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many years. By and large, there is a tendency to err on the side of the tenant and to protect his interests against those of the landlord. Successive Governments, including the present Conservative Government, have operated in that way, but some of us believe that the protective elements tend to frustrate the purpose of the new laws.I do not share the view of the hon. Member for Rotherham (Mr. Crowther), who represents certain interests, that this is a sinister arrangement to sweeeten the pill for the brewer. As I represent the brewing centre of England and, of course, have a well-known and declared interest on that industry's behalf, one would not expect me to accept the view that the brewers aim to exploit tenants by including in the Bill a provision whereby brewers can easily opt out of the restriction.
From time to time, there will be a temptation to take advantage of the contracting-out provision. That is human and business nature. The Monopolies and Mergers Commission reached that conclusion in its report. This issue is a potential irritant between landlord and tenants. In a sense, I am speaking on behalf not of the great brewers of Burton upon Trent but of the licensees, the tenants of the great public houses, as the weaker party to the contract. I therefore have a common cause with the hon. Member for Rotherham.
The Government should build into the Bill a mite more protection for the licensed victualler--the tenant. I make that claim because it would be better for the relationships that are to exist between landlord and tenant. The tenant should not think that a provision in the legislation will work against his interests. I also make that claim because the Government would not wish to be seen to introduce a measure erring on the side of the brewer and against the tenant. Peculiarly, perhaps, I thus find myself speaking against the interests that I normally represent. Not all the brewers in Burton upon Trent are big--there are some very small ones such as Burton Bridge and Heritage.
In order that justice may be seen to be done, any temptation to think that the contracting-out provisions are built in for the benefit of the stronger party should be mitigated by more action than is shown in the Bill. On balance, the Government should take seriously the amendments that have been tabled and be prepared to amend the Bill, although perhaps not precisely in those terms, to give more confidence to licensees. I know the brewers in my constituency very well and I can state that view, knowing that it is not their intention to exploit licensees. It may not, strictly speaking, be necessary to make such a change in the Bill but so that everybody may confidently believe that the Bill is even-handed and will protect licensees, I ask that the proposed change or a change approximating to it should be introduced.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood) : I have listened carefully to the arguments advanced by the Opposition and by my hon. and learned Friend the Member for Burton (Mr. Lawrence). I shall deal with some of the points that they made and then state the Government's position on this important subject.
It is true that the Landlord and Tenant Act 1954 arose out of the rebuilding of urban areas--against a different background. But the important clause in the Bill is based on legislation introduced by the Labour Administration in 1969, against a very different background indeed, and I think that the reasons given by that Labour Government
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hold true today. The Labour Government were concerned about the impact on the availability of business accommodation that would follow if a contracting-out clause were not introduced. The then Solicitor-General made the matter clear :"one must hold a balance between what is needed for the effective protection of tenants and what would fetter freedom of contract to such an extent that lettings were discouraged and worthwhile accommodation left unoccupied."--[ Official Report, 24 June 1969 ; Vol. 785, c. 1424.]
That is the nub of our case. The Government accept the wisdom of the Labour proposal in 1969, which created a balance in tenants' and landlords' rights that has lasted for the past 21 years and which will now be applied to include brewing landlords and their tenants, too. The provision was based on an independent study from the Law Commission, which also expressed its fears about the non-availability of tenancies. It was against that background that the 1969 amendments to the 1954 Act were made.
The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) rightly said that the issue before the House is whether we have struck the right balance between landlords' and tenants' interests. The House is united in wanting to achieve a fair balance between landlord and tenant which provides something in the commercial arrangement for the benefit of both parties so that enough tenancies are available. The Government contend that that is best supplied in the form of the balance in the 1954 Act as amended in 1969. The hon. Member for Newcastle upon Tyne, North also asked the important question whether undue pressure could be exerted on tenants as a result of the contracting-out proposal. It may be helpful if I remind the House how the contracting-out proposal works. Tenant and landlord have to go jointly to the court and seek its permission to have a contracted-out tenancy under the 1954 Act. That is, in itself, a protection against the very kind of undue pressure against which hon. Members wish to guard. The landlord and the tenant need to take separate legal advice from their lawyers and to go to court, and--among other things--the court must satisfy itself that both parties to the agreement know what they are entering into and understand the basis on which they are making their joint application. That is an important safeguard built into the judicial process relating to contracting-out.
Mr. Lawrence : My hon. Friend is quite right that there is provision for taking legal advice on going to court, but that can only make a licensee aware of what his rights are ; it will not affect the pressure that may be placed on him to go ahead with the matter even though he knows what his rights are. That is what bothers hon. Members on both sides of the House. It is one thing not to know one's rights ; it is another to know one's rights and not to want to act because one feels that one is under pressure.
Mr. Redwood : I think that my hon. and learned Friend agrees that there is an important safeguard against a tenant unknowingly entering into a contract agreement because he has not been properly advised or there is not a formal process.
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4.30 pmMr. Barry Field (Isle of Wight) : I apologise for not being present throughout the proceedings, but the Isle of Wight ferries were delayed by the severe weather. The Isle of Wight licensed victuallers association is worried about this point. As my hon. Friend knows, my hon. Friend the Member for Portsmouth, South (Mr. Martin) and I have the largest number of tied houses in the Whitbread brewery. The association is concerned that both new and existing tenancies may be put under considerable pressure, particularly when they take in host beer. Will the tenants negotiate as individuals? If so, they will face the considerable power of a large company. Surely that does not put tenants in a good position.
Mr. Redwood : The contract is entered into freely between two parties and the balance of power depends on the individual strengths of the local markets and the circumstances at the time.
Several Hon. Members rose--
Mr. Redwood : If I may, I shall deal with one point at a time. That may be helpful to the House and it is difficult to deal with three at a time.
The tenant will have the advice that he wants, for example, from the NLVA, which is diligent and helpful, and from his legal adviser. The worry is that if such an arrangement is not allowed, many people who want tenancies simply will not be able to get them. We should remember that the Monopolies and Mergers Commission exempted the first 12 months in its recommendation, specifically because many people who want to become tenants will have no track record and, therefore, will be unlikely to qualify as tenants, so a trial period is needed for them to introduce themselves to the brewers and for the brewers to make an assessment. Unfortunately, if that is only for 12 months and not thereafter, the market will become ossified and many subsequent potential new entrants will not have the same facility as those in the 12-month period.
Mr. David Martin (Portsmouth, South) : Can my hon. Friend deal with the fear that, although there is contracting-out, if third parties or a potential tenant does not agree to contract-out, a landlord will be inclined to find someone who will and say to the others, "If you won't, they will, so I will give it to them"?
Mr. Redwood : The purpose of the legislation is to give tenants greater security of tenure. The House is losing sight of the fundamental reason why the House is united on the principle of extending landlord- tenant protection to those categories of tenant. It would not be possible for a brewer to force out a tenant on that basis, unless he could terminate the tenancy for one of the restricted reasons given in the landlord and tenant legislation. That is protection which tenants do not have now which is why the NLVA urged me to introduce the Bill as soon as possible. The Government have introduced it at the earliest available opportunity to extend that protection as soon as the Bill can receive Royal Assent and the due number of weeks have passed for it to come into effect.
Mr. Crowther : Will the Minister address the following scenario? A tenant, who has been running his business for a long time and has developed a good business, even without the benefit of landlord and tenant legislation
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protection, may think that because this Bill is passed he will have protection under this legislation. When his existing tenancy expires, he will start talking to the landlord about his new tenancy which he will expect to be covered by landlord and tenant legislation protection. The landlord will say, "Hang on, I have decided that we shall contract-out." The tenant will say, "Surely a new Bill has gone through Parliament." The landlord will say, "I cannot help that. You will agree to go with me to the court and seek consent for contracting-out. Otherwise, your tenancy is finished and I shall find a new tenant." How will that problem be overcome? That is most worrying and I should like the Minister to comment on it.Mr. Redwood : The purpose of the legislation for all the tenancies covered by it is to necessitate, for the first time for pub tenancies, that a landlord has one of a limited number of reasons for terminating a tenancy. That is why the extra protection is being granted by the legislation. That is the point of it.
Mr. Matthew Taylor (Truro) : I took an office in my constituency under precisely those conditions, with an opting-out clause. I had no choice as the landlord insisted on that, so I went along with it. For an office, that does not matter that much, but for a tenancy the entire living depends on the location. The Minister is saying both that tenants need protection against landlords who may not operate fairly, and that protection should be removed for precisely those landlords against whom the tenants need protecting.
Mr. Redwood : I am not doing that. The legislation will provide the protection that all hon. Members want. After that, where the case is governed by the legislation, there will be a limited number of circumstances in which the tenancy can be terminated. That is why everyone agrees that we should extend that protection. It is rather similar to the good debate in Committee on the question of the widows' year and the protection for them. We all agreed that a widow should not be driven out of the tenancy on the death of her husband. However, the protection offered in the legislation is more generous and comprehensive for the widow, if she is the nominated successor of the deceased publican, than would have been the case under the amendments proposed in Committee, which is why I did not accept them. It is not that I wish widows to end up on the streets, but that I believe that the balance of legislation offers them a better break than the more limited proposal in the amendment. There is a great deal of good news in this legislation. The Government are pleased to be introducing it and I know that it is welcomed by tenants, as the hon. Member for Rotherham (Mr. Crowther) kindly said. That is the basis of the settlement.
I wish to deal with points that are relevant to the amendment. First, the Government are concerned not to reduce the number of tenancies available by introducing the wrong type of legislation to govern tenant security. One of the consequences of the Opposition's proposal is likely to be a reduction in the number of tenancies. That would be bad news for a number of people who would like to become tenants, and even for those who are already tenants. It might intensify the search for gateway exits by the landlord breweries for certain tenancies.
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Secondly, the amendment would be especially harsh on the untried entrant--the person who wishes to enter the pub trade and who may turn out to be a good landlord, providing more life and change in landlord-tenant business. Without that type of contracted-out tenancy arrangement, it would be difficult to have the right number of new entrants coming forward, and thereby allow brewers to give them the opportunity to prove themselves.Thirdly, there is a code of practice operated by the Brewers Society, which I know the hon. Member for Rotherham has welcomed. It will continue to be used by many reputable brewers, in addition to the provisions in the legislation that will become legally binding. I was interested to hear what the hon. Member for Newcastle upon Tyne, North said about new developments and changes in the type of pubs on offer within new town centres. The hon. Gentleman makes my fourth point for me. It is because it is a changing industry where the location and style of pubs are changing, and new pubs are becoming available in new types of development, that there needs to be some flexibility to allow new entrants and those who wish to experiment with a different style of tenancy within the pub framework. That may necessitate different marketing and a different approach to the business. That is what the provision in the Law of Property Act 1969 facilitates and permits.
I cannot agree with the hon. Member for Newcastle upon Tyne, North that amendment No. 3 is the key amendment by which to judge the legislation. I read in the Morning Advertiser on 26 February that three matters were crucial to the test of the legislation and that there would be an opportunity to debate all of them on amendments today. It referred to the inclusion of a right-to-buy clause, and the introduction of the widows' year. The hon. Gentleman might concede that his amendment is not the crucial one by which to judge the balance of the legislation. The hon. Gentleman is nodding, so he is taking back his words. There are a number of ways to judge the balance in the legislation between landlords and tenants.
Mr. Henderson : Does the Minister accept that, of the amendments that we tabled, No. 3 is the key one? Had other amendments been called that would still have been so. I had hoped that the Minister recognised from the contributions of some of his hon. Friends that if the amendment is not accepted many of the other provisions in the Bill will be meaningless. That is the point we have tried to establish.
Mr. Redwood : Therein lays the disagreement between us. I do not believe that the amendment is a key one in relationship to the range of amendments looked at in Committee. This is an important debate, but it is not the most important, over and above the other amendments examined.
I was disappointed that the Opposition did not table new amendments in the light of our debates in Committee. I felt that we had a good Committee stage, that we made a lot of progress, found some common ground and identified some problems. I thought that the Opposition would introduce new amendments that addressed what the Committee had debated. Instead, we are faced with amendments that were debated extensively in Committee.
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Those amendments were considerably damaged in Committee because they did not make sense in relation to the balance in the landlord and tenant legislation.Mr. Dixon : If, in Committee, the Minister agreed with some of the Opposition's arguments, it was up to him to table amendments on Report ; it is not up to the Opposition.
Mr. Redwood : If I thought that there were things that needed varying in the balance of the legislation I would have introduced amendments today. If the hon. Gentleman refers back to the text of our Committee proceedings he will see that in a number of important respects, such as the widows' year and the right to buy, the amendments tabled did not offer anything above what already existed in legislation or in the framework that governs the relationship between the landlord and tenant. That is why I am happy with the Bill and recommend it to the House.
I suggest that the House votes against the amendment, as it would not improve the Bill and would make life a lot more difficult for many people who want to become the tenants of brewers.
Dr. Lewis Moonie (Kirkcaldy) : I submit that the Government's position on this Bill is clear--not for the reasons suggested by the Minister--as they are prone before the brewing interests. Today those interests have been much more fairly represented than those of the tenants.
The amendment concerns contracting out of the Landlord and Tenant Act 1954. My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) is right in saying that the world has changed in the intervening 35 years, but, sadly, some things do not change--for example, the desire of the stronger partner in any agreement to obtain more than his or her fair share of influence over it. There is a strong desire to put one over on the other participant. The Bill fails to address that problem. That is its fundamental weakness and why we tabled the amendment.
We believe that the balance of interest must be maintained, particularly, as my hon. Friend the Member for Newcastle upon Tyne, North has said, at a time of great change in the industry. It is facing a major reorganisation and we remain convinced that it will not benefit the tenant licensee.
My hon. Friend the Member for Rotherham (Mr. Crowther) is well known for the vigour with which he promotes the case of the National Licensed Victuallers Association. He is also well known for the forthright way in which he declares his interest in any matter on which he speaks to the House. I wish that his example was followed more widely.
My hon. Friend has quoted several detailed examples of the fears that contracting-out raises in the minds of tenants and their representatives. I do not intend to cite any more evidence in support of our case today as I believe it has been proved.
My hon. Friends and I are not minded to accept the Minister's lightly given assurances. We shall press the amendment to a Division because of the Minister's failure to produce any evidence to show that both parties will benefit from the contracting-out provisions. Question put, That the amendment be made :--
The House divided : Ayes 64, Noes 160.
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Division No. 96 [4.44 pmAYES
Allen, Graham
Alton, David
Archer, Rt Hon Peter
Armstrong, Hilary
Barnes, Harry (Derbyshire NE)
Barron, Kevin
Blair, Tony
Brown, Gordon (D'mline E)
Caborn, Richard
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Cartwright, John
Clark, Dr David (S Shields)
Cohen, Harry
Coleman, Donald
Corbyn, Jeremy
Cox, Tom
Crowther, Stan
Cunningham, Dr John
Dalyell, Tam
Davies, Ron (Caerphilly)
Dixon, Don
Doran, Frank
Eastham, Ken
Fisher, Mark
Foster, Derek
George, Bruce
Golding, Mrs Llin
Hardy, Peter
Haynes, Frank
Heffer, Eric S.
Henderson, Doug
Hogg, N. (C'nauld & Kilsyth)
Hughes, Robert (Aberdeen N)
Hughes, Simon (Southwark)
Jones, Barry (Alyn & Deeside)
Kaufman, Rt Hon Gerald
Kennedy, Charles
Kinnock, Rt Hon Neil
Leighton, Ron
McKay, Allen (Barnsley West)
McWilliam, John
Marek, Dr John
Meale, Alan
Michael, Alun
Moonie, Dr Lewis
Morris, Rt Hon A. (W'shawe)
Mowlam, Marjorie
Mullin, Chris
O'Neill, Martin
Pendry, Tom
Pike, Peter L.
Powell, Ray (Ogmore)
Prescott, John
Redmond, Martin
Reid, Dr John
Richardson, Jo
Rooker, Jeff
Ruddock, Joan
Skinner, Dennis
Smith, Rt Hon J. (Monk'ds E)
Steel, Rt Hon Sir David
Taylor, Matthew (Truro)
Williams, Rt Hon Alan
Tellers for the Ayes :
Mr. Tony Banks and
Mr. John Cummings.
NOES
Alexander, Richard
Alison, Rt Hon Michael
Amos, Alan
Arbuthnot, James
Ashby, David
Baker, Nicholas (Dorset N)
Baldry, Tony
Batiste, Spencer
Beaumont-Dark, Anthony
Bendall, Vivian
Bennett, Nicholas (Pembroke)
Bevan, David Gilroy
Bonsor, Sir Nicholas
Boscawen, Hon Robert
Boswell, Tim
Bottomley, Mrs Virginia
Bowden, A (Brighton K'pto'n)
Bowis, John
Brazier, Julian
Bright, Graham
Browne, John (Winchester)
Bruce, Ian (Dorset South)
Buck, Sir Antony
Burns, Simon
Burt, Alistair
Butler, Chris
Butterfill, John
Carlisle, Kenneth (Lincoln)
Carrington, Matthew
Chapman, Sydney
Clark, Hon Alan (Plym'th S'n)
Clark, Dr Michael (Rochford)
Clark, Sir W. (Croydon S)
Clarke, Rt Hon K. (Rushcliffe)
Colvin, Michael
Coombs, Simon (Swindon)
Cormack, Patrick
Cran, James
Critchley, Julian
Currie, Mrs Edwina
Davies, Q. (Stamf'd & Spald'g)
Day, Stephen
Devlin, Tim
Dickens, Geoffrey
Dicks, Terry
Dorrell, Stephen
Douglas-Hamilton, Lord James
Durant, Tony
Emery, Sir Peter
Evennett, David
Fallon, Michael
Finsberg, Sir Geoffrey
Fishburn, John Dudley
Forman, Nigel
Forsyth, Michael (Stirling)
Forth, Eric
Freeman, Roger
French, Douglas
Gale, Roger
Garel-Jones, Tristan
Goodlad, Alastair
Gorman, Mrs Teresa
Gow, Ian
Greenway, Harry (Ealing N)
Greenway, John (Ryedale)
Gregory, Conal
Griffiths, Peter (Portsmouth N)
Hague, William
Hargreaves, A. (B'ham H'll Gr')
Harris, David
Hayhoe, Rt Hon Sir Barney
Hayward, Robert
Hind, Kenneth
Hordern, Sir Peter
Howard, Rt Hon Michael
Hunt, Sir John (Ravensbourne)
Irvine, Michael
Jack, Michael
Janman, Tim
Johnson Smith, Sir Geoffrey
Key, Robert
King, Roger (B'ham N'thfield)
Knapman, Roger
Knight, Greg (Derby North)
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