§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]
§ 10.0 p.m.
§ Mr. G. M. Thomson (Dundee, East)
The debate which I wish to raise on the Adjournment tonight is a sequel to one which took place on 21st July last year. It is a sequel which I think is at once unnecessary and rather extraordinary and one that reflects little credit on the Secretary of State for Scotland. Perhaps it will be for the convenience of the House if I recapitulate briefly the facts in this case.
In law the Northern Housing Association, with which we are concerned, is a friendly society established under the Act of 1893 but, in fact, it is a well-known firm of property owners and factors in Dundee, Messrs. J. and E. Shepherd. By turning themselves into a friendly society in the early 1920's they were enabled to receive about £40,000 of public funds in order to build houses for renting under the Housing Act, 1923.
One of the rules of this Association when it was set up stipulated that it could not sell any of these houses or raise any of the rents of these houses or change any of its rules without the consent of the Secretary of State. It has now been suggested that this rule was a mistake and that it was unnecessary—rather belatedly, because the rule has been in existence for a long time. I suspect, however, that the rule was included in the first place in order to put a more plausible case before the Dundee Corporation for the granting of these public funds and in order to assure citizens that their use would be fully safeguarded.
Whatever the reason for the rule being included in those years long ago, the fact is that in recent years the Association has been breaking the rule. During recent years it has sold 49 of its houses in breach of this rule without consulting the Secretary of State for Scotland. Also, when the 1954 Housing (Repairs and Rents) (Scotland) Act was introduced the Northern Housing Association told its tenants that it would increase their rents, again in breach of its own rules, without 166 seeking the sanction of the Secretary of State. It was only when my right hon. Friend the Member for Dundee, West (Mr. Strachey) and myself began to expose this matter in this Chamber that the Northern Housing Association rather belatedly sought the permission of the Secretary of State to raise its rents.
Quite properly the Secretary of State took his time considering this matter, and then the Northern Housing Association simply went ahead and raised its rents without receiving the consent of the right hon. Gentleman. Apparently it took the view that the wishes of the Secretary of State were of no importance in comparison with the desire of Messrs. J. and E. Shepherd to obtain an increase in rents.
It was at this point that the debate on the Adjournment took place last year. I asked the Joint Under-Secretary of State for Scotland to refuse consent to these increases and I submitted that the Northern Housing Association was not, in the words used in the Committee stage of the Bill, a body providing houses on a non-profit making basis as a service. I suggested that, while nominally the Association was a non-profit making body, there were more ways than one of making a profit and I described the intriguing situation in which,Messrs. Shepherd, in the capacity of board of management of the Northern Housing Association, pay Messrs. Shepherd, in the capacity of agents, to employ Messrs. Shepherd, in the capacity of house repairers, to carry out presumably profitable repairs."—[OFFICIAL REPORT, 21st July, 1955; Vol. 544, c. 708.]I end my quotation there, but that process is given the fanciful name of non-profit making.
These facts were not denied in the debate, nor have they been denied since. Yet the Secretary of State ignored them. He also ignored the very contemptuous way in which his high office had been treated by this local firm of property owners. He took refuge from his responsibilities in a legality and refused to take any action at all, leaving the tenants to go to court if they wished. At the time I called it a shameful and abject surrender, and the Joint Under-Secretary who replied to me denied my allegations very strongly, but I submit that what has happened since has proved up to the hilt the charges that I made.
167 What has occurred since that time? The Association or Messrs. J. and E. Shepherd began to alter their tactics. In the first place, they withdrew the rent increases which had been imposed for several months. Therefore, if nothing else has been achieved, my right hon. Friend and I can console ourselves with the fact that we have helped the tenants to avoid paying one year of increased rent.
However, Messrs. Shepherd or the Association followed this up by composing a book of new rules which completely eliminates the very embarrassing rule 115 which stated that the Secretary of State's consent had to be obtained to the selling of property or to increases in rents. It also eliminates a number of other rules which sought to give certain safeguards to the tenant; the safeguards were never operated, but they were in the rule book.
The Association, apparently, then submitted the book of rules to the Secretary of State, as it was obliged to do under the previous rules. It was known that if the Secretary of State gave his consent to the new rules it would mean giving assent to the Association raising rents to whatever level it thought proper, although the Association is not a body which is responsible to the public in any way as a local authority is. To the astonishment of everyone, the Secretary of State proceeded to give his consent to the elimination of the very rule which contained his authority to act, the very rule which had so flagrantly been broken a few months previously. I am bound to ask whether in the light of that the Secretary of State has any self-respect at all in this matter.
The right hon. Gentleman argues that the rules are similar to those used by housing associations throughout the country. However, I have sought to bring evidence this evening, and I did so in the last debate, that the Association is not what we normally regard as a housing association, a body providing houses as a social service. I do not think that anybody in Dundee, no matter what his private political views might be, would suggest that Messrs. Shepherd run the Association as a charitable or philanthropic venture.
The Secretary of State also argues that he has no grounds for refusing the 168 request. I suggest that even on the ground of the way he has been treated by the Association he would have had ample ground for refusing the request, and refusing it outright, which is what he ought to have done. He could at the very least have done what he did in July in relation to the tenants; he could have said "I am not going to take any action at all about this and shall leave the matter to be thrashed out between the Association, its tenants and the courts." That would at least have been consistent, but he ought to have refused outright to grant the change in the rules in view of all that has gone before, because it is exactly the same situation as we faced on 21st July.
The former rules contained two provisions which affect us. One was that the Secretary of State had to give his consent to increases in rents, and the other was that the Secretary of State had to give his consent to changes in the rules. When one comes along and asks for an increase in the rents to be stopped, the Secretary of State says, "I cannot have anything to do with that. The tenants must go to the courts about it." But when the Association comes along and asks for changes in its rules to the great detriment of its tenants, the Secretary of State does not tell the Association to go to the courts. The Secretary of State grants what the Association wants.
I can conclude only that we have a very revealing example of what Conservative housing policy is. It means that when one asks for intervention on behalf of the tenants, one is sent to the lawyers; but when one asks for intervention in exactly the same case and in the same circumstances on behalf of the landlord, the Secretary of State rushes in and grants what the landlord wants. Of course, this bias in favour of the landlord in this case has been evident throughout the whole story.
The Joint Under-Secretary of State who replied in July had been informed that the tenants had agreed to the increase. I told him then that that was completely untrue. Since then the Secretary of State has received information from the tenants showing that I was perfectly right. It is clear that in that case the Secretary of State accepted the word of the landlords without any attempt to check what the tenants' views really were.
169 The case of the Northern Housing Association shows on a local scale the present Government's housing policy. It shows up on a local scale how clearly the present Government are on the side of the landlords and against the tenants. Of course, the Government are going along the same road a very great deal further and are now proposing drastically to reduce rent control and in the end altogether to abolish it. There is still time for the Secretary of State to change his mind about the course which he is pursuing. He could begin tonight by reversing his decision to give the Association consent to change its rules and to raise its rents as much as it cares so to do. He could begin changing his mind by amending the Housing (Repairs and Rents) (Scotland) Act, 1954, to give tenants of private housing associations the normal protection which private tenants enjoy elsewhere. If he is unwilling so to do tonight, the tenants of Dundee will know beyond doubt that the Government intend to use their bigger majority, obtained at the last General Election, to look after private owners at the expense of tenants.
§ 10.13 p.m.
§ Mr. John Strachey (Dundee, West)
We have reached a most extraordinary position in this matter. The Northern Housing Association first acted wrongfully and in breach of its own rules by raising or attempting to raise rents of its houses without receiving the permission of the Secretary of State. That was stage one. Stage two in the exposure by my hon. Friend and to some extent by myself was when it was forced to apply for permission from the Secretary of State for the raising of the rents. The Association did not receive that permission. It is true that neither did it receive a refusal. The Secretary of State simply did nothing.
Evidently in its action now the Association acknowledges that such a permission is necessary. In fact there is no dispute about that. It has changed its action. Instead of acting and continuing to act wrongfully and in breach of its rules it has said in effect, "Let us change the rules. Let us alter them. Let us altogether abolish this awkward and unpleasant necessity of getting the Secretary of State's permission to do this and simply make a new application to him, not for permission to raise the rents, but for permission so to alter the rules that the very 170 occasion of having to ask for permission so to do is eliminated."
The Secretary of State, far from his reserved attitude on the first application of making no reply, now readily gives his consent and the rules are changed so that the one element of public control over this body is eliminated and in future it will act precisely like a private landlord in this respect. The last vestige of public control is eliminated, and yet by the passage of the Housing (Repairs and Rents) (Scotland) Act, 1954, which was passed against our votes and against our opposition at every stage, these houses and this Association are to be entirely outside the Rent Restrictions Acts and the Association is to be able to raise its rents to any extent.
At every stage in the discussion of that Act we were told that it was only a nonprofit making organisation, an organisation of a public character under public control. There was at any rate a vestige of reality in that so long as the permission of the Secretary of State had to be sought before it could act. But now the Secretary of State, completely and blithely, allows it to alter its rules so that the last vestige of public control is taken away.
My hon. Friend used some rather harsh words about this, but one cannot deny that those words are justified when such a thing happens. When it is a matter of the protection of the tenants, the Secretary of State gives no decision. When it is a matter of eliminating his responsibility in the whole matter, he does so readily and at once. I must press the Joint Under-Secretary very hard indeed to tell us how he can possibly defend such gross partiality on the part of his Department—I can call it nothing else. When this whole story is laid before hon. Members of this House, and I trust that it will be laid before the tenants at Dundee, how can they possibly come to any other conclusion than that the intervention of the Governent Department has been readily obtained when it is on the side of the landlord, yet it cannot be obtained at all when it is a question of protecting the tenants?
It may be thought that this is a small matter, and in a sense it is, because it affects a limited number of tenants. But it is not a small matter for those 300 tenants. It may be relatively a small 171 matter nationally, but it is a very important matter for these people. Finally, the cup of bitterness was filled when we were told that the tenants had consented to these increases in rents; when we in Dundee were being lobbied almost daily by tenants protesting against these rent increases. When tenants were coming to us and had formed a well-organised association specifically for the purpose of resisting these unjustified increases, we were blithely told from the Government Front Bench that the tenants were perfectly happy about these increases and had agreed to them.
The Joint Under-Secretary should explain to us how his "boss," how the Secretary of State himself, and his Department, can possibly justify this extraordinary partiality as between tenant and landlord. I ask him either to do that, to give us some reasons which will bear examination for this extraordinary inaction and then action on behalf of the landlords, or to reverse this decision which is flying in the face of the most elementary equity as between landlord and tenant.
§ 10.19 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. J. Henderson Stewart)
As the hon. Member for Dundee, East (Mr. G. M. Thomson) has told us, on 21st July last he took the opportunity of the Adjournment of the House to call attention to some recent operations of what is called the Northern Housing Association of Dundee. On that occasion he was concerned principally with the attitude of the Secretary of State towards the decision of the Association to raise the rents of its houses. Tonight the hon. Member, supported by his partner in the representation of that fine city, the right hon. Member for Dundee, West (Mr. Strachey) returns to the attack both on the Secretary of State and the Housing Association, but this time, as I gather, on the narrower issue of the Secretary of State's approval recently given to the new rules adopted by the Association.
On the previous occasion, the Government reply was given by my hon. Friend the Joint Under-Secretary of State responsible for housing who, but for his illness—from which I am glad to report that he is making a good recovery—would, I am sure, have been very happy to reply to this debate. I am acting in 172 his place, and I wish to say at once that I welcome the opportunity to clear up whatever misunderstanding there may be as a result of the hon. Member's agitation, which I cannot help feeling is little more than a storm in the Dundee Labour Party's teacup if, in fact, not an actual mare's nest, as I can show.
Let me, as did the hon. Gentleman, run over the history of this matter. In 1925, the Northern Housing Association Limited, of Dundee, was formed with the object of building houses—surely an admirable objective—with the assistance of Exchequer grants which were available at that time for the encouragement of private enterprise in this vital field of social development. The grants were made through the machinery of the Dundee Corporation, and with the aid of the grants, which varied in amount up to about £125 per house, the Association built in all 283 houses—not a bad effort at that time and one of great value to the tenants.
To comply with the provisions of the Industrial and Provident Societies Act, 1893, the Association registered with the Assistant Registrar of Friendly Societies for Scotland, and a code of rules governing the administration of the body was also registered. At that time, I suppose, the Registrar of Friendly Societies made a close examination of the bona fides and objects of the Association, and he has done so again recently, as I shall show.
At the beginning of 1955, my right hon. Friend's attention was drawn to the Association's proposals to increase the rent of its houses as from 28th May. The proposal was questioned by the hon. Member opposite and others. Before it was due to take effect, the Association applied to my right hon. Friend in accordance with Rule 115 of the constitution which required the Association to obtain my right hon. Friend's approval of the rents to be charged for its houses. This, I have to confess, was the first time that the Scottish Office was made aware of the existence of any such rule. Before that, we did not know about it at all.
There appeared, and there still appears, to be no reason for that rule, because no conditions were attached to the payment of Exchequer grants in respect of the houses erected by the Association in 1925. But before my right hon. Friend could give a decision on the application, 173 the Association raised the rents with effect from 28th May without any intimation to my right hon. Friend that it had done so.
In the Adjournment debate of last July, my hon. Friend announced that my right hon. Friend the Secretary of State had in all the circumstances of the case then decided to refrain from further consideration of the Association's application to increase rents, and the Association was informed of this on 25th July. That is the short history of the matter so far. Subsequently, the Association withdrew the rent increases, but neither the hon. Gentleman nor the right hon. Gentleman opposite told us that.
§ Mr. Stewart
Well, if he did, I repeat it. It withdrew the rent increases and made arrangements for adjusting, at the November term, all excess rents actually paid up to that point. No extra money has been paid by any tenant in any part of the estate.
The next step was when, on 27th October last, the Association submitted for the approval of the Secretary of State a new code of rules. This was based upon the model rules adopted by other housing associations, of which the hon. Gentleman and the right hon. Gentleman know there are many in Scotland. The rules which it has now adopted are precisely those of many other associations I fancy that there is not one of any consequence which is in any sense different from the model rules. That new code, like the model codes of other similar bodies, leaves the day to day domestic running of the Association in the hands of the Association itself, without any reference to my right hon. Friend. The adoption of the new code was made strictly in accordance with the rules of the Association, and my right hon. Friend took the view that there was no ground upon which he could withhold his approval, and that was given on 12th December.
I should like to add that, had my right hon. Friend insisted that any change in the rents charged by the Association should continue to be subject to his approval, it would have been in direct 174 conflict with the provisions of the Housing (Repairs and Rents) (Scotland) Act, 1954, which removed houses belonging to housing associations from the scope of rent control. Therefore, the hon. and right hon. Gentleman will see that it would have been incompetent for my right hon. Friend to make any such provision as he is apparently now asked to do. There were no grounds for opposing the action of the Association, and approval was accordingly given in a letter to the Association dated 12th December.
A little earlier the new code of rules had been submitted to the Assistant Registrar of Friendly Societies for Scotland, and was registered on 4th November, 1955, under the Industrial and Provident Societies Act, 1893. Hon. Members opposite know as well as I do that the Registrar of Friendly Societies does not register any old Tom, Dick or Harry of a body; he examines with great care their constitutions, bona fides and objectives. I can only take it that he did so in this case and was satisfied upon these matters. If he was satisfied I am and, with great respect, I say that the hon. Member should also be satisfied. That is all I need to say. Here is a body which had committed a technical mistake a little earlier in the year. It has now put matters absolutely right, and I hope that it may now proceed with its work uninterrupted by political agitation. If it is possible for it to build more houses for the people of Dundee I am sure that everybody will be glad.
§ Mr. Thomson
The Joint Under-Secretary is appparently claiming that there is something ultra vires in the Association having in its rules a provision that the Secretary of State must give consent when the Housing Act took housing associations out of the Act. Surely there are many housing associations in Scotland which have different conditions attached to them. Some have to seek local authority consent. Surely the Minister is not suggesting that these associations do not need to apply to their local authorities because this Act has been passed. There was nothing at all incongrous about the housing association being exempted from the Act and still having to seek the Secretary of State's consent for an increase, under its rules.
§ Mr. Stewart
That is entirely different. Of course it goes to the Dundee Corporation for a great many things, but this unnecessary rule requiring it to appeal to the Secretary of State was not ultra vires; it was just a senseless and useless rule and should never have been made——
§ The Question having been proposed at Ten o'clock, and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at half-past Ten o'clock.