§ Order for Second Reading read.
§ 3.47 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell)
I beg to move, That the Bill be now read a Second time.
The achievement of this country in housing since the war has been, by any standard, a most remarkable one. In new houses alone, between 2½ million and 2¾ million have been constructed in Great Britain. It is a record which bears comparison with that of any other European country. It is a record in which the nation as a whole and not one party only can take pride. But, of course, it is not the mere number of houses built which matters so much as the ratio between the supply and the demand, between the number of families and the number of houses or homes which there are to accommodate them.
As early as 1949, in introducing the Housing Act of that year, the then Minister of Health, the right hon. Member for Ebbw Vale (Mr. Bevan) was able to point out that the number of houses per head of the population was then already higher than before the war and that that ratio was constantly improving. Since that time, over 1½ million net additional homes have been provided, so that the ratio today must be very much more favourable than it was then.
The census of 1951 provided a firm basis upon which could be founded an estimate of need and the availability of homes to meet it. A study made by P.E.P. of the results of that census came to a conclusion about the ratio between the supply and demand for homes at the end of 1954. If I may remind the House of that conclusion, the calculation was as follows:Rough estimates…of the position at the end of 1954…suggest that the need for additional dwellings had fallen, in England and Wales, to about three-quarters of a million.And it concluded:It is…clear that the demand for more houses is beginning to be met.This estimate of an additional Three-quarters of a million houses required to 1760 bring the general demand and supply into balance over the country has, I notice, been adopted by the party opposite as a minimum, and as the basis of their calculations in their policy for housing.
Taking that admittedly rough estimate of demand as it was at the end of 1954, from then until the end of 1957, when the provisions of this Bill will be coming fully into force, we can calculate with certainty that there will be a net addition of at least three quarters of a million homes. It follows that upon an objective basis, and one which has been broadly accepted I think, we are now within sight of, and should in 12 months' time or so be level with, an equation of the overall supply and demand for homes.
Rent control as we have it is essentially an emergency measure. It is a product of the war, a product of the stresses of war, a product of the temporary derangement of the relationship between demand and supply which the war inevitably brought with it.
§ Mr. Powell
It is partly a product of the First World War but, for the most part, today rent control is new control, the control which was established in 1939. The majority of houses controlled today are new controlled houses, as can be verified if the right hon. Gentleman will refer to the statistics furnished in Cmnd. 17.
§ Mr. A. J. Irvine (Liverpool, Edge Hill)
On this matter of demand, is it not correct to say that the vital figures are those which show the numbers of houses of different sizes in the country and the numbers of families of different sizes? One wants to compare and correlate those two columns. Will the hon. Gentleman explain why that information is not available to the House, having regard to the fact that it can be easily extracted from the information derived from the census?
§ Mr. Powell
I understand the importance of the occupation of houses and I shall be dealing with that point several times in my speech. But, also material, is the broader point I have been making hitherto, the balance between units of accommodation and household units, be they respectively large or small.
1761 It is interesting to remember, as a reminder of the emergency character of rent restriction, that it could be brought to an end within six months by an Order in Council declaring the end of the emergency. Thereby, under Section 1 of the 1939 Act, rent restriction as a whole would come to an end in this country. So we are dealing with a state of affairs and with a system of control which is the fruit partly of the first, but also partly of the second, wartime emergency. Now that supply and demand are coming into balance—
§ Mr. Powell
This emergency action is not only losing its usefulness, but it is becoming productive of greater and greater and widely recognised evils. Perhaps the most useful summary of those evils which I could quote to the House was given in a leading article in the Manchester Guardian a few days ago. Referring to rent restriction, that article stated:It discourages the landlord from keeping old houses in good repair, and so increases the rate at which they become uninhabitable. It further diminishes the number of houses to let by encouraging the sale of those which fall vacant, and deterring the letting of those which have previously been owner-occupied. It creates a vested interest in a sitting tenancy, and so prevents large houses from being made available for growing families by the removal of shrinking households to smaller premises; by the same token, it inhibits the movement of redundant workers to places where their labour is needed.Now I will look for a moment at some of the items in that list of the present evils which rent restriction is producing. The first is the waste of accommodation, and has already been mentioned. This is notorious, but there is statistical evidence of it. For example, the 1951 census showed that there were 1¼ million households with three or more rooms per person, and the probability is that the under-occupation which those figures indicate has increased rather than lessened since 1951.
§ Mr. Powell
Probably so. There is no relationship between the size of a house and the rent of a house and consequently, no inducement to a small or shrinking family to seek to reduce its commitments 1762 by way of rent by releasing larger accommodation than it needs.
There is the discouragement to the letting or sub-letting of accommodation which is not needed, since the sub-letting of controlled premises would be subject to a further application of controlled rent, and a person contemplating the subletting of part of his house would have to consider that the proposed tenant would become a protected tenant.
Then there is the factor of the constant erosion of the stock of houses available for renting by the fact that, whenever a rented house falls vacant upon the departure of a tenant, in far more cases than not the landlord puts it up for sale, however long he has to wait to effect a sale.
§ Mr. Powell
I shall explain that.
This was well stated in a leading article last week in the Municipal Journal, which made the following point clearly:The current situation is quite ridiculous. While many people are desperately in need of a home of their own…rent restricted houses are standing empty, for sale. One such—a five-roomed, self-contained maisonette in an over-populated district of south-east London—has lain unoccupied since February pending a sale. The controlled rent…bears no relation to present value; which is why the owner feels obliged to sell.The writer then calculated how little could be obtained in net rent from that house if the owner continued to let it.
§ Mr. Charles Royle (Salford, West)
But is it not a fact that the price being asked for the house also has some relationship to the fact that the house has been empty so long?
§ Mr. Powell
We all recognise the reality of the problem of the sale of previously rented houses and the simple reasons which lie behind it. Then there is the serious fact of immobility, the fact that people who have to move, or who are setting up a family, move from rent-restricted accommodation into circumstances in which they cannot even rent accommodation at market value, but must seek furnished accommodation until they can get to the head of the council waiting list in the place to which they have gone. The whole natural movement of the population is inhibited by the effects of rent restrictions.
1763 There is, I think, no doubt at all that both sides of the House and professional opinion have recognised that rent control is one of the main factors in the disrepair of houses. The Labour Party recognised that specifically and expressly in its recent publication on the subject. The effect on the repair of houses was studied as long ago as 1949 by P.E.P., which found that not only is there often no margin left after repairs have been done but that, in some cases, the whole rent is insufficient to meet the necessary outlay. Small wonder, then, that all observers deplore the constant deterioration in the condition of repair of our stock of rented houses.
To end this brief analysis of the consequence of rent restriction, there is the injustice of the whole system. There is the injustice between tenant and tenant occupying identical property rented entirely differently for no reason whatever except the vagaries of rent control. There is the injustice arising from the fact that there is no relation between the size of the property and its rent. There is the injustice arising from landlords being called upon in many cases, by rent restriction, to subsidise the incomes of tenants who are better off than they are.
There is, therefore, a general recognition of the evils which rent control, as we have it, is producing, and increasingly producing. There is a general recognition that the time is now ripe for that to be dealt with. [HON. MEMBERS: "No."] Hon. Members opposite have just produced their own proposals for dealing with the situation. They think that the time is ripe and we agree with them. The difference between us is the form of decontrol, whether we shall end rent restriction in the manner outlined in the Bill or whether we shall do it by transferring the whole stock of rented houses to municipal ownership—which is also decontrol. It is, therefore, only upon the form of decontrol, the method whereby rent restriction is to be abolished, that the two sides of the House differ.
Before I sit down, I shall make some observations upon the implications of the method which is proposed by the Labour Party. I want for the moment merely to point out one other feature which is common to both sets of proposals. It is 1764 that they both envisage a general rise in the level of rents. It is perfectly clear—to give them credit, hon. Members opposite have never sought to deny it—that the proposals of the Labour Party would imply, just as do the proposals in the Bill, a substantial rise in the general level of rents. That is one of the important differences, perhaps the most important difference, between the process of decontrol as we knew it between the two wars and that in which both sides of the House are prepared at this time to engage.
§ Mr. Raymond Gower (Barry)
Would not my hon. Friend also agree that there is one circumstance which is compatible with his proposals but incompatible with the proposals of the Labour Party, namely, that at present many local authorities will not accept these houses even when they are offered to them for practically nothing?
§ Mr. Powell
I do not think that it has been denied that, as I said, a substantial rise in rents is implicit in either alternative.
When rent restriction was previously dealt with by the House in the years from 1923 to 1938, which spanned the inter-war measures of decontrol, the situation was that during those years the cost of building was falling steadily and the value of money was rising. In 1934, the economic rents of council houses—I mean the unsubsidised rents—were practically down to the level of the subsidised rents of council houses built only eight years previously. Therefore, as each slice of rent controlled property was decontrolled between the wars, very little increase in the rents of those houses followed. If one compares 1956, the gross values—
§ Mrs. Jean Mann (Coatbridge and Airdrie)
Will the hon. Gentleman also take into account the rents of the houses which were decontrolled between the two wars?
§ Mr. Powell
I am simply placing on record the fact that, owing to the steady increase in the value of money and the steady decline in the cost of building, pre-1914 controlled rents and post-1918 economic rents moved to meet one another in those years, so that at each step of decontrol the consequent rise in rents was comparatively insignificant. 1765 One can judge that from a comparison between the gross values in the current valuation lists, which, in England and Wales, represent the assessment of 1939 market rentals, and the controlled rents of old controlled houses. On the whole—
§ Mr. Powell
Hon. Members may assign what causes they please to these phenomena, but I am giving the facts of the situation over those years. The old controlled rents are, on average, little below the assessment of 1939 free market rentals.
Today, controlled rents, whether they be 1939 rents or whether they be old controlled rents—that is, 1914 rents plus 40 per cent.—are completely out of line with current values. The cost of building today stands at about three and, a half times the 1939 level, the cost of living stands at about two and a half times the 1939 level, and average earnings are 3.7 times what they were in 1939.
§ Mr. Ellis Smith rose—
§ Mr. Powell
I really cannot give way. In addition, there is the fact to be borne in mind that average family earnings have risen more than in proportion to average earnings.
It is in consequence of these facts that the decontrol which both sides of the House envisage involves an increase in rents, though by no means necessarily an increase proportionate to the increase in purchasing power. However, because rent restriction has been in force for seventeen years at least—in the case of many houses, it has been in force for more than forty years—decontrol cannot be sudden or immediate. It must allow for necessary readjustments, and the transition must be smoothed.
I wish now to turn to the provisions of the Bill which relate to decontrol. I refer to Clause 9. The proposals are as follows. Hon. Members may also find it convenient to have in front of them the statistics published in Command Paper 17, entitled "Rent Control".
1766 Where an owner-occupier is at present in possession of a house, that house will, from now onwards, be decontrolled and the Rent Acts will cease to apply to it. Hon. Gentlemen will see from Table I that 4.4 million houses—that is the England and Wales figure—are affected by that provision. This means that houses will in future be let which otherwise would not be. There are many circumstances in which an owner-occupier, either moving temporarily to another town on business or, having built a house for retirement but not needing to occupy it for a year or two, would wish in the meantime to let that house and allow use to be made of the accommodation. Today, that does not happen. In future, the owner of a house will be able to let that house out of control.
In the second place, wherever a controlled tenancy comes to an end, the dwelling to which that tenancy applies will also be decontrolled. The House may be interested in an estimate of the number of houses which may be involved as time goes on as the result of this provision. Between 1923 and 1933 there was a similar provision for the decontrol of houses upon the ending of a controlled tenancy. In that period, it was found that about 3 per cent. per annum of the houses in the bracket to which this provision will now apply, came into possession, and were consequently decontrolled.
If that very rough estimate be applied to obtain an estimate of the number of houses remaining under control under the Bill, it results in an annual decontrol of about 125,000 houses a year, all cases in which the increase in rent does not fall to be met by the controlled tenant and all cases where the controlled tenancy has, in any case, come to an end.
§ Mr. Barnett Janner (Leicester, North-West)
Will the Parliamentary Secretary tell the House what happened after the 1923 decontrol; whether there was not an outcry in the country and what the Government had to do in consequence of it?
§ Mr. Powell
What happened was that in 1933 the decontrol upon vacant possession of the very small houses where there was still a continuing disbalance of supply and demand, was terminated. Undoubtedly, between 1923 and 1933 the decontrol of other houses contributed to a 1767 general loosening of the housing situation in those years.
Undoubtedly, the provision which I have been explaining will have a most beneficial effect. It will mean that houses such as that to which the Municipal Journal, in the quotation which I made, referred, will no longer be held empty month after month, waiting for a purchaser, although quite unsuitable for an owner occupier. [HON. MEMBERS: "Why?"] Those houses will now be let, and it will be the object of the landlord—[HON. MEMBERS: "Why?"] Why? I will tell hon. Members opposite why. Because, in future, there will be no difference between the value of the house with vacant possession and the house with tenants.
They will be let at the market rent. The capital value of a house is the capitalisation of its market rent. The inducement to an owner to attempt to get the current value of his house by selling it will disappear. He will have the object of letting that house again as soon as possible. In future, the object of landlords will not be to get possession, but to avoid voids.
§ Mr. G. Lindgren (Wellingborough)
The Parliamentary Secretary has perhaps put himself out of line with his right hon. and hon. Friends now, by doing himself an injustice. His suggestion was that the type of house now being held for sale is unfit for owner-occupation, which means that a tenant can be expected to occupy accommodation which is inferior to that of an owner-occupier.
§ Mr. Powell
Oh, no. I do not think that the hon. Member really disagrees about this matter. There are large numbers of older houses rented which can be and should be, when maintained in proper condition, able to provide very good accommodation but for which an individual ought not to be induced to take responsibility as a family investment. I do not think that there is any difference between us on that point.
When the Bill comes into force there will already, as a result of this provision, be a considerable initial reservoir of houses to let, either which have come into possession since the terms of the Bill were known or which were already standing empty awaiting a purchaser. 1768 They will provide a useful transition and assistance for the original implementation of the provisions of the Bill.
The third measure of decontrol is that houses above £30 rateable value in the provinces and £40 rateable value in Scotland and in London, will be decontrolled. From Table II hon. Members will see that these houses number 750,000 in England and Wales, and that of them 190,000 are in London. The first point I want to make about these houses which are being decontrolled by rateable value is that they are only a minority of the total number of houses of that class and type. In fact, they are only, as the figures in the table show, just over a quarter.
Where similar decontrol occurred between the wars the number of houses decontrolled bore a much higher proportion to the total stock in the relevant band. For example, in 1933, when houses were decontrolled down to £35 rateable value, these houses were 44 per cent. of the total. In 1938, when control was brought down to £20, these houses were 32 per cent. of the total. The houses being decontrolled are a minority of the total available, but that minority is constantly diminishing because it is for this class of owner-occupier that private enterprise is constantly building at a high rate; so that with every year that passes, and, indeed, before these provisions are implemented, the proportion of these houses to the total available of that class will be even smaller than one in four.
A large number—and it is a large number—are being decontrolled at once, half as many again as were decontrolled at once in 1933, a sufficient number, the Government believe, to provide for adequate consumer resistance and to ensure that demand is not concentrated upon a comparatively smaller number of houses which go out of control.
I was interested in the leading article today in the Manchester Guardian. [HON. MEMBERS: "Oh."] I thought I would venture to quote this journal as not one which has been conspicuous for its general support of the Government. The article says:When we add to these"—that is, the 800,000—many thousands of controlled houses that have been standing vacant for months—simply because it pays the landlord to wait for a buyer 1769 when a tenant leaves rather than let again at the controlled rent—we get a market that should be adequate in size to keep free rents down to an economic level.That is a calculation which, the Government believe, will be proved correct.
§ Mr. Thomas Fraser (Hamilton)
Does this apply to houses in Scotland? The Parliamentary Secretary is moving the Second Reading of a Bill that applies to Scotland, but I should have thought that what he has said does not apply to Scotland.
§ Mr. Powell
The hon. Gentleman can read from the tables of statistics the similar proportion which these houses in Scotland bear to the total stock. I invite him to do that.
§ Mr. George Chetwynd (Stockton-on-Tees) rose—
§ Mr. Powell
Now that I am describing the provisions of the Bill I should very much like to be able to proceed with my speech without giving way.
Where houses are decontrolled under Clause 9, not upon possession but by rateable value, there will be a minimum of six months' notice from the landlord to the tenant, a minimum of six months during which a new rent—for, in the vast majority of cases, that is what it will be—can be negotiated between the two. The detailed provisions for that notice are set out in the Fourth Schedule to the Bill.
I would once again emphasise to the House that in the vast majority of cases the object of the owners of these houses will be to ensure that they are not vacant of a tenant. If they are to get the value out of those houses, they will have to continue to let them at a market rent at which they can find tenants and they will have to bid for those tenants—[HON. MEMBERSH "Oh"]—in what I have shown is a very large market indeed.
§ Mr. Kenneth Robinson (St. Pancras, North)
Can the hon. Gentleman tell us where the consumer resistance is coming from in London, where the demand grossly exceeds the supply for this type of house? What estimate have the Government made of the increased rents which are to be asked by landlords for this decontrolled class of property?
§ Mr. Powell
In London alone, as I have informed the hon. Member, 190,000 houses will be decontrolled at once. In addition, there will be a number of houses which have come into possession since—indeed, before the publication of the Bill—which will all be on the letting market at the same time. It is the common experience of hon. Members that a great many houses which have been let and which, up to the present, have been subject to rent control in London, are standing vacant in the vain endeavour to sell them.
§ Mr. G. R. Mitchison (Kettering)
I have restrained myself with great difficulty from interrupting before and I am obliged to the hon. Gentleman for giving way. I want to ask only one question. Does he, or does he not, say that the demand for houses in London will have been met by the end of 1957?
§ Mr. Powell
Undoubtedly there are areas of the country where the balance of supply and demand is different from that in other areas. In London there is a special situation, but the Government see no reason to doubt that the rents which it will be possible to obtain for this large number of rented houses coming on to the market at the same time will be not much in excess of the rents which will be permissible under the rest of the Bill for houses remaining in control.
Before I pass from the decontrol provisions to those relating to houses remaining in control, I want to emphasise that these provisions do not affect the protection accorded to members of the auxiliary and reserve forces. None of the decontrol provisions affect their security in any way.
There will then remain—here I am giving the England and Wales figure—4¼ million rent-controlled houses which are at present let. Those houses, except upon possession, will not be decontrolled until the pattern which will emerge as a result of the rest of the provisions of the Bill can be clearly seen. If hon. Members will look at Clause 9, subsection 3, they will see that the utmost flexibility has been retained so that decontrol can be varied according to place and to type of house which falls under it from time to time.
Now I come to the provisions of the Bill relating to the houses which will 1771 remain under the Rent Acts. I am going to deal with the English Clauses in this context. My right hon. Friend the Secretary of State for Scotland will be dealing tomorrow with the different Scottish provisions which, in that respect, apply.
§ Mr. Powell
In the case of the 4¼ million houses which remain controlled, all the provisions of the Rent Acts, security of tenure, and so forth, will continue to apply, but the rents will be able to be raised in a manner prescribed in the Bill up to certain limits if they are below those limits. The basic constituent of these new rent limits is a multiple of the 1956 gross value, that is to say, the gross value of the house shown in the current valuation lists subject to any alteration which may be made in pursuance of a proposal made before 7th November this year.
This basing of the new rent limits upon gross values provides for the first time some means of bringing into uniformity the gross variations at present between controlled rents. It will eliminate the existing unfairnesses and anomalies since, for the first time, we have got a nationwide valuation of the 1939 rental of dwelling-houses. To this basic constituent of a multiple of 1956 gross value will be added, as under the Rent Acts at present the rates payable for the time being so far as they are payable by the landlord, 8 per cent. of any expenditure by landlords upon future reasonable improvements and also the cost of any services, furniture, and so on, provided by the landlord for the tenant.
The multiple by which the gross value is to be multiplied in the calculation of the rent limit varies according to the responsibility of the landlord for repairing. The normal situation is that the landlord is responsible for all repairs except internal decorative repairs. Where that is so the multiplier wil be 2; the basic constituent of the rent limit will be twice the 1956 gross value. Where the landlord also does internal decorative repairs, the figure will be 2⅓. On the other hand, 1772 where he is responsible for no repairs at all, the figure will be 1⅓. In the normal case the figure will be twice the 1956 gross value.
This figure was selected as one clearly below the rise since 1939 both in costs generally and also in wages and earnings, since the intention was to retain a real measure of protection and control. Even so, in many cases I believe that this new rent limit will prove to be in reality a maximum which in many cases will not in practice be actually obtained. The existing rent will be able to be raised in the prescribed manner up to the rent limit I have described by stages. It will be necessary for the landlord to give three months' notice of any increase and, for any increase—where one is allowable—exceeding 7s. 6d., nine months' notice will be required. That is under Clause 2 of the Bill. For 2 million of the houses concerned the increase under the Bill cannot in any case exceed 7s. 6d. a week and for more than a further 1 million it cannot exceed 10s. That appears from Table IV in the White Paper.
Looked at from the point of view of the resultant maximum net rents, the new maximum net rent will not exceed 15s. for more than 2 million houses, or £1 for more than 3 million houses. As long as control continues, it would clearly be wrong to allow the increase to be obtained for a house which is not in a condition to command the rent.
§ Mr. Mitchison
May I ask this question before the hon. Gentleman leaves that point? All the leading newspapers simultaneously published a statement estimating the average increase at just under 10s. I think that it must have come from the Ministry. Can the hon. Gentleman tell me whether it was one of the figures which the Ministry provided and, if so, was it one of the correct ones or incorrect ones?
§ Mr. Powell
The hon. and learned Gentleman has only to look at Table IV of the White Paper, which shows the increases and the number applicable for each increase and he can work out the average for himself. [HON. MEMBERS: "No."] I mean that it would be possible for him to work out the average for himself while looking at Table IV.
It was essential that a safeguard should be provided to ensure that the new rent 1773 was only obtained for a house which was fairly in a condition to provide for it. Accordingly, there can be no increase for houses which are subject to any statutory procedure for unfitness—the House will find this procedure set out in detail in Clause 2 (2, c)—or for any house whose landlord fails to remedy items of disrepair notified to him by the tenant and upon the tenant's application certified by the local authority.
Where an increase of rent has been obtained under the Bill, if the house subsequently fails to be kept in a condition to command the rent there is a provision for the abatement of the rent to the rent that would be obtainable if the landlord were not responsible for doing any repairs at all. This procedure is set out in the First Schedule to the Bill. Briefly, it is that the tenant at any time, and not merely upon receiving a notice of increase from the landlord, can serve upon the landlord a list of the defects of repair which he considers to exist in the house. The landlord can put them right, or he can give an undertaking to put them right. If he failed to do either, the tenant can go to the local authority and ask for a certificate of disrepair. Before the certificate of disrepair is issued, the landlord has a last chance of giving an undertaking to remedy the defects.
If the landlord undertakes to remedy the defects, he has six months in which to do it. At the end of that time—
§ Mr. Powell
—if the work is not done, the abatement provided by the Bill is suffered and the excess of rent which has been overpaid is recovered week by week until it is paid off.
Secondly, the tenant is protected where the house is defective in repair either against an initial increase or, if an initial increase has been obtained, against a larger rent being payable to the landlord than would be payable if the tenant were responsible for all items of repair himself.
The Bill includes certain minor provisions which, I think, will be widely welcomed. One is that in the case of furnished lettings which remain subject to the Furnished Houses (Rent Control) Act, 1946, a rent book must be provided 1774 and duly maintained. Incidentally, the Bill removes from the control of the tribunals lettings of premises which would not be controlled if they were let unfurnished.
The existing right of the owner of a house to apply to the court for possession of the house for the use of himself or his family upon proof that the tenant will not suffer greater hardship by leaving than the owner does by being excluded from possession will be extended to include persons who acquired houses up to the date of the publication of the Bill.
I think it is right that we should attempt to see the financial implications of the new rent limits for houses remaining in control in their wider perspective. In the first place, these increases will affect the actual rent of, at the most, four out of the 13½ million houses in England and Wales.
§ Mr. Powell
The hon. and learned Gentleman will realise that many of these houses are subject to statutory procedure for unfitness and many will not qualify for reasons of disrepair, so I think that the figure four—4 million out of 13½ million—is on the high side rather than on the low. These increases, as they take effect, will do so gradually over many months, and for the great majority of the households effected the new maximum rent will amount to less than 8½ per cent. of current adult male earnings.
I have chosen that standard of comparison because the House will recollect that the housing subsidies from the 1946 Act onwards were based by the party opposite upon the concept of a rent which represented 10 per cent. of average adult male earnings. The rents of these houses will be proportionate to the size and the value of the accommodation since they are based on the valuation of free market rental value.
§ Mr. Lindgren
Does the hon. Gentleman mean to say that a house built prior to 1875, when there were no building regulations, is comparable accommodation to a house built under Dudley standards in 1946, as to purchase and the rest?
§ Mr. Powell
I am also suggesting that such a house will not be found in the 1775 higher rateable value brackets which will qualify for a higher rent.
The net rent—and it is upon the net rent that these increases operate—
§ Mr. Callaghan
I will certainly withdraw that, Mr. Deputy Speaker, because the remark was not addressed to you. I was referring to some of the landlords on the other side of the House.
§ Mr. Deputy-Speaker
If right hon. and hon. Gentlemen would address their remarks to the Chair, we should perhaps get on better.
§ Mr. Powell
The net rent—and it is upon the net rent that these provisions of the Bill operate—represents, in the actual cost-of-living index, 3.6 points out of 100. It will, therefore, be seen when one considers as a whole the financial bearing of the increases of this order the impact both upon the cost of living and upon family budgets is very much less than many people have suggested.
This is the Measure which, with the safeguards and provisions for transition which I have outlined, the Government believe will go far to meet the evils which I outlined at the beginning of my speech. It will halt the drain upon rented accommodation, it will release additional accommodation which is under-used or wasted, it will arrest the deterioration of millions of houses for lack of maintenance, and it will give to persons who are moving or setting up home the opportunity to find accommodation in the market.
The Bill will end long-standing injustices between tenant and tenant and between landlord and tenant. We want this or something like it to remedy a situation which, by universal agreement has become intolerable. [HON. MEMBERS: "Intolerable to whom? "] Intolerable to those represented on both sides of the House, because both sides have made proposals for dealing with it.
The only alternative is decontrol by 100 per cent. public ownership of the accommodation which is now rented in control. I think it is right that the public 1776 should recognise what that alternative method of attaining these agreed ends would mean. It would mean that virtually all in this country except owner-occupiers would be council tenants. It would mean that for those who want a home there would be no recourse but to the waiting list of the local authority.
§ Mr. Powell
It would mean that those who required to move from one part of the country to another would have to wait until they could be admitted to the waiting list of the local authority in the place to which they had to go. So serious have hon. Members opposite felt this difficulty to be that in their policy they say thatDifficulties could arise—which is putting it mildly—over transfers from other parts of the country. If necessary we shall assist the local authorities to set up a central clearing house that will be able to co-ordinate such work.In a man's own town he goes on the local authority waiting list, but, otherwise—
§ Mr. Powell
—if he wants to move, he goes to the local authority's central clearing house. That is the proposition which hon. Members opposite place before the country. It is not, I believe, the solution which the people of this country would wish to embrace. [HON. MEMBERS: "Ask them."] I do not believe that in circumstances in which the people are able to command an ever-increasing standard of living, in which they are able to demand and obtain for themselves not only the necessities but, happily and increasingly, the luxuries of life—
§ Mr. Powell
—they will not be willing or able to pay the current value of the accommodation which they occupy. I do not believe that they will wish to continue to be subsidised by their fellow citizens through rent control or become the universal tenants of the local authorities.
It is upon that belief and that assessment that the Bill is founded, but it is also founded upon a still more fundamental conviction: that it is a caricature 1777 of our society to see it divided into antagonistic classes and sections with mutually opposing interests—employers against employees, suppliers against consumers, landlords against tenants. It is a conviction that if our laws are justly and reasonably framed, the profit and the advantage of one section is the gain and not the loss of another section, the gain of one can contribute and should contribute to the comfort and convenience of the other—
§ Mr. Powell
—and the nation can be richer and stronger by the mutual and not conflicting interests of both.
§ 4.47 p.m.
§ Mr. G. R. Mitchison (Kettering)
I think it would be kinder not to say too much about the Parliamentary Secretary. He was put up to argue an unarguable case and to move the Second Reading of a preposterous Bill. He kept completely off the Scottish part of the Bill, as distinct from both the English part and the United Kingdom part. I shall do likewise, but I should like to make a protest about this situation.
It is quite wrong that there should be a single Bill to cover completely different conditions and completely different proposals about the increase in rents in Scotland and in England. If there is a single Bill, as there now appears to be, I think it ought to be dealt with on the Floor of the House in order that Scottish Members may have a proper opportunity of dealing with their part of the Bill. If that is not to be done, then the specifically Scottish part of it ought certainly to be sent to the Scottish Grand Committee: otherwise, the English will have to listen to a great deal which they do not understand and the number of Scots who will be able to deal with it in Committee will be inadequate for the importance to them of what is proposed.
Having said that, I should like to make one further incursion into Scotland and adopt a sentence which fell from the Secretary of State for Scotland in the course of a housing debate the other day. He said:I am afraid that my vocabulary does not contain enough adjectives to compete."—[OFFICIAL REPORT, 7th November, 1956; Vol. 559, c. 243.]1778 Nor does mine in relation to this Bill, and I make my choice rather carefully. I call it an iniquitous Bill—and so it is, for two reasons. First of all, the one obvious and certain effect of it is to transfer a very large sum of money from people who cannot afford to pay it, and many of whom are very poor indeed, to people who do not need it nearly as much, that is to say, to the landlords, corporate and individual, of this country.
The second major effect of it is to deprive a very large number of people of a security in the occupation of what has now become their home which they have enjoyed for years and to give them no sort of security in return. I am therefore justified in calling it iniquitous, and I should like to take three other adjectives and follow them out: it is ill-timed, it is harsh and it is misconceived.
I will begin with "ill-timed." The Parliamentary Secretary seems to have forgotten that the Government made a previous attempt to deal with rent increases. Three years ago, in November, 1953, they produced what they called "Houses The Next Step," Cmd. 8996. In Section 27 of it there appears these words:Since there is still a severe housing shortage, rents of privately-owned houses cannot yet be freed from control. Her Majesty's Government do not think that it would yet be right to free even the houses in the higher rateable value categories as was done in the 1930's; that method of approach would not in any event"—that is to say, even if it could be done now—deal with the problem of maintenance and repair among those houses left under control.In consequence, they brought in the 1954 Act, Part II of the Housing Repairs and Rents Act, 1954, which made any increase conditional on the landlord spending money on repairs.
In this Bill there is not a word about that, as I shall show later. I am not talking about liability; I am talking about the repairs actually being done. That is not the end of the story. That was before the General Election of 1955 and, of course, in a General Election there are at least two ways of influencing public opinion. One way is by political broadcasts. There was not a word about this in the political broadcasts—I have looked at all of them—but there was something else.
1779 My right hon. Friend the Member for Ebbw Vale (Mr. Bevan) appears to have said at Huddersfield on 11th May:If the Tories get back with a majority all rent-controlled houses will have an increase in rent.That seems to be exactly what the Bill will do, in some cases directly and in others indirectly. Here, two days later, are the comments from the Conservative research department—their "Daily Notes." This is what they say:This is reminiscent of an earlier canard of Mr. Hugh Dalton, who said at the Margate Conference on 2nd October, 1951, that 'a general permission to raise rents everywhere was what the Conservatives wanted'.Then they say:There was no more truth in the report circulated by Mr. Bevan than there was in Mr. Dalton's insinuation of October, 1951.This is what they told the electorate, or asked their speakers to tell the electorate. They were not content with doing it once. They did it again the next day. They referred to the same remarks by my right hon. Friend the Member for Ebbw Vale and said:Apart from the fact that this is not true…and then they proceeded to a number of criticisms of Socialist policy.
What do hon. Members think they headed this little paragraph? They headed it:Rents: Misleading the People.Who was misleading the people? That is what I should like to know. At any rate, we can take it for certain that, since these election notes presumably represented the policy and the views of the Conservative Party at that time, they did not at that period think—this was in May, 1955—that rent decontrol was in the least bit required.
Now we hear a most remarkable proposition, that by the end of 1957 supply of and demand for houses will have coincided. "We shall be able to meet," say the party opposite, "the demand for houses by the end of 1957." I do not propose to repeat what I said in a housing debate the other day, but let me just take one or two remarks out of it. By an understatement characteristic of many Government blue-books, the Ministry's own Report for 1955, on page 3, speaking 1780 of the present as I read it—it was published last month—admitted that:.. this problem"—That is to say, the severe shortage of housing accommodation—is still acute in some areas.…I think that that was putting it very mildly indeed There is a lot more than that. The figure quoted by the Parliamentary Secretary from the P.E.P. report, which incidentally was a report on the 1951 census, cannot be regarded as anything more than a bare minimum for one thing and that thing is the demand on a family basis.
I remind the hon. Gentleman, who seems to have forgotten, that the Government are conducting a great slum clearance campaign at the moment. There are nearly 1 million slum houses in the United Kingdom and they are now being cleared in England and Wales at the rate of 33,000 to 34,000 houses a year. Even the astronomical arithmetic occasionally indulged in by the Minister and his hon. Friend would hardly justify them in supposing that they can clear a deficit of 1 million houses at the rate of 33,000 a year in one and a half years. That is just a little wrong.
§ Mr. Powell
Perhaps I can make it clear to the hon. and learned Gentleman that the figure of 750,000 houses between the end of 1954 and the end of 1957, to which I referred, is exclusive of any houses built for slum clearance.
§ Mr. Mitchison
It appears to be abundantly clear—as indeed everybody knows; it is really foolish to tell the House this sort of thing—that the supply of houses will not be sufficient to meet the demand by the end of 1957. Just look at the figures. The housing position is really acute. Right hon. and hon. Gentlemen opposite who produce the sort of nonsense that was just talked by the Parliamentary Secretary about supply meeting demand are shutting their eyes to the true facts of the situation and seem to me to be paying remarkably little attention to the constituencies which they are supposed to represent. Let them go and ask some people who live in their constituency about housing. They will tell them fast enough.
Let me remind the House of one or two facts, as distinct from the fancies 1781 with which we have been regaled so recently. Take the London position. Did the House notice how the hon. Gentleman shuffled away in a coil of verbiage from the very simple question, do the Government or do they not say that the London housing shortage can be met by the end of 1957? It is possible to answer that question "Yes" or "No," and the hon. Gentleman is perfectly aware as is the rest of the House, that to answer it "Yes" would be absolutely untrue.
There are 165,000 cases on the London housing list, of which 53,000 are urgent; and apart from a quite small figure for slum clearance all that the L.C.C. can do at present is to cope with them at the rate, at most, of 2,000 a year. It is clear that not only is there an acute shortage of housing in London but equally that it is wicked nonsense to say that that shortage can be met in a matter of a year or two. [An HON. MEMBER: "What about South Wales?"] I have no doubt that it is the same in South Wales, but I cannot give all the figures. This applies all over the country, but the figures vary. Here are some of the figures for the big cities: Birmingham and Manchester, a shortage of over 200,000; Liverpool. 150,000; Sheffield and Leeds, 70,000. Are these figures consonant with the suggestion that the supply of houses will meet the demand by the end of 1957?
This is all from the point of view of family accommodation, but look at the condition of the houses. Remember that, of the houses we are talking about now—the let unfurnished, rent controlled houses—nearly one-half have not got a bath and about one-quarter have not got a water closet of their own. What do the Government propose to do about that sort of thing? Remember that this Bill is their one contribution, so it appears from the Gracious Speech, to the housing problem that I have just outlined. Really, how a Government charged with the responsibility, among other things, of housing our people can take that line and make that defence of it passes my imagination.
This is not a new proposition from the Conservative Party. The House of Commons was not favoured with it first. On the contrary, by the beaches of Llandudno—if it has any—in the bracing 1782 air of those parts, the right hon. Gentleman faced the embattled and somewhat indignant Tories. They had not had enough tax reductions; prices were too high; some of the things that had been said, even to them, at the last election had proved to be a trifle untrue, and something had to be done about it.
What did the right hon. Gentleman do? He first of all made some remarks, to which I shall refer in a minute, about the Socialist policy in these matters, and then he produced this:Our Conservative solution is a much simpler one. It is progressively to abolish rent control altogether.Let the House make no mistake about it—this Bill is simply the first step, and a very large step at that, towards the complete abolition of rent control.
Let us look at his reasons. The first one was that it creates an artificial shortage by discouraging letting and encouraging under-occupation. Of course, if one encourages letting by putting up the rents, one does not increase either the number of houses or the number of people who live in them. What one certainly does is to rule out a large number of people who cannot any longer afford to pay the rent. That will be the effect of this Bill.
I would not deny for one moment that there is under-occupation, but it is not confined to this type of house. It is just as common in owner-occupied houses as in others; and I do not believe that the rent is a substantial reason. At any rate, in most of the cases I know, the reasons have been family rather than economic. People who had raised a family had themselves grown older and did not want to move from the house: and, I might add that, sometimes—and equally, of owner-occupiers—they could not afford to move.
I say that, because this is not just a problem relating to rented houses. The remedy for it ought to be exchange. In Committee on the 1954 Bill we brought forward a Clause to give local authorities power to promote and facilitate exchanges, not only between council tenants and council tenants but between other tenants. The right hon. Gentleman's predecessor, the present Chancellor of the Exchequer, said a few kind words about it—and then turned it down because it gave too much power to the local authorities.
1783 That may or may not be a good reason, but let us see what happened. The next thing was the issue of Circular No. 68 in 1954—not the first on this subject—which urged local authorities to do certain things; and among other things, to get together with private landlords to find out what could be done about exchanges. Reports were to be made to the Minister. So far as I know, nothing more ever has been done—certainly, nothing has been published—and I suggest to the right hon. Gentleman that, in connection with this question, which ought not to be exaggerated, there is a very great deal more to be done yet before resorting to the drastic remedy that he advances in this Bill.
Let us come to another criticism. I am dealing now with what this Bill will not do, and I have just instanced one thing that it will not do.The first feature of this haphazard and obsolete system "—said the right hon. Gentleman:is its fearful unfairness.I would agree at once that there are anomalies in rent-restricted houses at present. It would be quite absurd to deny it. Nevertheless, the extent is, I think, exaggerated. The anomalies are almost entirely in old controlled houses—that is, a minority of the houses with which we are now concerned—and in another type of house, houses which were let for the first time because the owner-occupier moved out during the war, or after the war. There are a great many such houses, and I shall have to refer to them in a moment in another connection.
The old controlled houses were those which in 1939 were only of a value of, or under, £30 in London and £20 elsewhere. All those houses had, at various periods, been decontrolled during the years between the wars, and quite a number had, in fact, been recontrolled. It is perfectly clear that that type is the smallest, cheapest and poorest house. That is the type of house with which we will interfere by going about it in this way.
There is something else which supports me in my opinion that the "fearful unfairness" of the system is much exaggerated by the right hon. Gentleman Cmd. 17, the statistics to which we have been referred, shows that there was a general correspondence—I am referring to Table III—between the rents and the 1784 gross rateable values; and the gross rateable values, let it be remembered, are assessed on their market basis, not on a rent control basis. They are assessed on more or less the usual terms, with the landlord's liability for repairs and maintenance.
If there were, in fact, a very large-scale spread of anomalies one would find them reflected in the Table, and it is not there. I say, therefore, that while I do not regard the present control, in its incidence, as by any means perfect, and while I recognise that there are anomalies in it, it certainly does not amount to anything that would justify the right hon. Gentleman in what he is now proposing.
I come to another point. It is said that many of these rents are unreasonable. I refer now to the owner-occupied house from which the owner moved during the war, or after, and let for the first time. Obviously, there are a great many of those houses, and there is at present a provision by which rent tribunals can fix a reasonable rent for them. It was the party opposite that, in 1954, brought in that provision by allowing those tribunals to increase the rent in those cases, whereas previously they had been allowed only to reduce it. The Government, therefore, provided a method for rent tribunals to fix reasonable rents for, at any rate, those houses. But when I asked the right hon. Gentleman the other day how many of them there were, he replied:I have no information on this point."—[OFFICIAL REPORT, 19th Nov., 1956; Vol. 560, c. 58.]Let us see what it amounts to. If, in fact, this Bill is to allow rents higher than those that the rent tribunals would allow then it is to allow unreasonably high rents in all of those cases, and the machinery for fixing reasonable rents is being repealed by this Bill. It seems pretty obvious that for certain purposes, and in certain cases at any rate, the party opposite prefers the unreasonable to the reasonable.
Let us look at one very simple effect of the Bill which, I noticed, was not mentioned by the hon. Gentleman in putting it before the House. I asked him if he supported the figure, given in all leading newspapers, of an average increase of 10s. a week. He did not answer. He referred me to tables. They do not give an average figure, but if one tries to calculate 1785 it from the figures given it comes to something like 8s. a week.
I am going to take the lower figure, the 8s., the average permitted increase of a two-factor house—that is to say, with the landlord doing the repairs. It is not going to be the end of the story, so the Parliamentary Secretary will get one or two deductions if he waits. Take 8s. a week, or £20 a year roughly speaking, on 4¼ million houses. The result is nearly £88½ million a year, which is going to be added to the landlords' rents in this country.
From that figure we have to make a deduction for anything that was done under the 1954 Act, called by its promoters "Operation Rescue" and by my right hon. Friend the Member for Ebbw Vale a "mouldy old turnip" for the landlords. The landlords declined to be rescued and they declined to eat the turnip because they have done remarkably little about it. It is impossible to get accurate figures, but there is something to be got out of the National Assistance Board's Report for 1955, on page 9. If we apply the figures there to the whole bulk of these houses I think I am safe in saying that they certainly do not account for more than £1 million out of the total figure of £88.4 million.
Next let me refer to the cases where repairs are paid for by the tenant. There are not many such cases, as the Minister rightly pointed out. The usual position is that nobody is responsible for the repairs, but very often in the rent book there is a provision that the landlord should do the outside repairs. It is a question of whether any allowance should be made for that in the future. We are going to see what the effect of it is.
As to the liability to repair—that is to say, the factor that would reduce the increase from twice to 1⅓ times the gross value—there can be very little doubt that there is little or no liability in the vast majority of cases. I am perfectly safe in saying that on the reduction in rents alone £85 million or more is going out of the pockets of the tenants into the pockets of the landlords. One does not know why, although I think one may guess.
That, however, does not account for decontrol. That is anybody's guess. But I feel certain that the average rise on 1786 decontrol will be a great deal bigger, and I say with confidence—and I invite the right hon. Gentleman to deny it if he can—that the result of this Bill is going to mean at least £100 million a year extra into the pockets of landlords. The sum of £100 million a year is the total amount that was paid towards council housing out of council rates and public taxes in 1955. That is the extraordinary result of this effort.
I come next to the question who is going to pay these increases? I should like to refer to the Oxford Institute of Statistics bulletin on the results of the 1952 housing survey. The document is mentioned in Cmd. 17, and, by the way, in one of its sidelines it pointed out how extraordinarily inaccurate the Government's previous statistics were. But I will let that be.
Out of two tables in that bulletin it becomes quite clear that more than half of these unfurnished houses are occupied by manual workers—57 per cent. of them; 18 per cent. by white collar workers, much better off; and no less than 25 per cent. by a much smaller group who are called in the census the retired and unoccupied, and whose gross household income averages £330 a year. Those people pay nearly 12 per cent. of their gross income in rents and rates. That is one class of person who will have to pay these higher rents.
What is the result going to be? Again, taking the information in the National Assistance Board's Report, somewhere about £16 million or £17 million of the £88 million increase that I was talking about is going to be paid by the National Assistance Board. Does the right hon. Gentleman really intend or welcome this remarkable result, or does he deny it? That is what the effect seems to be. It is impossible to assess it accurately, I agree, but the figure is not going to be very far out, and it is abundantly clear that a substantial contribution towards the funds of the landlords in England and Wales is going to be made by the National Assistance Board in helping tenants to pay their rents. Are hon. Members opposite, who are usually so sedulous in their conservation of public funds, wholly satisfied with that result? Are there not some uneasy qualms of conscience among them?
Let me mention another public service which will have to pay these increases— 1787 and let it be remembered that they have to be paid. These people will not have anywhere else to go. That is the plain English of it. If the Government put up the rent of people as poor as the majority of these tenants are, and certainly as poor as the people to whom I have been referring as retired and unoccupied, which usually means the very old, what happens? They do not get any more money. They take it out in food.
If hon. Members opposite would look back to 1933 and study the Proceedings of the Royal Society of Medicine, they will find that the then medical officer of health for Stockport carefully examined what happened when a large number of people were moved out of a very poor area into a new housing estate at much higher rents. They could not afford the higher rents. They took it out in food, and the mortality rate rose.
Do hon. Members opposite by this Bill, which will no doubt give great satisfaction to the landlords, really wish to be responsible for starving a considerable number of people and increasing the mortality rate among those who occupy these houses, many of them old houses?
The right hon. Gentleman said at Llandudno—a bracing place—The Socialists are certain to misrepresent our motives.I can see him explaining that it is not his motive to starve those who are already rather near the starvation level. I am sure he would say that. But when men are in Government they must be judged by the effect—the certain effect, as I see it—of what they are going to do. They are not justified, in order to correct a few anomalies, a few questions of under-occupation and the like, in allowing landlords to double the existing rent. I say "to double the existing rent" because in the tables in Cmd. 17 that appears to be roughly what is going to happen. There is no exception—not even the smallest houses. They used to be left under control in the old days, but not under this Government.
Before turning to the next side of the Bill I want to mention one other matter in connection with repairs. I wonder if hon. Members opposite realise one effect of what has happened. They are going to raise the rent without changing the house. The only protection which most 1788 tenants have against a landlord, if they want to get repairs done, is that for small houses the landlord is, notwithstanding any stipulation to the contrary, bound to keep the premises fit to live in, and whether or not the premises are "small houses" is judged by the rent. The rent limit is £36 in London and £20 in the provinces. The effect of this provision will be to deprive a large number of tenants of small houses of the only right they have had so far to get the landlords to do repairs. That is a serious matter.
I turn from that to the Conservative solution, the much simpler one, to abolish rent control altogether. The party opposite has made a fairly good step towards it. It has first of all removed what was called at Llandudno a "slice of higher value houses". What happens? The result is that within a limit of time mentioned by the Parliamentary Secretary—I will not repeat it—a landlord is entitled to turn out any occupants of those houses. The numbers involved are quite considerable. Take them at the three-quarters of a million mentioned.
Let us consider some of the types of house to be particularly affected. May I say to right hon. and hon. Gentlemen opposite that I find that a very great many of my hon. Friends live in this kind of house. Perhaps hon. Gentlemen opposite do. If they do, they will find that they have to make a bargain with the landlord, and the better the house the more likely the landlord is to turn them out because, if the place has been well kept inside by the tenant, the better is the bargain for the landlord if he can get the tenant out. Do hon. Gentlemen really suppose that in this large-scale marauding expedition sentiment is going to play a large part?
§ The Secretary of State for Scotland (Mr. James Stuart)
Does the hon. and learned Member for Kettering (Mr. Mitchison) really mean to suggest that the landlord will want to lose a good tenant who has kept the place in good order?
§ Mr. Mitchison
I should have thought it was not necessary for me to assure the right hon. Gentleman, who is Secretary of State for Scotland, that financial considerations do move landlords even in England and Wales, and that they would get a better rent out of a well maintained house than they would out of a ill 1789 maintained one. They would therefore prefer to have possession, either for sale or to let, of the better maintained house. I see that the right hon. Gentleman is falling a little short of adjectives for me. I am sorry.
Let us consider a few more cases. My right hon. Friend the Member for Battersea, North (Mr. Jay) had a letter from a Tenants Security Association formed as a result of this Bil. So did the right hon. Gentleman the Minister of Housing and Local Government. I can assure him that large numbers of people have written to me saying that they have written to him also; he must have quite a mailbag now—more than the seven telegrams, was it, that the Conservative Central Office admitted that the Prime Minister received about Suez?
What did these people say? The chairman of the association is a clergyman, and I had better find the association's own words. It is put quite generally first of all; these people say it is a somewhat iniquitous Measure, and will cause grave hardship. Hon. Gentlemen must remember where these people are; this is Chelsea and Battersea, on the whole a fairly well-off part of London. At any rate, Chelsea usually returns a Tory Member without much difficulty. Speaking about the decontrol provision the letter says:The tenants of the dwellings which will be affected include old people and sole women with children living on fixed incomes; ex-Service men building up their careers after long war service; persons without capital and others prevented by the credit squeeze from buying houses, parents with large families. In fact, those with the largest families will suffer most, for the larger the dwelling the higher the rateable value and the more likely the rateable value is to be over the prescribed limits.I think this very respectable body of people has really understood and put the point very plainly.
Take the case of the small shopkeeper who lives over his shop. He is going to be hit by this Bill. He is usually quite a good Tory voter, like the man whose letter I have here. He says that he has been a Conservative for thirty years, but he has now realised his folly; the Conservative Party has never helped him and is now going to throw him out of business if the Bill goes through. What I have here is only a selection; I can assure the House there are many other 1790 letters. What the right hon. Gentleman's mailbag must be like, I do not know. He would be wise not to look at it for a little while, I think.
There is another provision as to tenancies. Incidentally, this is quite different from the provision in the 1923 Act to which the Parliamentary Secretary assimilated it, and if he would look at a copy of the 1923 Act and read it through carefully he will see the differences for himself. It says in Clause 9 (2):…a tenancy beginning at or after the commencement of this Act…We know what happens to a controlled tenancy at present; it is transmitted, as the phrase goes, when Mr. A dies to Mrs. A, the widow who has been living with him. Remarkable though it may seem, the better view, to quote from the standard text book, is that a transmitted statutory tenancy begins with the new tenant, so that it is a new tenancy rather than a continuation of the old. I do not suppose for one moment that the right hon. Gentleman has not been properly advised about this. He must know perfectly well what he is doing, which is to decontrol property in a case where Mr. A dies and Mrs. A—
§ Mr. Mitchison
I am very glad to hear that I may have omitted Clause 16 (2), and so much the better; but I do not think I shall argue with the hon. Gentleman about that now.
§ Mr. Mitchison
It becomes a Committee point, and it is quite sufficient for me to take the family one stage further. Besides Mrs. A, there is Miss Jane A and Miss Mary A, who have always lived with the parents. Now they have no right to succeed, but if they do succeed they succeed at the controlled rents; whereas under the Bill the poor girls will be left to make the best bargain they can with the landlord. That is the effect of decontrol.
Lastly, we must consider the Minister's powers. What the Minister does by this extraordinary Bill is to take power to do everything short of complete decontrol— 1791 to do it at one swoop, to do it in bits and patches, to do it locally, and so on. He has taken to himself, subject only to affirmative Resolution, the power to decontrol any number of other houses, the power to remove these limits or, if he likes, to reduce them to £I rateable value, and so on. As to that, I can only say that there is no precedent whatever for it in any previous rent Bill. I know of no other precedent for taking this sort of power, except what the right hon. Gentleman himself did in connection with housing subsidies, and that is not too good a precedent. It goes far beyond anything that any Minister of the Crown ought to do without bringing in a new Bill and providing the opportunity for full discussion and amendment that a new Bill would provide.
Now I turn to the last thing I am going to say, and I apologise to the House if I have taken rather too long. It is, after all, not much good to say that a Bill is thoroughly bad, even that it would be better to leave things as they are if one does admit, as I do, that there is a little wrong, and has no alternative to propose. I have never heard a more fantastic summary of what the hon. Gentleman appeared to think were the proposals of my party on the subject than what emerged from his lips today.
Let me put it a little more simply. The right hon. Gentleman's objection to these proposals was this. This is part of the Llandudno speech:It would merely transfer the problem from the private owner to the local authority and unless huge new subsidies are to be provided one thing is quite certain and that is that the local authorities would have to put up rents to pay for the repairs.I take those two sentences. Of course it would transfer the problem from the private owners to the local authorities. That is exactly what it is intended to do. Are hon. and right hon. Gentlemen opposite so confident of the virtues of landlords, so confident of the complete efficiency of private enterprise in dealing with the housing problem that they really suggest that private owners would solve it? The condition of their houses and the matters I referred to a short time earlier show perfectly well two things. One is that the private owners as a whole have not met the requirements of modern housing. They do not provide it. Modern houses, and some very good houses, have 1792 been provided by councils. Of course they have. The private owners have not done it. Now it is said that under diligent fostering they are doing a lot, but how many of their houses are to let? How many of them are at prices many can afford to pay? We do not know.
The final objection was that the councils would put up the rents to pay for the repairs. What is going to happen under this Bill? Rents are going to be put up—
§ Mr. Mitchison
—and there is not even any provision that the repairs should be done. Under the 1954 Act there was at least that. There was a stopper. One could not go above the stopper. The stopper reappears a bit larger in the Bill because rateable values have gone up since then, but it appears without any obligation whatever to do any repairs. There is no condition saying, "If you do not do the repairs you shall not get more rent."
§ The Minister of Housing and Local Government (Mr. Duncan Sandys)
I think the hon. and learned Gentleman should be more accurate. He has referred with great precision to many of the detailed provisions of the Bill, indicating that he has studied it with care, and I cannot believe that he has observed that rents may not be increased unless repairs are done and the house is put into a proper state of repair. I should like to ask the hon. and learned Gentleman a question, since he quoted that part of my speech in which I said that, unless large subsidies were to be made available to local authorities for the purpose of doing these repairs, rents would have to go up to pay for the repairs. Would he tell us, since we have not yet been told this clearly, whether the Labour Party proposes that large additional subsidies should be paid to put into a proper state of repair the private houses it proposes should be taken over?
§ Mr. Mitchison
I am flattered indeed at having provoked the right hon. Gentleman to such a long interruption. I am afraid I cannot agree with him about the first point. Let me tell him what his own Bill does provide. No doubt, he will tell me if I am wrong. It provides two things. First, if the landlord 1793 has no liability for repairs and the tenant has, then in that case the rent shall still increase but increase only to one and one-third times the gross value. Exactly how to justify a 33⅓ per cent. increase—which is really what it is under those conditions—I do not know.
The next thing it does is this. If the house is in a state of disrepair there is very elaborate machinery indeed to be initiated by the tenant, machinery that we shall have to look at very carefully in Committee, by which the tenant may be able to get a certificate of disrepair from the landlord. In those circumstances what is going to happen? The increase is not to stop altogether. It is only to be reduced to the one and one-third figure instead of the double figure. That is a very remarkable proposal. Neither of those propositions obliges the landlord to do repairs, and I simply repeat that there are houses which quite obviously need repairs, and others which would require them to avoid getting a certificate of disrepair which is a stiffer proposition. If the right hon. Gentleman would be prepared to accept Amendments to make it perfectly clear that whenever there were any repairs to be done there would be no increase at all, we could come easily to terms.
I turn to the next question the right hon. Gentleman asked, about paying for repairs. Somebody has got to pay for repairs of old houses—somebody somehow. Under this Bill they are going to be paid for, if they are done at all to the smaller houses, by increasing the rents to the tenants. They are going to be paid for in the larger houses by decontrolling them, and enabling the landlords to make pretty stiff bargains. It does not in the least appear that the landlord is going to do the repairs. If somebody has to do them, and let us assume the landlord can be forced to, even if the 1954 Act failed, is it better that they should be done by him or that they should be done by local authority? Is there any reason whatever why huge subsidies should be required in order to get these repairs done? I should have thought that the right hon. Gentleman would have remembered the case of Birmingham, where they were allowed to take over a whole batch of slum property with some good property, and so far as I know no huge subsidies were required.
1794 I say this to the right hon. Gentleman. It is the first duty of the Government of the country to provide homes for the people in it through the local authorities or otherwise. In that duty the present system and the present landlords have completely failed. It has not been done. There are not enough houses. They are in too bad a state. Repairs have not been done. We say, as, indeed, we propose, that that responsibility ought to rest on the local authorities under Government control, and I would ask the right hon. Gentleman to read with more care than either he or his hon. Friend appear to have shown so far the proposals to that end in "Homes of the Future."
§ Mr. Sandys
I am still not clear. Will the hon. and learned Gentleman make it quite clear whether under the Labour Party's proposals rents will be put up in order to pay for the repairs? [Interruption.] I am sorry, but the hon. and learned Gentleman has deliberately spent some time in discussing his alternative proposals. I want to know whether under those proposals rents will be put up by local authorities to pay for the repairs. Alternatively, will there be an additional subsidy? We need not discuss how big the subsidy would be.
§ Mr. Mitchison
I should have thought that the answer to that must depend on each separate case. [HON. MEMBERS: "Ah."] If the right hon. Gentleman would listen for a minute he would, perhaps, understand a little better. It must depend on each case just as at present it depends on the views of the council and the resources of the council whether it can go on building houses or whether it cannot. It seems to me to be an exactly parallel case.
The right hon. Gentleman is in process of removing all Exchequer housing subsidies from the councils. They are still at liberty to put the cost of building council houses either on the rates or on the rents, or partly on the one and partly on the other. That must be a question for them to decide. I say this to the right hon. Gentleman. We have opposed and shall continue to oppose the removal of housing subsidies. We think that is completely wrong. We think there ought to be subsidised housing, not only for those who stand in sore need of it, but for the citizens of this country as a whole; 1795 and, of course, a subsidy for housing includes the subsidy for repairing houses as well as for building them. There can be no reasonable doubt about that.
I repeat to the right hon. Gentleman that we take an entirely different view of council housing. It is the view of the party opposite that subsidies are a gift and that they should be given only to those who stand in need of houses. The right hon. Gentleman himself has said so, and he means by that people who are in sore need and cannot afford to get houses on their own. We take the view that housing is a public service, that it must be provided now for the people, that it has got to be provided mainly from two sources—one is owner-occupied houses and the other is council houses—that the relationship between the private landlord and the tenant is quite wrong and that the private landlord is bound to regard his house simply as something out of which he gets money; and the other man has to live.
Just as in the course of this generation and the last the view of war between countries has completely changed and countries are no longer at liberty to indulge in private wars to settle their grievances if they are members of the United Nations, so in this country the view of housing has gradually changed and that which was at first a relief for the poor—" housing for the working classes," as the old phrase went—has now become a public service and must be treated as such.
What is fundamentally wrong with the Bill is that it does not recognise that and it hopes that out of the jungle of free bargaining between the landlord and the tenant some justice and fairness will emerge. It has never emerged in the past. It is no more likely to emerge under this Bill than it has done ever before. The result of the Bill will be the transfer of a large sum in money to the pockets of the landlords and the transfer of a power to them to deal with tenants who will be citizens of this country with nowhere to live and nowhere to go.
I know what those tenants will do. They will ask the councils for council houses and they will find that there are not any council houses because the right hon. Gentleman has cut the housing subsidy. He is choosing to introduce the Bill at a moment when he has cut the 1796 housing subsidy, when there is a credit squeeze going on that will make it much harder for people to buy houses and when, in addition to that, there will be serious trouble in connection with what the Government have been doing in Egypt. I say that it is completely wrong.
§ 5.43 p.m.
§ Sir Eric Errington (Aldershot)
The hon. and learned Member for Kettering (Mr. Mitchison) has, to his own satisfaction, divided the world, so far as concerns these matters which we are now debating, into the sheep and the goats. He and his party will find that in the mind of the country it is not such a simple division as that. I should like at once to declare my interest as the President of the National Federation of Property Owners and, in common with others, the owner of some rented property.
The hon. and learned Gentleman has said that over a period the property owners have not provided sufficient housing accommodation. The answer to that is the very simple one that for about forty years there has been some form of control or other. The result has been that there has been no money available for the private owner to do what he would otherwise wish to do.
I welcome the Bill because I believe it will go far to remedy some of the existing housing shortages. My first main reason for saying that is that it will free immediately about 5 million owner-occupied houses. The Ridley Committee stated in 1945 that 3 million houses were built between the wars and that most of them were owner-occupied. Those houses were occupied largely by families whose younger people have now grown up, and they have been held vacant largely because of the impossibility of anybody who is taken in being able to be got out if he does not fit in with the family arrangements.
I read in The Times yesterday of the plight of aMiddle-aged, undistinguished author, family now reared and matedand who has been looking for a smaller place in which his wife, his typewriter, his dog, his cat and himselfcan grow old together.He will have a much better chance of doing that under the conditions created by the Bill than he would ever have had in the past.
1797 The second main reason is that the Bill will foe of great value in increasing the flow of houses which become vacant, and will free from control many over the whole of the country which today are standing vacant. We have no reliable figures, but it is known to many hon. Members that that is the case. The main reason that they cannot be sold is the credit squeeze. The other reason is that owners who have a number of properties must—rather than let them—sell their houses at a favourable price so that they can obtain finance for the rest of their properties to ensure that they are kept in proper order.
Dealing with what I referred to as the habit of the hon. and learned Gentleman and of other hon. Members opposite to speak about goats and sheep in such clear terms of definition in respect of landlords and tenants, it should be realised that the houses which often are sold at vacant possession prices are often sold by tenants who have bought them as sitting tenants and who have made a considerable profit on the transaction.
The question of under-occupation is of great importance in considering the effect of this proposed legislation. From the 1951 Census, it is clear that in England and Wales there are 44 million people and 13½ million houses. This assumes an average of between three and three-and-a-half persons per house, which shows that there is sufficient accommodation over the whole country. Nobody pretends that the houses are in the right places, or that that applies to every class of house, but it applies as an overall figure.
In this connection, an interesting statement was made by the borough treasurer of a town not very far from my constituency. He said:However many new houses are built, the present shortage will persist for a generation unless most of the 7¼ million controlled houses are brought into circulation and used to the best advantage. During 1951, a census was taken by one local authority of the degree of under-occupation of 23,000 of their council houses.The local authority fixed a definite standard of occupation. It was considered that a family of three, that is parents and one child, needed two bedrooms, and a family of parents and two children needed three bedrooms.
1798 To continue the quotation:Of the total houses surveyed, 58 per cent. were under-occupied according to the standard adopted. The degree of under-occupation increased as the size of the houses increased. Further statistics of interest showed that 40 per cent. of the families occupying the houses had no children, and 67 per cent. had one child or less. Housing accommodation once occupied by a family with young children is now occupied by the parents only or a single survivor.The position could be greatly eased if under-occupation could be reduced. As another indication of the degree of under-occupation, the Preliminary Report to the 1951 Census stated that one of the most outstanding changes since 1931 was in the number of people living alone, which had more than doubled. The census showed 1¼ million living alone, nearly three-quarters of whom had separate dwellings to themselves, and they occupied, on average, over three rooms each.I asked an estate agent in a southern town to pick a fair sample of houses for which he is responsible. His information has as least the merit of being up to date. He chose fourteen houses in the same ownership and of a similar character. Seven of the fourteen houses were occupied by two people only, presumably husband and wife. Therefore, assuming that all were husbands and wives, they needed only seven bedrooms, but the list shows them to have twenty bedrooms. There was, therefore, under-occupation to the extent of nearly twice the accommodation.
§ Sir E. Errington
Doubling the rent is not the question with which I am now dealing. Doubling the rent is designed to make it possible for landlords in general to spend the amount of money which they ought to spend on their houses. I am dealing with under-occupation, to indicate that if there is some freedom it will be possible to make arrangements for people to go into houses which at the moment can be made available.
§ Sir E. Errington
They can do so if they want to, but they need not if they do not wish to do so. That is quite different from the theory held by some hon. Members opposite that we all have to do as the State tells us.
§ Mr. Parkin
I do not want to interrupt the hon. Member's analysis of what councils ought to do, but I am hoping that he will develop in his speech the special skills and knowledge which he indicated at the beginning. I do not want to bait the hon. Member, but it would be most interesting if he told us how many houses he has caused to be built and what provisions there are in the Bill or in any other Bill that the Conservative Party might put forward which would induce members of his association to re-invest their money in the building of new houses for working-class occupation?
§ Sir E. Errington
I hope to indicate some methods by which my association hopes to find a way of helping in these matters.
I want to refer particularly to the Minister's statement of his determination to provide subsidies for the provision of small dwellings for the older type of person or for people living alone, or for married couples living in houses which are too big for them. I am delighted that the Ministry is continuing to pay a subsidy to ensure that the older and more lonely people have an opportunity of living in suitable accommodation.
I pass from decontrol to matters relating to houses remaining under control. The whole history of the Rent Acts and their anomalies is well known to the House, and I believe that the proposal to raise, in general terms, the rent to twice the gross rateable value, where the landlord is liable for the normal repairs, is as good a way as any of dealing with this matter. I say quite definitely that the considerable number of small landlords who are members of the National Federation of Property Owners, to which I have the honour to belong, will not find that the increase of rent will make things too easy for them.
§ Sir E. Errington
I am not in a position to say whether they will or not, but the people whom I represent are not the sort of people who could afford to build large numbers of houses at present-day prices. They are concerned to have houses which are kept in as good a condition as possible, so that they may be 1800 used over a period. I believe that those people are doing a service to the community, because the alternative would be the expenditure of very large sums of money on new houses—if they could be built in time.
The number of people who will pay an increased rent in respect of property rated up to £15 is about 750,000, and they will have to pay up to 5s. a week more. I really do not think that the hon. and learned Member for Kettering has given the right impression about these matters. Nowadays, 5s. per week does not go any way to meet the very great increase in the cost of repairs. It certainly will not be easy for a large number of landlords to meet these costs, although it may be so for some people. We have only to remember that it costs 5s. to mend the washer of a tap to realise the problem.
§ Sir E. Errington
Then obviously the hon. Gentleman has not much experience of housing repairs, so he had better keep quiet.
§ Mr. David Jones (The Hartlepools)
I will undertake to put a washer on every tap that the hon. Gentleman can find for Is. a time, and I will make a profit.
§ Sir E. Errington
I shall be delighted if the hon. Gentleman will come along and do it.
I believe that the increases which this Bill will provide will be swallowed up for a considerable time. The majority of owners have realised for many years—without being able to do very much about the financial problems involved—the great importance of keeping their property in repair. I believe that they will take this opportunity to put their capital assets into repair. If they do so, they may save many thousands of properties from going out of existence as units of accommodation.
I know that it is not always agreed but it may be that in the case of some of the more highly-rented properties the law of supply and demand will come into operation before full increases are reached.
§ Mr. Mitchison
May I ask the hon. Gentleman one question? Does not that depend on how high is the rent? The 1801 hon. Gentleman mentioned higher-rented properties. If the rent is put high enough, I believe that the law of supply and demand can be satisfied.
§ Sir E. Errington
I am obliged for the correction. Higher-rated properties would be a better way of putting it.
The other matter I want to refer to is the certificate of disrepair procedure, which I think has been much improved under the Bill. It is right that the tenant should take the initiative and the first step to prove that the increased rent is not justified by the condition of the premises in which he is living.
When application is made for a certificate of disrepair there is an opportunity for negotiation to take place between the local authority, the tenant and the landlord. As a result of that negotiation, it should be possible reasonably to arrive at what ought to be done. If the landlord is prepared to give the undertaking, it will then be open to him to do the work within a period of six months. If he does not do so, then he has to repay any extra money that has been paid by the way of additional rent.
The National Federation of Property Owners desires to co-operate to its utmost in the operation of this Bill. It is fair to say that every effort was made to make the 1954 Act work, but the complications, and the few inducements to the landlord to undertake repairs, were such that this was impossible. The Federation is now preparing a pamphlet or booklet in which it will recommend to its members the standards of good ownership and good management which they should observe.
After forty years of quasi-regimentation, it will not be an easy matter for owners to adjust themselves to the new conditions. There will be a period of transition during which both owners and tenants will not quite know their rights and obligations and where they stand. Under those circumstances I have thought that it would be useful to outline for their guidance some recommendations as to a condition where there is at any rate some little freedom from control.
Hon. Members of the party opposite have produced a booklet called "Homes of the Future." Since it may be a long time before they have a chance to put their plan into practice, I feel that we 1802 should pay attention to the existing situation.
§ Sir E. Errington
The title of the booklet I have mentioned will be "Good Homes Now". That is what the landlords are out to achieve. There are between 150 and 250 associations in the country affiliated to our Federation. The majority of their members, some 30,000, are comparatively small men and women who are trying to do their best under what are admittedly difficult circumstances. What we want to do, and what I am afraid hon. Gentlemen opposite have not done much to help, is to restore a good relationship between landlord and tenant. [Laughter.] Hon. Gentlemen opposite laugh, but it is only in such a condition that landlords and tenants can be happy together.
In preparing this booklet we hope we shall have done something towards that condition. We shall advise that houses should be kept in a really good state of repair, a state of which any owner can be proud.
§ Mr. Albert Evans (Islington, South-West)
I am interested in what the hon. Gentleman is saying because he speaks for a large number of property owners. He-has told us that landlords are to be advised to maintain their houses in a good state of repair. Would he recommend to his members that they adopt the good standard of repair contained in the 1954 Act, which this Bill overthrows?
§ Sir E. Errington
Certainly I would recommend our members to put houses into good repair. I cannot say whether' I would agree with a definition set out in a specific Act, but everybody knows when a house is in a good state of repair.
Now I want to mention the situation arising in regard to repairs and the difficulty, particularly of the small property owner, of finding sufficient finance for repairs. Under Section 4 of the Housing Act, 1949, the local authority has power, with the sanction of the Minister, to advance money for the purpose of "altering, enlarging, repairing or improving houses." That power is limited to Part V of the Housing Act, 1936. So far as my experience goes, it has not been fully used by the owners of houses to help them to put the houses in 1803 better repair. When the Minister replies to the debate, would he tell us whether those powers can be used for the benefit of ordinary houses, whether they are used, and if not, whether he is prepared to frame some Measure by which assistance of this nature can be given, or at any rate can be made more generally known?
The situation is that the small man who has not very much capital wants to get his house into repair, but it is difficult for him to raise the money from the banks or any other source. However, it is most desirable that these houses should be put into repair, and if there is a procedure designed for this, it would be helpful if it could be more generally known in the country.
Property owners look upon the Bill favourably—
§ Mr. Janner
Before he comes to his peroration, will the hon. Gentleman be good enough to tell the House what recommendation he and his Federation propose to make to those owners who for very many years took the 25 per cent. increase in respect of repairs but did no repairs? Is he going to ask them to do something about it?
§ Sir E. Errington
There would be very few such people. [HON. MEMBERS: "Oh."] As is well known, it was almost impossible for repairs to be done during the war years. [HON. MEMBERS: "What about before the war? "] We are not now dealing, as hon. Members opposite so often do, with what happened years ago.
§ Sir E. Errington
We are now dealing with the Bill before the House.
Property owners look upon the Bill favourably as a first instalment in the abolition of a haphazard, out-of-date, unfair and impracticable mass of legislation which was justified only by war-time and immediate post-war considerations. I believe that the effect upon the condition of our available stock of houses will be very pronounced improvement. The feature about which I am happiest is it is a step to the restoration of a free market, because I believe that to be the shortest way to achieving ample housing accommodation.
§ 6.12 p.m.
§ Mr. C. W. Key (Poplar)
I shall not detain the House for many minutes. My only intention is to put on record the effect of the Bill upon a large number of my constituents. The area which I represent is one of the poorest and worst housed areas in the East End of London, and 98 per cent. of its houses will remain controlled after the Bill becomes an Act. Only 2 per cent. of the houses there, just over 200, have a gross value of more than £40 a year. Unfortunately, in that overcrowded area there are 3,000 people on the waiting list for new accommodation.
In order to be able to present this case, I asked an official of the local authority to give me information about the effect of the Bill, if it becomes law, upon a dozen houses selected from over a wide area in the constituency. The first house dealt with has a gross value of £39 and a rateable value of £27, and the present rent is 10s. 3d. net. When the Bill becomes law, if the landlord—this is not actually the case; I will deal later with what the landlord really has to do—is responsible for no repairs and thus has to do nothing to improve or maintain the condition of the house, the rent will become £1. This Bill will practically double the rent although the landlord has to do nothing in return for it.
In reality, the landlord is responsible for all repairs and interior decorations as well. That being the case, under the Bill the net rent will become £1 15s. a week. In other words, there will be an increase of £1 4s. 9d. per week in the rent. That is a gross burden to put upon such a tenant.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
Will the right hon. Gentleman tell the House the approximate rents of council houses in the immediate neighbourhood of the house about which he is speaking?
§ Mr. Key
The hon. Gentleman may wonder.
I will now deal with the average of the cases provided for me by the official of the local authority. The average gross value is £36, the average rateable value £25, the average net rent 14s. lld., and, 1805 if the Bill becomes law, the average net rent, the landlords being responsible for general repairs only and not interior decorations, will be £1 9s. 11d. Thus, the weekly increase in net rent for each tenant will be 15s. These houses were not picked out to enable me to make a case; they were selected to give an example of what will happen as a result of the Bill.
I now want to deal with the effect of the Bill upon the incomes of the landlords. The net rent of the first house with which I dealt is 10s. 3d., giving an annual income to the landlord of £27 14s. 8d. We were always given to understand that the difference between the gross value and the rateable value, the statutory deduction, is the average amount which the landlord was supposed to spend upon repairs to keep the house in an adequate condition. In 1939, having spent £12 upon keeping the house in repair, the landlord would have had a balance of £15 14s. 8d. to put in his own pocket.
What is the position under the Bill? The net rent is increased to £1 15s., giving an annual income of £91. When we dealt with the Housing Repairs and Rents Act, 1954, we could not say definitely that, in the light of existing costs, the statutory deduction was an adequate amount for repairs. However, the Minister and his colleagues told us that the provision being made was adequate and that the sum for repairs would be three times the statutory deduction, and that was provided in the 1954 Act. Take three times the statutory deduction, or £36, and deduct that from the £91. He will put into his pocket £55 now, out of that house.
§ Mr. Key
The landlord will get an increase from £15 to £55 on that house as a result of the carrying out of the provisions of the Bill.
Let me take the average of a dozen cases given to me. The average gross value is £36, the rateable value £25, the 1806 net rent 14s. lid. and the annual income £38 15s. 8d. If we take the statutory deduction at £11, it gives a pocket balance of £27 15s. 8d. Under the Bill, the net rent will average £1 10s., giving an annual income of £78. If three times the statutory deduction is spent upon repairs, say £33, the landlord will get an increase from £27 to £45. That is a gross injustice to people who are living in the type of property to which I have referred, in the condition in which they are and with the wages that they are now getting.
The Government are trying to put money into the landlord's pocket, and they are making it easier for him to do so by reducing the accommodation available from the activities of local authorities. The Government have increased the rate of interest to local authorities and have abolished subsidies to them. Thus they have reduced the capacity of local authorities to do general house-building and by that means they are trying to reduce the number of houses that are available and to make it possible for landlords to push up rents. The Government tell us that their policy will make it easier for more and more landlords to do that, while in the Bill they are taking power for the Minister to introduce Regulations for reduction of the standard of control by reducing the rate value to which it shall apply.
I turn to local authorities, particularly in the London area, and will give a comparison between them and the private landlord. I have some interesting figures relating to the London County Council. They show that the aggregate rent of dwellings owned by the London County Council is £9.4 million per year. The total gross value of the property so owned is £6 million. The London County Council is responsible for all repairs, including internal decoration. If these dwellings were owned by private corporations instead of by the London County Council the rents could be put up to £14 million a year, or two and one-third times the gross value. In other words, rents could be increased by more than £4½ million if they were in private ownership. This shows the benefits which tenants get from local-authority housing. Because the tenants get that benefit, Government supporters are trying to hinder general building by local authorities.
1807 The Bill is another step in the activities of the Government to improve financial conditions for the classes that they favour, at the expense of the poor people living in areas such as my constituency. I have spent the greater part of my life among the people in that area, dealing with educational and welfare problems among the boys and girls. The greatest obstacle to the improvement of their social and moral education was the cramped and confined conditions in which they lived.
What will be the result of the Bill? A goodly number of these families will not be able to find another £1 per week on their rent so they will have to go back to the over-crowding that we used to know in the early part of this century. The only salvation for the standard of living of the people is for the House to reject the Bill and for the people to eject the Government neck and crop.
§ 6.27 p.m.
§ Mr. James Ramsden (Harrogate)
I shall not follow the right hon. Gentleman the Member for Poplar (Mr. Key) into the problems of his constituency. I recognise that housing conditions vary very much between one part of the country and another. Most of my constituents will accept the Bill, as I do, and as we do on this side of the House, as a fair and reasonable attempt to deal with a pressing economic problem.
The hon. and learned Member for Kettering (Mr. Mitchison), who opened the debate for the Opposition—I am sorry that he is not in his place at the moment, because I want to take him up on one point—poured a great deal of cold water on the 1954 Act and on the success that attended the Government in getting property which was in bad condition renovated and put into order. I have obtained figures from my constituency which, in part, refute some of the implications made by the hon. and learned Gentleman. Since 1949, 12 improvement grants had been authorised by the principal housing authorities in my constituency, but since the passing of the Housing Repairs and Rents Act, 1954, they have given approval to more than 98 applications.
§ Mr. Lindgren
My hon. and learned Friend contended, rightly, that that Act was a failure because the repairs had not 1808 been carried out. The improvements to which the hon. Member is referring come under a totally different Act, passed by the Labour Government in 1949, under which the landlord got improvement grants and was allowed to put an increase of 8 per cent. on the rent as well as getting 50 per cent. towards the cost of the improvements.
§ Mr. Ramsden
One of the important provisions of the 1954 Act made it easier for local authorities to assist private owners by giving improvement grants. The figures which I have given prove its value.
§ Mr. Lindgren
There were 7 million sub-standard houses, and the total number of improvements grants in the whole time was £70,000. Most of those related to owner-occupiers and not to tenants of houses.
§ Mr. Ramsden
The hon. Member will have his opportunity to make his own speech. I have promised not to speak for too long, so I had better get on.
I wish to ask my right hon. Friend the Minister to say a little more on the general economic effects which he anticipates will arise as a result of the Bill. I suppose it is true that, in practice, one of the effects of rent control has been to reduce the true wage and salary bill of industry artificially by amounts paid by the taxpayer, the ratepayer, and, indeed, the landlord. It follows that now that we are getting in sight of a measure of reform there will be a shift in the incidence of those costs back to industry through wages.
I take it, therefore, that the Government have carefully considered what will be the effect on wage claims, on the inflationary position—[HON. MEMBERS: "Hear, hear."]; hon. Members opposite need not cheer so soon—on the export prospects of the country, and so on, as a result of the changes brought about by this Measure. I hope that my right hon. Friend will say a word about those considerations. I hope he will be able to confirm my impression that the increases under the Bill are so timely and that the increases, in particular, which may come about in respect of houses still under control so cushioned—I refer to the 7s. 6d. six months' limit—will not, in fact, produce any sudden or major distortion in the economy.
1809 We all recognise that lately there has been a tendency for the rent element in costs to rise. As local authorities put up their rents, differential rent schemes came into operation, and so on. That element in wage costs has been successfully absorbed so far and I should not have thought that any further increases which may come about under this Measure will produce a dangerous distortion of the economy. I think that industry generally would like to hear a little more about that from my right hon. Friend when he replies to the debate.
On the question of the likely levels of rent increases which may come about under the Bill, two points are worth making. The first concerns houses which will remain subject to rent control. I believe that the figures in the White Paper are rather misleading on the question of what rent increases are likely for this class of tenant. I refer to Table IV of the White Paper. Those figures have already succeeded in misleading one newspaper. Table IV sets out the amounts by which twice the 1956 gross values exceed the present weekly net rents. I noticed yesterday in one newspaper, which was enjoying considerable circulation among hon. Members opposite who were thinking about the speeches they would make today—
§ Mr. Ramsden
It was not the Daily Worker, but the Star, which reprinted this table as though it assumed that the increases which would follow this Measure for the various categories listed in the table were going to be as great as those set out in it.
§ Mr. Ramsden
If hon. Members will reflect on this matter, they will see that it simply is not so. The point that we and the public ought to bear in mind is that those figures based on the multiplier of the gross value are not in any sense flat rate statutory increases. They are not imposed as increases by this Bill, and there is no reason why they should be imposed as a result of this Bill. They are the permissible upper limits beyond which rents may not rise. In the event, the actual new rents will be agreed between the landlord and the tenant and will depend on the state of the market 1810 in the district and a hundred and one other things, such as the type of house, and the class of person needing accommodation.
To hon. Members opposite who are shaking their heads, I say that it is altogether too big an assumption to suppose, as I think is supposed, that the market will always allow for the maximum permitted increase to be imposed in a bargain between landlord and tenant.
§ Mr. Ramsden
My next point concerns the future rent levels of those houses which will become decontrolled altogether. The question which many people will be asking is: how much are the increases of rents in the free market which are contemplated by the Bill likely to be? I concede that there may be people who will be worried about this—[HON. MEMBERS: "There are."]—because there will be a period of uncertainty until the market level is known. A period of uncertainty is always a worrying thing to have to go through.
I was glad that earlier this afternoon my hon. Friend the Parliamentary Secretary was at great pains to make clear good reasons why, in the event, there should be no unreasonable difference between the existing levels of rent and the levels which will obtain in a free market.
After all, this is not the first time that my right hon. Friend and Her Majesty's Government have had to make an assessment of the conditions which will obtain in a market which has been set free. There are plenty of opportunities open to my right hon. Friend and his advisers for getting the information necessary to make an accurate assessment of the kind of market conditions which may obtain in various parts of the country. Personally, I would accept unreservedly the estimate he has been able to make, on which he has based his policy, and I believe the country will do so, also.
§ Mr. Janner
Have we not already had experience of that? When the 1923 Act was introduced did we not need to resume control because the estimated market price was not that which the Government of that time assumed it would be?
§ Mr. Ramsden
The hon. Member goes back beyond my time, but I should have thought that the reasons given for assuming that the new market level would not be unreasonable were, on the whole, convincing. This is a serious problem and a decision has to be made; it is only reasonable to go on the assumptions and information available. I do not think that anyone can expect that the Government could do more.
May I conclude by saying one word in criticism of what I understand to be the alternative policy proffered by hon. Gentlemen opposite? They would wish to see this problem solved through a measure of municipalisation of the houses in the categories which we are discussing. I wonder whether, if it came to the point—and this is not a political criticism so much as one based on administrative considerations—they would find that housing authorities would want to work the system of municipalisation which they contemplate.
It is, I am sure, within the experience of almost all hon. Members that 50 per cent., or nearly 50 per cent., of the housing cases which come to us arise when somebody has been allocated a council house and somebody else thinks that he should have got it and is aggrieved. [HON. MEMBERS: "Nonsense."] That is a common experience of mine. We would all wish to pay tribute to the work of the local authority housing committees. They have a very thankless task and get many more kicks than ha'pence, because when they satisfy one person they almost inevitably leave others dissatisfied. I do not think that it is reasonable to ask them to undertake a threefold extra responsibility in being responsible for the allotment of these houses. [An HON. MEMBER: "They are already."] Would it be reasonably practicable for them to administer this extra burden? I do not believe that, if it came to the point, hon. Members opposite would find local authorities very glad to undertake this new aspect of their policy.
Finally, I hope that it is not too cynical to say that for a political Measure I find it refreshingly disinterested. In spite of what hon. Gentlemen opposite have said, the Bill cannot be claimed in any sense to be a landlords' charter. I have no doubt that hon. Members on this side of 1812 the House who have more detailed knowledge of these matters than myself may very well argue that in many respects, considering the difficulties being experienced, this Measure does less than justice to some landlords. I do not believe that the Bill will win or lose many votes in the way that we tend to expect a bold and realistic policy to attract or lose votes. The Parliamentary Secretary has this afternoon made a straightforward attempt to tackle a grave and serious problem. This Bill is fair, and, even more important, it will, I believe, appear throughout the country generally to be fair. I hope that the country, as well as the House, will accept it.
§ 6.45 p.m.
§ Mr. Julius Silverman (Birmingham, Aston)
I should like to follow the hon. Member for Harrogate (Mr. Ramsden) on the question of the administration of houses by local authorities.
I come from the City of Birmingham which already has had very considerable experience in the administration of prewar houses, formerly controlled houses, that it has taken over. It has now a pool of about 23,000 such houses, which it administers without any considerable difficulty at a cost substantially less than estate management costs private landlords in the ordinary way.
I can assure hon. Members opposite that the city is not in the least degree worried about taking over a very much larger number of these houses, for the reason that the task of administration is well within the capacity of any local authority.
I say this because it is the actual experience which Birmingham has had. The cost of administration is less. They had at their disposal a large pool of prewar houses at varying rents and at varying places under local authority administration. This makes it possible for the easing of the housing situation, creates greater equity in administration and, generally speaking, makes the problem of the local authority in dealing with its housing register very much easier. That is one of our strongest arguments in favour of our policy upon this matter.
The Parliamentary Secretary, who opened the debate, spoke about the mobility which the increases in rents of houses decontrolled would produce. We 1813 say that we shall get the greatest amount of mobility by putting these houses under the control of the local authorities and we base that assumption upon the practical experience which Birmingham and other local authorities have had.
It is based on our experience in Birmingham. The Labour Party's policy, and its solution of allowing the local authorities to take over, is practicable, human and it has worked. Another thing is that repairs have been and are being done for the first time. The attitude of private landlordism towards these houses has been a complete failure, because the sole consideration of the private landlord is how much he can get out of them. In the majority of these cases he regards it as a short-term investment.
It is true that there are large companies who take a long-term view of repairs and investment, but the vast majority of these houses have been kept on a short-term investment basis and the landlord's main consideration has been how much he could get out of this as quickly as possible and, therefore, how little repairs he need do. That, unfortunately, is the consideration that applies to the great majority of houses in this country.
Let me give a practical illustration of what is happening in Birmingham. For houses taken over by the Birmingham City Council, an average of more than £200 has been spent in making them reasonably habitable. I do not say that that is sufficient to make them ah that houses should be because many of these houses are in due course—in five, ten, fifteen or twenty years—scheduled for demolition and clearance. But, in the meantime, an average of more than £200 has been spent. That shows that there has been a generation or more of sheer neglect by the landlords who have not done the repairs and have allowed the houses to fall into decay, not merely since the end of the war.
When it is suggested that the sole reason that landlords did not carry out repairs was that the price of repairs has gone up since the war, that is not so. It is not a matter of a few years' neglect; it is a generation of neglect. Bearing in mind that the repairs increase of 25 per cent., which is part of the 40 per cent. 1814 increase in 1920, was based on the cost of repairs and the cost of building existing in 1920, which steadily declined in price, as the Parliamentary Secretary admitted, we know that, although landlords were, therefore, getting a substantial allowance for repairs during the inter-war period, the plain fact is that the repairs were not done. That applies not only to the houses to which I have referred. This deterioration applies to the majority of rent-controlled houses. I say that that is proof that private landlordism in this matter has failed.
The main object of the Bill is not to remove unfairness, to get repairs done or to encourage housing mobility. It is simply to transfer a substantial portion of income from the pockets of the tenants, many of whom cannot afford it, to the pockets of the landlords. That is the purpose of the Bill. That is what it will achieve, and based upon past experience, we know that it will achieve little else.
That means that every week about £2 million will be going from the pockets of people who cannot afford it. What will be the economic consequences? The Chancellor of the Exchequer recently appealed to workers to restrain their demands for increased wages. He said, "Do not ask for more; the country cannot afford it". How can he possibly face the workers, 5 million of whom will have to pay an average of 10s. a week more in rent, and say, "Please do not ask for more wages"?
It is obvious that we are heading for great industrial clashes. I do not see how anybody on this side of the House has the right to say to the workers, when these increases come into operation, "Please do not ask for any more wages, because of the effect that will have upon the economy of the country". How can we do that when £100 million or £150 million every year is being put into the pockets of the landlords without any reason whatever?
That is not the whole picture. There are 800,000 houses which are being taken entirely out of control. What will happen to them? Will the rents be increased, or will the owners do what owners are doing now? When a house becomes decontrolled the owner evicts the tenant and sells it, making as much cash out of it as he can. It is clear that that is what 1815 will happen to most of these 800,000 houses.
Apart from the human effect of that, which was dealt with by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), let us deal with the economic effect. For example, landlords can make a clear £1,000 profit on many of these houses. If 800,000 houses are sold at substantial profits, varying from hundreds of pounds to £1,000 or even more, within the comparatively short period of one to two years, what will be the inflationary effect? Suppose that only half the houses are sold—400,000—and that the average profit is only £500, that means that there will be about £200 million which will contribute to a process of sheer, uncompensated inflation. What will be the effect?
§ Sir Keith Joseph (Leeds, North-East)
Even if one can assume the fantasy on which the hon. Gentleman bases his calculations, surely he realises that anybody who buys a house reduces his own resources as a result. This is not in the least inflationary; this is an exchange.
§ Mr. Silverman
No. The person who buys usually borrows or he invests capital. This is not a question of capital. The landlord gets a sheer profit and a very large part of it will be spent. What does one do with profit? Some prudent people may invest it, but a very large number say, "Well, if I have got several hundred pounds for nothing I will spend it". It is obvious that the effect must be inflationary.
§ Mr. Kenneth Thompson (Liverpool, Walton)
If it is true that the injection of, say, £200 million into our economy would be inflationary, and I have no doubt that it is true, will the hon. Gentleman consider how much more inflationary it would be if the local authorities compensated present owners to the tune of £3,000 million?
§ Mr. Silverman
I hope that the hon. Gentleman will read our policy. That is a matter which we have considered. To prevent any inflation there is provision for the compensation to be spread over a number of years.
§ Mr. Silverman
Based upon the value to the sitting tenant, as my hon. Friend 1816 says. That is a matter which we have taken into consideration, but the party opposite have not taken into consideration the economic consequences of what they are doing any more than they took into consideration the economic consequences of Suez.
Let us deal with the question of unfairness. The Minister is saying, "You tenants are being unfairly treated as between yourselves. This man in a similar house to yours is paying 3s. a week less rent than you; it is quite unfair; you are labouring under a sense of injustice: so what do we do? We put up the rent of everybody by 10s., and that removes the injustice". What nonsense. That is a most ineffective argument.
My hon. and learned Friend the Member for Kettering said that it would appear that, under the Bill, when a tenant dies the successor is not protected because it would seem, on the best authorities, that a new tenancy is then created and, therefore, under Clause 9 there is decontrol.
§ Mr. Powell
Perhaps the hon. Gentleman will allow me to explain that under Clause 16 (2) where a statutory tenancy is created out of a controlled tenancy, which is the case the hon. Gentleman has in mind, it is treated as one controlled tenancy and there is no decontrol.
§ Mr. Silverman
My attention has already been called to Clause 16 (2). If the hon. Gentleman examines what I have said he will find that his reply does not meet the objection. Clause 16 (2) deals with something entirely different. A statutory tenancy is created when in the case of an increase in rent where there is a common law tenancy.
Clause 16 (2) deals with the question of a person who has been a common law tenant where notice of an increase of rent has been served and he becomes a statutory tenant. The Clause provides that, as far as he is concerned, there will not be a new tenancy. It does not deal with the point made by my hon. and learned Friend about when there is a different person as successor. It may be that the hon. Gentleman has not considered that; I hope that he will. Clearly, this would be a complete disaster for a very large number of people.
Mention has been made of the provisions of paragraph 17 of the Sixth 1817 Schedule, which extends the Schedule of the 1933 Act which deals with the question of possession and the proving of hardship. What has frequently happened is that people have bought occupied houses with the intention of getting the tenants out. Up to now, the courts have been obliged to resist that procedure, quite rightly, because for such an action to succeed would be monstrous. This is a provision of the Bill which we shall certainly resist. It is one which, if carried, will result in very great hardship, because it is completely unjustified.
Even if the Minister were to look at these matters and to improve them, it would not make this Bill a good Bill. It is a thoroughly bad Bill. It achieves no useful purpose. It is introduced simply to make a wealthy section of the community wealthier and it is introduced, also, because the much-heralded and trumpeted Housing Repairs and Rents Act of 1954 has completely and entirely failed. This is a much worse Measure than that. It is the most iniquitous and reactionary piece of legislation that any Government have introduced in the last fifty years. I hope that we shall not only vote against its Second Reading tomorrow night, but that we shall resist it both inside and outside the House with all the means at our disposal.
§ 7.0 p.m.
§ Sir Keith Joseph (Leeds, North-East)
I should first explain that although I am director of a company owning housing accommodation, and of a building company, I have no interest to declare, as the first company ranks as an housing association and the building company builds no houses for itself.
I should like to refer to something about which the hon. Member for Aston (Mr. J. Silverman) spoke at the beginning of his speech. No one on this side of the House wishes in any way to criticise the conduct of such a pioneering local authority as Birmingham in the management of its own housing property, but there is a very great difference between a local authority owning even a substantial number of houses for rent and a local authority owning all the available houses for rent in an area. It is with that proposition in the Opposition's programme that I very much disagree.
1818 I welcome this Bill because it seems to be making a really serious effort to deal with those people of whom we have all too few statistics. Hon. Members on both sides of the House have told us harrowing tales of what will happen to present tenants of accommodation, but there are no statistics of the unhappiness, misery and frustration existing in the enormous waiting lists of people who cannot move—and cannot even get married—for lack of housing.
For most of the population it is bewildering to see, year after year, the enormous programmes of new housing construction—undertaken be it by the Tory Party or by the Socialist Party—and yet, at the same time, seeing the waiting lists of applicants for housing accommodation growing. Although some houses, it is true, fall out of use by deterioration, I think that the real explanation is under-occupation, and it is because this Measure deals with that problem that I think it is a brave Bill and one which should be supported.
Nobody begrudges living space to any family or individual, but surely it is unwise, when seeking to use to the optimum our national capital resources, to encourage the waste of an asset as scarce as housing now is. If we are to have the flexible and dynamic society which both sides of the House desire, we must encourage mobility of labour. If we are to take advantage of automation and of all the new techniques, it must be possible for wage-earners and management to move from industry to industry and from town to town. Unless there is much more freedom in the housing market that will be impossible.
I commend the Bill, first, because it releases from control the owner-occupied houses. That in itself will make a great contribution to providing that freedom of accommodation without which we cannot have mobility for tenants. It is true that those who own houses have been able to let rooms to lodgers or tenants, but in many cases they have been very frightened of the tenure which they were giving to those tenants, or of the control of rent, or of the other legal complexities in which they might involve themselves. I believe that decontrol will encourage owner-occupiers to make available very much more accommodation than has been 1819 available in the past. This is one of the first advantages of the Bill.
There is much under-occupation in rented houses as well as in owner-occupied houses—both in rented houses owned by local authorities and in those owned by private landlords. I think that both sides of the House recognise that, and recognise, too, that it will be necessary to increase rents. There is no difference between the two parties in this. There are at least two passages in the Opposition's booklet on the subject which clearly recognise it. We all recognise also that the bulk of the increase in rent will go towards enabling repairs to be carried out. That is my answer to the hon. Member for Aston; that in no case will a landlord be able to keep the extra rent unless he keeps the house in good condition.
§ Miss Alice Bacon (Leeds, South-East)
I know that the hon. Gentleman knows his constituency very well, and if he will go into Louis Street he will find an example of private landlordism doing nothing to maintain very good property. There the council had to take over the property compulsorily in order to improve it and make habitable flats. That would never have been done by the private landlords.
§ Sir K. Joseph
I am grateful to the hon. Lady, and of course I know the property to which she refers. Surely she is not trying to describe as bad landlordism a case where it has not been possible, because of war and licensing, to do decent repairs. But I am trying to direct the attention of the House to the problem of under-occupation and, without making any party point, I say that both sides recognise this as a problem.
If we, as a country, are to free the statistically higher average space per head that is in theory available, both parties will have to do something about it, and in all seriousness I should like to ask what the Opposition intends to do. I have read its pamphlet, page 19 of which makes it plain that the party opposite intends to encourage the transfer of small families from houses and flats which are too large to others more in keeping with their requirements. We could not put our own intent into better words.
1820 Nevertheless, the hon. and learned Member for Kettering (Mr. Mitchison) said, I think quite rightly, that in many cases tenants continue to hold under-occupied space for sentimental and family reasons. How will it be possible to encourage that transfer of those people if they just do not want to move? This is a real, human problem. Will the local authorities say "Very well, we will leave you to under-occupy these rooms. We will not charge you more rent"? Or will they, as I am sure they will, use differential rents to that end?
§ Mr. Mitchison
As the hon. Gentleman was kind enough to refer to me, may I ask him the same question with reference to this Bill? Supposing the sentimental tenant who under-occupies the space is unable to stay there because the rent is too high, or because the premises are decontrolled and the landlord wants to get him out—does the hon. Member regard that as a good thing?
§ Sir K. Joseph
It seems to me that this Bill will create a free market in housing accommodation which will give such a person ample alternatives at cheaper rents, though possibly not so much accommodation and possibly accommodation not in such good condition. This Bill will achieve that. That is its purpose.
By this Measure, people who have under-occupied housing space at a controlled rent will have to choose whether to spend more on housing, and go without something else, or move to less good and less ample accommodation which, I believe, will be made available; because I foresee that, whereas up to now the empty house has been a great asset to a landlord, because of the scarcity of houses, the landlord will in future find a discipline in the empty house; the void house will force landlords to maintain their property, because otherwise they will not be able to find tenants.
That is why I believe that this is the beginning of the creation of a really free market in housing accommodation, and I think that we should remember throughout this debate the tens of thousands of families, of whom we have no statistics, but who will welcome this Bill as their first chance to get the housing which they need.
§ 7.10 p.m.
§ Mr. Donald Wade (Huddersfield, West)
At the outset, I should like to say that I think it is a little ironical that it is only two and a half years since we were debating the Housing Repairs and Rents Bill. I remember those heated debates very well, because I sat throughout the Committee stage as well as through the debates on the Floor of the House, and I think it is fair to say that the sponsors of that Bill, which became the Act of 1954, were a little optimistic in their expectations of the effect that that Measure would have on the problem of repairs.
There was a White Paper which has already been referred to—Cmd. 8996—in the concluding paragraph of which there is this sentence:Her Majesty's Government feel that they are setting out on a new and inspiring adventure.I rather suspect that those words were coined by the present Chancellor of the Exchequer, for I think that that is the sort of phrase which he rather enjoys using.
While the words which were used when that Bill was introduced were, I think, over-enthusiastic, it is also fair to say that the denunciation of it was somewhat extravagant. On the one hand, we were told that it was a bold and courageous attempt to deal with this problem of houses falling into disrepair, and on the other hand, if I remember rightly, we were told that it would lead to very great hardships and serious unrest in the country.
§ Mr. Janner
Does not the hon. Gentleman admit that there were and are serious hardships? Does he not know of many cases in which such hardship is experienced?
§ Mr. Wade
Yes, there are cases of serious hardship, but I know of few as a result of that Measure.
I do not want to take up a lot of time talking about the 1954 Act. So far as improvements are concerned, I welcome the provisions in that Measure. I thought that they were helpful, and I still hold that opinion. In respect of repairs, the Act really has been rather a flop. Now we have a new attempt, and I think it is a bolder one.
1822 The attitude that one adopts to this new Bill depends largely on one's view about the alternative, and therefore although Members of the Opposition will probably not agree with me, I should like to say what I think of the alternative put forward by the Labour Party. I think that the Labour Party's alternative policy is logical, certainly from the Socialist point of view, but, in my opinion, the objections are overwhelming. In the first place, I think a number of local authorities will be reluctant to carry out those proposals.
According to a report which I read of a speech by the right hon. Member for Ebbw Vale (Mr. Bevan) on 2nd October at Blackpool—I understand that he was speaking on the subject of "Homes of the Future "—he pointed out thatThere must be no loopholes…If this operation is ever discharged with any prospect of success, it will have to be imposed on the local authorities by the Government.I feel uneasy about that. I have always supported independence for local authorities, and I think it is true that this policy of the Labour Party could be carried forward only by a considerable amount of compulsion upon local authorities. Secondly, I think the compensation would be very substantial, even though spread over a number of years.
I do not think that the policy would be particularly popular with tenants, although I know it has been contended that tenants would prefer to be council tenants rather than tenants of private landlords, but I do not think one can generalise, and I do not think that that is necessarily true. It is clear, however, that the Labour Party proposal is an indirect method of abolishing the Rent Restrictions Acts. It is another way of doing the same thing.
Also, in my opinion, the cost of repairs and of administration generally would on the whole be higher than where ownership is spread amongst a number of landlords. I know that there are good and bad landlords, but on the whole the cost of repairs and administration would work out at rather less in cases where ownership is spread among a number of landlords.
§ Mr. A. Evans
We are interested in the hon. Gentleman's view of the Labour Party's proposals, but would he tell us how he thinks maintenance would operate under local authority ownership as against private ownership?
§ Mr. J. Silverman
I am grateful to the hon. Gentleman for allowing me to intervene. May I comment on this matter of estate management and repairs? As the hon. Gentleman may know, the City of Birmingham has taken over a number of houses. Until fairly recently, the rent collection was managed by estate agents. The rent collection has now been taken over by the local authority, and it has been found that on these houses there is a saving of £3,500 per annum. On the question of repairs, obviously there would be a difference as between a private landlord and the local authority, but is that not simply because the landlord does not do the repairs and the local authority does?
§ Mr. Wade
I do not want to take up too much time on the Labour Party proposals, although I would gladly do so if I were given an opportunity on some other occasion.
Many landlords spend a great deal of time on administration for which they receive nothing, and for which no charge is made. Some of them carry out their own repairs. I think that on the average the cost would be less; at all events, that is my view.
One comes to the other possible policies to pursue. One could leave things as they are, and I gather that there is very little support for that view. One could introduce some minor amendments to the 1954 Act. That would cause irritation without achieving very much. At the other extreme, one could abolish the Rent Restrictions Acts at one stroke. It is true that we have a most bewildering maze of complex legislation as a result of these various Acts which have been passed dealing with rent control, but I think that the immediate abolition of the Rent Restrictions Acts would undoubtedly cause hardship, and I would not favour it. Thus, by a process of elimination I am brought to the conclusion that a gradual dismantling of the Rent Restrictions Acts is necessary. It is because this Bill broadly follows those lines that I think the right course is to give it a Second Reading.
I understand that Mr. Gladstone, at a public meeting, after speaking for an hour, paused for a moment and said, 1824 "Gentleman, that is my preface." Then he proceeded to speak for another hour. Having concluded my preface, I do not propose to speak for another hour, but I should like to make a few critical observations on the Bill.
The first question I asked myself when I studied this Bill was, what is the real purpose of its operation?
§ Mr. Wade
Is it primarily to raise rents? The mere raising of rents is not going to solve our housing problem. Frankly, I did not feel that the Parliamentary Secretary gave an entirely satisfactory or convincing statement on the raising of the rent to a limit of 1⅓ of the gross value where the landlord is not responsible for repairs As I understand it, if the landlord is not responsible for repairs, the rent can go up to 1⅓ of the gross value.
Further, if he is responsible for repairs and puts the premises in repair, but at some later date allows them to fall into disrepair, the rent can be reduced, but only to 1⅓ of the gross value and not to the original rent. Perhaps the Minister will deal with those two points when he winds up, because the Parliamentary Secretary certainly gave me the impression that, whatever view one may have of the Bill as a whole, those provisions—
§ Mr. Sandys
For the benefit of the hon. Member for Huddersfield, West (Mr. Wade) and the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison), I should like to say that there is evidently a misunderstanding about this point. I shall not deal with it by way of interruption, but I will deal with it in the course of my speech later.
§ Mr. Wade
I am much obliged to the Minister for that answer.
I suggest that we should have four aims in mind in considering this problem. The first is that there should be more houses to let as well as for sale. Although I know I do not carry the whole House with me in this, I am of the opinion that the result of a partial decontrol will be that some houses will become available to let, that when owners find it difficult to sell their houses and know that they are able to let them without the houses becoming rent controlled, they will be more willing to 1825 let. Therefore, I think that the Bill will probably result in more houses coming on to the market to let.
That alone will not suffice. We must have a more realistic policy on the subject of repairs. A mere increase in rent will not solve the very grave problem caused by houses falling into disrepair and which require very considerable work to be carried out on them; work which, of course, would cost a great deal today. I cannot now go into the reasons for the high cost of repairs, one of which I believe to be price rings in the manufacture and distribution of much of the material required for building repairs; but to discuss that would be out of order.
The fact is that repairs are very expensive. It may well be that the large property-owning companies can deal with the matter by borrowing from the bank, but the smaller property owner cannot do so. I should like to express again the view which I expressed in the debates in 1953 and 1954, that there should be some grants for repairs as well as for improvements. I have never been convinced of the need for drawing a hard and fast line between repairs and improvements. Obviously, it would be unfair that an owner should get a grant for repairs and then sell the property without having to repay what he has obtained. I should perhaps call it a loan.
§ Sir E. Errington
Under Section 4 of the Housing Act, 1949, the position is that money can be advanced and a mortgage taken in respect of that money as a charge on the property. The difficulty is that, so far, that provision has not been used to any extent.
§ Mr. Wade
Yes, I am aware that very little use has been made of that provision.
If loans—I think it is best to call them loans rather than grants—were made for essential repairs, and if the rent were increased, the loan being, say, 50 per cent. of the amount expended, it would be only fair that half of the increased rent should be paid to the local authority making the loan. Similarly if the house were sold the whole of the grant should be repaid. I am convinced that something will have to be done if the smaller landlords are to finance the major repairs which are needed, because even though they may get something back from maintenance 1826 claims in a few years' time, they have not got the ready capital with which to do the work now.
Thirdly, I suggest that we should have a more forthright policy on the subject of housing elderly people and finding accommodation for couples, husband and wife, for instance, who, their families having grown up and left them, are living in houses which are too large. We have all had such cases brought to our notice. I had one brought to mine a few days ago, of a man and wife living in a house obviously too large; the husband is unwell and has been told by his doctor that he should not go up and down stairs, but though those unfortunate people would willingly give up this large house in favour of someone with a larger family, they just cannot find other accommodation.
It is true that the Bill may result in more houses becoming available to let, but in the main they will be the larger houses. If the Bill is to be successful, there must, in addition, be some further building of houses for elderly people, more accommodation found for elderly people and for those who want smaller housing units. I calculate, on a very rough basis, that out of the higher rents there will be a tax yield to the Exchequer of between £20 million and £30 million a year. I see no reason why that money, at all events, should not be used in providing accommodation for older people and for people who want smaller houses.
Fourthly, I consider that something might well be done to facilitate exchanges. By that I do not mean compelling a landlord to take a particular tenant. During our debates in 1953 and 1954, reference was made to a suggestion that an exchange bureau system should be set up in order that there could be more information available when an employee goes from one part of the country to another. Something could well be done to facilitate movement from one place to another by people who want a house to let rather than to buy.
I am never enthusiastic about procedure by Ministerial Order, and I regret that under Clause 9 further decontrol can take place by Ministerial Order. It is true that those Orders will have to be approved by a Resolution of each House, but this is a subject of such importance to so many people that any further decontrol 1827 could and should be dealt with by a Bill introduced in the House in the normal way.
When the Housing Repairs and Rents Act, 1954, was passed, the authorities, no doubt with the assistance of the Ministry, produced a helpful leaflet explaining exactly what it was all about. True, a good many landlords and tenants, when they read it, decided to have nothing to do with it because the procedure was so complicated, but at any rate the attempt to clarify the position and put it into simple language was praiseworthy. I hope that the same attempt will be made again. This will not be a popular Bill. I do not suppose the Minister expects it to be a popular Bill, but the least we can do is to make as clear as possible to landlord and tenant exactly what their rights and liabilities are.
§ 7.28 p.m.
§ Mr. Richard Body (Billericay)
I find it difficult to follow the hon. Member for Huddersfield, West (Mr. Wade). As I understand, he has given quiet approval to the Bill. I had rather hoped to follow someone who would have offered some more robust opposition to it. I agree with many of the proposals that the hon. Gentleman made; indeed, I accept and agree with almost everything he said.
I hope that my right hon. Friend the Minister will take some comfort from the saying which is often repeated in my native county, that if one grasps a nettle firmly enough it will never sting. This is a Bill which will provide a measure of justice, not justice for the landlord—that will never be—or justice for the tenant, but something more important than that: justice for the nation's housing drive.
I hope that the House will forgive me if for a moment I go back to the Second Reading debate of the original Bill which introduced rent restriction in 1915. It was a Measure intended to prevent the raising of the rents of houses occupied by a few munitions workers in a few munitions towns. The sole purpose of the Bill was to help those people.
§ Mr. Janner
Is not the hon. Member aware that the 1915 Bill was introduced for the specific purpose of preventing landlords from extracting higher rentals from those who were left in this country when their menfolk were away fighting?
§ Mr. Body
That gives me an excuse to remind the House of what was said by the President of the Local Government Board in introducing the Bill. I have the OFFICIAL REPORT of the Second Reading debate here.
In answer to the hon. Member for Leicester, North-West (Mr. Janner), I will point out that in introducing the Bill the President of the Local Government Board said that he had inquired throughout the whole of the United Kingdom whether there had been any rent raising as a result of the war, and that he was happy to report to the House that there had been no widespread rent increases of that kind. The hon. Member for Leicester, North-West may shake his head, but I have memorised those words from the OFFICIAL REPORT which I have open here in front of me.
The President of the Local Government Board went on to say that legislation of that kind would never have been introduced had it not been for the war. He went on to give a very significant reason for that. His reason was that, although rent raising in itself was an evil thing if done to exploit the emergency of the war, the remedy for it might create far greater evils afterwards. In those days, pioneering the first piece of legislation in rent restriction, he was not to know what was to follow. To put his words in a nutshell, he said that the effects of such legislation might store up greater troubles for the future and that the cure might be far worse than the disease.
It is impossible to say whether the cure of rent restriction has been worse than the disease of rent raising by bad landlords, but all can agree that to some degree at least rent restriction has meant the deterioration of many properties into slums. Some of us on this side of the House believe that it has been one of the principal factors.
The hon. and learned Member for Kettering (Mr. Mitchison) said the other day that about 1 million houses are now reduced to slums and will have to be demolished. It has also been estimated that the number of dwellings which come into that category each year is 200,000. The drive to pull down those dwellings is now well under way, thanks to my right 1829 hon. Friend the Minister for Housing and Local Government. In particular, I know of one district in West Ham which has almost been cleared. Nearly all the houses have been pulled down. These houses were erected only seventy years ago and were originally of sound structure. The adjoining street, of the same type of house, has also been very nearly demolished and all the occupants re-housed elsewhere.
One house is still standing in the street and still occupied. It was built at the same time and of exactly the same structure as all the other houses which have been demolished, yet it is still lived in by its present occupant; and it is still clean, comfortable and in good repair. It will have to be demolished; it is one of a terrace, and it is out of the question to expect that house to remain in the midst of the new flats and council houses which will be erected in place of the other slum property.
There is one reason that that single house stands alone, still occupied and fit to be lived in for at least another generation. There has been spent on it two or three times as much money as has been spent on any of the adjoining property, the rents of which have been but a few shillings a week.
When one allows for the payment of rates and Schedule A Income Tax and the cost of collecting the rents, no margin is left for the landlord of those other properties to make any but the most cursory repairs. A landlord owning 12 of those terraced houses, each bringing in a rent of 7s. a week, receives a total of £4 4s. a week from the property. Rates, taxes and the cost of rent collection take £3, which means that the landlord has an income of £50 a year for his 12 houses, representing a capital of £10,000. If my arithmetic is correct that is interest at the rate of ½ per cent.
Out of that ½ per cent. he has to meet the cost of repairs, including such articles as a new dustbin, and such other items for which the landlord is responsible. The good landlord—and there is such an animal—sees his property gradually deteriorating. In this case he has £50 in his pocket with which to effect all the necessary repairs to those houses. Anyone who has seen a builder's bill in recent years knows that precious little can be done for £50, let alone when it is 1830 spread over 12 houses; it works out at £4 a house, which might cover the replacement of a few tiles on the roof.
§ Mr. A. Evans
Has the hon. Gentleman taken into account in his figures the initial cost of the houses? He has said that they have been up for seventy years, and the initial cost of the erection of such a house was probably £150. Has he also taken into account the cost of maintenance in the early years before prices rose?
§ Mr. Body
Perhaps the difficulties have not existed for seventy years, but the structural repairs must be done regularly. In any event, I hope the hon. Member does not think that I have any special brief for the landlords. I have not. My only brief, such as it is, is for the country's housing drive.
§ Mr. H. Butler
The hon. Member says that he has no brief for the landlords. Will he tell us something about his brief for, or his interest in, the tenants who happen to be his constituents?
§ Mr. Body
They are concerned, as we are all concerned, with the success of the country's housing drive, and it is ray earnest belief that we shall never solve the problem without a Bill of this kind, to ensure that the older properties are kept in a reasonable state of repair. Surely it is ludicrous to expect a house erected fifty or sixty years ago to be kept in sound structural repair for £4 a year. In my opinion, the Bill will enable more repairs to be done.
Hon. and right hon. Gentlemen opposite suggest that this Bill is a profiteers' charter. I have always understood a profiteer to be someone who makes an unduly large profit, out of all proportion to his investment. Under the Bill, the property owner is lucky to derive interest of 1 per cent. That is a little less than one-third of what he would receive if he invested his money in a building society.
1831 I notice that the Daily Herald has joined in the cry of profiteering, the allegation made against the landlords. I notice, also, that it declares a good healthy dividend of 17½ per cent. I do not know what its criterion is of profiteering, but the Daily Herald is a property which yields 17½ times what these landlords receive from their properties. [An HON. MEMBER: "It belongs to Odham's."] Odham's'? Odham's hold 49 per cent. of its shares.
The hon. and learned Gentleman the Member for Kettering took up the cry of profiteering during his vigorous denunciation of the Bill today. I feel tempted to remind him that the Martha Gold Mining Company, of which he is chairman, is so successful under his chairmanship that it declared a dividend of no less than 200 per cent. last year.
§ Mr. Mitchison
It is very kind of the hon. Member for Billericay (Mr. Body), to say so, but he has got that one wrong.
§ Mr. Body
It was in 1955. There was a dividend of 33⅓ per cent. in 1954. I do not blame the hon. and learned Gentleman or his company for being so successful as to declare so healthy a dividend.
The answer to what the hon. and learned Gentleman says and to what others say who make this allegation of profiteering is Part II of the First Schedule to the Bill. It provides the most stringent and severe penalties for the bad and even the mediocre landlord. Such benefits as accrue to landlords under the Bill are taken away by that Schedule. Many landlords will say that they derive no net benefit from the Bill. Apart from that, a landlord's income depends upon his letting houses. No tenants, no income; and he will soon have no tenants when houses become more plentiful, as they will when the Bill is enacted.
The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) and the hon. Gentleman the Member for Welling-borough (Mr. Lindgren) are both on record as saying that there is no shortage of accommodation as distinct from houses. There are more rooms per head of the population than there have ever been. The Bill will do much towards 1832 releasing that excess accommodation. That itself will provide a most powerful incentive to the profiteers to put and keep their houses in good repair. For these and other reasons the older tenanted houses will be kept up to a standard which would be impossible to maintain without the Bill. Far fewer houses will deteriorate into slums than the 200,000 dwellings which now deteriorate into slums every year and every house saved from slumdom is equivalent to a new house.
May I return for a moment to those houses in West Ham which I mentioned? If they had all been maintained at the standard of that one house to which I referred, where that same family can go on living for the time being, about fifty houses would be saved from demolition and fifty families would not need to be re-housed. That example in West Ham can be repeated all over the country. The number of slum properties could have been halved had a Measure of this kind been introduced in the 1920's.
We can never solve the housing problem if every house has to be demolished after a generation or two. There are countless dwellings, both in the country and in the towns, that are structurally the same now as they were a hundred or a hundred and fifty years ago. With this Bill enacted, many houses can have their lives extended for no less time.
My plea, therefore, is this: we shall never solve the housing problem unless we regard a house as something permanent, a place to be lived in not for just one or two generations, but for several. That can never be done while 11 million houses are shackled by arbitrary rent restrictions. All of us are in favour of restrictions upon unscrupulous landlords, but the present rent restrictions go far beyond that. For these reasons, I believe the Bill to be essential for the successful solution of our housing problem.
§ 7.45 p.m.
§ Mr. Albert Evans (Islington, South-West)
I wish I could really believe it to be true that there are landlords of the kind about whom the Member for Billericay (Mr. Body) has just been telling us, landlords who are content with a one per cent. yield upon their investments, landlords who really play fair by their tenants and do essential repairs.
1833 I wish I could believe those landlords to be typical of landlords, but all my experience, and all the evidence, too, I should have thought, indicates quite clearly that the landlords who own property for rent as a business are primarily concerned with the profit yields they give them and only secondarily are concerned with their tenants.
§ Mr. Evans
I am much obliged to the hon. Member. He agrees, at any rate, that it is very doubtful whether essential repairs are being carried out, and it is the view we hold on this side of the House that under private ownership and control essential repairs are neglected and that slums are the consequence.
The Bill will have some very far-reaching consequences. It will have a permanent effect upon the whole economy, and even after this Government have been forgotten and their sorry record is a thing of the past, the consequences of this Bill will be felt. Throughout industry wage claims will be started. We cannot impose large increases of rent upon 4 million or 5 million of our people and not expect them to ask for higher wages. The Government must bear in mind that in due course, when the Bill becomes fully operative and large increases of rent result for large numbers of people, the trade unions will demand that wages should go up to meet the higher cost of living. In consequence of that change in wage rates there will be a stimulus to the rise of prices. I say to the Government that these will be some of the long-term consequences of their Bill, and that they should bear those things in mind.
The Bill takes out of the ambit of the Rent Restrictions Acts about 4½ million owner-occupied houses. They have been legally within the Acts, but they have not been really subject to rent restrictions for the simple reason that they have not been rented, but occupied, by their owners. I do not think that there is any great difference of view in the House about owner-occupiers. Nobody on these benches would wish to restrict what a man does with his house which he owns and in 1834 which he lives. The only difference between the two sides of the House is in deciding how to arrange the finance for his buying of his house.
The Government cannot avoid the plain fact that during the past two or three years they have imposed upon those who wish to buy their own houses a terrific burden of interest rates. We on this side, as we have said in our policy statement, shall attempt as soon as possible to make money available to house buyers at reasonable rates of interest. On the other hand, the Government's record shows that they have been persistently pushing up the price which a man has to pay for money with which to buy his own house.
The Bill takes about three-quarters of a million houses completely out of the ambit of the Rent Restrictions Acts. The tenants of all these houses will be subject to the imposition of any rent the landlord chooses. Furthermore, their security of tenure will end. I have in my hand a letter, one of a number sent me today, from fourteen teachers at a secondary school in my constituency. They protest against the Bill and especially against the Clause which proposes the complete decontrol of houses and flats with a rateable value of £40 and over in London. They say:This will not only cause great hardship, but might well result in the loss of their homes for a large number of professional people.Undoubtedly, those houses which are taken completely out of control are occupied, in the main, not by industrial workers but by teachers, bank clerks, and that type of person.
We have had rent restriction in this country for thirty-five years. Ever since 1920 we have had some form of restriction of rents on rentable property. We have had these Rent Restrictions Acts for the simple reason that the supply of rentable property has been less than the demand. It could be said that as supply was at last drawing level with the demand there would be a case in logic for abolishing the Rent Restrictions Acts but, although we have made progress and built more houses over the years, and there is a greater number of houses available for letting, I do not think that we can say that even by the end of 1958 the supply of rentable houses will be equal to the demand.
1835 However much we build, while there is more demand than supply the landlord's market will remain and the need for control will continue. The gap between the two has to be only a small one and still the tenant has no alternative. He should be protected from the landlord who can extort an unfair rent. That difference between supply and demand of rentable houses remains and that fundamental of the Rent Restrictions Acts remains. It is quite as effective as it was in 1920, 1940 or 1950. As long as we have more people requiring rentable accommodation than there is rentable accommodation available for them, there is the possibility of exploitation. Not until we have sufficient accommodation to meet the demand can we say that the time is ripe to take away control.
The Minister believes that now is the time to begin decontrol, because he believes that thereby he will bring into the lettable market some unoccupied accommodation. I believe that the right hon. Gentleman is basing this part of his argument upon a fallacy. It is true that many houses are unoccupied, but it must be remembered that today people demand more living space. They expect an adequate number of rooms for themselves and their families. The standard of living space which people expect has risen considerably. People will continue to have an adequate number of rooms for their families unless they are forced by economic pressure to give up some of those rooms. Therefore, the under-occupation which the Minister might disturb and bring into the lettable pool will be that under-occupation by poor people who are forced by their economic situation to crowd up and surrender some of their accommodation.
I should be very surprised if, as a result of these rent increases, we have an appreciable amount of accommodation made available. It is quite true that the main evil of rent restriction and control has been the widespread neglect of maintenance. We all know that to be so, and we can see its effect in our own constituencies. Some of the things we see and read about in this matter of neglect of maintenance are horrible and shocking. People are living in intolerable conditions because of this neglect.
I agree with the hon. Member for Billericay that some part of the neglect 1836 arises from low rents. It was the purpose of control to keep rents low, and it did so. Therefore, I am quite prepared to concede that the Rent Restrictions Acts have kept rents low and made it more difficult for landlords to maintain their houses adequately. There are good landlords who maintain their houses in fairly satisfactory conditions. Houses have been well maintained even under the Rent Restrictions Acts. The evil of this neglect arises partly from low controlled rents, but partly, also, from the profit motive which guides those people who own property and let it. It is the function of people in the property-owning business to get a profit out of their business. That is what they are there for.
§ Sir Ian Horobin (Oldham, East)
Can the hon. Member tell us how one gets a profit out of a business by spending a lot of money on building a house, only to neglect the maintenance so that it becomes a slum and is taken away at site value?
§ Mr. Evans
Perhaps I shall be able to describe some of the failings of that procedure before I finish my speech.
The Government seem to think that if, by means of this Bill, the landlord receives higher rent he will play the game and do the repairs, maintain good standards, and maintain his asset, but surely the businessman maintains his asset at the point of maximum profit. He would be a bad businessman if he did not. That is the motive which animates all property-owners. If it were not so, they would be strange fellows. Therefore, we cannot expect private people engaged in letting houses to spend more on repairs than they are obliged to do in their own interests.
§ Mr. Evans
I do not follow that interjection. These people maintain the asset only at the point of maximum profit. They do not maintain the property in a state of good repair, because they are not concerned with amenity. That is the ethics of business. I should have thought that all of us would agree on that point.
We cannot expect people engaged in letting houses to concern themselves with standards, with amenities, and with developing better conditions. All our experience of houses tells us that the development of better social conditions is not the function of the person who is in business for profit. Only the Government and the local authorities can fulfil that social function.
As leading members of the community we have a responsibility to recognise that housing is a basic need of our people. Between 4 million and 5 million people must rent houses. They cannot buy them, for a number of reasons. Therefore, it is essential for them to rent houses, and we should recognise this as an essential part of our society.
When we look at what has happened under existing arrangements, where rented houses are owned in order to yield profit, we find slums, and there are 1 million slum houses in this country today. We say that private enterprise has failed to meet the basic human need of a decent home and that the only alternative is for the community to step in and meet this basic human need.
The policy of the Labour Party has been mentioned, and I also have tried to give an indication of it to the House. It has been said that this will cost money. I agree at once that it will cost money to give our people decent houses. We must be prepared to spend. We spend over £400 million on our National Health Service, and even hon. Gentlemen opposite would not deny that this is a good investment. We spend £300 million on our education service. What hon. Gentlemen opposite will say that we should do other than spend this money? When we come to the social service of housing we must be prepared, if necessary, to spend money out of taxation so that we can meet the basic human need of these 4 million people.
§ Mr. Evans
The hon. Gentleman is a lawyer. He should not allow his fancy to run away with him. I did not say anything about £400 million or £500 million. I said that we should be prepared to spend public money out of taxation to provide housing as a social service. I stand by that. Although some of my colleagues may not agree with me, I take the view that Exchequer money must be provided to make the supply of rented houses a social service.
It has been said that rents will go up. Of course they will. I have admitted that rents are artificially low. Even under local authority ownership, rents will have to rise from their present artificially low levels. But the difference is that under local authority ownership the houses will be maintained. They will be decent houses in which people can enjoy living and bringing up their families, whereas under private enterprise there are 1 million slum houses in the country today. That is the contrast. We are forced to adhere to the Socialist view that only common action can solve this problem.
The Minister has run away from the standard set by the 1954 Act. When the present Chancellor of the Exchequer framed that Measure he made an attempt to oblige landlords to carry out essential repairs. The right hon. Gentleman put safeguards into that Act which were good ones. He knew that properties would not be maintained unless he enforced maintenance, so he made it obligatory for the landlord, before getting an increased rent, to serve a notice of increase upon the tenant. Then the landlord had to make a declaration that the house was in good repair and fit for human habitation. Under the 1954 Act the landlord had to declare on the prescribed form that the house was sound as to fitness and stability and in good repair, was free from damp, had ventilation, natural lighting, and had drainage and sanitary conveniences as well as having facilities for storage, preparation and cooking of food and for the disposal of waste water.
§ Mr. Evans
Please do not bring politics into this.
1839 The landlord was also obliged to say that the house was in good repair, and the definition in the Act was as follows:'Good repair' in relation to any premises, means that having regard to the age, character and locality of the premises they are in good repair both as respects structure and as respects decoration;All those safeguards have gone. The Minister may try to deny that, but he cannot. My reading of the second part of the Second Schedule to this Bill indicates that. Though I must admit that it is difficult to make out exactly what is the intention, I think I am correct in saying that the conditions imposed upon the landlord as to maintenance are much more lax than they were under the 1954 Act. Then he could obtain a certificate of disrepair and the onus was upon the landlord, but now the initiative is left with the tenant, who has to serve a notice upon his landlord.
I am sorry that the Government have been so drastic in their proposals under the Bill, particularly in the case of the 750,000 tenants who, in future, will not enjoy security. I suppose that this is a part of the Tory freedom about which hon. Gentlemen opposite like to talk, and which they have extended to these tenants. Those people will be free to be turned out if the landlord so decides, and without having any alternative accommodation. They will be free to pay any rent the landlord demands. Another 4½ million of our people will be free to pay greatly increased rents, with no assurance that their houses will be properly maintained.
This is a Tory Measure. It will hit the poor and put money into the pockets of the rich. The reckoning will come. It came in 1945. It will come again, perhaps very soon.
§ 8.10 p.m.
§ Sir Henry d'Avigdor-Goldsmid (Walsall, South)
It is a very great pleasure for me to be able, for once, to speak in a debate of this sort after having sat mute by order for over a year in similar debates during last Session.
I cannot begin more appropriately than by congratulating my right hon. Friend and my hon. Friend upon the Measure. It took very great courage to produce it at this moment. I know the intense thoroughness with which the whole matter has been studied and the enormous 1840 care which they have given to it, and I also realise their very great aliveness to the human values involved.
This is primarily a matter where human values take precedence over everything—that is frankly recognised on both sides of the House—but, all the same, I think it has also caused a certain fogginess to enter into some of the arguments which have been used. The words "landlord" and "landlordism" seem to bear no particular relation to actual landlords. I mention that because, in the nature of things, when our laws were made, they were made by the property, owning classes. Therefore, up to fifty years ago the law was very much biased in favour of the landlord. During the last fifty years all our legislation has been entirely opposed to the landlord.
As a result, the landlord has changed his character very much. He is no longer the wicked oppressor who derived great profit from the squalor in which his tenants lived. That sort of landlord sold out a long time ago. The owners of low-rented properties today are basically divided into two classes. In one class we have the tied house or tied cottage. Whether it is owned by a company or a farmer is immaterial. In the other class, we have what is really mainly working-class investment. From my experience in my own constituency, I should say that the ownership of a few houses is very often a working-class investment.
The big landlords who built our industrial towns have been out of the business for years and years. They got out when they saw the trend of legislation against them. The streets in my constituency bear the names of famous men, great landowners, but nowadays the ownership of the houses there is in no way related to the original landlords.
§ Mr. Lindgren
While that may be true about the individual landlord in small urban and rural areas, surely the hon. Member is not contending that in such large cities as London, Birmingham, Liverpool and Manchester the present landlords are not soulless investment companies managed by estate agents who have no concern for the tenants?
§ Sir H. d'Avigdor-Goldsmid
I referred to low-rented properties. The ownership of such properties is not an attractive 1841 investment today. Despite what has been said, profits are being earned through medium and high-rented properties which are not affected by the Measure.
§ Mrs. Lena Jeger (Holborn and St. Pancras, South)
What kind of rent has the hon. Member in mind when he refers to medium-rented properties? I know of flats rented for £5 a week which will be affected by the Bill. Is that a medium rent or a low rent which should be raised in order to help the landlord?
§ Sir H. d'Avigdor-Goldsmid
Obviously, I cannot talk about individual flats. I am talking about the main lines of the Measure. No doubt points such as the hon. Lady has in mind may be dealt with in Committee.
§ Sir H. d'Avigdor-Goldsmid
I am not prepared to set such a point. I base my attitude upon the White Paper. Rents will remain controlled for 4,250,000 houses. The "soulless companies" referred to by the hon. Member for Welling-borough (Mr. Lindgren) do not own properties of that type.
§ Mr. David Weitzman (Stoke Newington and Hackney, North)
Does not the hon. Gentleman realise that there are many properties in London at a rental of £200 to £300 a year which will be directly affected by the Measure, and that the rents will rise to £400 or £500 a year?
§ Sir H. d'Avigdor-Goldsmid
I am obliged for that information. I am still talking about the bulk of the people affected by the Measure.
In any case, the landlord has undoubtedly suffered under our legislation during the last fifty years. As a result of this, we have created a privileged class, that of the sitting tenant. The sitting tenant has been entirely arbitrarily chosen. Anyone lucky enough to be a sitting tenant has had major advantages. He has taken no special action to earn those advantages; they have simply come to him. The interesting thing is that this privilege is paid for by means of a levy charged not upon the public purse but upon the private landlord, whoever he may be. If we wanted to have a privileged class, I should have thought it would have been proper for the cost of 1842 the privilege to be borne by the Exchequer. It is nonsensical that landlords, individually, should be asked to provide the privilege.
It is similar to the situation which might arise if, during a time of petrol shortage, we considered it desirable for most of our people to use bicycles, and we therefore ordered the bicycle manufacturers to sell their machines at very greatly reduced prices. The answer to that is obvious. The bicycle manufacturers would, of course, go out of business. That is exactly what landlords as a whole have done. Landlords as a whole are not in business for the class of property which we are mainly discussing here.
I can see no stigma attaching to owning property. There was a time when people thought it a very bad thing to own armaments shares, but I notice that the Church Commissioners have been wise enough to change some of their investments, and they have certainly bought some of those shares.
§ Sir H. d'Avigdor-Goldsmid
They may have had slums, too, but the fact is that these things are done by the Church Commissioners. I have no doubt that the T.U.C. has also invested its funds wisely.
§ Sir H. d'Avigdor-Goldsmid
The hon. and learned Member for Kettering (Mr. Mitchison) produced a calculation and said that as a result of the permitted increase a sum of £85 million might be going into the pockets of the landlords. This is related to the 4,250,000 houses the rents of which remain controlled. Without accepting those figures—though I do not see any reason for not doing so—I would recall that the hon. and learned Gentleman said that this might double the existing rents. In other words, the rents would go up
The hon. and learned Gentleman said that the average rent would be 17s a week, but that does not represent in any way today the cost of producing an adequate house. I do not understand why hon. Gentlemen opposite think there is a duty on landlords, as against other people, to provide a service at less than it costs to replace—
§ Mr. Callaghan rose—
§ Sir H. d'Avigdor-Goldsmid
Perhaps the hon. Gentleman will just allow me to finish my sentence.
I was just about to mention the point made by the hon. Member for Aston (Mr. J. Silverman) that an enormous inflationary effect might arise through the 800,000 houses now to be free from rent control being put on the market. He foresaw the possibility of all these houses being sold at great profit at the same time. I am sorry that the hon. Gentleman is not in his place at the moment, but when one waits all the evening to speak one cannot always ensure that hon. Members points of whose speeches one takes up are here. I really must stress one point. We all know that rows of empty houses are waiting for sale. Why the hon. Gentleman feels that because 800,000 more houses are available they should all be for sale and all find buyers, when at the present time they do not find buyers, absolutely defeats me.
The hon. Member for Islington, South-West (Mr. A. Evans) said that the Bill was particularly untimely. I should have thought it a particularly timely Measure because it is almost impossible to borrow money now to buy a house, and therefore there is no danger of all the houses which are now to be available being sold by people who pre-empt and so prevent tenants from getting them. Most of the houses that change hands do so on borrowed money.
§ Mr. Callaghan
That was a very long sentence by the hon. and gallant Gentleman. He has escaped from the point on which I wanted to keep him. I wanted him to explain why he saw no reason why landlords should be expected to provide a service at less than cost. He hesitated and then said, "Less than the cost of replacement." Which does he mean? The rent of 17s. 6d. which he cited related to a house which cost only £200 when built sixty or seventy years ago.
§ Sir H. d'Avigdor-Goldsmid
Anybody who can maintain in good order a house which was built seventy years ago and which up to now has only had a rental of under 10s. a week deserves public praise. His award of 17s. 6d. will in no way reimburse him for the expense which he has had in maintaining that 1844 house. [Interruption.] I am sorry, but I must continue with my speech.
The right hon. Member for Poplar (Mr. Key) mentioned with great feeling a large number of houses the rent of which would go up from 10s. 8d. per week to a higher figure. I would point out to the House that 10s. 8d. per week only pays for 50 cigarettes. Do we really believe that the value of a house is 50 cigarettes a week? Are we taking as our dominant principle in these matters that 50 cigarettes a week is all the value we place on a house? I really cannot believe it.
Those who represent industrial constituencies are familiar with three disagreeable features, all of which the Bill will help to remove. The first is the rows upon rows of houses that are for sale, empty houses. They are a feature of most of our towns. Why are they for sale? Because, as hon. Gentlemen opposite have said, in present conditions the disadvantage of having a sitting tenant outweighs the rent which he can be asked to pay.
The second feature has not been mentioned, and I would draw it to the attention of hon. Gentlemen. It is something I have met very often and occurs where old people are living in a small rent-controlled house in my constituency. They have found themselves under very great pressure to buy the houses, many of which are little better than slums, at absolutely ridiculously high prices, in many cases. The reason they are under this pressure is that these are old people and the agents have told them that the tenancy will expire with their death and if they want to safeguard their children who are living with them they must buy the house. That is a great social evil that we see in industrial towns. The Bill will do something to remedy it because people will find that other accommodation is available.
The third feature is one of which we are very conscious. It is the creation of new slums from the over-occupation of property. We are particularly conscious of it in the Midlands. The Bill will do a very great deal to correct these three features. The Bill may be extremely unpopular but any housing measure is always unpopular. I believe it to be a serious effort to bring reality into housing matters.
1845 I see the point that hon. Gentlemen make in their publication "Homes of the Future". Hon. Gentlemen should notice that many of us have in the last few days been reading that interesting pamphlet about turning housing into a social service. If housing is a social service why not the supply of bread? [HON. MEMBERS: "Why not? "] Very good. If hon. Gentlemen intend to put before the electors a programme in which they wish to nationalise or municipalise every form of service in this country, let them say so openly to the electors and let the electors judge whether they want every form of service to be nationalised or municipalised. I have no doubt whatsoever what the result will be if the electors have a chance to give a decision upon it.
§ 8.27 p.m.
§ Mr. Victor Collins (Shoreditch and Finsbury)
I can assure the hon. Member for Walsall South (Sir H. d'Avigdor-Goldsmid) that we are only too anxious to submit our views on these matters to the electorate. We also have no doubt whatever what the result will be: we shall be sitting on the Government benches and some Government supporters, but not so many, will be sitting on these benches.
The hon. Member tried to calm our fears about the actions of landlords under the Bill by saying that in his experience most landlords were working-class Conservatives. I do not know that I take any comfort from that because the probability is that those curious individuals are even more ruthless than the other kind. The hon. Member said that the 17s. 6d. rent was not sufficient for an adequate house. I can assure him that in the constituency of which I have most knowledge we are not dealing with adequate houses.
What has been most marked about this debate is that in all their speeches back bench Members opposite have put forward experiences of their own constituencies, I am sure quite honestly. They confirmed my view that experience throughout the country is hopelessly uneven and that the Bill—while it might not hurt hon. Members opposite in their constituencies, where, perhaps the majority of people are already adequately housed—will, I assure the Parliamentary Secretary, do a great deal of damage and cause 1846 very considerable hardship in constituencies in London and the big towns.
I consider that the statement of the Parliamentary Secretary that by the end of 1957, roughly speaking, the supply of houses is expected to be equal to the demand is fantastic when we realise that all over London local authorities are closing their housing lists and telling people, "There is no more hope for you." Out of 160,000 applicants the L.C.C. may be able to house 2,000 from their waiting lists in three years. In a small constituency like mine there are 7,000 on the waiting list. The hon. Gentleman was good enough to make clear that when he was speaking of building three-quarters of a million houses he excluded those to be built for slum clearance.
§ Mr. Powell
That was because I was talking of a net increase in the total number of houses and necessarily omitted houses built to replace those demolished.
§ Mr. Collins
I agree; I thought that that was what the hon. Gentleman must mean, but there is no other building than slum clearance going on in constituencies like mine and, in effect, no building for the 7,000 on the waiting list, unless they happen to be in an area due for clearance.
This is a very serious thing and, in my view, the most wicked and anti-social piece of legislation introduced by either of the last two Tory Governments. The Minister has thrown the people to the wolves. He has given everything to the landlords and exacted nothing by way of repairs and improvements in return. The greatest crime is not so much the increase of rents—although that is bad enough—but the destruction of security of tenure. If this Government remain in power no one in a privately rented house will be safe. The Minister told us this afternoon that the annual increase of decontrolled houses through natural processes will be at the rate of 125,000 a year, in addition to the 800,000 that it is intended to decontrol under this Measure.
The Government take power in the Bill progressively to reduce the rateable value level, which means that before very long, if they continue in power, over every home there will hang the threat, "Pay up. Pay to the limit, or get out into the street". The Bill shows how 1847 utterly out of touch the Government and hon. Members opposite are with the realities and stark misery of the housing situation in the densely populated areas of London and other big cities. When its full effects are made known to the people I believe that their anger will be such that no Government will find it possible to stand against it.
I believe that in putting forward some details of my constituency I am putting forward what is typical of a very considerable number. We have 20,000 dwellings, of which 8,000 are flats built by the local authority and housing associations. That leaves 12,000 dwellings which are old houses, without modern conveniences, and none of which has been built this century. The newest is eighty years old. Most of them are ripe for demolition or very soon will be. Yet, out of that 12,000, 2,324—nearly one-fifth—are rated at over £40. If this Measure is enacted they will be decontrolled, so that one out of every five families will be liable to pay an exorbitant rent or be put out on the street.
Landlords can demand, and many will demand, an impossible rent with the sole object of getting vacant possession. Then they will be able to sell at a high price a big sub-standard house. The main value to them is that these houses are big and they can put a family in every room and charge each family an exorbitant rent. Have the Government considered what will happen in Central London constituencies if the new colonies of exploited tenants are British subjects from overseas? If some of these houses are decontrolled it should be a punishable offence to charge rent for them; people ought to be paid to live in them.
I know of houses, to be decontrolled under the Bill, which have not been internally decorated for more than thirty years. There is nothing in this Measure to compel the landlord, if he charges only double the gross value, to pay one penny for internal decoration. Surely the Government cannot commit the supreme folly of leaving the figure for rateable value at £40. That would be a gross injustice. I hope that at a later stage we can get that altered to £70 or £75. In my constituency, high rateable values are due to high site values. The condition of the accommodation is a disgrace. I say most 1848 earnestly to the Minister that he must look on this as a matter of inequity throughout the country and of special circumstances, so that during the other stages of this Bill exceptions can be made.
The Parliamentary Secretary himself has admitted that the supply of dwellings in the areas of which I have spoken cannot possibly be adequate under present arrangements in anything like the time that he has mentioned. I say that unless exceptions are made hundreds of thousands of families will be thrown out of their homes and local authorities will be asked to bear the impossible burden of housing them at the very time when the Government—I am not arguing about this—are insisting that they devote all their housing energies to re-housing the people from the slums.
And we have such slums. Of the 12,000 houses of which I spoke, 6,053—more than 50 per cent.—are rated at less than £18 a year. I ask hon. Members opposite to consider that kind of constituency, where, of 12,000 houses, 6,053 are rated at less than £18 a year. Some of those houses are a hundred years old. They have the lavatory in the yard, rain coming through the roof and they are damp and overcrowded. I say that we cannot put any more burdens on people already suffering those conditions.
That is what this Bill does. It adds to their burden. In some cases it will even take from them the pitiful thing to which they cling, the security of even living in a hovel such as that.
§ Mr. K. Thompson
Surely the hon. Gentleman is not trying to mislead the House. The tenants of these houses will not lose their houses, because houses at £18 a year will not be taken out of control. Secondly, if the houses are in the condition be describes, they will qualify for a certificate of disrepair.
§ Mr. Collins
I would ask the hon. Member to look at the White Paper. He will then see that there are 141,000 dwellings in England and Wales, at present let at net rentals of 5s. to £1, which will be decontrolled. There are many other ways in which these houses will be decontrolled, as I have already mentioned. Hon. Members may say that the tenant will be protected from such conditions because he can get a certificate of disrepair. I am not so sure about that.
1849 I would remind the House that twice in the Schedules these words appear in relation to a disrepair certificate:Having due regard to the age, character and locality of the dwelling.How is this to be interpreted? I ask the Minister tonight to remove apprehensions on this score and consider even using the language and procedure of the 1954 Housing Repairs and Rents Act which was very much better in this respect, left much less onus on the tenant and did not give us this objectionable minimum nine weeks' delay that we have now and during which possibly higher rents can be charged. I ask the Minister to take serious note of the difficulties of the disrepair certificate, particularly when we have such a large number of substandard houses.
One question which I think is important relates to Clause 14, concerning the position of the landlord and tenant of a former requisitioned house. The position now is that where a landlord has accepted the council's invitation to take the house back, together with the existing tenant, the tenant has a statutory tenancy and the statutory rent is laid down in Section 4 of the Requisitioned Houses and Housing (Amendment) Act, 1955. This rent is roughly the annual rate of compensation paid by the local authority plus the statutory repairs deduction, plus the rates. Under Section 4 of that Act the landlord, subject to the discretion of the local authority, could not recover more than the rent previously paid by the tenant to the council and the council was under a duty to make up the difference.
It is not at all clear what the effect of Clause 14 would be on this arrangement. Will the Minister say whether the notice of increase refers only to rates, or whether it means that the landlord who has taken back a tenant can, in fact, also raise the rent under the provisions of the Bill? If he can, then I say that it is absolutely iniquitous, because I would remind the House that this landlord has had two sweeteners. He has had paid to him two and a half years' compensation rent and, in addition, has received a sum to cover repairs, etc., which may have amounted to anything from £200 to £400. In other words, he may already have received quite as much as the house 1850 is worth, and, in the opinion of many of us, more than the house is worth.
I do not know how much public money has been spent in that way, but I would assess it at about £10 million. Are we to understand that, that public money having been paid, the landlord is to be allowed to put up the rent again under this Bill even though in many cases he has not done the repairs for which he was paid? It would be a scandal if that were the position.
I will quote two instances taken at random. The first is in respect of house A, a house which has been handed over. Under the council, the old standard all-inclusive rent was £99. The new rent would be £143, which means an additional 16s. 11d. per week. The second is house B, which had the old standard rent of £87 15s. In this case, the new rent would be £103 8s. 4d., which means that the council would have to pay an extra 6s. a week.
This is a striking example of how much more cheaply the local authority could and did do it and how much lower the rent was than it will be if it is allowed to go up to twice the gross value. The Minister is looking doubtful. If there is any point on which he is not clear, I will willingly give way. I have mentioned two actual cases and I would say that if the Government can find £10 million to throw away on landlords in this way it makes it even more scandalous that they cannot find even another 2s. 6d. a week for the old-age pensioners.
There is another small point to which I should be grateful to have an answer. The Bill provides that rents fixed as a condition of the making of improvement grants will be subject to increase in the same manner as other rents. This seems a very unfair provision and a misuse of public money when the local authority has made a grant on the assumption that the rent would be at some particular unalterable rate.
I should also like to ask the Minister to tell us what is meant in the Bill by a "clearance area." It is referred to in Clause 2 (2, c). I think it should be made clear what exactly is meant. Is it the resolution of the council or the making of the order or the confirmation of the order by the Minister which makes 1851 it a clearance order? Something might be said for including in that provision any properties which are included in the joint proposals, as slum clearance, for five years confirmed by the Minister in Section 1 of the Housing Repairs and Rents Act, 1954.
My final point refers to the proposed variation of the powers of the court to make an order for possession without alternative accommodation being provided. At present, the landlord can get such possession only for occupation by himself or his family, except where he purchased after 6th December, 1937. Now it is proposed to make the date 7th November, 1956. It was well known that there were legislative proposals of this kind, and I think it is utterly wrong to have put in the date 7th November when people have had a great deal of opportunity to buy property with the sole idea that in this way they could get the sitting tenants out and use it for their own occupation. I hope that considerable thought will be given to that point.
The Minister has a reputation for toughness, for conceding the shadow while retaining the substance. I hope that during the passage of the Bill he will lose that reputation and, to that end, I invite him and the Parliamentary Secretary once again to come to East and North-East London to see some of the properties to which I have referred. If they do, I am sure that they will be convinced that the Bill must not be allowed to go on the Statute Book without major modification.
§ 8.46 p.m.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
The Bill can be summarised by the Opposition in the following words: it is a wicked, anti-social, iniquitous Bill the purpose of which is to starve the old people and to release a flood of wage claims. I have had the opportunity of listening to the entire debate, and that is a summary of the phrases used. If it were so, I would expect to see, in such a momentous debate, a good many more Members on the Opposition benches than there are.
§ Mr. Rees-Davies
On the other hand, we have considerable confidence and trust 1852 in the Minister and therefore the enthusiasm which one would have expected from hon. Gentlemen opposite is not necessary on this side of the House.
As I am very limited in respect of time, I turn to my main points. In his lucid and extremely able speech the Parliamentary Secretary stated the issue as between the two parties briefly and accurately, as one would expect of him. The two sides differ on the method to end rent restriction; but what he left out is what may be the differences on our own side on this Bill which he is promoting, and that is the second issue: what is to be the timing of this very important operation? That is the issue to which I wish to turn tonight.
First, let me say that I am sorry not to have the opportunity to debate a little some of the observations which have been made by hon. Members opposite and also, in particular, to develop the merits of what I call the rent part of the Bill. This Bill is a misnomer. It is not a Rent Bill; it is a rent and decontrol Bill. It is primarily a Bill for the amendment of the Rent Restrictions Acts. The second feature is in fact the increase of rent.
I support all that part of the Bill which deals with the increase of rent, and I think it can be briefly stated thus: that the increase of rent provided for in Clause I will, in almost every case, not mean that the tenant will have to pay more than similar tenants are paying at present for their council houses. In those circumstances I do not see any financial hardship imposed under that Clause.
What I want to do is, I am afraid, to be perhaps the only person tonight to criticise, and I hope criticise constructively with suggestions, one part of the Bill—Clause 9 (1). I am very much in favour of the progressive decontrol under the Rent Restrictions Acts. I accept entirely both the objectives of getting a fair rent and of decontrolling progressively the houses of this country, but from my experience in this matter, and the sources which I shall be prepared, if need be, to quote and to enlarge upon by further evidence subsequently, I want to draw attention to the position in London.
There are, altogether, as we know, about 5 million houses which will remain under control, and about 4½ million which will go out of control in any event. 1853 Therefore, the problem with which I am dealing is a very small one. The total problem for the country is that altogether three-quarters of a million houses are to be decontrolled or, taking 3.6 as the average number of people per household, there are just over 2 million people involved, including wives and children.
In London, however, there are approximately 200,000 houses and flats which are at present controlled and which will become decontrolled, if in fact the rateable value to which the Rent Acts apply is reduced from £100 to £40 in the Metropolitan Police district. As between those limits of £40 and £100 there are involved, roughly speaking, 200,000 properties, rather more than half being flats. Let us just look at the position.
It is a statement of fact which I challenge anyone to disprove, whether he be land agent, estate valuer or anyone else, that the true value of the property if it returns to the open market will be four times the gross value, and the rents which will be commanded in the near future will frequently be two and a half times as great as those paid at present. I have here some actual instances, which are supported by the valuations of independent valuers. And I may say in passing that I have here no axe to grind at all. I am speaking, of course, in relation to London, not to my own constituency, and speaking from actual knowledge of a multiplicity of cases in this matter.
I take, first, as an example a block of flats in Sloane Avenue. They are one-room flats, with a bathroom, a kitchen and a hall. The occupants living in that type of bachelor flat are professional men and women, their average income being about £750 per annum. These are the facts. The gross value is £58. The rateable value is £42. The rates are approximately £30 per annum. The present rent is £100 a year. I am leaving out of consideration, for the moment, repairs, and am giving the full amount.
Therefore, for the future, if the rent were controlled under Clause 1, it would be £116 gross, plus £30 for rates, plus about £15 for services—about £160 a year. It is the judgment of those advising me in the matter, and of those who are able members of the Town Planning Institute—land agents and the like— 1854 that, in fact, the free value of a flat in this block is £230 to £250 a year. As I say, the present rent is £100 a year. Therefore, in that block of flats, those professional people who are at present paying about £100 to £110 a year will, if the property is freed, have to pay about £230 to £250 per annum, and my view of the matter is that they will not be able to afford that.
The next point is this. If 750,000 properties are to come on the market at once, will that, in fact, bring down the values sufficiently so that the effect will not be what it would be in today's conditions? The answer to that is, no, because there is a very considerable demand. That can be checked—and this is what the valuation officers in the Inland Revenue do not know and what the open estate agents and others do know; and it is why I think that on this matter the Government have not had the best advice.
There is an enormous demand from the Midlands and the North by businessmen, mainly company directors and others, for a pied-à-terre in London. They are able to do that on expense accounts, as company directors. I know of three cases in the last fortnight in which rents of £7 to £7 10s. a week have been cheerfully paid by these directors for furnished accommodation in this particular block of flats, and they would be quite willing to pay £250 for an unfurnished flat there, with a deterrent effect upon the professional men.
As I say, I regret casting a note of discord in this matter. I cannot, because I have not the time, develop my remarks on the features which I find so admirable in this Bill, as to 90 per cent. of which I am entirely behind the Minister. I believe that this is a courageous Bill.
Let me now give my second example of some large flats in Kensington. At the present time the rent of a flat of six rooms is £230 per annum. The gross value is £110, the rateable value £86 and the rates £65. If that were governed under Clause 1, we should get a rent of £220, plus £65 for rates and £40 for services, which would be £325. That is to say, there would be an increase of £95 to the tenant if Clause I were applied. The free value of that flat at the moment is £500 per annum, which can easily be obtained. That is to say, it is two and 1855 a quarter times the amount paid at the moment.
May I take a third example before I conclude, and this relates to a flat in the country in my own constituency, at Broadstairs, where the same problem does not arise? There the identical-sized flat has a gross value of £80 and a net value of £55, with rates of £50. If that were governed under Clause 1, there would be a rent of £160 plus £50 for rates, which is £210, plus £20 for services, which is £230. The rent which was last demanded was £160.
It is clear that at the present time in the country, although there would be an increase of rentals between £40 and £100, or between 50 per cent. and 70 per cent., by the application of Clause 1 and the elimination of Clause 9 (1), we should produce a rental which, although low, would not be altogether unfair throughout the country. Probably two and a half to three times the gross rateable value is a fair estimate of what is the true economic value throughout the country at the present time.
That, however, does not apply in central London or in certain of the suburban parts of London. Hence we get the real difficulty, not, as has been suggested, in the Labour constituencies, but in such places as Hendon, where this difficult problem arises. I suggest that the most admirable feature of this Bill is Clause 9 (3), despite what was said by the hon. Member for Huddersfield, West (Mr. Wade), whose views on this kind of subject I respect and usually share. In this case it is not a question of using the principle of Statutory Rules and Orders of this House. We have an operation which is an evolutionary process. The actual law which we are passing at the moment is one in which the Minister is carrying out a gradual process. He is seeking to bring about the progressive abolition of rent control by stages.
The second important issue, therefore, which I draw to the attention of the Minister is the timing of that operation. At the present time taxation is extremely high on those with an income of about £1,500 a year. Those are the people who are going to suffer here. In the County of London—I would stress this—this is a speculators' paradise which will attack the living standards of the middle class. 1856 It may be that it is so in some other big cities—I do not know; I have no evidence—but it will certainly be so here. I believe that the young chartered accountants, barristers, people working in the banks and others who have to work in and near the City and who receive from £1,200 to £1,500 a year will not be able to pay the rents which will be demanded of them, amounting to as much as £500 a year or more.
In conclusion, therefore—I will finish now so that the hon. Member for Welling-borough (Mr. Lindgren) can rise—I suggest that Clause 9 (1) should be excluded, but only in this sense, that it should be excluded so that Clause 9 (3) can be operated by the Minister whenever he chooses; and that in the operation of Clause 9 (3), that is to say, in the operation of the limits of decontrol, we should decontrol throughout the country, but, for the present, we should be very careful of decontrolling property in the Metropolitan Police district, if at all, because if one starts one may have accentuated the problem by taking out too little, and it may be that when one wants to operate decontrol one may want to take it even further than the £40 limit which is provided.
I do invite my right hon. Friend the Minister to treat the matter with the greatest care. I believe that the Bill which he has introduced is an admirable and courageous one in very many respects, but it would be unfortunate if the commercial men were enabled to muscle in on the extreme shortage of accommodation in the West End, Chelsea, Batter-sea and other parts of London, to the real detriment of the extremely hard-working professional man.
As I have said, I am sorry to strike a somewhat discordant note and not expatiate on all the points of which I approve, but I am limited in what I have to say solely by a shortage of time. If I may help my right hon. Friend by giving him evidence about this matter, which I have available in abundance, supported by surveyors of repute, I should be only too glad to do so.
§ 9.1 p.m.
§ Mr. G. Lindgren (Wellingborough)
This has been a rather unusual debate, unusual because it was opened by the Parliamentary Secretary who, as no one on either side of the House would deny, is a 1857 man of very considerable ability. The hon. Gentleman is usually at ease at the Dispatch Box, and he was equally at ease when he was on the back benches. He earned his promotion by the facility of his speech and manner of explanation when he sat on the second bench. But if I may say so, with the greatest respect, I am sure that the Parliamentry Secretary was not satisfied even with himself today. We sympathise with him because he was ill at ease in putting before the House a Measure which no person can really have at heart if he is at all disinterested.
Throughout this debate, there has been a sense of uneasiness among hon. Members opposite, until we came to the speech of the hon. Gentleman the Member for the Isle of Thanet (Mr. Rees-Davies) who was less ill at ease because he was criticising the Bill from the standpoint of a section of the community with which he is in contact and which he knows. Today—at least, this is the impression left on me—hon. Gentlemen opposite have just not had a clue as to what happens in the homes of these people about whom they are talking.
One or two hon. Gentlemen opposite have declared an interest, quite rightly, because they are associated with property companies or associations. Will the Minister declare an interest on behalf of the Government? This Measure is a payout to the landlords in response to contributions from property owners' associations and large landowners to Tory Party funds.
Sometimes I envy my more academic colleagues because they can, from their wider vocabulary, find words which somehow seem to keep within the rules of order, whereas I, if I said the same thing in my language, would be out of order.
§ Mr. Lindgren
Yes, I should still be correct. It is rather questionable, if no more, that we should have here a piece of legislation, which will put millions of pounds into the pockets of one small section of the community, introduced in response to contributions to party funds. If that were done by the ordinary hon. Member of the House, it would be a case 1858 for the Committee of Privileges and he would soon be outside the House. Yet a Government can do it almost with impunity.
Do not let us hide any facts or be mealy-mouthed about this. The purpose of the Bill is to take money out of the pockets of the tenants and to put it into the pockets of the landlords. That being so, the Bill is lowering the standard of a section of the community. The hon. Member for the Isle of Thanet said that the Bill lowered the standard of professional and technical people very seriously. I make no bones about it; I am much more concerned about the 4 million people in the lower income groups than about the professional and technical people. After all, 80 per cent. of the latter are responsible for the Government being in office. They asked for it and now they have got it. The Bill lowers the standard of life of the people.
Let us see what the Government say is the purpose of the Bill, as opposed to what I say is its purpose. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) referred to the Minister's speech at the Tory Party Conference. On that occasion the Minister spoke of "fearful unfairness". He said that it was unfair that private tenants should have their rents frozen while council house tenants enjoyed no such security
It is surprising to see this tenderness on the part of the Tory Government towards council house tenants. To make this new increase of rent possible they set about increasing the rents of council house tenants. The Government have never been anxious about substantiating their statements with the facts. Let us consider the facts. When discussing the recent Housing Subsidies Act, the Minister spoke about an increase of 9d. a week in rents. Yet hon. Members on both sides of the House know that council house rents in their constituencies have risen by anything up to £1 a week directly as a result of the Government's actions.
Having put up those rents by £1 a week, the Government now say that it is unfair that the council house tenant should have his rent increased while the private landlord is unable to put up the rents of his houses. The Minister went on to tell the Tory Party Conference that it was unfair to the nation as a whole that a substantial proportion of the 1859 precious stock of houses should be left to degenerate into slums.
I intend to deal with those two points. First, there is the question of it being unfair to the council house tenant. Let me say straight away that the vast majority of tenants, whether under a private landlord or under a local authority, have no objection at all to paying a reasonable rent for a reasonable standard of accommodation and reasonable facilities to go with that accommodation. What they object to is being robbed by high rents for a low standard of accommodation.
Let us look at the council house tenant. He has a reasonable standard of accommodation, and no more than a reasonable standard; he has water provided, sanitation, a bathroom and a reasonable standard of density in the area in which the houses are sited. Let us now look at the houses owned by private landlords. We are talking now about 7¼ million houses which are privately rented. Of these 2¼ million are over a hundred years old; 1¾ million are over seventy years old; 750,000 of them are over sixty-five years old. We come to the houses which are to have their rents increased by the Bill. I grant to the Government that 1 million slum houses are not to have their rents increased.
The 4 million houses we are talking about, whose rents are to be increased, are houses which were built before the Public Health Act, 1875, built before there were any rules and regulations and restrictions about standards of building construction, density of building, or anything else. There are 5 million houses which have no bathroom; 3 million which have no water closet, or in which the water closet is shared; 2 million which have no kitchen sink; and 1 million which have no kitchen stove.
All these houses, with the exception of the 1 million which have already been declared slums, are to have their rents doubled for no additional amenity whatever. What justification is there for doubling the rents of accommodation of that type? The landlords have for a long time proved that they have no intention of improving it.
It is suggested by the Government, and their supporters that rent control is the cause of property falling into disrepair. 1860 That is sheer nonsense. The landlord is concerned with his profit. He is concerned with what he gets out of his property, not what he puts into it. Landlords, in the main, have never been concerned with repairs to their property. Ever since the Torrens Act, the Artizans and Labourers Dwellings Act, 1868, we have had legislation to try to make landlords maintain their properties at a good standard. Was it rent control which caused the Government of the day, in 1868, to make the legislation to make landlords keep their properties in good repair? Of course it was not.
Ever since that time Governments of various parties—I will give credit to right hon. and hon. Gentlemen opposite and say successive Tory Governments and Liberal Governments—have passed successive pieces of legislation in attempts to try to make property owners accept the responsibility for maintaining their property at a reasonable standard. They have all failed. The Government have even placed the responsibility upon the local authorities, and the local authorities, through their sanitary inspectors and medical officers, have had to try to do it.
It is not merely coincidence that the only two categories of local authority officers who are protected from getting the sack by local authorities have been the categories, medical officer of health and sanitary inspector. The reason for that is this. Landlords were on local authorities, and as soon as the sanitary inspectors or medical officers of health started to do their job of getting the landlords to put their properties into repair the local authorities would sack them. So even Tory and Liberal Governments had to seek to protect those local authority officers.
What reason is there to suppose that landlords today are any different from the landlords of those days? I know, and admit right away, that there are persons who own one or two houses, the one in which they live and some other. Most of the houses owned by such people are in the small rural and urban areas. Their owners try to maintain their property at a reasonable standard. The vast majority of these houses we are talking about, however, are in large towns, London, Birmingham, Manchester, and the rest.
Large investment trusts buy up the properties and try to get out of them as 1861 much as they can as quickly as they can. The properties are administered by estate agents, and the tenants just do not stand any chance whatever. An hon. Member opposite is muttering. Lawyers are not exempt from these strictures, particularly some solicitors who sometimes aid and abet landlords in getting more out of their property than what they are entitled to.
Although he mentioned that we had rent control in the two wars, the Parliamentary Secretary did not say why we had to have it in 1915 and 1939. The reason why a Liberal Government had to impose it in 1915, and a Tory Government in 1939, was that the landlords could not be trusted not to exploit the wife and family of the soldier when he was away fighting for his country and, incidentally, for the landlord's property. If one could not trust the landlord in those circumstances, is there any more reason to trust him to be more reasonable in peacetime? 1, at least, do not think so.
We also had, in 1920, an Act to control rents—the Increase of Rent and Mortgage Interest (Restrictions) Act. Although the landlords of that time were given a 40 per cent. increase—15 per cent. for their investment and the remaining 25 per cent. towards the cost of repairs because materials and labour were at a high price then—the vast majority of them just pocketed the whole of that 40 per cent., and they have done nothing at all to the property. The property has been maintained only because the tenant, having to live there, and trying to make the best of it for his wife and family, has spent his own money in improving at least the internal condition of the property.
I agree that where tenants have not done that, the property has deteriorated even further. One can find examples everywhere of a street in a town where two or three houses are complete slums and the remainder are of a more reasonable standard, because those tenants have been responsible for maintaining the properties internally for the sake of their own health and comfort. But for the whole time the landlord has been taking the money.
He has taken the money during a peirod when the cost of labour and materials was falling all the time. There 1862 was no difficulty about obtaining materials and labour during the inter-war period. Painters and plasterers were walking the streets of London. Materials were cheap, and if the landlord could not get the job done officially by a builder he could always have it done by a workman who was only too glad to get a job.
There has been decontrol under both the Rent and Mortgage Interest Restrictions Act, 1923, and the amending Act of 1933. Under those Acts, 3½ million houses of all types came out of control. They included property of a rateable value over £45 in London and £35 in the provinces, but there is no evidence anywhere to show that those houses which came out of control were better maintained by the landlord than those which still remained under control. Because of the shortage of accommodation., the landlord has secured his high rents and has put as little as possible into the property in return.
Not one hon. Gentleman who has spoken from the opposite side of the House has said that there is any guarantee that any of the money coming in will be used for repairs. Indeed, the hon. Gentleman the Member for Aldershot (Sir E. Errington) was frank enough to say that if we wanted a higher standard of repair to be maintained this increase was not sufficient.
§ Sir E. Errington
May I point out to the hon. Gentleman that I was speaking only of the smaller landlords?
§ Mr. Lindgren
The smaller the house, the less it will cost to maintain. I agree; that there is not quite so much profit likely to be made out of that property as out of the property to which the hon. Gentleman the Member for the Isle of Thanet referred. The Parliamentary Secretary was very coy. No one would have thought from his speech that we had the Housing Repairs and Rents Act of 1954, because he ignored it completely
§ Mr. Lindgren
I do not think that even the Suez crisis has caused either the hon. Gentleman or his right hon. Friend to forget that Act. That great "Operation Rescue," on which we spent so much Parliamentary time both in the House and in Committee upstairs, where is it 1863 now? [An HON. MEMBER: "Sunk in the Canal."] If that Act had done its job, why is this Bill necessary? [An HON. MEMBER: "Operation salvation."] The Parliamentary Secretary ignored that Act because he did not want to admit that it had been a complete failure.
Perhaps I ought not to say "complete" because I have to declare an interest. Unfortunately, under that Act, my rent was increased by £20 a year. [An HON. MEMBER: "Hear, hear."] An hon. Gentleman opposite says, "Hear, hear." That meant a reduction in my standard of life, but the hon. Gentleman did not say "Hear, hear," when we wanted more money to help us to pay that £20.
Under the 1954 Act the increase of rent was applied to repairs. Having mentioned my own case, may I say that I had no cause for complaint because the repairs were carried out by the landlord. But in the majority of cases the landlord is concerned only with rent, not with repairs, and because the repairs were required before he received more rent he did not increase the rent. [An HON. MEMBER: "Sometimes he did."] Yes, he increased the rent sometimes when he was entitled to it. I do not object to that. No tenant will object to it if the standard of accommodation is there. If there is reasonable maintenance of the standard, no tenant minds paying for it, but nowhere, at any time, has there been any guarantee that this work would really be done.
Of course, there is a considerable difference between 1954 and now. Then, it is true, right hon. and hon. Gentlemen opposite were also in office, but they had a very small Parliamentary majority. They were much more worried about pairs then than they are now.
§ Mr. Lindgren
When the Minister made his speech at Llandudno he did 1864 not realise that his other right hon. Friend was likely to make a mess of foreign affairs and put him in the cart with this Bill. This is the deceit that the Tory Party practises on the electors,
In 1954, because they had a small Parliamentary majority, were likely to go to the country and, naturally, did not want to lose the General Election, the Government said "We must put a piece of legislation through as window-dressing. When we have got our majority, we will, early in the new Session, put through some legislation which will really give the landlords something. We will then hope that the electors will have forgotten it when the next General Election comes along, in three or four years' time." That is true. If it is not true, why did not the Tory Party say at the General Election that the Housing Repairs and Rents Act would not be sufficient from the point of view of the landlords and that they would again increase rents?
I want to give, a little more evidence that landlords are not likely to improve their properties. Ever since 1920 it has been possible for landlords of the properties about which we are speaking to improve them and to increase their facilities in respect of bathrooms, sanitation, kitchen sinks, and so on, and charge increased rents based upon a reasonable percentage of the money spent upon the properties. However, the landlords just have not done that. I have already quoted the figures for sub-standard houses.
The Labour Government said, "These landlords have never done anything. The Government, in 1920, helped them to obtain an increase in rent and allowed them to charge for repairs on the basis of a certain percentage. We will now give them 50 per cent. of the cost of improvements." Some of my hon. Friends, if not some of my right hon. Friends, thought that the Labour Government were being too generous to the landlords in 1949 by offering to provide half the cost of the improvements to their properties. Nevertheless, we gave the landlords the advantage of having half the cost of the improvements, up to a maximum of £400, met by the Government, and of being able to charge 8 per cent. upon the money spent upon the improvements.
1865 Did the landlords respond to that? Well, there are 7 million substandard houses, and the number of grants made under the 1949 Act and subsequent Acts is 70,000. Also, the great majority of the 70,000 grants have been to owner-occupiers who purchased houses and then wished to bring them up to standard. Advantage of the provision was taken by a number of country estates which improved the houses occupied by agricultural and other workers, but ordinary landlords took no advantage of the provision. The Parliamentary Secretary interjected earlier that the purpose of the 1954 Act was to encourage landlords to carry out improvements.
§ Mr. Lindgren
Some local authorities may have been a little slow in approving advances, but successive Governments have tried to induce them to make grants. It is true that some local authorities thought the provisions were a little generous to landlords, but, generally, landlords have not taken advantage of them.
The Parliamentary Secretary referred to supply and demand. I would ask the Minister either to confirm or correct the impression given to the House by his hon. Friend that our housing problem is finished and that by the end of 1957 supply will have met demand and everything in the garden will be lovely.
Reference has been made to London. My hon. and learned Friend the Member for Kettering referred to the 160,000 on the London waiting list, but the same applies to the rest of the country. Local authorities in my constituency have been no more backward than elsewhere; housing lists are there, with hundreds of applicants. What is worse, because of the action of the Government, local authorities are not now continuing with housing for general needs. People on the waiting lists just do not stand a chance of being housed within the next ten years, let alone in 1957. Nevertheless, the Parliamentary Secretary talks about the Bill helping tenants because it would make accommodation available.
1866 It has been stated that there is some under-occupation. Of course there is. What right hon. or hon. Gentleman on the Government benches has a house which is not under-occupied? Have they not a spare room? A large number of Government supporters have both a flat in London and a country house. It is only the worker who has to be huddled up. Is not the worker entitled to a spare room? If his family gets married—if he has a family—and he has a three-bedroomed house, is he not entitled to keep the three bedrooms, so that if a son or daughter wants to visit him for the week-end, with ma and pa, he or she can come? Even better, when grandchildren come along they can spend a week-end, or even a week, with grandma and grandpa.
Why do Government supporters say that it is only we, the working class, who ought to be huddled together? That is what they are saying. Of course there is under-occupation. There is under-occupation in every section of the community. I hope that we shall never go back to the days of my boyhood when we were huddled together five or six in one room, father, mother and children aged 12, 13, and even 14, all sleeping in one room.
The Parliamentary Secretary said that the Bill would release accommodation. People in the big houses would give then) up and go into smaller houses. May I ask whether the occupier of the smaller one is likely to give it up and go into a big house, the rent of which has been put up? He is not.
I can tell Government supporters what this means. What is coming is what they want. They are going back to the days when, for the working class, it was "doubling up". We have to accept all the overcrowding. We know what it is to be one of five or six families in a tenement house, each family having one or two rooms. But Government supporters are not concerned about that son of thing. Landlords have paid money to the party funds and it is the landlords who are concerned with the Bill.
The hon. Member for Henley (Mr. Hay) smiles. Let me remind him that when I was at the Ministry of Local Government and Planning, with my right hon. 1867 Friend the Member for Bishop Auckland (Mr. Dalton), the Property Owners' Association was almost daily on our doorstep to ask us when we intended to do something for it. We said that we were much more concerned with the 8 million tenants than we were with the landlords. The Tory Government has now told the Association that they are more concerned with the landlords than with the tenants.
I make a final plea to the Minister, in a most serious way. The country is in a difficult economic position. This point follows upon the one made by the hon. Member for Harrogate (Mr. Ramsden). I am not arguing now whether the Suez policy was right or wrong, but the economic consequences of the Suez policy will make matters much more difficult for the country. Some of us are trade unionists and some have responsibilities inside the trade union movement. I am a national officer of my trade union and am proud of it.
The Chancellor of the Exchequer has been lecturing us in the trade union movement. He even offered to come to the Trades Union Congress, at Brighton. He has been asking us not to make applications for wage increases. We in the trade union movement realise that the spiral of wages and prices is such that trade unionists ultimately do not gain. We were prepared to do something if the Chancellor would play his part in keeping prices stable. He talked about his "plateau" of prices.
I will make an even more personal point. My trade union has not gone forward with a wage claim, although there has been very heavy pressure from the membership to do so. I put it to the Minister, quite bluntly, that for those of us who have been asking the trade unions to exercise restraint he is cutting the ground right from under our feet. Some of the members I represent, and who accept the Tory idea of a property-owning democracy, have had their repayments increased by £1 a week as a result of the increased interest charges on their mortgages. Those in council houses have had their rents increased up to £1 a week. Under this Bill, those rents are to go up by about 15s. a week and 800,000 are to be decontrolled. Goodness knows what will happen to them.
1868 I say to the right hon. Gentleman that he has come to the limit and that if he puts these burdens on our members he can no longer expect those of us who are associated with the trade union movement to accept that reduction in their standard of living. He and the Government will have to face the fact that these payments to landlords will not only come from grants to be paid by the National Assistance Board for those no longer in employment, but in increased wages to those who are in employment and are represented in the trade union movement.
§ 9.37 p.m.
§ Sir Ian Horobin (Oldham, East)
I cannot think that the speech of the hon. Member for Welling-borough (Mr. Lindgren) will increase his reputation. I do not intend to waste the last few minutes in this debate by referring to his speech but to some of the important matters dealt with by the hon. and learned Member for Kettering (Mr. Mitchison) and other hon. Members. [Interruption.] I think I can claim that I have spent all my life in a working-class district, and I want to treat this matter much more seriously than this knock-about turn of the hon. Member's party.
The housing record of this Government is, after all, not too bad, and it entitles them to a hearing in this matter. It does not lie with hon. Members opposite to criticise them, even those who speak with much more care than the hon. Member for Welling-borough. After all, we built nearly twice the number of houses that were built by hon. Members opposite. We are doing about four times as much in improvements. For the first time since the war we have started on slum clearance, and are already doing more in a year than they did in all their time in office.
Paradoxical as it may sound, it is rather important to get back to what this Bill is really about. Strictly speaking, the point which seriously divides the House and which requires serious discussion, and on which the country must make up its mind, is not a rent problem at all. What we are discussing is not whether rents should be decontrolled, for that is agreed. It is true that hon. Members opposite want to decontrol faster than we do, but it is agreed on both sides of the House that rent control must come to an end. 1869 We are not discussing whether rents should go up. All serious hon. Members and all speeches in the debate—I am not referring to the last one—on both sides of the House have agreed that rents must go up. There is no dispute on that. It is extremely doubtful whether the level of rents at the end of the day will be very different whether our proposals or those of hon. Members opposite are adopted. It is equally true, although I am not quite so categorical about it, that the question of security of tenure is not really very much at issue between serious hon. Members on both sides of the House. There is less security of tenure in our proposals over part of the fields—
§ Several Hon. Members rose—
§ Sir I. Horobin
I have little time and I am not being provocative.
On the other hand, serious hon. Members have argued from the Socialist point of view that good local authority housing management to some extent and by some method implies a greater melting of the present over-rigidity in the occupation of houses. That is not really what is in dispute between us. What we are really discussing tonight, and what we have to settle, is not whether rent should go up but who is to own the houses which are to let.
Hon. Members opposite have a perfectly arguable case. Frankly, I think that in part of the field it is a stronger case than is sometimes recognised on these benches. What they in effect say, when they are being serious, is: "It is vital to get rid of control, vital to put up rents, but you cannot fairly do that without grave risk of injustice unless we own the houses". That is a perfectly arguable proposition, if put honestly and frankly in that way. Why is it that we on these benches are making, as was very rightly stated, a second desperate effort since we came here in 1951 not to take that line of action?
We have two general objections to anything which would involve, as a means of getting rid of rent control, all rentable houses being owned by local authorities. We have some practical objections. First, we feel that it would grossly overburden the local authorities. We want them in the next few years to 1870 concentrate on slum clearance and reconditioning, without having to take over millions of houses which we feel would hopelessly overclog the local authority machine.
Secondly, in spite of some of the fantastic financial arguments which I do not think that the hon. Member for Aston (Mr. J. Silverman) on consideration would wish to pursue, we feel that the financial implications of paying anything like fair compensation in respect of millions of houses would be quite intolerable, particularly at a time when we are still struggling with inflation. Those are two practical objections. We also have social objections.
We have social objection to there being only one landlord over a huge area of some of our great towns. We think that bad in itself. I, for instance, know well—and other hon. Members probably know—what we might call the Becontree mentality. [Interruption.] I am not asking hon. Members opposite to agree. I tried to put their case fairly and now I am putting ours—why we on these benches will not accept that there is no alternative to the proposal for all rented houses to be owned by local authorities. We think that that would be building up a thoroughly bad society which would be in danger of becoming a totalitarian society. We feel that it is thoroughly bad that in large industrial areas people should grow up in street after street looking to the town hall for everything from the time they are born to the time they die.
We take that view, and that is why we are introducing this Bill. It is fair enough for hon. Members opposite to ask us: is it practicable to reconstruct the old landlord-tenant relationship? Can it be done? Even if we desired to do it, is it possible? [An HON. MEMBER: "Heaven forbid."] It is not a question should heaven forbid it; but can we forbid it? That is not quite the same thing. I tell hon. Members at once that over part of the field I very much doubt whether it can be done.
For forty years we have made in this country the position even of the good landlord of the smaller and poorer type of houses impossible. Even where he wanted to keep them in decent repair he could not do so. We may for a moment admit that some of them may not have 1871 tried. But it is just not true—hon. Members on this side of the House will bear me out and I shall be surprised if some hon. Members opposite do not—that every landlord becomes a curious creature with no virtues, who is at the same time such a good businessman that he wants to make a profit and such a bad businessman that he puts off all repairs until they cost five times as much, and his house falls down. That is a fantasy and bears no relation to the true position.
Over a small part of the field—what I might call the near-slum—I frankly admit that something in the nature of what Birmingham set out to do and what the Government have done their best to foster in Sections of the 1954 Act will have to be done. I frankly do not believe that any increase of rents under this Bill could possibly meet the kind of house referred to by the hon. Member for Aston, I think it was, where about £200 has got to be spent on each house. In the majority of those cases such houses will have been under old control, and, therefore, it is fair to point out that for forty years the landlord will not have had the money with which to keep them up. It is no good jobbing backwards on that.
I admit at once, and I think the Minister will admit it, that those sort of houses cannot be rescued in this kind of way. Local authorities will have to take them over. [HON. MEMBERS: "Ah."] They are taking them over. We cannot claim that that kind of bad property will be rescued by a Bill of this sort, but such property is not representative. It is ridiculous to pretend that such houses are representative of all the millions of working-class houses. That just is not true. A great number of these houses will easily be kept in decent repair if rents anything like the present value of money are allowed to be paid, as they will be paid under the Bill.
I want at this stage to put one very important point. I do not want to go into it in detail tonight because that can be done during the Committee stage. I beg the Minister not to make the mistake made in the relevant Sections of the 1954 Act of cutting this thing too fine. We simply come to the psychology of the ordinary human individual. If he is given a chance to keep his house in decent order, the normal businessman will try 1872 to do that, but if whatever he is allowed is going to be clearly insufficient to prevent the house from falling gradually into a slum, he will not spend a penny on it. He will put the money into his pocket, which is what anybody would do. That is what will happen in respect of a great many of these houses where £30 or £40—certainly £20 or £30—has got to be spent because in recent years it has been impossible to find the money out of the controlled rent.
If we take 10s. as the average increase, the landlord is only going to get £26 in the course of a year and only £13 in six months. If, therefore, he is met with a list of things which no doubt ought to be done and which may cost two or three times that amount, and if he has not done that at the end of the six months of the increased rent and has got to refund the increase, the result will be that he will not do any of that work. Therefore, the Minister must make sure that the landlord cannot be called upon to do more than the repairs which can be paid for by the increase in rent which he has received
I do not think that any hon. Member on either side of the House would wish a landlord of a house on which work ought to be done to be able to have an increase in rent unless he does an equivalent amount in work. But we must face the fact that these landlords have no more money left. There is nothing in the kitty. They have got to have this money first—
§ Sir I. Horobin
They have to have the money first if they are to spend it. I do not need to ask anybody. I have dealt with these houses all my life. I live among them, as the hon. Member knows perfectly well.
The sort of people who have these reasonable, decent houses in working-class areas round about London cannot spend £30, £40 or £50 out of their own pockets. They have to have it first. If it can be lent to them by some procedure, well and good, but the normal thing is that it should come out of the rent. We should be sure that any demand made under the certificate procedure does not call upon them to do more than the 1873 amount that they get out of the increased rent, because if that happens they will not in fact do anything at all.
Before leaving that general point, I insist that the normal landlord-tenant relationship is nothing like as bad as has been made out. There are thoroughly bad slum landlords, but my principal objection to the Rent Restrictions Acts is that they have been a great apparatus for ensuring that nobody who is not a bad landlord owns this kind of house if he can help it. There must be something thoroughly wrong with a social structure which makes it a good proposition to make television sets and an excellent proposition to spend years and years improving motor cars until we have got the Rolls Royce, when the one thing that no businessman will do if he can help it is either to build or own houses for rent. That situation has been produced by the Rent Restrictions Acts.
What we are setting out to do in the Bill, and I believe that we shall do it increasingly, is to make it possible once again for the ordinary decent investor to hold houses for letting. It used not to be the investor of large sums of money. The joke in my constituency is that everybody in the town owns his own house and the house next door.
Working-class houses always have been a favourite form of investment for a person owning two or three of them. We want to make it possible for those sort of people to keep these houses in decent condition, for themselves and their neighbours. Equally, where there are good companies which own houses of this kind, we want to make it possible for them to raise capital in the ordinary way on the market and to spend it in the ordinary way on keeping these houses in decent condition. We shall never do that so long as we have the Rent Restrictions Acts.
Both sides of the House have come to that conclusion. The only thing we differ upon is whether we can do it as fast as hon. Members opposite think, or whether we have to go more slowly. We are determined to ensure that the private landlord should not be in a position to exploit houses which he, for one reason or another, is not able or willing to spend money on to put them in good repair.
I want to make a few passing remarks on two criticisms that have been made 1874 and to comment on a point which nobody has criticised, and which I think is very interesting. Nobody has even referred critically to the very important decisions of the Government to rest their rent increases on the rateable value. I am speaking only of England and Wales. It is an extremely strong point in favour of the Bill that, by avoiding anything in the nature of a percentage increase and concentrating on the rateable value basis, we have found a much more reasonable way of gradually lessening the control than by any alternative.
It has been suggested that the limit on rents under the Bill will be too high. The answer to that, in my submission, is simply this: that at the very highest I do not believe there can be many of the houses concerned where all that money will not be needed for a substantial time to be spent on the houses, and anything less than that would not prevent those houses falling into decay.
It is of no use at all putting on an increase of just a few shillings a week because, even if it is all spent on the house, when it has been spent we still have a wasting asset. From the national point of view that is a complete waste of money. Even supposing, for the sake of argument, that we let the Opposition have its way and that the money, in some extraordinary way, was taken from the tenant and spent by the local authority on the house—so that every penny was spent on the house—it would still be a gross waste of money if we merely spent a few extra shillings a week on repairs which were not sufficient to prevent the house falling into decay. I think that that is the fundamental argument in favour of an increase of at least the kind which we are providing.
We have heard some complicated calculations suggesting that this is a huge subsidy to landlords. Of course, that is putting the matter the wrong way round completely. For years there has been a concealed subsidy of tenants by landlords. What we are now doing is simply a tardy act of semi-justice, and all the calculations which have been put forward merely show the extent to which a quite unreasonable and unfair burden has been put on one section of society to provide accommodation for another.
It is proved beyond all doubt that if we go on as we are, millions of houses 1875 will simply fall down. There is no solution of the housing problem at all in simply building one house at one end of the street and watching two houses falling down at the other. The present position is completely intolerable and must be brought to an end. That is the answer, if I may say so, to the adjective used by the hon. and learned Member for Kettering who spoke of this Bill being "untimely". So far from being untimely, this Measure is years overdue.
The present position cannot be allowed to continue. If we are not prepared to see a situation arising in the main industrial towns in which there is only one landlord and, therefore, a landlord with complete monopoly control over the livelihood of the citizens, we are forced to something like this Measure. More money must be found to be spent on these houses, otherwise they will just fall down. Some means must be found of abolishing the absurd position, which we know perfectly well happens over and over again, in which landlords are having to pay these huge subsidies to tenants who are earning more money than they, and who sometimes, in their turn, are sub-letting.
Millions of our houses are going to remain for letting. It is impossible to envisage a position in which everybody can be an owner-occupier. I am all in 1876 favour of owner-occupiers, and think that they should be helped in every possible way—[Interruption]. Incidentally, that is one of the reasons why I want to see council houses sold. It is, however, quite unrealistic to suppose that more than a proportion, even though a substantial proportion, of the people in this country can be owner-occupiers. Millions of people will continue to do what they have always done—live in houses belonging to someone else.
To whomever the houses belong it is, in the public interest, essential that sufficient money should be available to preserve the asset. What the country has to decide, and what this House will be deciding when it votes tomorrow night has, as I say, nothing at all to do with rents, security of tenure or anything else, but with who is to own the houses which will be available for letting to working people. Hon. Members opposite have argued the case that they should all belong to the local authorities. We, on this side, are not prepared to accept that. Therefore, we have brought in this Bill which will, we believe, ensure that the private owners of houses available for letting shall have sufficient money to prevent them falling down.
Debate adjourned.—[Mr. E. Wakefield.]
§ Debate to be resumed Tomorrow.