Hon. F. J.Howell, Charles (Perry Barr)Pryde, D. J.
Bence, C. R. (Dumbartonshire, E.)Howell, Dents (All Saints)Randall, H. E.
Benn, Hn. Wedgwood (Bristol, S.E.)Hoy, J. H.Rankin, John
Benson, G.Hubbard, T. F.Redhead, E. C.
Beswick, FrankHughes, Cledwyn (Anglesey)Reeves, J.
Blackburn, F.Hughes, Emrys (S. Ayrshire)Reid, William
Blenkinsop, A.Hughes, Hector (Aberdeen, N.)Robens, Rt. Hon. A.
Blyton, W. R.Hunter, A. E.Roberts, Albert (Normanton)
Boardman, H.Hynd, H, (Accrington)Roberts, Goronwy (Caernarvon)
Bowden, H, W. (Leicester, S.W.)Hynd, J. B.(Attercliffe)Robinson, Kenneth (St. Pancras, N)
Bowen, E. R. (Cardigan)Irvine, A. J. (Edge Hill)Ross, William
Bowles, F. G.Irvine Sydney (Dartford)Royle, C.
Boyd, T. C.Isaacs, Rt. Hon. G. A.Shinwell, Rt. Hon. E.
Braddock, Mrs. ElizabethJanner, B.Short, E. W.
Brockway, A. F.Jay, Rt. Hon. D. P. T.Shurmer, P. L. E.
Broughton, Dr. A. D. D.Jeger, George (Goole)Silverman, Julius (Aston)
Brown, Thomas (Ince)Jeger, Mrs. Lena(Holbn & St.Pncs,S.)Silverman, Sydney (Nelson)
Burke, W. A.Jenkins, Roy (Stechford)Simmons, C. J. (Brierley Hill)
Burton, Miss F. E.Johnston, Douglas (Paisley)Skeffington, A. M.
Butler, Herbert (Hackney, C.)Jones, David (The Hartlepools)Slater, Mrs. H. (Stoke, N.)
Butler, Mrs. Joyce (Wood Green)Jones, J. Idwal (Wrexham)Slater, J. (Sedgefield)
Callaghan, L. J.Jones, T. W. (Merloneth)Smith, Ellis (Stoke, S.)
Carmichael, J.Key, Rt. Hon. C. W.Sorensen, R. W.
Champion, A, J.King, Dr. H. M.Sparks, J. A.
Chapman, W. D.Lawson, G. M.Steele, T.
Chetwynd, G. R.Ledger, R. J.Stewart, Michael (Fulham)
Coldrick, WLee, Frederick (Newton)Stonehouse, J. T.
Collick, P. H. (Birkenhead)Lee, Miss Jennie (Cannock)Stones, W. (Consett)
Collins, V. J.(Shoreditch&Finsbury)Lever, Leslie (Ardwick)Strachey, Rt. Hon. J.
Corbet, Mrs. FredaLewis, ArthurStrauss, Rt. Hon. Geore (Vauxhall)
Cove, W. G.Lindgren, G. S.Summerskill, Rt, Hon. E.
Craddock, George (Bradford, S.)Lipton, MarcusSwingler, S. T.
Cronin, J. D.MacDermot, NiallSylvester, G. O.
Crossman, R. H. S.McGhee, H. G.Taylor, Bernard (Mansfield)
Cullen, Mrs. A.McGovern, J.Thomas, George (Cardiff)
Dalton Rt. Hon. H.McInnes, J.Thomas, Iorwerth (Rhondda, W.)
Dnavies, Ernest (Enfield, E.)McKay, John (Wallsend)Thomson, George (Dundee, E.)
Davies. Harold (Leek)MacMillan, M. K. (Western Isles)Thornton, E.
Davies, Stephen (Merthyr)MacPherson, Malcolm (Stirling)Timmons, J.
Deer, G.Mahon, SimonTomney, F.
de Freitas, GeoffreyMainwarlng, W. H.Ungoed-Thomas, Sir Lynn
Delargy, H. J.Mallalieu, E. L. (Brigg)Usborne, H. C.
Dodds, N. N.Mallalieu, J. P. W. (Huddersfd, E.)Viant, S. P.
Donnelly, D. L.Mann, Mrs. JeanWade, D. W.
Dugdale, Rt. Hn. John (W. Brmwch)Marquand, Rt. Hon. H. A.Warbey, W. N.
Dye, S.Mason, RoyWatkins, T. E.
Ede, Rt. Hon. J. C.Mayhew, C. P.Weitzman, D.
Edelman, M.Mellish, R. J.Wells, Percy (Faversham)
Edwards, Rt. Hon. John (Brighouse)Messer, Sir F.Wells, William (Walsall, N.)
Edwards, Rt. Hon. Ness (Caerphilly)Mikardo, IanWest, D. G.
Edwards, Robert (Bilston)Mitchison, G. R.Wheeldon, W. E.
Edwards, W. J. (Stepney)Monslow, W.White, Mrs. Eirene (E. Flint)
Evans, Albert (Islington, S.W.)Moody, A. S.White, Henry (Derbyshire, N.E.)
Fernyhough, E.Morris. Percy (Swansea, W.)Wigg, George
Fienburgh, W.Morrison, Rt. Hn. Herbert(Lewis'm, S.)Wilcock, Group Capt C. A. B.
Finch, H. J.Moss, R.Wilkins, W. A.
Fletcher, EricMoyle, A.Willey, Frederick
Forman, J. C.Mulley, F. W.Williams, David (Neath)
Gaitskell, Rt. Hon. H. T. N.Neal, Harold (Bolsover)Williams, Rev. Llywelyn (Ab'tillery)
Gibson, C. W.Noel-Baker, Rt. Hon. P. (Derby, S.)Williams, Ronald (Wigan)
Gooch, E. G.Oliver, G. H.Williams, Rt. Hon. T. (Don Valley)
Gordon Walker, Rt. Hon. P. C.Orbach, M.Williams, W. R. (Openshaw)
Greenwood, AnthonyOswald, T.Williams W. T. (Barons Court)
Grenfell, Rt. Hon. D. R.Owen, W. J.Willis, Eustace (Edinburgh, E.)
Grey, C. F.Padley, W. E.Wilson, Rt. Hon. Harold (Huyton)
Griffiths, Rt. Hon. James (Llanelly)Paget, R. T.Woof, R. E.
Grimond, J.Paling, Rt. Hon. W. (Dearne Valley)Yates, V. (Ladywood)
Hall, Rt. Hn. Glenvil (Colne Valley)Palmer, A. M. F.Younger, Rt. Hon. K.
Hamilton, W. W.Pannell, Charles (Leeds, W.)Zilliacus, K.
Hannan, W.Pargiter, G. A.
Harrison, J. (Nottingham, N.)Parker, J.TELLERS FOR THE AYES:
Hastings, S.Parkin, B. T.Mr. John Taylor and
Hayman, F. H.Paton, JohnMr, G. H. R. Rogers.
NOES
Agnew, Sir PeterGeorge, J. C. (Pollok)Macmillan, Maurice (Halifax)
Aitken, W. T.Gibson-Watt, D.Macpherson, Niall (Dumfries)
Allan, R. A. (Paddington, S.)Godber, J. B.Maddan, Martin
Alport, C. J. M.Gomme-Duncan, Col. Sir AlanMaitland, Cdr. J. F. W. (Horncastle)
Amory, Rt. Hn. Heathcoat(Tiverton)Goodhart, P. C.Maitiand, Hon. Patrick (Lanark)
Anstruther-Gray, Major Sir WilliamGough, C. F. H.Marshall, Douglas
Arbuthnot, JohnGower, H. R.Mathew, R.
Armstrong, C, W,Graham, Sir FergusMaude, Angus
Ashton, H.Green A.Maudling, Rt. Hon. R.
Astor, Hon. J. J.Grimston, Hon. John (St. Albans)Mawby, R. L.
Atkins, H. E.Grimston, Sir Robert (Westbury)Maydon, Lt.-Comdr. S. L. C.
Baldock, Lt.-Cmdr. J. M.Grosvenor, Lt.-Col. R. G.Medlicott, Sir Frank
Baldwin, A. E.Gurden, HaroldMilligan, Rt. Hon. W. R.
Balniel, LordHall, John (Wycombe)Moore, Sir Thomas
Barber, AnthonyHarris, Frederic (Croydon, N.W.)Morrison, John (Salisbury)
Barter, JohnHarmon, A. B. C. (Maldon)Mott-Radclyffe, Sir Charles
Baxter, Sir BeverleyHarrison, Col. J. H. (Eye)Nabarro, G. D. N.
Beamish, Maj. TuftonHarvey, Air Cdre. A. V. (Maeclesfd)Nairn, D. L. S.
Bell, Ronald (Bucks, S.)Harvey, Ian (Harrow, E.)Neave, Airey
Bennett, F. M. (Torquay)Harvey, John (Walthamstow, E.)Nicholls, Harmar
Bennett, Dr. ReginaldHarvie-Watt, Sir GeorgeNicholson, Godfrey (Farnham)
Bevins, J. R. (Toxteth)Hay, JohnNlcolson, N. (B'n'm'th, E. & Chr'ch)
Bidgood, J. C.Heald, Rt. Hon. Sir LionelNugent, G. R. H.
Biggs-Davison, J. A.Heath, Rt. Hon. E. R. G.Oakshott, H. D.
Birch, Rt. Hon. NigelHenderson, John (Cathcart)O'Neill, Hn. Phelim (Co. Antrim,N.)
Bishop, F. P.Hesketh, R. F.Ormsby-Gore, Rt. Hon. W. D.
Black, C. W.Hicks-Beach, Maj. W. W.Orr, Capt. L. P. S.
Body, R. F.Hill, Rt. Hon. Charles (Luton)Orr-Ewing, Charles Ian (Hendon, N.)
Boothby, Sir RobertHill, John (S. Norfolk)Orr-Ewing, Sir Ian (Weston-S-Mare)
Bossom, Sir AlfredHlnchingbrooke, ViscountOsborne, C.
Boyd-Carpenter, Rt. Hon. J. A.Hobson, J. G. S.(War'ck & Leam'gtn)Page, R. G.
Boyle, Sir EdwardHolland-Martin, C. J.Pannell, N. A. (Kirkdale)
Braine, B. R.Hope, Lord JohnPartridge, E.
Braithwaite, Sir Albert (Harrow, W.)Hornby, R. P.Peyton, J. W. W.
Bromley-Davenport, Lt.-Col. W. H.Horntsby-Smith, Miss M. P.Pickthorn, K. W. M.
Brooke, Rt. Hon. HenryHorobin, Sir IanPike, Miss Mervyn
Brooman-White, R. C.Horsbrugh, Rt. Hon. Dame FlorencePilkington, Capt R. A.
Browne, J Nixon (Craigton)Howard, Hon. Greville (St. Ivel)Pitman, I. J.
Bryan, P.Howard, John (Test)Pitt, Miss E. M.
Bullus, Wing Commander E. E.Hughes Hallett, Vice-Admlral J.Pott, H. P.
Butcher, Sir HerbertHughes-Young, M. H. C.Powell, J. Enoch
Butler, Rt. Hn.R. A.(Saffron Walden)Hulbert, Sir NormanPrice, Henry (Lewisham, W.)
Campbell, Sir DavidHutchison, Sir Ian Clark (E'b'gh, W.)P[...]rior-Palmer, Brig. O. L.
Carr, RobertHutchison, Sir James (Sootstoun)Raikes, Sir Victor
Cary, Sir RobertHyde, MontgomeryRamsden, J. E.
Channon, Sir HenryHylton-Foster, Rt. Hon. Sir HarryRawlinson, Peter
Chlchester-Clark, R.Iremonger, T. L.Redmayne, M.
Conant, Maj. Sir Roger Irvine, Bryant Godman (Rye)Remnant, Hon. P.
Cooke, RobertJennings, J. C. (Burton)Renton, D. L. M.
Cooper, A. E.Johnson, Dr. Donald (Carlisle)Ridsdale, J. E.
Cooper-Key, E. M.Johnson, Eric (Blackley)Rippon, A. G. F.
Corfield, Capt. F. V.Johnson, Howard (Kemptown)Robertson, Sir David
Craddock, Beresford (Spelthorne)Joseph, Sir KeithRobson-Brown, W.
Crouch, R. F.Joynson-Hicks, Hon. Sir LanceiotRodgers, John (Sevenoaks)
Crowder, Sir John (Flnchley)Keegan, D.Roper, Sir Harold
Cunningham, KnoxKerby, Capt. H. B.Ropner, Col. Sir Leonard
Currle, G. B. H.Kerr, H. W.Russell, R. S.
Dance, J. C. G.Kershaw, J. A.Sandys, Rt. Hon. D.
Davidson, ViscountessKimball, M.Schofield, Lt.-Col. W.
Deedes, W. F.Kirk, P. M.Scott-Miller, Cmdr. R.
Digby, Simon WingfieldLambert, Hon. G.Sharpies, R. C.
Doughty, C. J. A.Lancaster, Col. C. G.Shepherd, William
Drayson, G. B.Langford-Holt, J. A.Smithers, Peter (Winchester)
du Cann, E. D. L.Leavey, J. A.Smyth, Brig, Sir John (Norwood)
Dugdale, Rt. Hn. Sir T. (Richmond)Leburn, W. G.Soames, Christopher
Duncan, Capt. J. A. L.Legge-Bourke, Maj. E. A. H.Spearman, Sir Alexander
Duthie, W. S.Lindsay, Hon. James (Devon, N.)Speir, R. M.
Eden, J. B. (Bournemouth, West)Linstead, Sir H. N.Spence, H. R. (Aberdeen, W.)
Elliott, R. W.Llewellyn, D. T.Spens, Rt. Hn. Sir P. (Kens'g'tn, S.)
Emmet, Hon Mrs. EvelynLloyd, Maj. Sir Guy (Renfrew, E.)Stanley, Capt. Hon. Richard
Erroll, F. J.Longden, GilbertStevens, Geoffrey
Farey-Jones, F. W.Low, Rt. Hon. A. R. W,Steward, Harold (Stockport, S.)
Fell, A.Lucas, Sir Jocelyn (Portsmouth, S.)Steward, Sir William (Woolwich, W.)
Finlay, GraemeLucas, P. B. (Brentford & Chlswick)Stewart, Sir James Henderson (Fife,E.)
Fisher, NigelLucas-Tooth, Sir HughStoddart-Scott, Col. M.
Fletcher-Cooke, C.Macdonald, Sir PeterStorey, S.
Fort, R.Mackeson, Brig. Sir HarryStuart, Rt. Hon. James (Moray)
Fraser, Sir Ian (M'cmbe & Lonsdale)Mackie, J. H. (Galloway)Studholme, Sir Henry
Freeth, DenzilMcLaughlin, Mrs. P.Summers, Sir Spencer
Galbraith, Hon. T. G. D.McLean, Neil (Inverness)Taylor, Sir Charles (Eastbourne)
Garner-Evans, E. H.MacLeod, John (Ross & Cromarty)Temple, J. M.
Thomas, Leslie (Canterbury)Vane, W. M. F.Whitelaw, W.S.I.(Penrith & Border)
Thomas, P. J. M. (Conway)Vaughan-Morgan, J. K.Williams, Paul (Sunderland, S.)
Thompson, Kenneth (Walton)Vickers, Miss JoanWilliams, R. Dudley (Exeter)
Thompson, Lt.-Cdr. R.(Croydon, S.)Wakefield, Edward (Derbyshire, W.)Wilson, Geoffrey (Truro)
Thornton-Kemsley, C. N.Walker-Smith, Rt. Hon. D. C.Wood, Hon. R.
Tiley, A. (Bradford, W.)Ward, Rt. Hon. G. R. (Worcester)Yates, William (The Wrekin)
Turner, H. F. L.Waterhouse, Capt. Rt. Hon. C.
Turton, Rt. Hon. R. H.Watkinson, Rt. Hon. HaroldTELLERS FOR THE NOES:
Tweedsmuir, LadyWebbe, Sir H.Mr Wills and Mr. Legh.