HC Deb 30 April 1973 vol 855 cc918-24

Question again proposed.

10.1 p.m.

Mr. Freeson

I will sum up as follows. Why have we the distinction in the ceiling for unfurnished and furnished tenancies for rateable value and rent registration purposes? Is it the Government's intention to advise local authorities to use what powers they have to refer direct to rent tribunals and, where necessary and where tenants are at risk, to seek the purchase of properties? Is it the intention of the Government to issue advice which will clarify the law along the lines suggested by my hon. Friend the Member for Kensington, North in respect of local authority rent tribunals?

Is it the Government's wish to see a much bigger use of the rights in law to get security of tenure, limited though it may be, and get registration well beyond the total of 100,000 out of 600,000 such tenancies? Is it the Government's desire that rent tribunals should continue to extend their powers to secure security of tenure in terms of rent registration which up to now have been used only to a very limited degree? Is it the Government's intention to introduce some broadly based policy which would enable local authorities and others to get control of the rapidly deteriorating situation in this area which has such a marked impact on the inner stress areas of our cities?

10.3 p.m.

Mr. Graham Page

I must first state that this is an order made under Section 89 of the Housing Finance Act 1972, and under that Act—and indeed under the Counter-Inflation Act 1973—it would not have been possible to make an order which would have extended the rateable value limit protection for existing dwellings. It could have been an order which increased the limits for new dwellings, but that would not have met the cases put to me by the hon. Members for Kensington, North (Mr. Douglas-Mann) and for Willesden, East (Mr. Freeson). It would therefore not have been possible under the order to meet their case.

Parliament has accepted the Counter-Inflation Act 1973 and the Housing Finance Act 1972, which limits the orders which can be made to the type of order which I have brought before the House tonight—the amendment of the rateable value limits on new dwellings coming within the valuation list on or after 1st April. That is as far as the Government can go under existing legislation.

Mr. Douglas-Mann

Can the Minister elaborate a little on the reasons why, under Section 89 of the Housing Finance Act, the Government are limited in the way he suggests? As I understand the section, there is power to increase rateable value limits for the purpose of the Rent Act 1968—under subsections (1) and (2) of Section 89 of that Act. For the purposes of Section 1 and 71 of the Rent Act 1968, Section 89 of the Housing Finance Act enables the Government to determine as the relevant amount for a dwelling-house in Greater London, such sum exceeding £400 as is specified in the order, and (b) as the relevant amount for a dwelling-house elsewhere, such sum exceeding £200 as is so specified. I cannot see the provision in Section 89 which would limit the Government's power to raise the rateable value limits to the same levels as those to which they have been raised in the Counter-Inflation Act 1973.

Mr. Page

With respect, if the hon. Gentleman reads the whole section he will find that power was given in the Act itself to raise the limit on new unfurnished dwellings but that it did not give the Government power to raise the limit on existing dwellings. I shall endeavour to explain the position more fully in a letter to the hon. Gentleman if he wishes, but without wishing to sound conceited I am certain that I am right in what I say. I should not have had the power to make the order for which the hon. Gentleman asks.

In saying that, I have no wish to avoid on that ground the points which have been put forward in the debate. What the hon. Member for Kensington, North and the hon. Member for Willesden, East have argued is that the Government ought to have taken power to do that, and they have asked how in future we intend to take that power.

The protection offered by the Rent Acts to the tenants of unfurnished accommodation was increased by the Counter-Inflation Act 1973. That was done by raising the rateable value limits, as they were then, to £600 in London and £300 elsewhere. Under revaluation those limits go up to £1,500 and £750 respectively. That was done because of the evident hardship to tenants whose flats had a rateable value of £400 in London and £200 elsewhere in a situation where the demand for unfurnished tenancies exceeded the supply. As was pointed out in the debates on the relevant clause of the Counter-Inflation Bill, those tenants were being forced to pay inflated market rents and had no protection when landlords began the even more profitable practice of selling all their flats on long leases.

The £400 limit had been chosen back in 1965 as the point beyond which there was a balance of supply and demand at that time resulting in a free market above those figures. That was a free market acceptable to both landlord and tenant at that time. But as the situation had clearly changed in terms of unfurnished tenancies the limits were raised to £600 in London and £300 elsewhere. This maintained a dividing line similar to that created by the £400 and £200 in 1965.

We looked very carefully at those considerations at the time. They did not apply to furnished tenancies. The Acts have always acknowledged the difference between furnished and unfurnished tenure and the demand and supply of each. There is no automatic reason to raise the rateable value limits for furnished tenancies to keep in step with the unfurnished sector—

Mr. Freeson

Is the right hon. Gentleman really suggesting that there is some kind of balance as between supply and demand in the furnished rented market?

Mr. Page

There is above the £400 and £200 figures. There is very little furnished accommodation in London above the £400 limit. My Department has no evidence of undue pressure on the little furnished accommodation which exists above that figure. The demand for accommodation of that kind comes mainly from diplomats and businessmen seeking flats in London.

In the circumstances, there seemed to be no need to tamper with the free market forces in those areas.

Mr. Freeson

Will the Minister therefore explain why all people who are observing the ceiling are saying that there is an extension of the market for furnished accommodation at that level? More accommodation in inner London is being emptied of its present tenants and held, converted, modernised, and so on, at higher rateable value, for diplomats, businessmen, tourists, and so on. It is going on now, and the Minister is saying that it is not.

Mr. Page

I do not accept that all people are saying that. The people who need protecting are those within the limits of £400 in London and £200 elsewhere. Above that there is no pressure on the market which necessitates that protection. The extension of the Rent Act's protection to the unfurnished sector was made in the knowledge that that sector was declining. By comparison, the furnished sector is relatively stable. The 1971 census figures show an increase in the number of furnished lettings in London. In view of that indication, it would seem wrong to discourage such lettings by further control. That is why we refused, on the passing of the Counter-Inflation Act 1973, to increase the limits for furnished lettings in the same way as we had for unfurnished lettings. The hon. Member for Willesden, East asked me what the distinction was between the limits for furnished and unfurnished dwellings. That is my answer to his question.

The hon. Gentleman also asked about the Government's thinking on this area of housing. The Government do not believe there is any need to increase the limits for furnished dwellings beyond those figures of £400 and £200 or to adjust them for new dwellings coming on to the valuation list on or after 1st April.

I was asked whether, in implementing the order, we would undertake further steps to explain the law. It is not the duty or responsibility of a Minister to interpret the law. I thought that the hon. Member for Kensington, North was inviting me to teach county court judges their law. I assure him that I have practised, as he has, before county court judges for more years than I care to remember and have endeavoured to teach them the law, but I have never been well received in doing so. Therefore, I should not like to try now.

We have the Citizens Advice Bureaux, which are wholeheartedly supported by the Government both financially and in other ways, to which citizens can resort to find out their rights. The more we can encourage them to do so the better. We encourage local authorities to advertise the Citizens Advice Bureaux and to encourage people to go to them for advice. That is the only way that we can ensure that people do get advice.

I was asked whether I would recommend local authorities to refer cases to rent tribunals. I am sure that local authorities know that they have the right to take cases before rent tribunals where the tenants ask them to do so. [Interruption.] I heard a murmur. Even if the tenants do not ask them to do so, they have the right to take cases before rent tribunals. Perhaps I should stress on the Floor of the House that there is no need for local authorities to wait to be asked. If they think that there is a case of harassment of a tenant they have the right to take the case either to a rent tribunal or elsewhere.

Mr. Ronald Brown (Shoreditch and Finsbury)

Does the Minister agree that the general consensus in London is to advise against going to the tribunals because they cannot guarantee more than 28 days' or, at best, two months' notice? Consequently, the advice to the tenant always is "I would not go if I were you."

Mr. Page

I do not accept that. The rent tribunals are there for the benefit of the tenants. I do not think that rent tribunals are so over-crowded that a tenant cannot get before one in a short time. When the tenant goes to a rent tribunal there is available a substantial security of tenure.

The hon. Member for Kensington, North rather scoffed at the idea of six months, plus another six months, plus another six months, but these applications can go to the rent tribunals and they can extend the period of time for as long as necessary.

I was asked whether I would support local authorities in the purchase of properties where there was, I presume, harassment of tenants and where that was the only way of securing the tenants' home to them. I know of no case in which the Secretary of State has refused compulsory purchase on proper grounds of that sort. Where the local authority comes forward with a compulsory purchase order on proper housing grounds it is considered on its merits, and the merits are whether it is necessary to preserve the housing and provide housing for the people within the district.

I was asked whether I would tell rent tribunals to extend the period of tenure. Parliament has given rent tribunals a discretion in this and it is not for Ministers to tell them how to exercise that discretion. To do so would be contempt of Parliament by the Minister concerned. The Act gives rent tribunals that discretion and they must exercise it as they see fit on the merits of each case.

I cannot give the hon. Gentleman the answer to his question about the proportion subject to rent registration and limited security, but I shall endeavour to look up the up-to-date figures on that.

I mentioned that there were a number of conversions of property which in the future would command a high rateable value. I do not think that it is necessary to provide protection for those, but where there are conversions which come within the limits of this order, the tenants of those areas should have protection.

The order goes as far as Parliament allows under the existing legislation, and to that extent I ask the House to approve it.

Question put and agreed to.

Resolved, That the Furnished Lettings (Rateable Value Limits) Order 1973, a draft of which was laid before this House on 16th April, be approved.