HC Deb 14 June 1968 vol 766 cc664-74

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

3.10 p.m.

Mr. Gilbert Longden (Hertfordshire, South-West)

The issue which the luck of the draw has given me the chance to raise this afternoon is that of the malignant effects which the present law—that is, the Government's Rent Act, 1965, as consolidated in the 1968 Act—have had and are having upon 1,700,000 of the nation's houses and upon 400,000 tenants who occupy them—

Mr. Speaker

Order. I hesitate to interrupt, as the hon. Gentleman can imagine, but he cannot, on the Adjournment, advocate a change in the law. He must call attention to things for which the Ministry is administratively responsible.

Mr. Longden

Mr. Speaker, I am not advocating a change in the law.

As you are aware, Sir, this debate would normally be limited to 30 minutes, but today we have a little longer at our disposal. My task of confining my remarks to within about 15 minutes is made the easier because this matter has been recently debated in both Houses, in another place on the initiative of the noble Lord, the Earl of Kinnoull, on 7th December last, and in this House on the initiative of my hon. Friend the Member for Bournemouth, West (Sir J. Eden) on 28th February last.

Since those two debates we have had the White Paper—" Old Houses into New Homes", Cmnd. 3602—which reveals that, as a result of three years of Socialist bias against private landlords, there are now 1.8 million houses, which is 12 per cent. of all our houses, which are slums, and another 4½ million which need substantial repair to bring them up to standard—"up to standard" meaning having a bath, a basin, a kitchen sink, all with hot and cold water, and an indoor lavatory—and in decent repair.

The White Paper proposed that houses that are up to standard, or which are brought up to standard with the aid of a grant, should become regulated tenancies with fair rents, but that … it would be clearly wrong for the full fair rent to be payable right away. The increase in rent will therefore be phased over a period. In other words, this gross injustice is to continue for an unspecified duration.

The Fair Rent Association described the White Paper as the beginnings of a victory for common sense. I hope that the Association is right, but these are only proposals. Many of my hon. Friends and I have been asking the Government for many months when they propose to act. Eighteen months ago my name was drawn third out of the hat for Private Members' Motions, and my Motion appeared on the Order Paper for 27th January, 1967. It was a long Motion, dealing with many of the Government's actions concerning property, including a detailed account of what I am now discussing, and it ended by saying that this House has no confidence in a Government whose pathological bias against the private sector is mainly responsible for their failure to fulfil the country's present housing needs". The Motion was not debated because it was third. I believe that even the second was not reached that day.

I make no apology for raising the matter again today. In so doing, I have no interest whatever to declare except that interest which every Member of Parliament should have in fighting injustice and in striving to redress the justified grievances of Her Majesty's subjects. Unfortunately for them, the subjects to whom I refer are too unorganised, uninfluential and scattered to have much electoral significance, and unfortunately, too, they now have a Government who react pathologically to the word "landlord" and who have no great love for private property in any form. I have never understood why, just because a man has chosen to invest his savings in house property rather than in equities or gilt-edged securities, he should be presumed to be a Rachman; or why, since some tenants need to be subsidised, it should be at the exclusive expense of some of their fellow citizens rather than by us all.

It is estimated by the Fair Rent Association, from Ministerial and other publications, that out of our national stock of 17½ million houses 46 per cent. are owner-occupied, 28 per cent. are rented from local authorities, 5 per cent. are tied, and 21 per cent. are rented from private owners. The 21 per cent. privately rented are divided into only 9 per cent. "regulated"—that is, houses let at rents which have been adjudged to be fair, and 12 per cent. old controlled, that is, houses which, by implication, are still let at unfair rents by private landlords—perhaps 400,000 of them, of whom at least half are pensioners and of whom very many are worse off than the tenants they are subsidising.

These controlled rents were fixed in 1956, when the Conservative Rent Act brought some relief to private house owners by allowing the then controlled rents to be increased to twice the gross value of the houses in that year. But in that year rateable values were based upon 1939 rents, and in any case that year is now 12 years ago and these rents have not altered since.

The result is that the average controlled rent today in London is £66 per annum and in the rest of England and Wales it is £38 per annum. Those figures were given by the hon. Gentleman the Joint Parliamentary Secretary on 20th June, 1967, col. 1400 of HANSARD. In Scotland, according to the Cullingworth Report of 1967, over half of these tenants are paying no more than 10s. a week and over a quarter no more than 5s.

On 2nd May, in response to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter)— HANSARD, col. 40—the Minister told the House that registered rents are now two-and-a-half times higher than controlled rents. It has been calculated by the National Federation of Property Owners that this represents in total a subsidy of £95 million per annum received by one group of our fellow citizens at the expense of another. The "Great Rent Robbery", indeed!

I have had nothing new to tell the Joint Parliamentary Secretary. He knows all these facts far better than I do and has done so for far longer. Nevertheless, I want to give him the chance of saying at long last when the Government will do something to reverse a policy, the flagrant injustice of which deprives a man of the reasonable rewards of his thrift by gradually eroding his capital and by confining his income within derisory limits; and the economic folly of which is rapidly destroying a valuable national asset.

The hon. Gentleman will have seen the hard cases collected by the Fair Rent Association, and there are thousands of similar cases up and down the land. I have time to cite only two among many from my personal experience. Mr. F owns seven controlled properties in outer London, six smallish houses and a shop. From these seven properties he actually receives £132 15s. per annum. When Mr. F claimed a supplementary pension, he was told that under the 1966 social security legislation account had to be taken, not of the income which he actually receives, but of the capital value of his assets.

This capital value had been estimated by the district valuer as being £2,233 15s. and, under Part III of Schedule 2 of the Act, that figure was treated as the equivalent of a weekly income of £7, that is to say, £364 per annum, or nearly three times what he actually gets. He was, therefore, entitled to a supplementary pension of only 5s. a week. Of course he cannot sell these properties. If the divorce reformers in the House have their way, it will soon be easier to get rid of an uncontrolled wife than of a controlled house.

The second case is described in a letter which I wrote to the Minister of Housing and Local Government on 15th December, 1966. I quote: One of my constituents owns three self-contained maisonettes. Each contains two bedrooms, one reception room, a kitchen and a bathroom; and each has a separate entrance. The rateable value of each of these homes is £98; yet my constituent is only able to obtain £1 6s. 5d. in rent from each of them, the tenants paying the rates. In one of these three flats lives an old lady who takes lodgers … in another the husband and the wife and their grown-up son all work; in the third both the husband and the wife work. All of them have been there for years and are much better off than their wretched landlord. Considering that the neighbouring Council is charging up to £8 a week for the rent of a Council house, this seems to me to be iniquitous and a perfect case for the Ombudsman. If it is impossible for my constituent to increase his rents, I should be glad to hear your views on the whole issue. That constituent, when he came to see me, had just had to spend £550 on re- pointing and on the gutters, and he brought with him a peremptory notice from the local council telling him that he must give instructions for further work to be done without delay. He also told me that two of his tenants spent more per week on their poodle dog than they spent in a month in rent.

The Joint Parliamentary Secretary replied: From what you say it seems likely that the rents of the maisonettes are still governed by the 1957 Rent Act and I know that rents of this type can cause difficulties for landlords. The new system of rent regulation by means of rent officers and rent assessment committees which has been set up under the 1965 Rent Act is designed eventually to cover all unfurnished dwellings with rateable values up to £400 in Greater London. It was not practicable however to cover the whole field from the outset and the Government had to choose priorities. It was decided that the first call on the new system must be to deal with decontrolled rents, where the greatest hardship was being caused. This means that the controlled rents are left as they are for the time being but the Minister has the power to make an order bringing them into the rent regulation system. That is what I ask him to do today.

The letter continued: Anthony Greenwood said recently that he had no intention of making such an order at present and I cannot add anything to that. But when the appropriate order is made a landlord who owns property of this type will be able to apply to the rent officer for a fair rent to be fixed, and will then be able to increase the controlled rent by 15 per cent. a year until the fair rent is reached. When is the appropriate order to be made? The power to do so was given by Section 11 of the 1965 Act which has been repeated in Section 8 of the Consolidating Act of 1968.

Back in 1965, when the present Lord President of the Council was Minister, he gave what was then interpreted as a pledge that the controlled tenancies would be regulated just as soon as the then decontrolled tenancies had been dealt with by the newly appointed rent officers; and, as Lord Kinnoull reminded their Lordships, the letter appointing these rent officers contained the following paragraph: Stage I will deal with previously decontrolled rents which are brought into regulation by the Act, and Stage II with the rents of properties which were subject to control under the earlier Rent Acts before the Act of 1965 came into force. This is the important stage. Stage I will throw up a relatively large volume of work initially which will then tail off to a steady and lower level. As this point is reached, the Minister will bring Stage II into operation. This will enable the present controlled rents to be reviewed by the new regulation system and fair rents to be fixed."— [OFFICIAL REPORT, House of Lords, 7th December, 1967; Vol. 287, c. 842.] It is my submission that the great majority of these rent officers, who number about 250, are now under-employed, and I believe that they would be among the first to say so. The time has come, therefore, for Stage II to be operated forthwith and for economic rents to be allowable for all house property.

Undoubtedly some, and perhaps many, of these tenants will need to be subsidised, just as some council house tenants need to be subsidised; but that, surely, must be done by the community as a whole and not by a small section of our people.

In a letter to The Times of 27th May last, Professor Donnison wrote that the Government could not be expected to bring old controlled tenancies into the so-called fair rent system … before we have devised ways of subsidising the poorest tenants who cannot afford a fair rent. I think that that was best answered by Mr. Alec Samuels, of the Faculty of Law at the University of Southampton, who wrote to The Times on 31st May: The continued failure to bring in the controlled tenancies is contrary to what we were led in 1965 to believe would happen and the present situation constitutes a way of enforced subsidising of the tenant at the expense of the landlord without any regard whatsoever to the means of either party, and represents a shocking social injustice, as well as a threat to the maintenance of the premises. Subsidies should be given to people, not premises; and by the community, not by private persons, least of all private persons selected at random. Many others more qualified than I have written about the iniquitous effects of this Act: Mary Holland, in the Observer; "Insight", in the Sunday Times; and Mr. Norman MacCrae, of the Economist, in his study " Homes for the People", in which he says, among other things, that something has gone crazily wrong with Britain's economic system. I think, too, that what I wrote in the Daily Telegraph of 18th January, 1967, applies equally to this matter: I do not see how anyone of any party who has any respect for equity or the rule of law could acquiesce in these proposals. It is true that they will affect but a small minority; but what the rest of us had better realise is that, if the legal rights of any citizen can thus be arbitrarily altered, the rights of every citizen are thereafter ever in jeopardy. That is all I have to say. I devoutly hope that I shall get a less perfunctory answer from the Minister than the one which he vouchsafed to my hon. Friend the Member for Bournemouth, West.

3.31 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)

When speaking on behalf of the Government I always start by making a good resolution that I will behave in a dispassionate and dignified way, raising the standards of Parliament, not descending to party squabbles or indulging in "me-too-ism". So often I am outraged by the kind of case which is put to the House and, through the House, to the public that I find it extremely difficult to avoid doing a certain amount of party crowing rather than dealing with the case that has been put up.

The hon. Member for Hertfordshire, South-West (Mr. Longden) started by talking about the "malignant effects" of the 1965 Rent Act, and about the "pathological bias" among Socialists against the private sector. Anybody listening to him would get the impression that when the Government came into power they did something prejudicial to the position of private landlords because they disliked and wanted to discourage them.

The hon. Gentleman never said that the controls he was denouncing, which have all these so-called appalling economic and social effects, and are causing so much damage to houses, were not controls introduced by this Government. They were controls introduced, first, about 50 years ago. In 1957, under a Conservative Administration, these controls were left in the legislation. The 1965 Act did nothing to worsen the position of old controlled property. It tackled the problem of the great social and economic crisis caused by the 1957 decontrol provisions. The hon. Gentleman condemned regulation as a substitute for complete decontrol. He did not mention the position of old controlled property.

Mr. Longden

Rent control was introduced for the first time in 1915. By 1957 the time had come for it to be abolished, and for those tenants who needed to be subsidised in their rents, whether for public or private property, to be subsidised by the community. If the 1957 Act had been left undisturbed it would gradually have phased out all rent control. The 1965 Act stopped that process.

Mr. MacColl

The hon. Gentleman is wrong. It is true that there were powers in the 1957 Act in certain circumstances to alter the measure of decontrol, but it is also true that for electoral and political purposes the then Government gave a pledge that they were not going to extend the range of decontrol.

We introduced the 1965 Act to deal with the de-control provisions of the 1957 Act, and we left in the 1965 Act Section 11 to which the hon. Gentleman referred which dealt with the possibility of extending decontrol at some time. As the hon. Gentleman said, although this was not a new field, we were building up a new system of rent regulation which we had not had before, and as we saw the situation at the time it seemed to us that we were likely to be able to extend its provisions. What I am repeating to the hon. Gentleman is that all his talk about pathological bias against the private sector is nonsense. The provision was left in the 1957 Act, and the hon. Gentleman was among those who voted for it.

The hon. Gentleman went on to talk— and I ought not to develop this point— about the new White Paper dealing with older houses. I ought not to go into detail about this, but it is by far and away the biggest thing that has ever been done for the private sector of housing. The proposals are far more effective, more generous, and more likely to make the private sector viable, to keep up the condition of the houses, to improve the quality of the houses, than anything else that we have ever had on the Statute Book.

We have had to deal with the legislation we inherited, and this debate is about existing legislation. The legislation is largely what we inherited, with comparatively small improvement grants. It is interesting historically to note that the first improvement grants were the 1949 ones, which were made under the Labour Government of that time.

There was another point which the hon. Gentleman did not mention, although I am sure that this was not intentional. He did not explain the workings of creeping decontrol. He talked about the great rent robbery, and the fact that the present legislation had riveted these tenants on the landlord for ever, but that is not the truth. The position is that when there is a change of tenancy, subject to the qualification of the first succession of somebody living in the house, that house automatically comes into rent regulation and out of the old control.

The people of whom we are talking have certainly been living in their houses since 1957. They are all well-established; they are not people who have moved in and have obtained the advantages of artificially low rents. Many of them have been living in their houses long before 1957 and are elderly; and they are not rolling in money, as is sometimes implied. Some may be, but generally the incomes of these tenants are low. There may be a need for a subsidy in the privately-rented field, but that, again, would require new legislation and I cannot go into it in detail. We had an interesting debate on that point in the Birmingham Bill, not long ago.

The figures which the hon. Member quoted are correct, to the extent that they are the ones that we have used. I do not quarrel in any way with his use of them. But I am a little suspicious of these figures, because there is a certain amount of circular reasoning about them. To try to discover how many of these old controlled tenancies existed we had a housing survey in 1963-64, which gave us a figure. We then assumed that creeping decontrol was operating at the rate of 10 per cent. a year, and by a simple calculation we worked out how many were left after five years. But we cannot go on from that to say that creeping control is not working quickly, just because we have suggested a rate of 10 per cent. That is merely a guideline.

It seems to me that the percentage must increase, because these people are all growing older and no more people are coming into the group. I suspect that the figure may not be very accurate. At the moment, the Department of Employment and Productivity is engaged on a survey to find out as nearly as possible the number that remain. I hope that we shall know something by the end of the year.

I do not propose to take up the question which the hon. Gentleman asked, namely, why should the investment in houses be interfered with, in comparison with investment in securities. It all depends when the investment in the security was made, and in which security it was made. If people bought gilt-edged stock when many of these houses were built they would not find much difference in the yield from stocks or houses. If an investor were as competent as the hon. Member and had his knowledge of the problems of the market he might have been able to avoid this, but considering a single investment it is misleading to assume that the value of securities would go on increasing while the value of the investment in the houses would not.

One of the reasons why we have not been able to implement Section 11 of the 1957 Act, now Section 8 of the 1968 Act, is that the whole system of rent regulation and termination is a great experiment which has worked well and has introduced a different tone to landlord-tenant relationships. The situation just after the 1964 Election, when the Milner Holland Committee reported on the appalling and shocking housing conditions and landlord-tenant relationships in London, shows a great improvement today, when a great deal of the abuse has been removed.

But it is a new system and it is early to say how it is working. It takes time to settle down and to decide whether the levels of rent at which it is operating are the right ones. One of the things which we are anxious to do is to increase the numbers of people using these facilities. There is no doubt that if more people in the cheaper and poorer rented property used the rent officers, they would find that the system worked and that many of them were paying lower rents.

The argument is linked with the question of when we can make changes with controlled property. We are anxious to act in the interests of those for whom the Act was designed and we are starting a publicity campaign to spread the knowledge of the service where it is most needed by means of television, local press, posters and leaflets, which will also draw attention to the protection afforded to tenants against harassment and illegal eviction. I hope that these measures will lead to increased use of the services by those most likely to benefit.

Professor Donnison has been a vice-president of the panel in London and a great housing expert and pioneer. What he said in the letter which the hon. Member quoted is of great value. When I say that we have not yet solved the problems of private landlord-tenant relationships and private rents, I am not confessing to a story of miserable failure but saying that, in spite of the tremendous improvements which we have made in many directions and our immediate proposals to improve them even more, there are still headaches which we must overcome, and we are anxious to do so.

I am sorry to return to a somewhat polemical point, but we can claim that, in our period of office, we have done infinitely more than was done by previous Governments and that we have, so far from having obsessively tried to be beastly to private landlords, in many cases made things far better for them. We are being scolded not for anything which we have done, but because, in one respect, the Government have not judged that this is the right moment, not to introduce something, but to get rid of something which even Conservative Governments could not get rid of—old control.

Question put and agreed to.

Adjourned accordingly at ten minutes to Four o'clock.