HC Deb 22 June 1971 vol 819 cc1387-96

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

1.47 a.m.

Mr. Michael Barnes (Brentford and Chiswick)

I am glad of this opportunity to raise the subject of the need for further regulations governing the conduct of rent assessment committee hearings. The regulations I am seeking would require such committees—in cases where they publish in written form their decisions and the reasons for making them—to summarise all the evidence they hear, both the evidence given on behalf of the tenants and that given on behalf of the landlords, before reaching their final conclusions.

I am raising this issue because I am particularly concerned at the way in which London rent assessment committees appear to be arriving at their decisions. I have with me an extraordinary document giving the decisions and reasons of the London Rent Assessment Committee in determinations it made concerning eight flats at Sutton Court in Chiswick, in my constituency.

This document consists of 14 pages, 12 of which comprise evidence submitted on behalf of the landlords. The tenants were represented by counsel at the hearing in question before this committee, but there is no mention in the document of any cross-examination, though it took place, of the landlords' witness by the tenants' counsel. There are no references to any of the arguments adduced on behalf of the tenants. There is merely this one sentence: Mr. Sedley … counsel for the tenants … informed the Committee that his clients had instructed him to accept the figures for Fair Rent registered by the Rent Officer in respect of each property". Apart from that, there is no reference to what was submitted on behalf of the tenants. I say that this is an extraordinary document because I believe that it makes a mockery of the intentions of the Rent Act, for reasons which I shall show.

The landlords in this case are the Freshwater Group of Companies, one of the biggest landlords of private rented accommodation in the country. I will not dwell on the Freshwater operation. It was the subject of an inquiry in the Sunday Times on 8th November, 1970. I would just say that their operation is clearly a very slick one designed to get maximum benefit out of the Rent Act for the company rather than to work within the spirit of the Act. They rely to a considerable extent on ignorance of the Rent Act among their tenants, and when leases fall in and they offer new leases it appears to be their practice to ask for very big increases in rent in the hope that tenants are unaware of their rights under the Act. This has caused a lot of distress, particularly to some elderly tenants in Sutton Court, Chiswick.

It is also their practice, so it appears, when they grant new tenancies, to say to the prospective tenants that they will get the tenancy only if the tenant agrees to make a joint application with Freshwaters to the rent officer for a fair rent to be fixed—and the tenant will get the flat only on that basis. This is a useful device from Freshwater's point of view because if the application to the rent officer is a joint application, it is possible for the rent to be re-registered within three years of any previous registration.

I should like to look in detail at three of these eight flats at Sutton Court, Nos. 67, 131 and 135. In the case of these three flats the previous registrations were respectively £225, £250 and £230 rent per annum. The flats were then let to new tenants, on condition that there would be this joint application to the rent officer, for rents of £425, £475 and £450 respectively. The rent officer then fixed the rents at £300, £285 and £300 respectively. The Rent Assessment Committee then registered the rents at £332, £338 and £332 respectively.

The percentage increases, that is, the increase in the rent fixed by the Rent Assessment Committee over the previous registration, are 47.5, 35.2 and 44.3 respectively.

Mr. Evelyn King (Dorset, South)

As the hon. Gentleman has given that percentage increase, could he say when was the last registration? Over how many years does that increase apply?

Mr. Barnes

The registrations are no more than three years ago, and two of them are just within the three-year period. To be fair, I was about to point out that two of the flats, Nos. 67 and 135, had about £700 worth of repairs done to them before they were let to the new tenants, so because of that, let us concentrate on flat No. 131 which did not have that kind of money spent on it. I do not think that any money was spent on repairs before it was let to the new tenant. The rent officer raised the rent of flat No. 131 by 14 per cent. when asked to fix a fair rent. But the Rent Assessment Committee fixed a rent which was 35 per cent. above the previous registration. This registration was just within the three-year period. That is a 35 per cent. increase in rent within a three-year period. In other words, the Rent Assessment Committee more than doubled the increase fixed by the rent officer, and its increase of 35 per cent. was far in excess of any figure by which it could be said that rents had increased during the three-year period.

I come to the question of the evidence in this decision and the reasons. There is no reference to the cross-examination of the landlords' witness by the tenants' counsel. There is no reference, either, to the fact that the new tenants of the three flats were granted the leases only on the condition that they were willing to sign a document agreeing to make a joint application to the rent officer. The tenants thought that this was a very important point, because they thought that the fact that they had been forced to agree to make a joint application to the rent officer prejudiced their case before the Rent Assessment Committee and they thought that the Committee should have taken careful note of the fact that they made that joint application only under duress.

I took up this question with the President of the London Rent Assessment Panel. He, after corresponding with the Chairman of the Committee concerned, replied as follows: Mr. Sedley"— that is the tenants' counsel— did cross-examine Mr. Musto"— that is the landlords' witness— on a number of points which were not material to the decision and were not therefore included. Mr. Sedley did make a comment that the tenants were under pressure to sign the application forms to the Rent Officer or else they would not get their flats. This was not included in our decision as it had no bearing upon the determination by the Committee of the fair rents. In other words, none of the evidence submitted on behalf of the tenants had any bearing on the Committee's decision but 12 pages of the landlords' evidence was presumably highly relevant to the Committee's determination.

Page 2 of the evidence says this As a result of the change of ownership a more positive form of management policy has been introduced. As an example of this more positive management on page 3 are set out a whole lot of covenants which the new landlords included in the new leases and which they claim were not in the previous leases granted by the Norwich Union Life Insurance Society, the previous landlords. These covenants involved such things as keeping the gardens or open spaces neat and tidy, employing certain porters and caretakers, keeping the structure in repair, maintaining the estate roads, and lighting the common entrances. It may be that the covenants were not in the Norwich Union leases, but the tenants assure me that none of these things is in any way different or better under the so-called more positive management of the Freshwater Group of companies than it was under the Norwich Union.

I could go on throughout the 12 pages of landlords' evidence and pick similar holes in many of the arguments there advanced. It is worrying that it should be possible to do this, because clearly the Rent Assessment Committee was greatly influenced by these 12 pages of evidence, because the President of the London Rent Assessment Panel has said that these pages of evidence would not have been included in the committee's decision and reasons if they had not been highly relevant.

I therefore believe that this is a situation which the Minister should regard as serious, because there is already a feeling among tenants, certainly in London, that besides the huge expertise that big property companies like Freshwater can bring to bear, tenants just do not stand a chance before rent assessment committees. This case is a classic example of that. It seems to bear out that feeling almost exactly and it can only help to strengthen the feeling that many people already have about rent assessment committees in London.

I believe that the Committee has dealt with those eight cases in an extremely perfunctory manner. It has swallowed the landlord's case whole and has not bothered to include in its decision and reasons a single word of evidence put forward on behalf of the tenants.

Therefore, I ask the Minister, first, to make clear to the committees that they are not fulfilling their functions under the Rent Act if they publish decisions and reasons in that way, and, second to reinforce his representations to them by introducing before Parliament the regulations to which I referred at the beginning of the debate, requiring rent assessment committees to set out all the evidence put before them fairly in the written decision and reasons which they publish. If this is done, at least tenants will be able to feel that the evidence they put have put forward has been properly considered.

I am very much afraid that the tenants in the case of the eight flats in Sutton Court in Chiswick are totally unable to feel that their evidence was properly considered.

2.1 a.m.

The Under-Secretary of State for the Environment (Mr. Paul Channon)

Before dealing with the case which the hon. Member for Brentford and Chiswick (Mr. Barnes) has made with regard to his constituents in Sutton Court, Chiswick, I must point out that tribunals such as Rent Assessment Committees are independent bodies which come to their decisions on the basis of the evidence put to them, and taking into account any other facts that they consider relevant. It is not for me to comment on the merits of any decision they make, nor is it right for the House to attempt to retry decisions made.

I am extremely sorry that the hon. Gentleman should have used this occasion to make a general attack on the working of Rent Assessment Committees, which I believe are generally recognised, as was shown by the unanimous report of the Francis Committee on this issue, to be working well and fulfilling their difficult duties in an extremely fair manner.

Of course, any system can be improved, but I believe that the rent assessment committee system and the fair rent system in general are working well, was borne out by the Francis Committee Report.

The case raised by the hon. Gentleman concerns the determination of fair rents for eight flats in Sutton Court, Chiswick. In January and February, 1970 the landlords and tenants made six joint applications to the rent officer. In the two remaining cases the tenants applied to the rent officer for the registration of a fair rent following the renewal of their leases at a higher rent.

In every case the rent officer registered a fair rent which was lower than the rent requested either in the joint applications or in the two cases where the tenants requested a registration. Irrespective of whether a rent registration is applied for jointly or by one of the parties, the rent officer has a statutory duty to ensure that the rent he registers is the rent he considers to be fair. The fact that an application is made jointly in no way detracts from that duty. The only criterion is whether the rent is fair. It makes not a scrap of difference whether it is a joint application or an application by one of the parties.

Following the rent officer's determination, the landlords appealed to the Rent Assessment Committee. One registration was, by the agreement of all the parties concerned, withdrawn, and so the committee in fact considered seven cases. The hearing took place on 17th November last year, when the committee determined fair rents which were higher than those registered by the rent officer but generally substantially lower than those originally requested. I can send the hon. Gentleman the facts of that if his impression is different.

Subsequently the hon. Gentleman wrote to the President of the London Rent Assessment Panel about the terms of the decision letter issued by the Committee. The President replied in the terms which have been quoted to the House. It is not for me to comment on the decision of the assessment committee, which is an entirely independent body, and such committees take a great deal of trouble and are generally respected for the work they do. Any part that is aggrieved by a decision may appeal on a point of \aw to the High Court, but this must be done within 28 days of the issue of the decision letter.

At the hearing three expert witnesses were called by the solicitors acting for the landlords. These were cross-questioned by the tenants' counsel. I would point out that the tenants were represented by counsel, and it was a little unfair of the hon. Gentleman to imply that the tenants were not adequately represented.

Mr. Barnes

I think the hon. Gentleman has misunderstood what I said. At no stage did I imply the tenants were not adequately represented. I said that the cross-examination which their counsel carried out, indeed his whole case, was not referred to in a single word of the decision.

Mr. Channon

I shall come to the decision letter in a moment. What the hon. Gentleman said was that in cases of this kind it was unfortunate that the great property companies could use professional witnesses and had counsel at their service, but that the poor tenants were not represented. These tenants in fact were represented by counsel.

Several of the tenants were also called by counsel to answer questions about the standard of the provision of services and other matters. The decision letter, however, very largely consists of what was said in evidence by one of the expert witnesses called by the landlord's solicitors and refers very briefly to the tenants being satisfied with the rent officer's determination.

One can only presume that the Committee considered this evidence to be the most important and that other matters raised were, in their opinion, either not relevant or, since the landlords were present, points raised by the tenants could be noted by them and therefore did not need to be included in the decision letter. Indeed, this is the gist of the comments made by the Chairman of the Committees and passed on to the hon. Member by the President of the London Rent Assessment Panel.

I can well understand and sympathise with the tenants' concern that the terms of the decision letter would seem to suggest that the Committee had not considered sufficiently their side of the case. I have no reason to doubt that the Committee acted fairly, but I accept that the wording of the decision letter could, and apparently did, give another impression.

The hon. Gentleman was interested in the statutory position. The Rent Act, 1968, in Schedule 6, paragraph 9(2), deals in part with the determination of a fair rent by a Rent Assessment Committee. The particular paragraph 9(2) states: Where the committee confirm or determine a rent under this paragraph they shall notify the landlord, the tenant and the rent officer accordingly. This does not specify that reasons for any decision be given. But Rent Assessment Committees are tribunals within the meaning of the Tribunals and Inquiries Act, 1958. Section 12(1) of that Act states that the tribunals specified are duty bound, except in wholly exceptional cases, to give reasons for their decisions if requested to do so.

Evidence given to the Francis Committee pointed out Rent Assessment Committees vary in their practice as regards giving of decisions. The Committee found that Rent Assessment Committees outside London often announced their decisions orally, with reasons, after the close of the argument and in such cases did not always furnish the parties with a written statement of the reasons for the decision. In London the Committee found that it was the practice to give a written decision with reasons in every case and a copy was sent to every party. I hope, therefore, that the hon. Member will accept that if he does not consider that the giving of reasons was adequate in this case, that it is nevertheless the normal practice to ensure that the parties concerned do receive reasons.

The question of giving satisfactory reasons for a decision fixing a fair rent is not a new one. It is clear that such reasons should go beyond the mere statement that the rent fixed is that which the committee has arrived at by applying the "fair rent" formula in Section 46 of the Rent Act.

Although it is sometimes far from easy to give reasons for valuing something at a particular level, an attempt is generally made to state the committee's view on any particular issues which arose at the hearing. There have been High Court decisions adjuring Rent Assessment Committees to give adequate reasons, and indeed the President of the London Rent Assessment Panel has drawn the attention of all members of his panel to such decisions, and has always stressed that decisions should deal with any material relevant to the Committee's conclusions.

The London President holds regular meetings of his panel members, at which he discusses with them any matters affecting the conduct of Rent Assessment Committee work in general and any criticisms made of the functioning of these committees. I am sure he will consider carefully if anything further can be done to help towards the aim that justice will not only be done but will be seen to be done. I will write to him and draw his attention to the hon. Gentleman's remarks.

The hon. Member will also be interested to know that my right hon. Friend intends to lay before the House very shortly new Regulations governing the procedure to be followed by Rent Assessment Committees at their hearings. The proposed Regulations specify that the decision should be given with reasons. These Regulations will largely spell out what is in fact existing practice. For example, it is general practice that London Rent Assessment Committees do give reasons for their decisions in their decision letters.

The regulations will also provide—I will not go through the list—that parties at a hearing shall have the right both to give evidence on their own behalf and to cross-examine any witnesses called by the other party; they deal with a whole host of matters.

These regulations are the outcome of full discussions between panel presidents, the Council on Tribunals and the Department, and I hope that the hon. Member will find them satisfactory.

May I take up, briefly, on important point raised by the hon. Member. This is the suggestion that the Landlords make it a condition in the granting of a new tenancy that the tenant sign a joint application for the registration of the agreed rent by the rent officer. As I have pointed out, the rent officer is duty bound to register a rent for a dwelling which he considers to be fair and the fact that it is a joint application which he is considering does not affect this.

Secondly, though a tenant may have agreed a rent with his landlord without going to the rent officer, he is fully entitled, following for instance, greater knowledge of fair rent levels in his area, to go to the rent officer at any later date and ask for a fair rent to be determined. May I also emphasise that irrespective of any disagreement over rent, any sitting tenant has security under the Rent Act and the fact that a rent officer may be determining a fair rent for his dwelling does not affect his security in any way.

The hon. Member made another point which rather surprised me, when he said that if a joint application was made to a rent officer a person could seek re-registration within three years. Section 44 of the 1968 Rent Act specifies that three years should elapse, unless there is a change of circumstances, before a new registration can take place. The fact that it was a joint application makes no difference. It is exactly the same as if it was an application made by one or other of the parties. The hon. Member need not be concerned about the practice of making joint applications, because it does not prejudice the position later if a tenant wishes to go to the rent officer. The rent officer has to consider what is the fair rent for that particular dwelling. That is the sole criteria he uses, irrespective of whether it is a joint application, or one made by an individual.

On the hon. Gentleman's point about the wording of decision letters, I shall certainly draw the attention of the President of the London Rent Assessment Panel to his remarks. Dealing with his general point about the need for further regulations governing the conduct of these hearings, independent of his action this evening, the Government had already decided to lay such regulations and they will be available shortly. I hope that the hon. Gentleman will find that they are satisfactory. They have been the subject of detailed discussions, and I believe that they will be in the interests of all parties at these hearings. I agree with the hon. Gentleman that while justice is done at these hearings, it is equally important that it should be seen to be done. That is certainly the aim of all rent assessment committees.

Question put and agreed to.

Adjourned accordingly at a quarter past Two o'clock.