§ Order for Second Reading read.
§ 3.41 p.m.
§ The Minister for Housing and Construction (Mr. Paul Channon)
I beg to move, That the Bill be now read a Second time.
§ Mr. Speaker
I have selected the amendment in the name of the right hon. Member for Grimsby (Mr. Crosland).
§ Mr. Channon
As the House will know, the Bill provides for rent allowances to be granted to tenants of furnished accommodation. It fulfils an undertaking given by my right hon. Friend the former Minister for Housing and Construction during the Report stage of the Housing Finance Bill in April last year. My right hon. Friend then said that we had reached a position where we could embark on formal consultations with the local authority associations with a view to working out a practical and effective scheme for providing rent allowances for tenants of furnished accommodation. Subsequently, in August, my right hon. Friend announced that with the help of the local authority associations a practical scheme had been devised and the Government would bring forward legislation as soon as possible.
I believe—I know that there are other views in the House—that we have found a fair and workable way of overcoming the difficulties, which I admit to the House are considerable. Now for the first time, if the House agrees to pass this legislation, tenants who are renting furnished accommodation and have difficulty in affording their rent have the prospect of getting a measure of assistance towards it.
The House will see that the Bill seeks to widen the scope of the rent allowance schemes which local authorities have been required to operate since 1st January. Largely for that reason, but partly to facilitate the consolidation of housing legislation, the Bill takes the form of a series of amendments to the two principal Acts. The amendments are contained in the two schedules—Schedule 1 for 227 England and Wales and Schedule 2 for Scotland. I appreciate that this way of doing things makes the Bill a little difficult to follow, and I apologise for that. To assist the House we have produced in the form of a Cmnd. Paper, Cmnd. 5183. a textual memorandum which shows the relevant provisions of the two principal Acts that would appear if the proposed amendments in the Bill were made. I hope that right hon. and hon. Members will find the document helpful in understanding what is proposed in this measure.
On the best estimate that we can make there are about 600,000 furnished lettings in England and Wales. In Scotland, as the House will know, they form a much less significant part of the housing pattern. There are only some 28,000 in Scotland.
§ Dr. J. Dickson Mabon (Greenock) rose——
§ Mr. Channon
The hon. Member for Greenock (Dr. Dickson Mabon) will be able to make his point if he catches your eye, Mr. Speaker.
Of the 600,000 furnished lettings in England and Wales, some 40 per cent. are in Greater London. There is a particularly heavy concentration in the Inner London boroughs of Camden, Kensington and Chelsea and Westminster. Outside London in the South-East there is a relatively high proportion of furnished lettings. There are probably just over 100,000. The remainder are scattered more or less evenly across the country. Birmingham, for example, has approximately 20,000. There are smaller concentrations in Manchester. Liverpool, Leeds and Bristol.
The furnished tenant population is extremely varied. It includes both the very rich and the poorest. Furnished tenants in general are younger and more mobile than those who live in unfurnished accommodation. The tenants survey undertaken in the London conurbation in 1970 for the Francis Committee showed that the head of household in furnished tenancies was under 25 in about 43 per cent. of such tenancies, as opposed to 15 per cent. in unfurnished lettings. In a further 35 per cent. of furnished lettings the household head was under 35. Over 228 60 per cent. of the furnished tenants interviewed in the survey had moved into their accommodation in the previous 18 months, and only 9 per cent. had rented their home for more than five years.
In London in particular, and to a lesser degree in other big cities, there are many young single people, typically four or five, sharing a flat, among whom there is a heavy turnover. As well as that, there are many single people of all ages in rooms. Sometimes they are lodgers sharing some of their accommodation with the landlord or other tenants. Some of them are in furnished accommodation because they want a base only for a short time, perhaps to do a seasonal job or for an extended holiday. There are many variations to which attention can be drawn if one looks at single people who have furnished lettings as their accommodation.
Apart from single people there are also families. We must help these families. Indeed, we must concentrate on helping them with rent allowances. About a quarter of all furnished tenancies are occupied by families. Among these families are some of the poorest in the country. They live in furnished accommodation because that is the only type of housing they can get. Although overall the proportion of households with children tends to be lower in furnished accommodation than unfurnished accommodation, in the stress areas of London, where the great problem largely exists, the tenants survey found that 49 per cent. of furnished lettings were occupied by families. I am only too well aware that all too often these families are living in entirely unsatisfactory conditions. Far more people in the furnished sector are living in a room or rooms than in a flat, and overcrowding is more prevalent.
I think that the House will agree that the furnished tenant population is very varied. As many hon. Members will know, and there are many hon. Members present representing the London constituencies, the pressure on furnished accommodation is in places very severe. I hope that we can start on the basis that there is general agreement on both sides of the House that in all our policies paramount consideration must be given to avoid doing anything that will make the position of these people any worse. We must do what we can to improve it.
229 I turn briefly to the main provisions of the Bill. Clause 1 requires local authorities to vary or replace their existing rent allowance scheme in April so as to take account of the amendments proposed in that scheme by the Bill.
§ Dr. Dickson Mabon
I take it that the Minister will later return to what is not in the Bill; namely, the implementation of the recommendation of the Francis Committee. I have been misled by Ministers, perhaps not unintentionally, that the recommendation of the Francis Committee would be incorporated in the Bill. Will the Minister explain that matter at some stage? Perhaps he will proceed to argue against the Francis Committee's recommendation.
§ Mr. Channon
With great respect, the hon. Member may have confused the position. I shall deal with security of tenure because that is included in the reasoned amendment put forward by the Opposition. I shall deal with that later. The Francis Committee recommended very strongly against security of tenure.
§ Mr. Channon
Then I do not know to what recommendation the hon. Gentleman referred. I will turn to the points raised in the reasoned amendment raised by the Opposition. If I fail to cover the hon. Gentleman's point, no doubt he will interrupt me again.
§ Dr. Mabon
Unless I have completely misread the Bill, and it is not an easy Bill to follow, I understand that recommendation 26 on page 226 of the Francis Committee's Report, which was published in March 1971, will not be implemented in the Bill. That recommendation is that furnished tenancies will be brought into the fair rents system. I am not referring to the minority recommendation of Miss Lyndal Evans relating to security of tenure. I want the Minister to tell us why he is not incorporating recommendation No. 26.
§ Mr. Channon
What I am doing is meeting a genuine wish on both sides of the House—there may be argument about whether it is being fulfilled—as expressed repeatedly in the debates on the Housing Finance Bill, that we should extend the system of rent allowances from 230 unfurnished to furnished tenancies. This is not a Bill to reform the structure of the furnished rented sector. If it were, it would be much bigger, wider and more complicated. It merely extends the provision of rent allowances to the furnished sector, as my predecessor was pressed to do.
I will deal with security of tenure, because that is raised in the Amendment, but this is a limited Bill, which I do not pretend is the last word in the furnished sector. However, it is well worth supporting for what it contains.
§ Mr. Bruce Douglas-Mann (Kensington, North)
We are to have amendments to Section 25 of the Housing Finance Act, under which, in effect, the Bill will work on the assumption that the scarcity factor will be 20 per cent. There will be considerable differences and anomalies if we have two separate systems for rent assessment—one under the rent tribunal and the other under the rent officer. I hope that the Minister will deal with the arguments for not accepting the recommendation of Francis—we will come on to the other argument about security later—that the two systems should be assimilated because the resulting anomalies will make the system almost unworkable in high-stress areas where the differentiation between the regulated rate and the furnished rate is much greater than 20 per cent.
§ Mr. Channon
I understand the points raised by both hon. Members. The House will recall what my predecessor said about the recommendations of Francis last year and the Government's wish to legislate in due course about Francis. This Bill does not do that, and that may be a point of criticism. It is a limited measure to extend the provisions of rent allowances to the furnished sector. It does not attempt to deal with some of the other recommendations of the Francis Committee with which, no doubt, the House will want to deal on other occasions. I am sure that we shall come in due course to all the recommendations of Francis. This is a rent allowances Bill, not a rent Bill—
§ Mr. Channon
I am not saying that it is out of order; I am simply saying what 231 I am doing. What hon. Gentlemen seek to argue is a matter for them.
To return to what the Bill does rather than what hon. Gentlemen say it should do, Clause I requires local authorities to vary or replace their existing rent allowance schemes in April to take account of the amendments in the Bill. Local authorities will have to widen the scope of their rent allowance scheme to apply to furnished as well as unfurnished tenancies. April is the earliest by which it would be reasonable to expect them to take on this additional task.
There will be considerable work for the small number of authorities with a large number of furnished lettings in their area, but if local authorities want to grant allowances earlier than the mandatory date, there is nothing to stop them, if the Bill is enacted, just as a handful did for some unfurnished tenants at the beginning of October rather than at the beginning of January.
Because the Bill provides for furnished tenants to get rent allowances under an extension of the existing scheme, most of the arrangements in that scheme will apply to furnished tenants in exactly the same way. The rules for the calculation of an allowance will apply. There will be the same needs allowance, for example, and furnished tenants will benefit from the same date as will unfurnished tenants from the increase of £3.50 in the needs allowance which my right hon. Friend announced last week.
Tenants who already qualify for a rent allowance will be entitled to a larger allowance than previously envisaged. For example, a married couple with two children and a weekly income of £35 and a rent of £4 do not at present qualify for an allowance. Under the new scale they will be entitled to one of 49p. My hon. Friend will be delighted to give many other examples if required, when he winds up.
The administrative arrangements for applications and grants of rent allowances provided in the earlier legislation will apply, and furnished tenants will have exactly the same rights and safeguards as unfurnished tenants.
On the point which has worried some local authorities, the provision in Section 8 of the Housing Finance Act for paying rent allowance subsidy will apply to 232 allowances paid to furnished tenants on precisely the same basis; that is to say, up to 1975–76 the Government will meet 100 per cent. of the cost and from 1976–77 the rate of subsidy will be at least 80 per cent. or any higher percentage that may be specified.
Any improvements on the model scheme which a local authority has imported into its allowance scheme will apply equally to furnished tenants and there will be the same scope for the authority, within certain financial limits, to grant somewhat more generous allowances in individual cases of special hardship than its scheme provides for.
But there are two respects in which the rent allowance scheme will operate rather differently in regard to furnished tenants. These take us to the heart of the Bill, for these are the issues which have been much the most difficult to resolve. They are: which tenants should be eligible to claim an allowance?; and: how much of the rent paid by the tenant should fall to be met by an allowance? As in the case of unfurnished tenants, we have based our definition of furnished tenants on the Rent Act, and the Bill applies to persons who occupy a dwelling under a contract under Part VI of the Act.
We have also included "boarders". Part VI of the Rent Act does not extend to contracts where the rent includes a payment for board which forms a substantial proportion of the whole rent. But it seemed to us that rent allowances should be extended to persons whose rent includes payment for one or more meals, because there may well be people in this situation who should get help with their rent.
Now we come to the dilemma, and it is a very real one. I see from the amendment that the Opposition are suggesting that we should give allowances to all furnished tenants who qualify, I suppose on the relevant income grounds—[Interruption.] If I have misunderstood, no doubt this will be made clear, but the amendment refers to the "restricted" provision in the Bill. If that applies only to the amount, there is no dispute between us. But if it means that every tenant who qualifies on income grounds should get an allowance, there is a difference, and it is 233 an important point which I should explain to the House.
We can surely all agree that the problems of the great pressure on the furnished sector are acute—in particular, the problems of the large number of families who live in furnished accommodation—and what I am not prepared to do is anything which will make those problems worse. If we gave rent allowances to every furnished tenant, there would be even greater pressure on the furnished rented market and we could make the task of helping those who need help even more difficult. I hope and believe that that would be the wish of the whole House, and I am sorry to see, if I have understood it correctly, an alternative point of view in the amendment.
Therefore, we have defined certain categories of qualified persons. A qualified person is defined in paragraph 10 of Schedule 1 either as someone whom the local authority is of the opinion would suffer hardship if the allowance were not granted or as someone falling within a description specified in regulations made by the Secretary of State. There are two categories. The general category of hardship and those who fall within the regulations.
We really must start cautiously, because the increases allowed by the Bill are not those that would be necessarily laid down for all time. There is plenty of scope for extension, and the House may express a view on that. What we must not do, by giving grants of rent allowances to all tenants of furnished accommodation, is to create a situation where those families in furnished accommodation find it more difficult. We must be prepared to consider extending the scope of the scheme when we have some experience of its operation. That is why we have provided that anyone who the local authority considers would suffer hardship without an allowance should be eligible. That also explains, partially, why we are seeking power to prescribe in regulations rather than in the Bill—which would otherwise have to be a much larger enactment—those categories of tenants who will be eligible as of right.
We are here breaking completely new ground in providing rent allowances for tenants of furnished accommodation, and 234 if the House wishes, we shall be able to alter or to add to the categories as time goes by. My right hon. Friend proposes to prescribe the categories in regulations, which the House will have the opportunity of praying against if it so wishes. Also, I should like to have the views of the Advisory Committee on Rent Rebates and Rent Allowances, which is to be set up under Section 23 of the Housing Finance Act and which my right hon. Friend hopes to appoint shortly.
I must give the House some indication of what use, at least at this stage, we intend to make of the powers.
§ Mr. Clinton Davis (Hackney, Central)
In dealing with questions of definition, is not the Minister aware that the Francis Committee was at pains to point out that there was great uncertainty at present in defining a furnished tenancy and made a specific recommendation about that? Is not this an appropriate time, therefore, to consider this aspect of the matter at the very least?
§ Mr. Channon
That may be the view of hon. Members. The Government have expressed their views on the Francis Committee recommendations on repeated occasions. All I am saying today is that I am trying to introduce a fairly modest measure; I am not trying to transform the whole of the furnished rented sector. That is a task which may well come but it is not one I am asking the House to approve today. If hon. Members wish to deal with that aspect, no doubt they will seek an appropriate occasion.
§ Mr. George Cunningham (Islington, South-West)
I think I am right in saying that the Government have not so far found an opportunity of doing anything about the Francis recommendations. In respect of one of the recommendations, the Government said that they would find the first legislative opportunity to give effect to it, and they had to be shown an opportunity to give effect to it. With this Bill coming up, surely some of the more modest recommendations of Francis, which are most relevant to the Bill, could have been fitted in without transforming the Bill from a modest measure into a major housing measure.
§ Mr. Channon
I cannot agree about that. Once one started upon the road of 235 Francis—a road which, perhaps, we all ought to follow—it would become a very important Rent Act indeed. This would be a quite different Bill and a Rent Act. That might be something worth doing, but that is not what I am doing today.
It is always easy to criticise Ministers for not producing Bills that they have not produced, but perhaps I may be allowed to deal with the Bill we have produced. Perhaps hon. Members are trying to get off on to Francis. Today I am asking the House to accept that the Bill is a very substantial step forward for furnished tenancies, and I hope that people will not demean it. I pay credit to the hon. Member for Islington, South-West (Mr. George Cunningham) for his noble efforts in dealing with the problem of harassment and the part he played in that. He will be glad to know that the new penalties can come into force, and we shall debate that on a suitable occasion.
Our object is to concentrate this new form of help on those tenants who have clearly established that they have settled down in furnished accommodation and are making their home there, and who are most readily identifiable as being in need. With that in mind, our thoughts at present are that these categories of tenants would be entitled to allowances as of right, if they qualified on grounds of rent and income: first, all families with children, including all single-parent families, who have been living in the local authority's area for at least six months; second, all old-age pensioners or tenants whose wife or husband is of pensionable age and who have been living for a similar period in the authority's area; third, all tenants with the same residential qualification who have a pensioner in their household. Fourth, there are the single tenants and the couples who have no children and no older people living with them. That is where the real difficulty comes. For them, I believe that there must be a longer qualifying period of residence in the authority's area and, perhaps, an age limit. But this is something on which I shall value the views of the House and the help of the advisory committee. I believe that this is the right approach, at least to start with. But we will, as we must, consult the advisory committee on our proposals before the regulations specifying the categories are 236 made; and naturally I shall listen to the views expressed as the Bill goes through Parliament.
All those furnished tenants in these specified categories will be eligible to claim an allowance as a right. In addition, local authorities will have a duty to grant a rent allowance to any furnished tenant who in their opinion would suffer hardship if he were not granted an allowance. The Bill provides that local authorities should arrive at their opinion in accordance with such guidance as may be given by the Secretary of State.
This provision is not an attempt to muzzle local authorities and to remove any effective discretion from them. It is there at the request of the local authority associations, because they realised that otherwise there would inevitably be wide variations between one authority and another, which would be very undesirable. Our guidance will be given by way of circular. Again we shall put our proposals before the advisory committee, and I shall be glad to take account of any suggestion that hon. Members may make But we shall be prepared to amend the guidance as our experience of the scheme increases.
At present we intend to include among those who should be regarded as likely to suffer hardship any tenants who are registered as chronically sick or disabled or who have someone so registered in their household. We shall also include tenants undergoing psychiatric treatment or who have been recently bereaved or separated. There will be other similar groups. There would be no restriction of residence or age in any of these cases. It is unlikely that our guidance will be able to deal with all the possible cases, and local authorities will have discretion to deal with those not mentioned in the guidance as they think fit in the light of our advice.
To sum up, local authorities will grant rent allowances to all those in hardship categories as I have described. All pensioners and all those with families will get allowances and there will be some single people who do so as well. We shall keep under permanent review the qualifying categories. But the important point is that all those in hardship will qualify.
§ Mr. Michael Meacher (Oldham, West)
On the question of the categories, will the Minister confirm that cross-reference from paragraph 22 of Schedule 1 would seem to indicate that tenants of rented residential caravans will be excluded? Will he explain why, because these undoubtedly include some of the very poorest people?
§ Mr. Channon
To save the time of the House, perhaps my hon. Friend will deal with that when he winds up the debate.
I must come now to the second main difference that the Bill provides for—which I think hon. Members have been criticising—in the operation of the rent allowance scheme in relation to furnished tenants. That is the calculation of the amount of rent which is eligible to be met by an allowance. The relevant provisions of the Bill are paragraphs 17 and 26 of the First Schedule. I will try to explain the effect of these paragraphs as simply as I can.
I am sure that there will be no disagreement that a rent allowance should not be paid on that part of the rent which is paid for the furniture, otherwise the tenant of furnished accommodation would be at considerable advantage over the tenant of unfurnished accommodation. It would place an extremely heavy burden on local authorities if they were expected to assess the value of the furniture in a dwelling and to deduct an appropriate amount on that account from the rent being paid. On the other hand, to base the rent allowance on the fair rent that would be fixed for the dwelling if it were let unfurnished would work to the tenant's disadvantage. There is widespread agreement that the rent for furnished accommodation contains an element that is not reflected either in the fair rent that the dwelling would command if it were let unfurnished or in that part of the rent which is paid for furniture. I could detail the reasons why that is so, but I do not think that the House disputes it.
The problem we had to face was how to allow for this in the rent, and what we have done, with the agreement of the local authority associations, is to assess it at one-quarter of the fair rent that the local authority estimated that the dwelling would command if it were let unfurnished. The amount of rent eligible to be 238 met by an allowance is therefore, subject to two provisos, 125 per cent. of the estimated fair rent for that dwelling if it were let unfurnished. That would be the amount eligible for allowance. The two provisos are, first, that that sum-125 per cent. of the fair rent—should not exceed the rent actually being paid by the tenants, and that is obvious; second, that it should not exceed any reasonable rent that may have been fixed for the accommodation as a furnished letting by the rent tribunal.
If a tenant is paying £6 rent for a furnished letting and no reasonable rent has been set for it and, let us say, the authority estimates the fair rent for the dwelling let unfurnished at £4, the amount towards which rent allowance would be payable is 125 per cent. of £4; that is, £5. On the other hand, if the authority assesses the fair rent at £5, the 125 per cent. figure would be £6.25 but, as it cannot exceed the amount actually paid, the allowance would be payable in that case towards the rent of £6. It is extremely difficult to know that the 125 per cent. figure is right. It is very difficult to obtain evidence on this, and difficult to obtain evidence to the contrary.
We may find, after experience of the scheme's operation, that a higher or a lower proportion of the estimated fair rent would more properly reflect the facts of the situation. Again we should alter that amount by order, and any such order will be made by Statutory Instrument subject to negative resolution.
I know that many hon. Members think that the most important part of the Bill is that which deals with the take-up of the allowance for which it provides, and I share their concern about rent rebates. The figures from a cross-section of local authorities are very encouraging. On average, about 35 per cent. are getting rebates compared with our estimate that about 35 per cent. to 40 per cent. would qualify.
§ Mr. Channon
We said 35 per cent. to 40 per cent. If I am wrong I apologise, but I seem to remember saying that.
When it comes to rent allowances for private tenants, the picture so far seems 239 to be less satisfactory. Initial response has been slow, but the scheme has been operating for only three weeks so far and it is bound to take time to build up. We were always aware that this would be a problem. We are advertising it extensively—we are spending £600,000 on it in the current year—and we shall continue to give publicity to it by every means. If any hon. Members have new ideas for publicising the scheme I shall be glad to hear of them. If, however, one finds that the take-up is unsatisfactory, that is no reason for not proceeding with the scheme. What we must do is to increase the take-up.
§ Mr. Julius Silverman (Birmingham, Aston)
The hon. Gentleman may be interested in the Birmingham take-up because for nearly four years the city has been operating a scheme of providing allowances for furnished tenancies, and it has been operating the new scheme since 1st October. Out of an estimated figure of more than 18,000 furnished tenancies, the take-up is 21 or less than one in a thousand.
§ Mr. Channon
If those figures are right they point even more to the need for take-up. I do not think that the hon. Gentleman is arguing that we should not have the scheme.
§ Mr. Channon
The hon. Gentleman is saying that we should be more concerned about take-up, and I shall be glad to hear any suggestions that he has to put forward for ensuring that the take-up is improved. We can all make destructive points. I want to hear constructive points about how we can increase take-up, because that is what we all wish to achieve.
§ Mr. Channon
With respect to the hon. Gentleman, he did not give the take-up for unfurnished tenancies.
§ Mr. Channon
If that figure also is low, it means that security of tenure makes little difference to the hon. Gentle- 240 man's calculations. I am sure we all want to ensure the largest take-up we can, and any ideas for bringing that about would be welcome.
As for furnished tenants, there should be no need for them to hold back from applying through fear that their landlord may get to know and will know of their financial circumstances. An application for a rent allowance is a confidential matter between a tenant and his local authority, and so the landlord can and should be quite unaware of such an application. Even where a fair rent has to be estimated, in the great majority of cases this can be done without the landlord's knowledge. We shall stress this point to local authorities after the Bill is enacted.
Some hon. Members will say—indeed, the hon. Member for Birmingham, Aston (Mr. Julius Silverman) said it a moment ago—that none of this is of any avail unless furnished tenants are given full security of tenure. I understand that to be the view of the Leader of the Opposition and no doubt it is shared by his colleagues. I have considerable sympathy with those hon. Members on both sides of the House who want to improve the lot of furnished tenants, and I understand the view of those who say that the answer must lie in extending full security to furnished tenants, but I must ask the House to reflect on all experience in this field. The Government are not prepared to contemplate any measure which might, in a short time, seriously prejudice the well-being of hundreds of thousands of tenants. I must therefore ask the House to look at the evidence.
Who would benefit, and who would lose, if there were full security of tenure for furnished tenants? It is obvious that the beneficiaries would be existing tenants—or, at least, existing tenants who were satisfied with their accommodation. But who would lose? The Government believe—and I shall come to the evidence in a moment—that to give full security for furnished lettings would lead to an immediate and irreversible loss of accommodation. Empty property would be withdrawn from the market, and since the furnished sector includes a high proportion of transient tenants the amount of property which the landlords would take off the rented market would grow very quickly.
241 The losers, therefore, are existing tenants who need to move, perhaps because they have changed jobs or because of growing families. But if there is no accommodation to let on the market, they will not find the fact that they have security where they are of any help. Similarly, people arriving in London from other parts of Britain and from abroad, students coming to university, people whose jobs have been temporarily switched to London, and new families—all these people might find that there is no room for them within the private rented sector. It will be more—not less—difficult to find accommodation. The result could well be not reduced homelessness, which we all want, but more homelessness, and no one can accept such a risk lightly.
I may be right or wrong, but every report on this problem since the war has come to the conclusion that I have advanced to the House. The history of rent control provides little comfort for those who believe that the housing shortage can be solved by regulation. Homelessness in the end arises from a shortage of supply of housing. It is a problem which, thank God, is not local, but it is ghastly and acute in parts of the country, and in particular in London.
All the evidence is that rent control in itself reduces the supply of rented accommodation. Unfurnished accommodation in the private rented sector has shrunk to under 3 million tenancies. The latest evidence in London, derived from the 1971 census, is that unfurnished accommodation for renting is declining by as much as 50,000 dwellings—or nearly 10 per cent.—a year. On the other hand there has been some growth in the furnished sector, though it does not compensate for the decline of unfurnished accommodation. This reflects a situation which the whole House must recognise. I do not think anyone can pretend that it is an easy issue. Whatever the short-term benefits of giving full security to furnished tenants, the longer-term result will be a significant and severe reduction in the availability of accommodation. All history shows that to be so.
I agree with those hon. Members who are disturbed by the implications of this 242 evidence. This is what the Francis Committee—certain portions of whose recommendations hon. Gentlemen opposite want me to implement—meant when it gave a solemn warning against extending full security to furnished tenants. Whatever we think of the committee and its recommendations, there is no doubt about the importance that it attached to this recommendation and to the solemn warning that it would be a disaster to attach full security to furnished tenancies. This was not a committee which I set up. It was set up by the hon. Member for Willesden, East (Mr. Freeson) when he was in office.
The House knows that the previous Administration did not deal with this problem of security of tenure for furnished tenants, and I think that the consequences of extending help to the extent suggested by the Leader of the Opposition—and it may be suggested by the right hon. Member for Grimsby (Mr. Crosland) this afternoon—must be faced fairly and squarely. I am not prepared to do anything that will make the situation worse rather than better. The right way to do something for furnished tenants—I accept that they need extra help—is to assist them through the Bill by providing rent allowances. We are not abandoning furnished tenants. On the contrary we are helping in a real and practical way and in full awareness of our responsibilities for ensuring an adequate supply of accommodation.
The Opposition amendment refers to the increasing homelessness in the stress areas of our cities. I am as concerned as anyone in the House that there should still be people in this country who, for whatever reason, find themselves homeless.
Yesterday my right hon. Friend the Secretary of State for Social Services and I had a meeting with the London boroughs to discuss with them some of the problems related to homelessness and what could be done to deal with the problem of homeless families. This is in many ways the most worrying aspect of the problem, and therefore the one on which the London working party, set up after the reports on homelessness, concentrated its first report.
The right answer is easier to state than to achieve. It is to find these people a 243 proper and permanent home. In the long run this is indistinguishable from the overall problem of adequate housing in London to meet all the needs for it, and on this problem my Department has been working continuously with the London boroughs and with my hon. Friend with his action group for the last two and a half years. In the short term, however, solutions to family homelessness must be found within the limits set by the existing housing stock. The most urgent immediate action is therefore to probe and to use every means to ensure that all accommodation suitable for family housing and which is or could be made available is brought into use to help with this problem of homelessness.
Most London boroughs have already adopted many of the recommendations of the London working party on improving their organisation and means of helping the homeless. Yesterday we discussed a wide range of possible ways of bringing every suitable dwelling into use. The London boroughs and the GLC are following up a number of suggestions and we plan to meet again soon to continue, together, our drive on this problem, which is a serious and ghastly one.
Although we concentrated yesterday on family homelessness, we are all conscious of the major and growing problem of homelessness among single people as a whole. I am making an urgent study of possible solutions to this problem and hope to have an early and full discussion with the London boroughs and the GLC and to put proposals to them at the earliest possible date.
§ Mr. Freeson
With regard to the meeting with the London boroughs yesterday, was it not the case that all, or at least most, of the London boroughs represented at the meeting expressed the view that the biggest single cause of homelessness is the insecurity of families in furnished accommodation and that the biggest single immediate step that could be taken to help the authorities as well as the families concerned would be to introduce security of tenure for such families?
§ Mr. Channon
That view was expressed by one member at the meeting. It did not represent the unanimous view of 244 either political party in the London Boroughs' Association.
Finally, I must say how sorry I am, although it is for the Opposition to decide, that they are putting forward a reasoned amendment to the Bill. I believe it to be a Bill which will provide limited—and I accept that—but nevertheless extremely valuable help to some of the worst-off members of our society. It is rather hard that we should be criticised as we are in the Opposition's reasoned amendment. When the Opposition were in power they had plenty of opportunity to tackle these problems of rent allowances or security of tenure, but they gave no help whatsoever along these lines to furnished tenants or, indeed, to unfurnished tenants.
I hope very much that in spite of the reasoned amendment, about which I know hon. Members opposite feel strongly, the House will give a Second Reading to the Bill and that it will be thought right to allow us to have it in reasonable time, because I think we are all agreed at least that it is important that furnished tenants should receive help at the earliest practicable date. I confidently commend the Bill to the House in the belief that it represents a limited but nevertheless a further important advance in housing policy and one which certainly deserves the support of the House of Commons.
§ 4.22 p.m.
§ Mr. Anthony Crosland (Grimsby)
We shall not vote against the Second Reading of the Bill tonight and we shall not obstruct it in Committee. Nevertheless, we have put down a reasoned amendment on which we shall divide the House tonight because we find a number of aspects of the Bill to be deeply disappointing and inadequate. There has for a long time been a great interest, not confined to one side of the House, in the position of furnished tenants and particularly in the different treatment meted out to them as against unfurnished tenants concerning not only security of tenure, but, when the Housing Finance Bill was introduced, in relation to the private rent allowance and on the last occasion in relation to the freeze, from which furnished tenants were altogether excluded.
245 The Labour Government—and I concede that, no doubt, we should have acted earlier—commissioned two important studies which bore centrally on the position of the furnished tenant. First, in April 1969 my right hon. Friend the Member for Coventry, East (Mr. Crossman) commissioned Professor Grieve to conduct his investigation into homelessness in London. That report was completed in June 1970 and, following a rather squalid squabble as to whether the Government were to publish it, was eventually published in January 1971. That report demonstrated, to the surprise of none I imagine, that one of the main reasons for the increased problem of the London homeless was the shift from the more controlled unfurnished sector to the less controlled furnished sector. The Labour Government, as the Minister has mentioned, also set up the Francis Committee in March 1971, and they certainly conducted the most massive discussion of the problem of the unfurnished tenant, although certainly not all their conclusions satisfied us on this side of the House.
The Minister referred to the background to this Bill, which is really the almost unanimous chorus of protest when the Housing Finance Bill was published at the fact that furnished tenants were excluded from the new private rent allowance. It was almost exactly a year ago, on 20th January, that my hon. Friend the Member for Kensington, North (Mr. Douglas-Mann) moved an amendment in Committee to include them, and the hon. Member for Hemel Hempstead (Mr. Allason) moved a similar amendment, and the Government were saved from defeat, I believe, only by the Minister's telling us that a mysterious Committee was already working at it and that something would arrive in due course. Now something has arrived—namely, this Bill.
It is important first, as the Minister rightly said, to examine the characteristics of the people we are trying to help. He gave a number of useful figures, and I should like to supplement one or two so that the House may have a fair picture of who the furnished tenants are.
As the Minister said, there are only 600,000 of them, but they form a par- 246 ticularly significant group because they are, broadly speaking, paying the highest rent, out of the lowest incomes, for the worst accommodation. As to the accommodation, according to the Francis Report, it has a number of characteristics. It is expensive, averaging even at the time the Francis Committee was sitting £240 a year, or 33 per cent. of the typical take-home pay of the tenants, compared with only 19 per cent. of income for corresponding tenants of unfurnished private accommodation. Its quality is very low. Most furnished lettings are small; 50 per cent. of them have only one or two rooms—66 per cent. in stress areas. Most of them have shared amenities; 78 per cent. in stress areas share a lavatory compared with only 44 per cent. in unfurnished accommodation. They are overcrowded: in 55 per cent. of rent tribunal cases the tenants are living at a density of 1½ persons or more per room.
As for the tenants themselves, I am glad the Minister has corrected some misapprehensions about what kind of people they are, because his predecessor was always using phrases such as "birds of passage", "fly-by-nights", and so on, as if they consisted almost entirely of single persons. In fact, they do not. As the Minister pointed out, many families are involved; 49 per cent. of lettings in the stress areas are to families which, far from being mobile and transient, find it extremely hard to escape from the sector; and 55 per cent. of tenants in the stress areas are coloured immigrants whose prospects of better housing are limited by prejudice as well as by low income. The result is that many tenants stay in this sector for years. The recent Shelter report found that 20 per cent. had been in the same accommodation for five years or more.
The truth is that, as the Francis Committee found, there are really two separate groups of tenants in furnished lettings. There is a group such as the Minister described—typically young, single, mobile people—and there is also a group consisting of poor families forced to rent furnished accommodation in the stress areas because access to anything else is for one reason or another denied to them: they cannot afford a mortgage; they cannot get a council house because the waiting list is too long. I agree with 247 the Minister that it is this latter group, the most deprived group in our cities, whose future should properly concern us most.
The question is whether this Bill will fulfil the objectives that I think all of us have in mind. First, who will it cover and who will be eligible? Here the Bill itself gives us very little idea because this is all to be defined in the provisions referred to by the Minister, in paragraph 10 of Schedule I, one provision depending very much on guidance given by the Secretary of State and the other provision waiting to be filled in by regulations that have not come to the House. He gave us a number of examples of categories he intended to be included. I find it difficult to comment on them at the moment because he has the characteristic of speaking extremely rapidly. That makes his speeches very enjoyable but also makes it difficult to follow a detailed argument, so we shall have to reserve judgment on the categories he intends to include in the Bill, although these may be obvious to some of my right hon. Friends, who reacted quickly to certain omissions.
It is interesting that Shelter estimated, on the basis of the Government's previous pronouncements, that probably half the furnished tenants would be excluded from the private rent allowance. I hope that the Under-Secretary, when he comes to reply, will give us some estimate of the broad proportion of furnished tenants he thinks will be covered by the Bill.
To the second question—whether for those who are covered the help will be adequate—the dogmatic answer must be "No". The crux of the matter is that the amount of rent to be taken into account in calculating the new allowance will be unrelated in many cases to the actual rent. This is made clear in paragraph 17 of Schedule 1 and by the Minister's description this afternoon. The rebate will be based on the occupational element of what will normally be the lowest of the three criteria mentioned in paragraph 17, namely, the local authority's estimate of what the fair rent for the dwelling would be plus 25 per cent.—or, as the Minister said, 125 per cent. of the fair rent.
It is this provision which has given rise to many of the doubts about the 248 adequacy of the Bill. My hon. Friends will doubtless have worked out a number of examples of how the provision will operate in practice. I take an example which I have checked and which is a typical Inner London one. It is that of a man earning £25 a week and living with his wife and child in two poor, seedy furnished rooms. At current rent levels he will be paying at least £5.50 a week. If the Government really wanted to help him, his allowance would be based on that figure, the rent which he is actually paying. With the increase in the needs allowance recently announced, he would get more than £2.50 under the new rent allowance scheme. But under this Bill he will not get an allowance which is based on the rent which he is actually paying. He will get an allowance based on the fair rent plus 25 per cent., a rent which will be nearer £2.50 a week. As it is on that rent that his allowance will be calculated, instead of getting an allowance of £2.50 he will get an allowance of well under £1 towards the £5.50 he is actually paying.
It is this meanness in the calculation on which the allowance is based which explains why the estimated cost of the scheme is so low—only £5 million to £8 million. We do not know what this will mean per person, because we do not know what proportion of furnished tenants will be eligible and, if eligible, will claim. Taking an imaginary and unrealistic calculation, if the whole £8 million were paid out between all the households living in furnished accommodation it would amount to an absolutely trivial sum per household. Even halving that gives a sum which will come as a considerable shock to furnished tenants when they learn it.
In this context it must be remembered that part of the burden of alleviating poverty is after 1975–76 to be put on to the rates and on to local authorities. This is a point to which we strongly objected in all the discussions on the Housing Finance Bill.
Considering both the calculations which can be made as to how the scheme will operate and the total figure of £5 million to £8 million, it appears to us that we shall be giving to this sector, which contains many of the poorest citizens, a 249 degree of help that is disproportionately low compared with what rightly goes to the council tenant and to the owner-occupier.
Our third reservation concerns the administration of the scheme which in practice will be very complicated, particularly in those areas with the highest concentrations of furnished tenants. Local authority officers, who are already very hard pressed as a result of the Housing Finance Act, will have to work out individually fair rents as the basis for the new allowances. There will have to be a great deal of guesswork and ad hoc-ery. Then at the end of the day—I do not envy them this part of their task—they will have to explain their calculations to angry tenants who expected to get a rebate based on their actual rent rather than on the hypothetical rent which is much lower. Many people in local government believe that if there were to be a high take-up under the scheme the scheme would be almost unworkable.
My fourth point relates to the problem of take-up, to which the Minister rightly devoted much attention. I fear, as most commentators have done, that far more likely than a high take-up is a very low one. Rebates for unfurnished tenants and council tenants are obviously much simpler than the new furnished rent allowance. I take one example which I checked a few days ago. In October with a great blaze of publicity Lambeth launched the new post-Housing Finance Act scheme of rebates for council tenants and for private unfurnished tenants, yet Lambeth has still had only 600 applications out of 20,000 who it is estimated are eligible.
The Birmingham scheme has been referred to today, as it has been referred to on many other occasions. I will not repeat the figures, because I hope that my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) will give them in detail. We all remember the disappointment expressed publicly, again almost exactly a year ago, by Mrs. Freda Cocks, Chairman of the Birmingham Housing Committee, about how the scheme has worked out in terms of take-up.
If, despite fair rents, council tenants are not applying, and if unfurnished tenants 250 whose rents are simpler to calculate are not applying, how likely are furnished tenants to apply? We know from the Francis Report that 55 per cent. of furnished tenants do not have a rent book. We know that many landlords of furnished tenants who are in breach of some stautory requirement or other are often terrified of officialdom, and the sight of a local authority officer snooping around in the course of his duty trying to assess a hypothetical fair rent could well be enough to provoke the dreaded and familiar notice to quit.
I agree with the Minister that all of us, given the scheme, want a high take-up. My fear is that, whether from ignorance, out of fear of the landlords reaction, or out of pride, furnished tenants will not have the take-up to which they are entitled under the Bill.
The Minister said that it is no good our expressing this fear in a negative way, and it would be unattractive for me to do so. The Minister asked what positive suggestions we had. I have come increasingly to the view that to rely on advertising campaigns, however massive, even using such sophisticated media as the television channels, will have only a limited effect. Where there is a very high geographical concentration of furnished tenants—this eases the whole problem of take-up—I am very attracted by the idea of the Child Poverty Action Group that the Government would get better value for money if they stopped television advertising and paid two or three field officers in certain areas, perhaps people from the Action Group, who could visit tenants who are affected. The employment of extra people might well have far more effect than the huge cost of a vast advertising programme.
I turn lastly to the fundamental question of security of tenure. The Labour Party's position on this question is unambiguous, though I concede that the Labour Government did not put it into effect. It was made clear in the party's evidence to the Francis Committee and was reaffirmed in the party's programme published last summer. I quote:We believe further that most furnished tenants should be given legal security of tenure. We reaffirm, as our evidence to the France Committee on the Rent Act stated, that furnished tenants should have the same security as is now available to unfurnished tenants.251 Before considering the arguments for and against, it is worth stressing the degree of insecurity that now exists. Nearly one-third of furnished tenants applying for a reduction in rent before getting a notice to quit received less than six months' security from the rent tribunal. More than one in five applying after receiving notice to quit got no security of tenure at all. A recent Shelter report, the one by Mr. Bebb on rent allowances for furnished tenants, showed an average security of 3.8 months at the first application and 1.9 months at the second application. In many of the worst areas of central London tenants know that an application to the rent tribunal is the most certain road to homelessness.
There are three arguments against security of tenure—or, perhaps more accurately, two—the first being divided into two parts. The first and most obvious is that to which the Minister alluded when he said that greater security of tenure would simply dry up the supply of rented accommodation. This was the majority view of the Francis Committee which stated:For the reasons we have indicated we cannot recommend such extension. On the contrary, we venture to sound a solemn warning against it.The Minister referred to the phrase "solemn warning". It is interesting to see what evidence the Francis Committee had for giving that solemn warning. The Committee's view that security of tenure would produce a reduced supply of rented accommodation was based on the stated intention not to rent, if security of tenure were introduced, of a minority of a small sample of landlords, most of them small lettors.
The Minister used a more powerful argument, although I found it no more convincing, basing himself not on a sample but on various statements about how the decline in the private rented sector has been due fundamentally to security of tenure. Anyone who has examined over the past few years the relative financial advantages of selling as opposed to renting does not need to look anywhere else in order to explain the decline in the private rented sector. The huge financial advantages now to be gained by selling as opposed to continuing to rent are overwhelming, and this in my view has been the decisive factor 252 in the decline of the private rented sector. I believe it will be the main reason for the decline which will continue. I hope that it will be hurried along by the next Labour Government, but it will continue anyway.
So I find myself unconvinced by this argument and I, like most of my hon. Friends, accept on this point the view of Miss Evans in the minority report. She argued that once security of tenure was provided it might be impossible for landlords not to go on letting. What else can be done with the rooms? They are usually quite unsaleable.
A curious fact about this argument is that the majority, although they gave a solemn warning, had the honesty to say:there is no 'evidence'—in the sense of facts based on actual experience—that such a reform would reduce the supply. But equally, there is no evidence that it would not. It is largely a matter of personal judgment.That is the fact of the matter and most of us here, particularly my hon. Friends with experience of areas with a concentration of furnished tenancies, believe that there is no evidence that security of tenure would dry up the supply of cheap rented accommodation.
There is a much more difficult and serious argument than that. It is that security of tenure might lead to landlords choosing tenants, as they might put it, more carefully, and in particular excluding some already very hard-pressed groups, such as unmarried mothers or immigrants. That is a serious danger, and it means that security of tenure would have to have as its corollary a policy of building up housing associations to cater for precisely such groups, and also much greater flexibility in local authority allocation procedures.
At any rate, although I accept that there is an argument here, I nevertheless come down for security of tenure on three fundamental grounds. The first is logic. I agree with Miss Evans, and again I quote the minority report:The present distinction with regard to security between the unfurnished tenancy and the furnished tenancy … is wholly illogical as a basis for differentiating between the degrees of security given to residential tenants.My second ground is one of equity because under the present system it is the 253 least well off who have the least protection, and the result is much of the misery and hardship that exists in central London.
Thirdly, and this is highly relevant to the Bill, I believe that the rent allowance scheme will not work without security of tenure. The tenant will be better off by £x as a result of the new allowance; the landlord will increase the rent by the same £x and if the tenant is not prepared to pay the landlord will find ways, as he frequently does these days, of getting rid of the tenant and finding a new one who is prepared to pay. So, without security of tenure the new allowance will be a straight subsidy to the landlord and will have the effect of forcing up furnished rents generally.
I conclude that the Bill is not radical enough to solve the problem of the furnished sector and the private rented sector generally. We need far more urgent measures. We need security of tenure, an increase in the supply of low-rented accommodation and a systematic programme of municipalisation.
We shall not vote against the Bill tonight because half a loaf is better than no bread, but in our view the Bill does not measure up to the desperately serious situation which exists in the furnished rented sector.
§ 4.44 p.m.
§ Sir Brandon Rhys Williams (Kensington, South)
I begin by congratulating my hon. Friend on the speed with which he has solved the problem of extending to furnished accommodation the allowances which are beginning to be paid in the unfurnished sector.
The Government made a pledge to hon. Members on both sides of the House who wanted the furnished tenants to benefit from the Housing Finance Act. There were experts who thought it could not he done. The two speeches we have heard so far today have dealt with the problems of where we go after the Bill rather than the problems which are likely to arise from its implementation.
My hon. Friend mentioned that the Borough of Kensington and Chelsea has a high concentration of furnished lettings. I believe that my constituency has the highest proportion of people living in 254 furnished rooms of any division in the country. I am certain that I speak for those people when I say that they are pleased that the Government have pushed ahead to deal with this complex problem and have come forward with a solution which they intend to implement so quickly.
The attitude of the Opposition will not be readily understood in South Kensington any more than their attitude to the Housing Finance Act has been understood. The extension to all poor people of the benefits of housing subsidies instead of concentrating them on people living in particular districts or particular local authority properties is obviously right. I am sure, therefore, that the Opposition will find with the passage of time that they have gravely misinterpreted public opinion. I believe that they are basically opposed to the extension of housing subsidies to people living outside the local authority sector.
§ Sir B. Rhys Williams
I am delighted that they are coming round to the principle—which many of us on the Conservative side have advocated for many years—of subsidising the family, not the house—if that is indeed the conclusion to be drawn from those interjections.
This is an appropriate occasion on which to remind ourselves of the purpose of housing subsidies. Obviously, they must ensure that all families are able to afford a fair rent and so to provide the only ultimate solution to family homelessness, which is to ensure that families are at least able to afford the rent in all circumstances. The social services have not fully solved the problem of the low-paid man with a family. The national insurance system aims to provide subsistence income—or more—to a man who is out of work because he is sick or injured or retired or for other reasons. But, although attempts have been made for a long time to find ways of subsidising a man who is in work but who still cannot afford to keep and house his family, we have not until now found our way to eliminating family poverty, particularly in areas where rents are high. I most warmly commend the Government's efforts under the Housing Finance 255 Act and this Bill to find a solution to the problem.
The purpose of housing subsidies goes beyond the narrower purpose of ensuring simply that there is enough money in every family to pay the rent. It goes beyond that to the point where it seeks to equalise the spending power of the family and the single person without dependants who has the same income. That is why I would not especially object if the Government were to insist initially that single people without dependants should not be eligible for housing subsidies under the Bill.
Certainly in Kensington, and I think it is true elsewhere, the upward pressure on rents often comes from groups of single people who are able to put more into rent than family people, particularly when they club together and make a home consisting of perhaps four or five wage-earners without any dependants. It is very often they who are making the running, and I do not think that the Government need to give priority to their interests in considering housing subsidies.
I want to say a few words about take-up. This is a subject which I have studied in connection with other social benefits. I am convinced that in the long run we have to work our way to an elimination of the means test or perhaps to make the income tax mechanism the means test to end all means tests. The assessment of income by local authorities will probably always be an unpopular process, at any rate to many of the people potentially entitled to benefit through local authority schemes.
It is certainly inefficient for assessments of income to be made firstly through the Pay As You Earn mechanism or whatever may succeed that in due course on a national basis and then by local authorities as well. There is an element of duplication in local authority assessment which I am certain we will eventually find has to be eliminated. Although I commend my hon. Friend's intention of drawing the attention of all who are eligible to the benefits under the new housing subsidy scheme, either in furnished or unfurnished accommodation, and pressing local authorities to do the maximum—this is naturally the right course in the short run—I hope that we 256 can look ahead to a system where the entitlement to subsidies for householders is integrated in the general national system of tax credits.
Possibly it is worth pressing a point about the householders' allowance which I have made in another connection. The aim has been suggested of treating men and women equally in the eyes of the State for national insurance benefits and tax credits. If we are examining the problem of substituting the personal allowance in the tax system for a positive payment to individuals the need to find a unisex solution becomes all the more obvious. We have to recognise that in the personal allowance in the tax system there is a concealed housing subsidy and there possibly always has been, consciously or unconsciously, from the start.
Having created a tax system at the end of the 18th century which gave especially large concessions to householders and a further, but not quite so large, concession to a householder with a female dependant, we are recognising that outgoings on housing are a special commitment to the wage earner. The State has recognised the housing element in deciding how much taxation people can bear. The same principle has been applied from the start in national insurance in that a single pensioner receives more in proportion per head than a married couple. There is a single household element included in the pension paid to the single person which is not repeated in calculating the pension of a married couple. The same applies with sickness and unemployment benefit, and so on.
I would like to see the Government's great step forward in extending housing allowances to such a much larger number of people taken right across the board in the tax credit system so that men and women can be treated singly and the only differentiation that needs to be made is to provide for the single householders in the group. This is an ultimate solution to the problem of take-up. However much my hon. Friend and local authorities may work to draw attention to the benefits available under the Housing Finance Act and under this Bill, take-up will always be somewhat disappointing while people feel that they have to go through the motions of submitting to a means test from their local authorities.
257 Apart from that contribution on the question of take-up which has been of a somewhat long nature, although I hope not inappropriately so on Second Reading, I believe that this is a very useful start. Possibly the scale of allowances could be made more generous with the passage of time. This is something which this or other Governments will be able to consider. This Bill is a welcome solution to a serious problem and an honest answer to a popular pledge.
§ 4.56 p.m.
§ Mr. Julius Silverman (Birmingham, Aston)
In discussing this subject it is well to take advantage of experience which we already have in this country. This is why I shall refer to Birmingham. It is not that I am taking a constituency view. Birmingham has a good deal of experience of private rent allowances. About four years ago it promoted a Private Bill to introduce allowances in the private sector, and I believe that it is the only city which has done so. This scheme catered not only for unfurnished tenancies but for furnished tenants. It is well to see what has happened.
On 1st October, having such a scheme in operation, Birmingham decided to bring into operation the private rent allowance scheme on the scales contained in the Housing Finance Act—three months before they were supposed to come into operation. Birmingham has therefore had three months' experience of the new allowance, and it has continued to apply the allowance to furnished tenants too. It is interesting to see the results.
The general take-up in the private sector has been disappointingly low. Before this Act came into operation the total number involved was about 250. It has now rather more than doubled but this is out of an estimated number of 60,000 private tenants. That is a very disappointing take-up. It means a take-up of about 1 in 100. I am not surprised, in view of our experience in Birmingham, that generally speaking the take-up in the private sector throughout the country is low. I do not believe that this scheme will bestow upon people in the private sector the immense benefits which the Government claim.
258 There is no doubt that many more tenants will have their rents increased by the provisions of the Housing Finance Act than will receive rebates under the Act or this Bill. Take-up in the private furnished sector is particularly low. After the new scheme had been in operation for almost four months there were 21 furnished tenants using it out of an estimated number—based on the last Census figures—of 18,400 private furnished tenants in Birmingham. That is probably an underestimate because the Census would have had great difficulty in getting round to all private furnished tenancies. This means a take-up of about 1 in 1,000, which is derisory.
Why is this? Obviously the Government must concern themselves with this because otherwise the scheme will become a meaningless gimmick. There has been a fair amount of publicity of the Birmingham scheme. No doubt there could be more, but that is not the answer. A scheme which has been in operation for four years and publicised on two or three occasions might not result in an enormous take-up but we would expect more than this derisory amount. My view, based to some extent on experience, is that the main factor is the lack of security of tenure.
Throughout the whole of the privately let sector and especially in the furnished sector there is this basic insecurity of tenure, this fear of the landlord, the idea that people had better say nothing and keep a roof over their heads. I do not think it applies only to the furnished sector, but it applies most of all there.
§ Mr. Arthur Jones (Northants, South)
Is it a fact that the landlord would get to know that the tenant had applied for a rebate?
§ Mr. Silverman
I would say that he would almost certainly get to know. There would have to be an assessment of the furniture. Someone would have to visit the house.
§ Mr. Silverman
In that case I would say that quite often the answer is "Yes", and in a sense that is quite right. When a tenant goes for a rent allowance he is asked what rent he is paying. If he 259 says that he is paying a grossly excessive amount the council tells him to go to the local rent officer. Otherwise he would not get the benefit of the allowance on the full rent that he was paying. The local authority in Birmingham has had the co-operation of the rent officer in deciding what the fair rents of these private dwellings should be. It is almost certain that the landlord would get to know, but even if he does not the tenant fears that he will.
There is, however, a still greater fear in the furnished sector, where there is practically no security of tenure. If the tenant goes to the local authority the fear is that he may be out on his neck. He will get very little security if he goes to the rent tribunal. I do not say that this is the only factor, but I am certain it is the major one.
My right hon. Friend the Member for Grimsby (Mr. Crosland) said that under the Bill, as under the Birmingham scheme, the furnished tenant is given an allowance based not upon the rent that he pays but upon a notional rent, upon what would be a fair rent if the value of the furniture were eliminated.
Let us see what happens. People come to see me sometimes about rent but more often about a council house, and I learn incidentally what rent they pay. A woman in a two-room attic pays £4 10s. a week rent. Upon the present fair rent basis the room might be worth about 25s. If she went to the council and asked for an allowance she would get an allowance based upon the 25s. She would not get perhaps a few shillings and it would not be worth her bother. That has to be balanced against the danger of insecurity, bearing in mind that the landlord can put up the rent next week and bang go the few shillings. This allowance might operate as a subsidy to the landlord, especially the sleaziest landlords who would take advantage of the Bill to put up the rent.
We could send out people house by house to discover what is happening, but we shall not get a significant take-up unless we solve the problem of security. I reject the recommendation of the Francis Committee upon this point. The conclusion the Committee came to was an astounding one bearing in mind the evidence it received. It is clear that 260 unless we can achieve a much greater degree of security for furnished lettings the Bill will be the next thing to a dead letter. I hope the Bill succeeds because we need a mitigation for these people, but so far there is not much evidence that it will succeed unless the basic problem of security is solved.
§ 5.7 p.m.
§ Mr. Arthur Jones (Northants, South)
The Bill is further evidence of the Government's policy to aid those in need and to do so selectively so as to ensure the best possible use of resources. I recognise it as a tentative move but one which is in the right direction.
I was interested in what the hon. Member for Birmingham, Aston (Mr. Julius Silverman) told us about the moves which Birmingham made a year or so ago. It has been interesting to see the result, in both the unfurnished and the furnished sectors. We should recognise that this move was introduced when Sir Francis Griffin was the Conservative leader of the Birmingham City Council. The whole country was grateful to that important authority for the initiative it took. In the context of our discussion, the fact that the take-up figure has been such a derisory one is disappointing, and it shows the problems which face the Government in the implementation of the Bill.
I do not share the view of the hon. Member for Aston that it is insecurity of tenure that lies at the root of the problem. In my intervention I asked whether the landlord would be likely to get to know that an application had been made. The great advantage of the scheme proposed by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) is that under a taxation rebate system there would presumably be much less chance of disclosure to the landlord.
People are reluctant to apply for aid, not only for housing aid but for social security payments. The right hon. Member for Grimsby (Mr. Crosland) spoke about the Child Poverty Action Group, which he suggested might have a rôle in making the facilities provided by the Bill known to tenants. But local authorities with their welfare services and housing departments have a much greater opportunity of contact with their communities as a whole than could be secured by the Child Poverty Action Group or Shelter. 261 The effort of those groups is concentrated in small sectors, whereas local authorities have a greater opportunity for publicising information more widely. I agree that there is a problem and that we have not yet found a solution to it.
I welcome the outline proposals of the Bill and the latitude of its terms in the appointment of an advisory committee on rent rebates and rent allowances which will enable the whole concept to be continually monitored and provide ways and means for its improvement and extension. I also welcome the considerable discretion which is proposed for local authorities. Here there is a much more positive rôle for local housing authorities to play than is generally recognised.
The Opposition's motion alleges that in not extending the provisions of security of tenure and rent regulation the Government are adding to the problems of homelessness in the stress areas of our cities. I find that wording very strange. On page 135 of the Francis Report two separate groups of furnished tenants are noted. The first comprises those households often of single persons usually without children who wish to remain mobile and independent. The second group consists largely of families, with children, who are too poor to buy houses, cannot find unfurnished accommodation to rent within their means and cannot obtain a council house. The cheapest accommodation available to them is a furnished room in a rundown area. It is essentially those two groups of people which most of us have in our minds.
The motion alleges that the lack of security of tenure and improved rent regulation for tenants is the biggest cause of homelessness in the stress areas. That statement is open to challenge. Other factors have to be taken into account such as the shortage of accommodation, concentration in urban areas and people's wish to live in cities. We have heard no evidence to substantiate the terms of this unfortunately worded motion. It is at best misleading and, in my opinion, incorrect. It appears to try to blacken a measure which is essentially directed at helping those in need. I was interested to hear the right hon. Gentleman's proposals, but we need to look to a positive contribution by local authorities in making these proposals effective. The Bill is 262 a palliative, but it is a genuine effort to make progress in this desperately difficult sector. The Opposition motion is false both in substance and supposed intention.
We have had a constructive debate, and I am sure there will be widespread and genuine welcome and support for the Bill.
§ 5.15 p.m.
§ Dr. J. Dickson Mabon (Greenock)
I should like to be as agreeable as I can before coming on to further remarks later. I compliment the Government on the fact that we are debating the Bill with the White Paper, Cmnd 5183, which sets out in a novel way what would be the position of the law if the Bill were to be incorporated in the present housing legislation. I do not know whether the Government intended to be helpful to the House of Commons or whether they wanted to help themselves by anticipating what the position would be under the consolidation which they say they are to carry out soon. Whatever the motive, I welcome the textual memorandum, which enables us to understand what will be the consequences of the Bill.
I am not distressed about the Bill. I think it is very good as far as it goes. No doubt efforts will be made in Committee to seek to strengthen it. I am concerned that the Minister seemed not to be willing to discuss what was not in the Bill. That is perfectly in order on Second Reading, and it is possible that in Committee we might seek to move new clauses or new parts to make a good Bill better. That is not an unknown parliamentary experience, even under this Government. I suggest that the Minister could have devoted part of his speech to telling us the circumstances in which the Bill is introduced and why certain matters are not included.
We do not know officially, but we know from the Lancaster House conference that certain consequences will fall on the legislation because of the prices and incomes policy which the Government are pursuing. In putting down a Question I was told by the Table Office that I could not refer to the Lancaster House conference and that I had to refer to statements made by the Prime Minister. Unless these are lodged in the Library I cannot make reference to them. The Minister should have told us the 263 effect on tenancies and rent allowances and on the two Acts of Parliament which are mentioned in the Bill of the Lancaster House statements, the White Paper and the Counter-Inflation Bill, which we shall discuss on Monday.
There has been a postponement of the application of certain sections of the Housing (Financial Provisions) (Scotland) Act. On page 10 of the White Paper there is a reference to Clause 16 of that Act, which reads:It shall be the duty of every local authority to bring into operation not later than 1st October 1973 or such earlier date …".The original date in the Act was 1st January 1973. I assume that the reason for the amendment is not only to enable allowances for furnished accommodation to be organised but to scoop up some of the Prime Minister's references to the postponement of certain applications of fair rents, and so on, which attract rent allowances in the private sector. The Minister should have told us a little more about this. It is contained in the Bill but is alluded to only by the reference to the changed date.
The other matter to which I wish to refer is fair rents. The Minister did not properly acquit himself in discussing the recommendation on assimilation.
§ Mr. Channon
I hope the hon. Gentleman will not be unfair to me, and no doubt he will come to his less agreeable remarks a little later. The Bill deals with furnished lettings and the payment of rent allowances. It has nothing to do with the local authority sector, the private unfurnished sector or fair rents in the public sector. Had I dealt with all those matters, my speech would have taken not 40 minutes but three hours, and I am sure the hon. Gentleman would have complained at a speech of that length.
§ Dr. Mabon
Three hours even of the hon. Gentleman would be too much, but I wish he had taken another half an hour because he did not cover these points adequately. He obviously wants to be a good Minister, but is not doing too well so far.
Is it or is it not a fact that there are changes in the operation of the fair rent system in respect of certain controlled properties? Is that not being referred to in this Bill, which seeks to amend the 264 earlier legislation? Perhaps I should read what was said by the Prime Minister at Lancaster House about the Governments earlier housing legislation to demonstrate that there are to be certain changes in operating the Acts. Should we not have had some reference to this situation, or must we wait until tomorrow's debate?
§ Mr. Channon
The hon. Gentleman may be under a basic misapprehension. The Bill deals only with furnished lettings. It does not deal with anything else. It deals not with the local authority controlled sector or with the regulated sector but with furnished lettings. Surely I was not expected to deal with those other matters in a speech which related entirely to furnished lettings.
§ Dr. Mabon
I have been in the House a little longer than the Minister, and I know from previous experience that it is in order in a debate of this nature to deal with the operation of other Acts and to discuss whether amendments on other matters should be made in Committee. The Minister may wish only to discuss furnished lettings, but it does not follow that the House of Commons wants to leave the matter there. It would be arrogant for the Minister to assume that we must discuss only what he wants us to discuss. We might want to add things. The date has been changed as applying to schemes affecting private tenants who occupy houses. The date is no longer 1st January 1973 but can be 1st October 1973or such earlier date as the Secretary of State may by order appoint".I was hoping that the Minister would explain the consequences in respect of the two earlier pieces of legislation in the light of the Prime Minister's remarks at Lancaster House. A great deal of misunderstanding has arisen from what was said by the Prime Minister, and there is a genuine need for information. I hope that the Minister will now make amends by asking his ministerial colleague who is to reply to the debate to tell the House what is happening.
Our criticism of the two earlier Acts of Parliament was that they were inflationary, though we concur in the social good represented by the bringing in of rent allowances and subsidies. I am sorry that the hon. Member for Kensington, 265 North (Sir B. Rhys Williams) is no longer present, because I should like him to explain his remark that rent subsidies and allowance have been part of Conservative policy for years. If that is the case, why did they fail to implement that policy in Parliament in earlier years. When the Labour Government introduced a series of substantial housing Bills, including the major Rent Act of 1965, the then Conservative Opposition failed to table any amendments to carry forward the concept of rent allowances and subsidies. I am not taking away from them credit for what they have done in the last year, but I challenge the claim that they have pursued this policy for years. One or two Liberal Members might wish to lay claim to this idea, but certainly the Tory party cannot lay claim to it.
It must not be said that we are uninterested in the extension of subsidies and allowances, for we welcome the Bill as far as it goes. However, it is not good enough to say that this should be the end of the matter. The Minister tried to argue that he could not consider recommendation 26 of the Francis Committee because it was a complex matter which would involve a very long Bill. I am certain that the Opposition would have facilitated the passage of a Bill which sought to bring in many of the Francis recommendations.
My right hon. Friend the Member for Grimsby (Mr. Crosland) in an admirable speech said that it was the people in furnished rented accommodation who were paying the highest rents. If they are paying the highest rents, then they will also have the highest rent allowances. We shall be subsidising directly and substantially one of the worst sectors of private housing. The more the State pursues the fair rent system—and it is a system with which I agree—and applies allowances and subsidies in helping tenants within the system, the more the State will have to be concerned with the well-being and upkeep of the properties and ultimately with their ownership.
Perhaps local authorities should go into the furnished rented sector. I agree that there are bound to be certain consequences if we bring the furnished tenancy sector within the fair rent system, although I feel that they would not be 266 as bad as the Minister suggests. I believe that many people who operate furnished tenancies would welcome such a system. The argument that security of tenure would destroy this system is fallacious. There is other evidence to show that this is not the situation.
I am not campaigning on the question of security of tenure. My complaint is that the Minister has failed to bring in one of the recommendations of the Francis Committee. The Minister rightly said that there are some Francis Committee recommendations which he wants and others he does not want. He also knows that we in our hearts want some of those recommendations rather than others. We are not bound to accept suggestions made by such a Committee.
The Minister said that he and his predecessors had made clear which of the Francis recommendations were endorsed by the Government. That is news to me. I would love to see set out in HANSARD a list of the recommendations which the Minister accepts on behalf of the Government and those which he rejects. I should like to know when the Minister intends to legislate on those recommendations. Will the Government adopt the excuse that because of the consolidation measure which is due and because the Government have already produced other housing legislation, they cannot bring forward another Bill to implement the Francis recommendations? It is annoying to see the Minister postponing action again and again.
In an intervention I complained that I had been misled by Ministers, and perhaps it is my fault not theirs. During the passage of the Bill when we all, Conservative and Labour Members, joined in demanding this kind of reform, I understood that the Bill would be more substantial than the present measure. The Under-Secretary of State will not mind my saying that I thought that there might be two separate Bills and, the consequences being more complicated for the English Bill than for our own, that it might be helpful to take the Scottish Bill first. I can assure the hon. Gentleman again that we on this side of the House would have facilitated its passage.
I am disappointed that the Bill is as restricted as it is. From time to time the Government tell us that it is our fair 267 rents system. That is true. But it is our fair rents system in disrepair. The landlords in charge of the system—the Government—have not been able to attend to their fair rents system properties for a good five years. The last time that we debated the fair rents system was in 1968, when we were dealing with what has become the 1969 Act.
References are made to the 1971 Rent Act. But we know that that Act was simply a consolidation measure. It is a summation of all the Acts preceding that. The fact is that we ought to have an amending Bill dealing with the fair rents system. There are numerous respects in which it is defective. On occasion the Under-Secretary admitted small marginal amendments to our Housing (Financial Provisions) (Scotland) Bill when we debated it in Committee. But he would not pretend that he has dealt with the Francis Committee's Report as it applies to Scotland.
That is my complaint to the Minister. He may say "I cannot possibly produce a Francis Bill just like that, and this must come first." But he should have taken the consequences of this Bill as it affected furnished properties and applied them to this Bill as well.
I have had experience in the housing section of the Scottish Office and with my hon. Friends in the old Ministry of Housing. I cannot believe that the draftsmen there have been telling Ministers that the implementation of recommendation No. 26 is so complicated and fraught with Parliamentary pitfalls that it would be unwise to include it in this Bill. The Minister has a reputation for being an honest man. If he thought that I was wrong in that assertion I am sure that by now he would be on his feet telling me so. I take his silence as being contentment rather than contempt, and I urge him seriously to look at this matter again.
We shall not get very far in the argument about security of tenure. Therefore, I shall vote for the reasoned amendment because I believe profoundly in what my right hon. Friend the Member for Grimsby said about the need for security of tenure in this sector. But, obviously, we shall not get very far. However, it is not partisan or unreasonable to expect the Minister to make this 268 change in the Bill and include that recommendation of the Francis Committee now. We cannot keep postponing implementation of the Francis Committee's Report. It has to be implemented some day—I hope with its minority recommendations as well.
§ 5.33 p.m.
§ Mr. James Allason (Hemel Hempstead)
The hon. Member for Greenock (Dr. Dickson Mabon) challenged my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) about what my hon. Friend said was Tory Party policy—
§ Mr. Allason
I can assure the hon. Gentleman that it has been Tory Party policy for a great many years that there should be substantial rent rebates for local authority tenants and that rebates should go to those who most need them rather than being spread over the whole mass of local authority tenants. That is rather similar to the views of the right hon. Member for Coventry, East (Mr. Crossman), who complained about the privileged position of local authority tenants. However, when the right hon. Gentleman was Minister of Housing he did not succeed in getting his way, and we have had to wait until the election of this Government for some reform and to see that at last rent rebates go to those most in need.
Rent allowances to private tenants were thought to be impracticable until Sir Frank Griffin succeeded in making them work in Birmingham. We have heard that they are not working as well as Sir Frank would have liked. But it is a practicable proposition. The Conservative Party has been able to steal Sir Frank's clothing and make it a success. I think that he was a willing ally to that theft.
I have to declare an interest here as the owner and manager of property which includes the furnished sector. I welcome this short Bill. I am sorry that it could not be included in the original Bill. At the time it appeared that there were considerable difficulties. First, when thinking of furnished tenancies one thinks of short-term and holiday tenancies. One tends to forget the long-term furnished tenancies which exist in considerable numbers Then when one turns to the longer-term 269 tenants one thinks of the bachelors of both sexes who share accommodation. There are numerous cases where five or six bachelor girls club together to share a flat, and it would be very difficult to nominate one as the tenant and to say that because of her low income she should be entitled to a rent allowance simply because she happened to be the tenant of furnished property. Where there is clubbing together it has to be recognised There is great difficulty in definition—
§ Mr. Douglas-Mann
There are provisions under the Housing Finance Act for a member of a household to be chosen as the representative tenant. Therefore, the hon. Gentleman's example can be overcome under the existing provisions of the Housing Finance Act.
§ Mr. Allason
The hon. Gentleman is confusing the issue slightly by that statement. He is referring to the case where the nominated tenant is someone with a very low income when there is a dependent member of the family with a substantial income. There are many retirement pensioners who happen to be tenants but have sons or daughters earning substantial incomes living with them. It is ridiculous that the income to be considered should be that of the original tenant.
The situation is entirely different when five bachelor girls all earning similar salaries club together in a flat, nominating one as the tenant. However, there is a solution. The Minister can make regulations about the categories of persons who should receive help and give permission to local authorities to consider those who are in hardship. By doing that, the initial difficulty which had kept the furnished tenant out of the provisions of the Housing Finance Act has been overcome.
During the passage of the Housing Finance Act strong views were expressed. As the right hon. Member for Grimsby (Mr. Crosland) pointed out, in Committee on 20th January last year a number of amendments were moved. It so happened that the only workable amendment was the one that I tabled where I said "Forget about the furnished rent. Think about what the rent would be if the premises were unfurnished and let us work on that." This received the agree- 270 ment of the Opposition. I think that had the then Minister been prepared to accept it there and then, it would have been incorporated in the Bill. As it is, instead of the figure of 100 per cent. on the unfurnished basis, we now have a figure of 125 per cent., which costs more, but I welcome that higher figure, and is the result of greater experience of the situation. Obviously the Government had to consult local authority associations. In consequence, there has been this period of slight delay, but we now have an even better scheme than that which I suggested, and I welcome it.
The right hon. Member for Grimsby suggested that this scheme should be considered a subsidy to the landlord—we have had this nonsense before—as the rent allowance is a subsidy to the landlord. However, it is quite different. The change has been moving the subsidy from the house to the family. Therefore, the landlord does not look for the poorest possible tenants in order that they shall have assistance with their rent and he will receive it. If anything, if he has a choice, he will probably go for the wealthiest tenant who can best afford to pay the rent. Therefore, it is nonsense to suggest that as soon as the tenant receives help with his rent, because he is in poor financial circumstances, thereby the landlord benefits. He does not. It is the tenant who benefits in those circumstances. So let us forget that rather silly slogan that we heard again today.
Security of tenure is mentioned in the reasoned amendment. Again, the right hon. Member for Grimsby said that it must be a matter of personal judgment whether there would be a loss of accommodation resulting from the introduction of security of tenure. I entirely agree. Let us consider it.
First, accommodation in people's homes. Can anyone really believe that if security of tenure is granted to a lodger in someone's home the householder will continue letting in those circumstances? One can imagine a householder getting somebody in who appears to be a perfectly charming tenant but who, as soon as he is in and has security of tenure, becomes an absolute fiend. We all know that this happens.
§ Mr. Freeson
Does the hon. Gentleman know of any person in authority who 271 has considered this subject who has recommended the granting of security of tenure to lodgers?
§ Mr. Allason
I use "lodger" in the rather general sense. The Francis Committee dealt with letting in a person's home. Technically, a lodger is somebody who rents a room and has access to common parts of the house, whereas a tenant has accommodation restricted to himself. The hon. Gentleman is just nitpicking. I am glad that he has again buried his nose in his papers. However, he knows that security of tenure within a landlord's own home is totally unacceptable.
I now turn to the second matter of a renting house where the landlord is not in residence and it is a purely commercial proposition for him. As the right hon. Member for Grimsby said, we know that landlords are getting out of the unfurnished sector because it is no longer profitable. The situation now is that they can do far better by selling their houses and lending the money to building societies. They get a better and safer return than by continuing to rent unfurnished properties.
This is not yet so with furnished property. That is still a marginally reasonable commercial proposition, but there is no guarantee that it will remain so. My own subjective judgment is that if we give security of tenure a landlord may fear that he will get an unpleasant tenant whom he is unable to get rid of and will feel that the game is no longer worth the candle. He will then follow the habit of the unfurnished property landlord of getting rid of the accommodation as fast as he can.
§ Mr. Douglas-Mann
To whom does the hon. Gentleman suggest these houses will be sold? Is there an unlimited number of people who will buy them? Does he accept that to dispose of property one needs both a market and a willing buyer? Has the hon. Gentleman considered the figures quoted by Miss Lyndal Evans in the minority report on the breakdown of furnished tenancies and their suitability for sale or otherwise?
§ Mr. Allason
It is usually necessary to obtain possession of the whole house. We are speaking of renting houses which are let off completely.
The hon. Gentleman asked from where the unlimited supply of purchasers would come. I remind him that only 1½per cent. of our stock of houses is being replaced every year. To my mind this is inadequate, but it indicates that there is not such a vast supply of houses coming forward that a buyer's market is about to develop. There is a huge demand for vacant housing and there will not be the slightest difficulty in getting rid of it. Indeed, I am alarmed at the way that house prices have risen in London. As the hon. Gentleman knows, this situation reflects the demand for houses.
The reasoned amendment speaks of improved rent regulations in the furnished dwellings sector. We have not heard much about that today. I do not think that it is anything to do with the Bill. I confidently forecast that at some time or other it will be possible to get the furnished and unfurnished regulations more closely interwoven, but surely not in this Bill. The whole purpose of this Bill is to get something through quickly to help tenants of furnished accommodation.
The speed with which my hon. Friend has been able to move is noteworthy. The unfurnished tenant's allowances started on 1st January, and in England at any rate the furnished tenant's allowances are due to start on 1st April. This is about as fast as would have happened had they been included in last year's Bill. I congratulate my hon. Friend upon both his speed and his humanity.
§ 5.49 p.m.
§ Mr. Bruce Douglas-Mann (Kensington, North)
I should like to take up two points made by the hon. Member for Hemel Hempstead (Mr. Allason). He referred to what he called the "silly slogan" that subsidisation of tenants is of benefit to the landlords. This has been said on many occasions from this side of the House and in other places as well.
Like my hon. Friends, I welcome the Bill because it corrects a serious anomaly following the passage of the Housing 273 Finance Act. Whereas the owner-occupier receives tax relief and the council tenant is eligible for the benefits of housing subsidies, to a greater or lesser extent, the private tenant, until the Housing Finance Act, received no benefit. We objected to the exclusion of furnished tenancies but welcomed the extension of subsidies to private tenants. But it would be wrong for us not to acknowledge that if the demand for any commodity is subsidised without simultaneously increasing the supply, the price will necessarily be driven upwards.
§ Mr. Allason indicated dissent.
§ Mr. Douglas-Mann
It is a basic and fundamental element of economics which I am sure the hon. Member for Hemel Hempstead does not find so puzzling as his expression suggests. When the amount of money provided to purchase something is increased, unless the supply is also increased the price is likely to rise.
§ Mr. Allason
I do not think that the hon. Gentleman would suggest that those who are most in need of help are likely to rush about looking for palaces in which to live. All they seek is help with their rent, which they already find pretty hard to meet.
§ Mr. Douglas-Mann
They do find it pretty hard to meet. I am not suggesting, and I am sure the hon. Gentleman knows that I am not, that the Bill will result in people rushing about for palaces. It will, however, enable them to pay a higher rent. Instead of a person paying £5 for a squalid room in North Kensington, the landlord may be able to extort £6. That is extremely likely. Nevertheless, if we have a situation in which the demand is such that the tenant is at the mercy of the landlord and then have these subsidies extended to furnished tenancies—we must look at the Bill in the context of the situation as it is—the landlord will be able to obtain a higher rent than he would have been able to otherwise. Although I warmly welcome the Bill, we must look at it in the context of housing supply.
A conference was organised by Shelter in November and some interesting papers were submitted which analysed the effect of the subsidisation of owner occupation 274 since the war. The conclusion of the learned authors of a number of papers, which I expect the Minister has seen, was that the subsidies have had an effect in raising the price of both houses and housing land, and have not had a significant effect—certainly they have had some effect—in increasing the supply.
In considering any further proposal for the extension of subsidies, we must look for fairness between different groups. The Bill is partially remedying the previous unfairness. However, we must realise that by enabling people to pay higher rents than they would otherwise be able to afford, we are necessarily pushing up the price.
The hon. Member for Hemel Hempstead must have heard the argument in Committee that, given the situation that we have of a certain number of council houses and a certain number of tenants with given incomes between whom the council houses will be distributed, the level of rent will be lower than if the level is set artificially high and then an excess is collected and transferred from one sector of the tenants to enable the others, who could not otherwise afford them, to pay such artificially high rents. In that way the rent is made higher than the market rate. That is what the Housing Finance Act did in relation to both council and unfurnished tenants.
It is important that we understand what we are doing. We are raising the level of rents in the council and private unfurnished sectors to a higher level than they would have been on the open market. We are doing that by overcharging some people. That can be done with council rents because the Government have created a monopolistic market situation; have raised rents above the market level, and are collecting an excess from those who can pay them and paying it back in subsidies to those who could not possibly have paid such rents if it were not for the subsidy. That is subsidisation of the landlord. Given that situation, and I trust that the hon. Gentleman will not misrepresent what I have been saying, it is essential that we have the Bill. I suggest that the Bill could have been more effective, more generous and more equitable, but a Bill was needed to redress the anomalies created by the Housing Finance Act for furnished tenants.
275 The Bill as it stands only partially meets the needs of furnished tenants. We have had already some discussion about the lack of security of tenure and the effect of that lack. The hon. Member for Kensington, South (Sir B. Rhys Williams) said earlier that the greatest number of furnished tenants were in his constituency. But it is in the borough of which the hon. Gentleman and I represent different parts that the problem of furnished tenancies is one of extreme acuteness. Every week at my surgery I have at least three or four cases of people with notice to quit who are threatened by eviction. That is only a small tip of the iceberg represented by people who are being evicted in North Kensington week after week.
In North Kensington the local Labour Party has been distributing in large numbers a leaflet which advises people "Do not lose your home". Most people do not realise that when they have furnished rent books they are in most cases unlikely to be classified as furnished if the issue comes before the court.
The extent and the seriousness of what is happening in the stress areas of London, and the significance of the lack of security of furnished tenants, is alarming. The greater part of the people who come to my surgery are elderly. They are mostly single, widows or widowers. They are mostly approaching retirement age. They have often lived for 11 or 12 years in a furnished room. They are then told by their landlord that he wishes to redevelop the place for luxury flats and given notice to quit. I have two examples which I have culled from today's post. One reads:I find myself, after 11 years of exemplary tenancy with my own furniture and a furnished rent book, in the certain knowledge that the furniture at the beginning of the tenancy was not even worth four months' rent, with a new landlord and imminent eviction. I have now applied for a third term of extension of security, if such it can be called, but do not expect to get it … I might also add that I have tried for 11 months to find myself another home, without successAnother tenant, a nurse who is still working at a Middlesex hospital, received a letter from her landlord which said:The rent tribunal which heard your third application today told you that if you applied to them again for an extension of security against the notice to quit which was served on you they would not grant such an extension. I am sure you know that when another tenant 276 refused to leave he was taken to court and was ordered to pay costs. I am sure that you will be able to find somewhere else to live.That lady, who is living on a nurse's salary and working in a London hospital, will find the prospects remote of finding anywhere else to live where she will be able to continue with her job or have any connection with the people with whom she has worked and lived all her working life.
On humane terms it is almost indefensible not to grant such security. I know that the Minister is a man of compassion, although I disagree with him on many things, and I am sure that he would wish to grant such security, but he and his Department have been overborne by the views expressed by the Francis Committee. I would ask him to consider these views with care and pay some attention to an analysis of the evidence upon which the majority came to their conclusion and upon which Miss Lyndal Evans came to hers.
In the first place, Miss Lyndal Evans, in her minority report, goes into the details of the figures of categories of furnished tenancies which exist and the reasons why she does not consider—I think with good reason—that it is likely that those premises could be put on the market. One reason is that 46 per cent. of the premises consist of single rooms, and it is clearly not practicable to dispose of those. The only parts which would be readily saleable are purpose-built flats and whole houses let furnished.
The evidence before the Francis Committee was that only 5 per cent. of furnished accommodation in Greater London consists of purpose-built flats and maisonettes and that whole houses let furnished accounted for another 6 per cent. So this was 11 per cent. of the furnished market which could be sold. Clearly, the single rooms could not be sold and almost all the remainder was accommodation in conversions which again is very difficult to sell, because it is not acceptable to mortgagees.
The hon. Member for Hemel Hemstead suggested that that is all right if the landlord can get possession of the whole house. Of course; but if security of tenure is granted this question is not very likely to arise. I am not sure how it is contemplated that, if the 500,000 households who occupy furnished tenancies 277 were given a right of security in their homes, any significant proportion of landlords could take those out of the market. For the most part, it would not be possible. One room falls vacant at a time.
I appreciate that some hon. Members opposite feel that it is hard luck on the landlord that his investment should be tampered with by the law in this way. But surely it is much harder luck on the tenants, who, because they have lived all their lives and have their roots in an area which has suddenly become fashionable or desirable—as is happening in North Kensington—find themselves evicted in large numbers.
§ Mr. Allason
Is the hon. Gentleman suggesting that the normal furnished tenant in North Kensington has lived there all his life?
§ Mr. Douglas-Mann
Clearly, not all furnished tenants have lived there all their lives, but many have lived there for long periods. I would refer the hon. Gentleman to the information in the Francis report, and I think that the Minister said that a significant proportion of furnished tenants have lived in the same accommodation for long periods and, in a large number of cases, in the same area. A substantial proportion of those with whom I have dealings in North Kensington have lived there or in Paddington for a considerable period.
To revert to the arguments of the Francis Committee, I would refer the Minister to another Shelter report, of a conference held on 13th March 1971, at which Mr. Francis gave information about the reasons for the conclusions that he reached.
He referred to the evidence given by landlords that, if security were granted to furnished tenants, many landlords would like to get out of the field. That, of course, is nonsense. How, in practice, could they do so? He then went on to make a fallacious assumption:I do not accept that the ordinary landlord will wilfully turn out a furnished tenant for no reason at all. In the vast majority of cases, there is no question at all that most landlords and furnished tenants get on quite well together and that the ordinary landlord will not turn out his tenant wilfully and capriciously, but only because there has been some misconduct on the part of the tenant or because the landlord may have a very good reason for wanting possession.278 The situation that I can see in North Kensington and that can be seen by almost every Central London Member is that the landlord has a good reason for wanting possession because there are now richer tenants who would be willing to occupy premises that have been a former tenant's home.
If Mr. Francis regards that as a very good reason, perhaps it explains his report. To be fair to him, however, it is more probable that he did not apply his mind to the situation of the changing structure of our central city areas, that we have large areas—indeed, almost all the areas in which furnished tenancies are concentrated—where property values are changing fast and the character of the neighbourhood either is changing or can be changed.
It is said that there are 500,000 households at risk. Obviously, it is not as high as that, but in London, where the greatest concentration is, a large number of dwellings are at risk, particularly at the hands of the property developers or speculators who have been buying up properties in North Kensington, including parts like Pembridge Square and Ladbroke Square, which have for many years been respectable middle-class areas, with every third house let off in furnished rooms. Tenants are being evicted in large numbers to enable landlords to turn the premises into furnished flats.
Anywhere in North Kensington one can see quantities of notices saying, "Sold for conversion to luxury flats". These furnished tenants are being evicted to make profits for the landlords. I cannot accept—I do not think that the House will accept—that it is legitimate to treat the homes of people, whether they are single or whether they have young children, in such a way that they can be told "You must go now, because I can make more money by getting someone else in."
If the argument advanced by the Minister, his hon. Friends and the majority of the Francis Committee is correct, that the only way to keep private landlords in the market is by ensuring that their tenants have no security, that they cannot go home at night or paint a room or buy furniture in the knowledge that they will still be there in a few years' time, such tenants cannot take pride or 279 have a sense of home in furnished accommodation. If this is the only way in which the private landlord can be kept in the market, it is high time that we got rid of the private landlord. However, I accept that this is not the time to discuss that proposition.
Miss Lyndal Evans, at page 45 of the transcript of the conference, said:I gave some figures in my minority report; the majority report gives absolutely no figures at all and just bases the whole thing on a hunch. In fact, they say, 'We are convinced', but they do not justify that conviction. I have tried to do so.Miss Lyndal Evans continues by referring to part of the furnished market, and I have dealt with the part which could be sold, only a very small part. She says:I do not think that all that much of the furnished sector is saleable or going to vanish from letting, and that some of it will be switched from furnished lettings to unfurnished. … Some small part of it may be modernised and improved—which will be a good thing—and I cannot see what landlords who own these terrible properties that are at present let furnished will do with them if they do not continue to let them.I strongly endorse that view.
I turn from the general point of security and subsidisation to the more detailed provisions of the Bill.
As the Bill stands, it will not achieve the object that has been claimed for it. The survey on rent levels commissioned by Francis shows the following:Rent levels in the furnished sector were substantially higher for broadly comparable accommodation than in the unfurnished sector. The average weekly rent for furnished 'rooms' was £4.90 (compared with £2.64 for unfurnished) and for furnished flats in converted houses £9.38 (compared with £3.41)Allowing 125 per cent. on unfurnished rent, the £2.64 plus one-quarter is £3.30; £3.41 plus one quarter is £4.26.
That means that under the Bill's provisions for this typical furnished flat in a conversion, the occupational element will be treated as £4.26, whereas the rent at the time of Francis was £9.38. Thus less than half of the rent will be eligible for rent allowance. That will lead to the situation in which a local authority may say—I do not see how it could do otherwise under the provisions of the Bill—"Having taken the advice of the rent officer, although these premises are let furnished at £9.38, the unfurnished rent would be £3.41, and therefore the occupa- 280 tional element of the rent on which the allowance is to be based is £4.26." How can the local authority make a contribution towards the rent which will be of any significance?
The only possibility is for the local authority to say to the tenant "Go to the rent tribunal and get your rent reduced." We know from Francis what happens to people who go to the rent tribunal. A year later Francis was able to find only 20 people out of 100 who went to the rent tribunal, and only five of those expected to remain in occupation. Ninety-five per cent. of those who go to rent tribunals are out or on their way out in a year.
We shall achieve nothing unless, as Francis and my hon. Friend the Member for Greenock (Dr. Dickson Mabon) have suggested, we assimiliate the two codes so that we ensure that rents in the furnished and unfurnished sectors are assessed on approximately the same bases, but with an increase for the furniture of furnished tenants. In practice we have the provisions of Section 25 of the Housing Finance Act, as amended, and it appears that the Government are working on the assumption that the scarcity factor will be 20 per cent. everywhere, that the difference between the occupational element of a furnished tenancy and the unfurnished rent will be only 20 per cent. Clearly, that is not the difference between the open market rent, which is what a furnished rent is, and a rent officer rent, which in large parts of the country is very much greater. The evidence is that at the time of Francis in my area it was 40 per cent., and in practice the difference is now probably very much greater than that.
It will not work unless we have assimilation and assessment based on similar bases of rent, and also security for furnished tenants who go to the rent tribunal or rent officer to get a fair rent assessed rather than a profit rent.
Further, it will not work because far too many categories of people are excluded. I heard the categories only when they were react by the Minister, and my notes of them are that they are families with children, old-age pensioners, tenants with a pensioner living in the family, single people without children only if they have a long residential qualification, and any furnished tenants who 281 would suffer hardship in the opinion of the local authority in accordance with the guidance of the Minister, such as the chronic sick and those undergoing psychiatric treatment.
But what of the hospital porters and nurses? What about the lady I have mentioned, about whom I do not know what to do? Another who recently retired is just about to be evicted and does not know what rent she will have to pay. She has an income from savings of £2 a week and will be eligible for a pension, but she would not have been eligible for rent allowance until about two weeks ago, when she retired from a job in which she was earning only a modest salary.
The single person family will not be eligible, unless we get guidance from the Minister to the contrary. They will not be covered by the proposals. These categories of people in relatively low-paid occupations in central London—we are anxious on social grounds that they should be able to continue to live in central London—will not be reached by the Bill's provisions.
§ Mr. Channon
I thought that the whole point of the hon. Gentleman's case was that the lady had been living there for a very long time. We cannot make too much of the circumstances of a particular case and cannot found an argument upon it, but the sort of case he has mentioned would obviously be covered.
§ Mr. Douglas-Mann
I appreciate that the old-age pensioner and the lady who had retired would be covered, coming within the OAP category. But in the period before they retire they would not be covered. I am most encouraged to learn the contrary and look forward to obtaining more detail from the Minister. We have only heard this today, but I trust that the Minister will be interpreting it in such a way as to enable the provisions, limited as they are, to be implemented with reasonable humanity.
I am glad to see some amendments to Section 24 of the Housing Finance Act which would provide that the landlord would be under a duty to give information to the tenant about the availability of the scheme. Bearing in mind, however, from Francis that the great majority 282 of tenants of furnished accommodation were unaware that there was provision to check the registration of rent, and that in Greater London 74 per cent. of all tenants who were paying rent in excess of the registered rents were unaware of that, I am sorry that the Minister has not taken the opportunity, which becomes important when dealing with furnished tenants, to ensure that there are more effective penalties for charging rents in excess of registered rent, and that rent shall not be recoverable if there is no rent book and if the notices required by the Bill are not provided.
Those are detailed points which can be more appropriately dealt with in Committee, but the major point is that the Bill, with its restrictions and limitations, is a necessity—given the structure of the housing market—that has been created as a result of the Housing Finance Act. It is necessary to correct the inequalities and inequities that have been created by the Government. But the Bill will not alleviate hardship unless and until we have security of tenure for furnished tenants and an assimilation of the two codes, calculated on the same basis, and a system under which every one in need, whether or not they come within a specific defined category, is entitled to apply.
The difficulties suggested by the hon. Member for Hemel Hempstead in having a universal scheme would apply equally to unfurnished tenancies, if there were such things in the situation he describes. But the difficulties could be overcome, and I am sure that the parliamentary draftsmen would be able to propose amendments to meet any difficulties that would arise in implementing a fair and just scheme. This is a useful part-measure which we shall support, but it is regrettable that it does not do a great deal more.
§ 6.21 p.m.
§ Mr. S. James A. Hill (Southampton, Test)
It is wrong that every Member who served on the Housing Finance Bill Committee last year is not here this evening to congratulate my hon. Friend the Minister on keeping the promise made by our right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) both in Committee and on the Floor of the House. I thought at the time that the promise would be difficult to keep. 283 Furnished accommodation is in a state of constant flux and it will be difficult to pinpoint the tenants who will be responsible for the rent. Nevertheless, I must congratulate my hon. Friend on bringing forward the Bill.
§ Mr. Arthur Latham (Paddington, North) rose—
§ Mr. Hill
I shall not take long. We know from past experience that the hon. Gentleman is inclined to think of a three-hour speech as an interval of time. I propose to speak for only five minutes, after which the hon. Gentleman will no doubt regale the House with one of the topics with which we were so enamoured in Committee and which helped to pass away the long night.
I am perturbed that there is no statement in the Bill to the effect that it is the rent officer who will assess the rents. Local government in its wisdom may have the qualifications and the valuation departments to do the job, and they may set what they consider to be fair rents, but those rents may not be the same as a rent officer would set.
I see that it is to be the unfurnished accommodation assessment with 25 per cent. added. Does that take in the quality of the furnishings? Does it take in the environmental area and the facilities in the block of flats or whatever it is? I am certain that there are anomalies there and that they will be difficult for local authorities to assess.
It may be made clear in Committee that all these valuations are to be done by rent officers. I know the immense strain already imposed upon them and their staff, and how hard-pressed they are for accommodation, and it may be that local government should not put any further burdens on them. The rent officer in Southampton is conscious of the fact that he does not have enough staff or enough accommodation. He has to deal with hundreds of applications at a time, and in Committee further provision should be made to provide extra finance and accommodation for rent officers.
With regard to the argument whether landlords will be vicious to tenants or whether tenants will be vicious to landlords, perhaps I may recall the details of a case that arose in my constituency. A woman living on her own with a small 284 child took a tenant into furnished accommodation. Later she came to me because her tenant was selling off the furniture. Even under the present law it took her some months to get vacant possession. By that time the police had been brought into the case, and when my constituent eventually obtained vacant possession—not having received any rent for some time—she found that not only had the furnishings been ill-used but that some were missing. It is not all landlords who are rascals and all tenants who are saints.
§ Mr. Clinton Davis
The lady had the right to seek an injunction from the local county court, quite apart from calling in the police. Does not the hon. Gentleman agree that these legal remedies have some value? Does not he also agree that this landlady, who appears to be rather poor, would probably have been eligible for legal aid, and possibly even free legal aid? Were not those remedies sought or even investigated?
§ Mr. Hill
The hon. Gentleman is perhaps forgetting that he is a strong, virile, masculine male, whereas this woman was terrified of her formidable tenant. It was only in the last resort that she went to law, because she knew what fury that would arouse. I have mentioned that not as a bone of contention but merely because once in a while somebody from these benches should point out that it is not all landlords who are rascals.
What the Opposition are going to do about the Housing Finance Act is a matter of conjecture but if, in the event of their returning to power, they rescind the measure, by that time the allowance proposed in the Bill will have made a fine contribution towards maintaining the housing stock. I implore hon. Gentlemen opposite not to destroy for the sake of destroying but to look carefully at this matter. There is a tremendous amount of good in the Housing Finance Act and in each step that has been taken by my hon. Friend, and I congratulate him and his staff on the way in which they have put the Bill together.
§ 6.27 p.m.
§ Mr. Cyril Smith (Rochdale)
Perhaps the first thing I should do is advise the Minister that not all the furnished tenancies are in either North Kensington or in greater London. There are other parts 285 of the country in which one finds large numbers of furnished tenancies, and therefore many of us are as interested in the Bill as are London Members.
The Liberals intend to support the Bill.
§ Mr. Smith
I should have said that the hon. Member would know that better than I would.
Although the Liberals will support the Bill, we agree with the official Opposition that it is somewhat inadequate. It is, however, an improvement on the present situation and I repeat that we propose to support the Government in the Lobby this evening.
The major weakness of the Bill is that touched on in the Opposition's reasoned amendment. It relates principally to the clause dealing with security of tenure. We believe that this is a major weakness because it could allow landlords to cash in on the subsidies that are to be given.
I do not subscribe to the view that all landlords are unscrupulous, but that does not alter the fact that some of them are. Under the Bill as it stands, if some tenants are able to obtain rebates and their landlords become aware of that—and there are many ways under the Bill by which that can be done—it is possible, if not in some cases highly probable, that rents will be increased as a consequence.
I regret too that I cannot accept the Minister's opening conclusions in relation to the provisions that we require concerning security of tenure. I cannot accept that the inclusion of security of tenure in the Bill would necessarily result in a reduction of the number of available tenancies. The first point is that it would not result in fewer houses. Therefore, 286 if one accepts the argument that it would result in fewer tenancies, what the Minister must be arguing is that the houses in question would be put up for sale as a consequence of security of tenure. If that were the case it might very well have the effect of reducing the selling price of houses, because there would be more houses for sale on the market. For my part, that is a risk I am prepared to take in requesting security of tenure for people in furnished dwellings.
It is debatable too whether a 25 per cent. allowance on the net rent allowance for furnishings and fittings is sufficient. I am advised that in some parts of the country the figure should certainly be 50 per cent. and that in other parts it may well require to be 100 per cent. I hope that the powers which the Minister has in this matter will be used.
I cannot understand why there should be two systems of fixing furnished rents—the existing rent tribunal and, now, the new local authority rent officer system. The existence of two systems can only increase the ad hoc nature of the way that furnished rents are set at the present time. I suggest that the Bill is liable to lead to inflationary tendencies in rents and I think that that also is to be regretted.
The Minister dealt in his speech with the problem of take-up, and certainly it is the wish of all of us that the rate of take-up should be high. Perhaps I might make the point that the Bill puts a further burden on local authorities in connection with their administration of it. A burden has already been placed on them by the Housing Finance Act 1972, and I hope that the Minister and the Government will find it possible to see that local authorities get special grants in order to ensure that the schemes are administered quickly and efficiently. It is all very well to say that local authorities are to receive 100 per cent. grants for the rebates that are allowed, but the fact is that the salaries and wages of staff are a burden on local ratepayers. I hope that the Minister will find it possible, by means of a special type of plan, to ensure that any extra staff who might have to be employed as a consequence of the Bill will not result in an additional burden being placed on the local authorities.
§ Mr. Crosland
The subsidy covering the rent allowance will be a 100 per cent. 287 Government subsidy for only a limited period. After that, the local authority will have to cover it.
§ Mr. Smith
I realise that. The right hon. Gentleman is absolutely correct in making the point. Those who have been actively concerned with local government, as I have for the past 20 years before I was a Member of this House, have seen a growing tendency on the part of all Governments to move the burden of national taxation to local taxation and to leave the local councillor to carry the can at the local elections. I very much hope that this point will be borne in mind.
What the Liberal Members of the House, including myself, are saying, is that the Bill is inadequate but is none the less an improvement on the present position. It might almost be described as a "pop and squash" Bill in which the fizzy bit is on top, the effervescence is very good and the drink is drinkable, but it would be much better if it were strengthened. That is how we see the Bill. I shall not delay the House any longer. I have said what I need to say and I hope that the Minister will find it possible, particularly concerning security of tenure, to strengthen the Bill in Committee.
§ 6.25 p.m.
§ Mr. Marcus Worsley (Chelsea)
The hon. Member for Rochdale (Mr. Cyril Smith), when he began, reminded us that furnished tenancies are not peculiar to London, but I think he will have heard the statistic given by my hon. Friend in opening this debate which showed that no less than 40 per cent. of furnished tenancies are in the Greater London area and that the overwhelming concentration of them is in the three boroughs of Central London, many of the hon. Members from which have spoken during this debate. So the greatest concentration of this problem is without doubt in London.
I think the hon. Gentleman's position was certainly more logical than that of the official Opposition. He said he would have liked to see more in the Bill, which is fair enough, but he did not put himself in the very curious situation of the previous speaker opposite, the hon. Member for Kensington, North (Mr. Douglas-Mann), who shares with me the honour of representing part of the Royal Borough, who, although he started by 288 saying that he much welcomed the Bill, has in fact put his name to the amendment, which starts by saying that the House declines to give a Second Reading to the Bill on certain grounds. This is an extraordinarily illogical position to have taken up. I do not know whether he accepts that the amendment which he and his right hon. and hon. Friends have put down will be defeated. Perhaps he is banking on that. Perhaps he is relying on the efficiency of the Government Whips, as he generally can. Were this amendment put down by himself and others to be accepted, this Bill would not go forward; yet he much welcomes it. So I think that he and his hon. Friends have got themselves into a considerable muddle—a muddle which the Liberal Party has avoided.
The fact is, of course, that this is a major step forward. The fact that it does not do everything that all of us would like—and I shall say a little about some of the things I would like—does not mean that it is not a really major step forward. The Opposition had the chance for six years of tackling this problem and they did not give, in either the unfurnished or the furnished sector, the kind of rent allowance which is now in operation in the unfurnished sector and soon will be in the furnished sector. I speak with a great deal of feeling about this because in my own constituency and in neighbouring ones it is going to make a a great deal of difference.
It is an important characteristic of my own constituency that there are a great number of people—and the hon. Gentleman mentioned such people in his speech—who are not very highly paid, who are working perhaps in hospitals or similar institutions in the centre of the city; admirable people, essential people, people who are above the level at which supplementary benefit, and so on, comes in to help them; but nevertheless people who find that housing costs in central London are hitting them very hard indeed. It is these people who are being helped by the Housing Finance Act which was so resolutely opposed by the Opposition, and who will be helped by this Bill which the Opposition intend to divide against.
What is so important about this form of support is that to keep such people in central London is to keep the community 289 in central London alive. If these people leave, they will be replaced by people from abroad or from other parts of England, people who do not feel involved in the community. Many of us are very concerned about the erosion of community life in central London.
I, therefore, congratulate the Government on tackling the problem by refusing to be alarmed at the real difficulties of extending help to the furnished sector. I commend the Government for their good efforts in Cmnd. 5183. If Governments were always to do some of our homework for us by showing the effect of amendments it would help us.
I turn to the important question that the Opposition raise in their amendment. It is illogical not to wish to pass the Bill because it does not deal with this question. However, it is something that must be tackled. The root of the problem is that there are two systems of control—one for furnished accommodation and one for unfurnished accommodation—and the line between them is not based on any very logical distinction. It has been based for 50 years on the arbitrary fact of the existence of various pieces of wood, leather and metal in a unit of accommodation. Radical consideration must be given to the question of what kind of property should be protected and what should not.
The Opposition's simplistic approach does not contribute much. It would not solve the problem simply to bring the furnished sector into the present system of control for the unfurnished sector. Many furnished units of accommodation would go off the market if there were even a serious threat of the type of control that exists in the unfurnished sector. I have in mind rooms, or often the whole floor of a house. A young couple acquires a house on marriage. At that stage the house is too large for them, so they let a whole floor. Then in the natural course of events their family grows, and they need that floor. So they occupy the whole house. If such people were told that if they let the accommodation the tenant would have all the panoply of the protection of the Rent Act they would not let it. That would cause hardship to the young couple, who need the income, and it would cause even greater 290 hardship to the speculative tenant who cannot move in.
§ Mr. Douglas-Mann
Is the hon. Gentleman aware that all the evidence submitted to the Francis Committee urging security of tenure for furnished tenants, particularly the Labour Party's evidence, the evidence of the Society of Labour Lawyers, and all the arguments that have been presented from this side, assume that the tenant of an owner-occupier where the tenant occupies less than half the house will be excluded from protection and that holiday lettings should be excluded? The recommendation made from this side is of the kind, though not necessarily in the precise form, put forward by Miss Lyndal Evans in the minority report of the Francis Committee; namely, that security of tenure would not be granted to a tenant where he was occupying less than half of a house occupied by his landlord.
§ Mr. Worsley
The hon. Gentleman has come some way towards the case I am making, but I will follow my argument through. I am arguing that there should be a new line of distinction, and the hon. Gentleman may agree with me when I have finished. There are many examples of furnished tenancies where this type of control would be thoroughly undesirable.
At the other end of the line—this is happening a great deal in my constituency—perfectly ordinary flats, by which I mean flats with all the modern conveniences and with a front door of their own, when they become vacant are being turned into furnished lettings instead of unfurnished lettings, simply to get round the Act. Such cases present a totally different problem, for the effect of this action is twofold. First, security is removed. Secondly, there is a tendency then to get people in such accommodation who contribute little or nothing to the community. They often make life difficult or impossible for the existing tenants of the unfurnished accommodation in the block. They tend to be students or groups of young people who by nature are noisy. These people are sometimes put in with harassment in mind. Sometimes the nature of the typical, furnished tenant is that he makes life very disagreeable for the tenants who are already there.
291 In such circumstances there is no case for saying that the existence of pieces of furniture in the flat should make any difference to the nature of the control.
We should think a little more radically than simply to say that furnished lettings should be brought under the same rules as unfurnished lettings. We should be looking for a new definition, and a new distinction between types of property where control is desirable and those where there should be a less extensive control for fear of putting the property off the market. It is necessary to look not at the furnishing of the flat or house but at the definition of the type of accommodation.
I shall with a clear mind vote against this ridiculous "reasoned amendment", but I emphasise that I do not believe that the situation can remain where it is. The question of control must be viewed radically and afresh. A system which has lasted for so many years is shown to be less and less satisfactory. Therefore, though I warmly applaud the Government for the Bill, which is a great step forward, I hope that it will be only a precursor of a much more wide-ranging Bill dealing with the question of security of tenure and rent control.
§ 6.50 p.m.
§ Mr. Clinton Davis (Hackney, Central)
The hon. Member for Chelsea (Mr. Worsley) hopes that some of the deficiencies relating to rent control of furnished lettings will be dealt with by the Government, but there was no sign of that in the speech by the Minister for Housing and Construction. The Minister gave no indication that the Government have any further legislation in the pipeline to deal with the problem. Therefore, it becomes abundantly plain that the Government, because they are not going to introduce further legislation, are going to waste this opportunity to introduce very urgently needed reforms.
The hon. Member for Chelsea said that he did not think that offering security of tenure to furnished lettings on the same basis as unfurnished lettings will solve the problem. I do not think it would solve the problem, because the problem is so immense in London that it will need startling assistance from the Government, something far more radical 292 than anything contemplated in this rather puny Bill. The hon. Member, like so many of his hon. Friends, asserts that there would be a drying-up of accommodation if the concept of security were extended to furnished accommodation. It is a mere assertion. It is based on no evidence. The example produced by the hon. Gentleman was not an example in fact but an assumption he made from certain facts that he postulated.
Indeed, as my right hon. Friend the Member for Grimsby (Mr. Crosland) has pointed out, the evidence before the Francis Committee indicated a contrary view to that which is being taken by the hon. Member for Chelsea. The hon. Gentleman says that he will go into the Division Lobby tonight with a clear mind. A clear mind was not altogether indicated by his speech because, coupled with the congratulations he offered the Government, he perceived, presumably from knowledge gleaned at his surgery and from going round his constituency, that all is not well and that it is not going to be made well by the provisions of the Bill.
Of course we on this side regard the Bill as an advance. The Government are to be applauded in a limited way for producing rebates to the furnished sector. They had intimated not long ago that it was well nigh impossible to do it, but now they have produced this short Bill indicating that it is possible after all. But the Bill is not really even beginning to grasp the nettle of the problem which faces us, particularly in the stress areas of Inner London. It indicates a misunderstanding of the nature of the problems besetting so many people—people who come along to local authorities when all is lost and ask "Can you help us?"; people who have not taken advantage of the remedies available in law simply because they do not know about them; people who have allowed their notices to quit to expire, who have perhaps hidden their heads in the sand in the hope that the problem will go away. Some of them do not know where to get advice or how to get it. In this section of the community we are dealing in very large measure with people who are most deprived, and maybe for that reason they are sometimes careless of the remedies available in law to give them some modicum of protection.
293 We have had a terrifying show of complacency by the Government today. The Minister referred to the London Action Group, which is supposed to be making a survey to ascertain whether land is available in the outer London boroughs for development by the inner London boroughs. It is supposed to be finding land. So far it has not been able to produce a single acre. I am not denigrating its efforts, but the Minister is rather casual in dealing with the problem of homelessness, which is at the root of what we are discussing, when he can allow the London Borough of Barnet to prevent the London Borough of Brent from developing a site for local authority housing.
Yet Brent had tendered a higher price than the private developers. Barnet, in its miserable complacency and selfishness, decided, however, that it would decline Brent's offer because it did not want to have local authority tenants. Snobbish values insisted that it should have private development there, and the Minister does nothing about it. He sits back complacently talking to a colleague and is not prepared to take any action to deal with this grotesque misuse of local authority powers. I hope that the Under-Secretary of State will deal with this matter in his reply, because such a situation happens time and again. It goes to the very root of the problem because so much homelessness stems from furnished tenants who have been deprived of their homes. A similar situation has occurred in Bromley.
The usual excuse offered in such circumstances is that the borough concerned is taking a number of transfers from the Greater London Council. One knows—my hon. Friends from inner London would certainly agree—that not only do these local authorities in outer London not take up all the transfers but that a minuscule number of people are moved. It is simply camouflage to cover up the appalling misuse of their powers by outer London boroughs.
In Hackney nearly 40 per cent. of the rented accommodation is furnished—at least that seems to be the latest estimate. What flows from this is a great deal of uncertainty on the part of these furnished tenants about their legal position—and uncertainty leads to acute 294 anxiety, depression and distress and all sorts of social and welfare problems that we meet in local authorities and in our surgeries. Thus, 37 per cent. or more of tenants are deprived of the remedies which are available to the more advantageously-placed unfurnished tenants.
What the Minister has singularly failed to understand is that in the vast majority of these cases the anxiety is related not so much to inability to pay the rent as to inability to ensure that for some time in the foreseeable future they will with certainty have a roof over their heads. There is in my borough a rising incidence of homelessness. In the quarter ending December 1972 there were 164 applications for admission to local authority accommodation, and 30 of these related to tenants whose landlords had obtained legal possession of their furnished accommodation. There were more whose landlords had taken advantage of the situation and had obtained illegal possession.
My surgery is run in conjunction with my colleagues on the local council, and, probably like those run by other hon. Members, it is a living testimony of the misery and hopelessness of these people. One observes the helplessness in which they find themselves when their notice to quit has expired. One can only advise them that it does not look as though they have a chance but that perhaps they could argue that theirs is not a true furnished tenancy, because that is their last hope. The local authority tells them that they must persist and defend the proceedings even though they do not have a defence because they must do the best they can to help themselves. In that way these people land themselves with additional costs. The local authority must then provide bed-and-breakfast accommodation for these people because in most inner London boroughs there is an insufficiency of accommodation for the homeless these days.
This is a terrible problem, and my right hon. Friend the Member for Grimsby was right when he said that it is likely to be exacerbated when landlords decide to serve notices to quit as soon as the local authority rent officer comes to make his inquiries. But, even if the Minister does not accept our proposition that security of tenure should be 295 extended to furnished tenancies, surely it is time for him to apply his mind to defining precisely what is a furnished tenancy. We were told on many occasions that his predecessor was doing so. This problem is dealt with in the Francis Committee's Report, where there is a firm recommendation that the present law should be regarded as grossly inadequate and misleading.
My hon. Friend the Member for Kensington, North (Mr. Douglas-Mann) has had some success in the local county court with cases he has undertaken in persuading the court to adopt a certain basis of valuation of tenancy; but that is applied very much by rule of thumb, with great respect to him. There are cases which indicate how much it is rule of thumb. There are cases which indicate that the proper proportion of the value which should be attached to furniture should be 8⅓ per cent., although some say 6 per cent., and, therefore, we just do not know what the true figure is. It is wrong that the law should be as uncertain as it is, so incapable of being defined, because uncertain law is bad law.
The uncertainty of the present position is such that I do not believe that it is possible for lawyers to advise adequately about the matter. That means that tenants are left in the air as to their true position. It follows, therefore, that the Government should at least consider the proposition advanced by Francis, that there should be a new definition. They have not done so, not that I think that would solve the problem, but it would at least have shown that the Government were thinking about it. It is because the Government have not said what they think and it is not possible to create a clear definition that we believe the law applied to furnished and unfurnished tenancies should be equated.
The illogicalities of the present situation are there for everyone to see. So much depends upon the situation which existed at the beginning of the tenancy. The tenant who replaces the landlord's worn-out furniture with his own, so that there is nothing left of that provided by the landlord, is still in an uncertain position. He may still be regarded as a furnished tenant and have none of the security of the unfurnished tenant.
296 The real reason for the decline in unfurnished accommodation and the increase in furnished accommodation has nothing to do with the arguments adduced by the hon. Members for Chelsea, Hemel Hempstead (Mr. Allason) and others. It is that rents in this sector are higher and security is less. Landlords are not in the business to do other than maximise their profits. We cannot complain because that is the nature of the system in which we live, but we do not condone it and desire to change it. Although what we are proposing undoubtedly would be a most useful advance, far in excess of anything the Government are proposing, the only way to solve the problems of the stress areas is to extend the powers of local authorities to take rented accommodation under their control. Yet that is the very solution which the Government reject. We have not heard about it from the Minister today, so perhaps he does not reject it. Perhaps he is battling against his ministerial colleagues. We do not know because he said nothing on the subject. Unless we begin to accept that private landlordism in areas like Hackney, Islington, and North Kensington has singularly failed and, therefore, must be replaced, we shall be unable to find any sort of solution to our difficulties.
It will be a difficult task. The depth of the problem is such that it needs a far more radical proposal and solution than anything that this puny Bill has to offer. Therefore, although I believe that the Government have made a little progress, I hope that they will think again and not neglect the opportunities that lie ahead radically to amend the Bill in order to make it much more worth while for the unfortunate people in the furnished sector.
§ 7.8 p.m.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
I had not intended to speak in the debate but I now wish to make a contribution on one or two aspects of the Bill. First, I welcome it because it makes at least some provision for those who are in real need and who are unable to meet their rent. It is, however, a limited Bill and it should remain so. The hon. Member for Hackney, Central (Mr. Clinton Davis) addressed himself to the problems which I am sure exist in Hackney and North Kensington. I 297 should like to address myself to the problem of furnished accommodation in other parts of the country.
The largest amount of furnished accommodation in the Metropolis is provided for the foreigner. It is provided for almost every type of foreigner who comes here to carry out his business. Those who come for only a few days stay in the expensive hotels, but those who come to do real business quickly move out of the hotels and seek furnished flats and rooms.
The second largest category of those who occupy furnished accommodation in London are our own people from the Midlands, the North and other parts of the country. They come on holiday in the summer when a large number of people have moved out of furnished flats, which they take, or they come from Birmingham, Manchester, Liverpool and elsewhere and they need a small pied-à-terre or furnished room regularly in London to enable them to meet their needs. I can illustrate this by saying that in Pimlico, in the very area in which we now are, there is one street with no less than 50 houses devoted entirely to that class of business, and several hon. Members live in that area. I am not one of them. There are also hon. Members on both sides of the House who own one or more of those houses. They are developed as furnished accommodation to meet a specific market. The letting seldom exceeds six months. It is often for three or four months and occasionally nine months.
The turnover is tremendous. For example, there are all those who serve in the Australian High Commission and who come and go, all those who serve in the various offices of the Commonwealth, all those who serve in the embassies and all the Americans who come here. Apart from that there is a wide range of businessmen.
I often speak in this House on tourism. This is not quite tourism. It is true that a large number of people who want to enjoy England today make their headquarters in London and branch out into the country. They cannot afford the hotels. The hotel industry in recent years has provided 40,000 to 50,000 extra bedrooms for those who can afford to pay 298 for them but it has not managed to provide cheap accommodation in London.
There is nowhere in London that I know of where a person can get bed and breakfast for £2. Consequently people turn to the furnished accommodation. The average price structure varies from about £12 to £20 a week for furnished accommodation in the Pimlico area, providing a bathroom, kitchen and at least two rooms. It is rightly called executive accommodation at the top end and it goes down to family accommodation for people coming from all over the country.
We have to be careful, if we seek to introduce statutory control, that we do not drive that accommodation off the market. There is not enough of it. Events are closing in. Unfortunately more and more of certain areas has been taken over for offices. Other areas have been taken over by wealthy people and by large companies able to buy large flats or even take over a whole house. As a result of our entry into the Common Market our friends from those other countries will be wanting a place in London, if they can afford it.
If we introduce any kind of control over what I call the decent class of furnished accommodation, it will be fatal. The question is whether the Government can in due course work out a scheme which will deal with the periphery of this matter and stop the undesirable behaviour of a small section of landlords in areas such as Paddington and Hackney whose main aim is to get the maximum amount of money—let us be blunt—mainly at the expense of coloured people. Perhaps there can be some joint thoughts on this.
I am sure that the Government would like to take action to prevent anything which smells of Rachmanism, extortion or failure to provide proper facilities. My judgment is that this will not be done by way of statutory control. It must be done along the lines of finding a way to ensure that the services provided are proper and adequate. There is very strict control through public housing to ensure proper sanitary conditions. It is by an extension of such lines that we may be able to get more satisfactory furnished accommodation for those who cannot afford to move into unfurnished accommodation and who are unable to obtain houses.
299 Who are those people? First they are the coloured community, particularly in areas such as Paddington and Brixton. The problem there is overcrowding. In one instance of which I heard recently in Thanet, there are no fewer than 30 people in one house. This kind of thing is frequently to be found in certain areas of London. It is still possible to use old provisions more effectively in preventing excessive rent. This worked before and it can work again. The difficulty is supervision. The problem lies in the overworked local authorities in these large areas being called on to perform yet another function in trying to watch over large areas of very cheap furnished accommodation. It is an extremely difficult additional burden.
I do not think that the right way is to introduce statutory control so that a person cannot be got rid of. I had to speak about this some years ago at the time of the original Act in connection with holiday lettings. In the end it worked out fairly well, but we still have occasional examples of people taking advantage of the situation and moving into a town such as Margate and deliberately remaining after their lease has ended in the knowledge that they will have to pay a higher rent once the high season begins in the summer.
Most important of all we must recognise that London, Liverpool, Birmingham, Manchester and Cardiff are the great cities of the European future. There will be a need for more accommodation. The hotels which are most crowded at the moment are, curiously enough, those recently built with single bedrooms. There is an immense demand. Equally there will be a demand in those areas for furnished accommodation, small flats, company flats and flats for people who may be working there during the week. It is easy nowadays to commute from London to Birmingham. I did it during November. I had to go up every morning and be back here in the House in the afternoon.
This means that we have to preserve mobility in the furnished accommodation market. I do not want to decry the human approach taken by the hon. Member for Hackney, Central on a different problem, but I do not think that the way out is through statutory controls so that people can never be moved. We 300 have to work at trying to make their conditions better and, by assisting with local authority grants, ensuring that standards are improved. By all means let us ensure that the landlord makes adequate and proper provision for all reasonable amenities.
§ 7.18 p.m.
§ Mr. Arthur Latham (Paddington, North)
I am particularly pleased to follow the hon. Member for Isle of Thanet (Mr. Rees-Davies) and to link what he has said with the contribution of his hon. Friend the Member for Chelsea (Mr. Worsley). It has to be recognised that there can be two problems, two types of furnished accommodation mixed up in this argument. We can come to contrary and conflicting conclusions according to whether we look at it from the point of view of a prosperous area in which furnished accommodation is naturally provided for those who seek temporary accommodation or whether we are linked with an area where ordinary working families are being exploited by landlords who are simply letting accommodation, which would otherwise be unfurnished, as furnished to circumvent the legislation protecting tenants living in unfurnished accommodation.
The hon. Member for Chelsea drew attention to this and suggested that the Government should be re-examining the problem and trying to find a way of dealing with the different situations. He referred to what in some circumstances he rightly regards as the arbitrary dividing line between what is furnished and what is not. There is this distinction between the type of accommodation to which I have referred and that which is intended as a service, to be let as furnished accommodation by a landlord and where the occupant is the tenant of furnished accommodation by choice, because he specifically wants furnished accommodation rather than to be a tenant who is in furnished accommodation simply because this is his last desperate attempt to find some kind of home, all the other agencies having failed to provide him with unfurnished accommodation.
What surprises and disappoints me is that the hon. Member for Southampton, Test (Mr. S. James A. Hill), who was so unwilling to allow an intervention and who has long since left the Chamber, was 301 rather forcibly congratulating the Government upon introducing the Bill. He reminded the House that the Bill emanated from an undertaking given in Committee about a year ago. We were told at that time by the then Minister that the Government were concerned that there were great complexities. We had in mind some of those which have been instanced by the hon. Member for Isle of Thanet and the hon. Member for Chelsea.
I would have hoped and expected that in the intervening 12 months not only the working party, about which we then heard for the first time, but the Government in their subsequent considerations would have set about tackling the complexities. The point I wanted to put to the hon. Member for Test, which I also put to the Government and to the House, is that although the situation is wrapped in complicated procedures which require a separate textual memorandum to assist hon. Members in understanding how this legislation will work, what is proposed is very simple indeed.
It does not represent anything which could have developed out of 12 months' consideration and deliberation and could not have been incorporated in the Housing Finance Bill when it was first considered. I would have hoped that the Government might at least have said that they recognised these complexities but had failed to find answers to the problems and were therefore bringing forward this inadequate and puny piece of legislation aimed at tackling the problem of the exploitation of ordinary working families.
I have a lack of enthusiasm for rent rebate schemes and I have even less enthusiasm for rent allowances, whether in the unfurnished or furnished sectors of housing. In the final analysis we are not, as some claim, subsidising the tenant; we are subsidising the landlord. I am unhappy about any extension of means-tested benefits and about a situation in which a substantial proportion of tenants, be it one-third or one-half, become eligible for such benefits.
Eligibility must not be confused with likely take-up. Whether we are dealing with the local authority sector or the private sector, furnished or unfurnished, 302 in a situation in which large proportions becomes eligible for rebate or allowances there must be either something wrong with the rent levels being charged or something wrong with the distribution of wealth and incomes in our society. I conclude that both of these charges are true. The fact that I am unenthusiastic over a situation in which a majority of people become eligible to apply for means-tested benefits, when I believe that it is the landlord who is ultimately being subsidised, does not lead me in the present circumstances, with the present Government, to vote against this puny measure.
It is wrong that so many old-age pensioners should have to depend on supplementary benefit. It would be better if the basic pension were adequate. To take that view, however, is not to oppose the provision of supplementary benefit in the meantime. Similarly, whilst I would prefer to see this problem resolved by bringing rents down, short of action in that direction I do not oppose the little assistance that might be offered in the Bill to tenants in furnished accommodation.
My right hon. Friend the Member for Grimsby (Mr. Crosland) thought that giving allowances to furnished tenants might mean that a tenant who claimed an allowance would find that his rent was increased so that the landlord would benefit from the allowance. In that way money paid by the community into the tenant's pocket would go straight into the landlord's pocket.
The Minister who is in charge of the Bill is usually realistic and lucid, although I do not always agree with his point of view. But he is not being realistic about the practicability of this scheme unless security of tenure is introduced. Whether or not one is in favour of rent allowances for furnished tenants, one must be realistic and see how they are likely to work in practice. At present people continue to pay unfair rents because they fear eviction and because there is a lack of protection. The hon. Member for Northants, South (Mr. Arthur Jones) claimed that a tenant of a furnished dwelling could apply for an allowance without the landlord knowing anything about it and would not be deterred from claiming by the fear of eviction. If the hon. Gentleman refers to the Bill he 303 will see that according to Schedule 1 the calculation for rebate purposes cannot be made without knowledge of three figures. One is the actual rent being paid, which the tenant may be able to substantiate without reference to the landlord by the production of a rent book. The second is an assessment of what the fair rent would be without furniture plus the 25 per cent. element referred to by the Minister. The third is the registered rent. The Bill provides that the amount of rent eligible to be met by the allowance shall be whichever is the smallest of those three figures. It is impossible to know which is the smallest without knowing all three figures.
A large number of properties in my constituency are no more than boxes with bits of sticks called furniture, a large proportion of the rents of which are unregistered. To obtain a rent allowance tenants of those properties will have to take steps to have the rent registered so that the comparison can be made. The choice will remain with them of taking such action—and the landlord knowing of that action—or of opting out of the rent allowance scheme altogether. My fear is that those tenants in my constituency will not want to get involved with officialdom and authority and will not want to go to the rent officer in case the landlord should become aware that they have taken such steps and, as many landlords have done in Paddington, finds reasons for getting them out of the accommodation and offering it to others who clamour for it, unsatisfactory and unhygienic as it is and exorbitant as is the rent.
If the Under-Secretary of State is able to say anything to allay that fear which my tenants justifiably have, I shall be delighted to hear it. I should like to know how tenants in furnished accommodation where the rent has not been registered may seek a rent allowance without the landlord becoming involved, and so remove the fear which inhibits them from seeking benefit from the scheme.
As my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) said, many tenants are ignorant of their rights. Many of them think of the law as belonging to a different class of person, and it is expensive. For these reasons, coupled with the fear of losing the roof 304 over their heads, they are prevented from exercising their rights.
I emphasise that the majority of those about whom I am concerned in my constituency are not in furnished accommodation through their own choice. They would much prefer unfurnished accommodation which they could furnish to their own liking. The only reason why the property they rent is furnished is that the owner of the property wants to get round the Rent Acts and make as much money as possible as quickly as he can. In the last two or three years there has been much evidence in Paddington that as soon as a property or part of a house which had previously been let unfurnished has become vacant, the landlord has put in a few cheap articles of furniture, divided up the property and let it as furnished accommodation at exorbitant rents. The Bill is disappointing as the Government have produced no solution to that problem. Such help as it gives is marginal and minimal and does not tackle the problem which needs to be solved.
My right hon. Friend the Member for Grimsby rightly said that the sale of property had become so profitable that it accounted for the reduction in privately let accommodation at the rate calculated by the Minister of 50,000 dwellings a year. For the reasons I have outlined there has been a reduction in the availability of private unfurnished accommodation and a corresponding increase of furnished accommodation. When it is suggested that control would lead to this property disappearing from the market, I find it hard to envisage the use to which the property could be put. After becoming vacant, good properties which have previously been let unfurnished have been sold. It is the poor properties which have been used to exploit the black and white residents in Paddington. I do not go along with the claim that the majority of the exploited tenants of furnished accommodation in Paddington are coloured people. A high proportion are, but the community as a whole is suffering exploitation.
It is not unusual to have exceptional legislation to deal with an exceptional problem in a particular part of the country. Recognition has been given to stress areas in the Housing Finance Act by 305 many special provisions. One contribution to the problem in the stress areas would be to insist that all tenancies whether furnished or unfurnished, must be registered, and that all rents should be determined through the rent machinery. Only in that way would the scheme before us give any great measure of assistance to a large number of tenants. So long as the initiative rests with the tenant to invite authority to take action, the tenant, either from ignorance or from fear, will be inhibited from initiating the process which can result in financial assistance being given to him.
The Government have spent a year or more studying the problem. In addition to the little that is in the Bill they should have brought forward proposals for dealing more effectively with bad landlords. There are good as well as bad landlords, but Paddington seems to have an unfair share of bad landlords, the type who will take advantage of a three-storey house with attic and basement to let five floors, often dividing each floor into two and letting one room or two rooms for between £6 and £8 a week for each individual tenant, representing an income of between £1,500 and £3,000 a year for one property with very poor shared facilities.
If one asked those tenants what action they would like the Government to take, their first priority would be for the Government to get them out of these hovels.
Their second priority would be for the landlord to put the house in order. Their third priority would be for the landlord to stop charging exorbitant rents. None of the tenants I have in mind would think that the solution is for the Government to give them a sub to help pay the exorbitant rent. They would not regard that as the way to meet their problem.
A future Government will insist on compulsory registration of all tenancies. Anyone willing to function as a landlord of furnished or unfurnished property should require to be licensed as a fit and proper person to own and manage someone else's home. It is necessary to have a licence to drive a car, to run a betting shop, to sell pets and to sell liquor. All kinds of functions which fall short in importance of managing and providing 306 a roof over someone else's head require a licence. Licences could be withdrawn if a person engaged in malpractices, and that might be a way of dealing with bad landlords.
I should like to deal with one other aspect of the Bill. A good deal of Press publicity has been given to the fact that some months ago the First National Finance Corporation netted a profit of £24 million simply by acquiring from the existing landlords, over the tenants heads, 110 blocks of flats and subsequently within a short time selling off those properties to a new set of private landlords. The number of tenancies involved divided into the total profit made by the corporation represents a sum of £2,333 per tenancy. This trading in people's homes represents a clear profit of over £2,000 per tenancy, since this is the difference between the original purchase price and the price at which the dwellings were subsequently sold. This is not a philanthropic venture, but represents a clear expectation of the future trend of rents in both the local authority and the private sector.
Against the background of profit from trading in people's homes, we should examine the impact of this puny measure on rent levels charged to people who otherwise would be homeless or living in inadequate accommodation. Some of the properties in the 110 blocks to which I have referred are furnished, and there are other deals and transactions taking place at present in the expectation that still higher rents will be possible. The payment of rent allowances, without any conditions being applied to the maintenance of the property, will result in rent levels rising still further and these profitable property transactions in people's homes will continue.
The tenants about whom I am concerned do not live in their present accommodation from choice. It may be argued that the Labour Government missed an opportunity to do something about furnished accommodation during their term of office. I make no apology for that but, for the reasons I outlined at the beginning of my speech, it must be said that the number of furnished units of accommodation—and more important, the number of problem furnished units—has been growing over the last two or three years. Furthermore, there has been a noticeable 307 increase in the excesses practised by the worst landlords in recent times.
I conclude by asking the Under-Secretary of State some direct questions. The Minister quoted figures which indicated that one-quarter of furnished accommodation was at present occupied by families. What was the methodology of the survey which produced that figure? How up to date is the Minister's figure of 600,000 dwellings and what is the proportion in London? What definition of the term "furnished accommodation" was adopted? It is difficult to adopt a clear definition in respect of many properties—and this certainly applies to properties in my constituency—and whether those properties can truly be regarded as furnished or unfurnished. If we are expected to base conclusions on the Minister's statistics, we are entitled to know a little more about the authenticity and accuracy of the figures.
The Bill only scratches at the problem and will have the effect of concealing many of the very real problems that exist. I do not question the motives of the Minister or of the Under-Secretary from the point of view of their own political philosophy, but I regard this exercise as a conscience-saver which may prevent a more comprehensive and thorough tackling of the problem. It may provide an alibi for something else. The question we have to consider is whether rent allowances will be provided for furnished tenancies and, if not, why not. I have given a number of reasons which apply to the majority of furnished tenancies in central London.
I regret that the Government have spent a whole year in looking at ways in which to tackle the problem and have come up with only a limited solution. They could have tackled the housing problem with much more comprehensive proposals which go much further than those contained in the Bill to help those in furnished accommodation who are exploited by had landlords.
§ 7.48 p.m.
§ Mr. David Stoddart (Swindon)
I have listened to the debate with great interest and I must confess that I had not intended to take part. However, having heard interesting speeches from both sides of the House, I feel that I should take 308 this opportunity to say a few words about the Bill and about the housing problem generally, particularly relating to furnished tenancies.
I had hoped that in the period which has elapsed since the long dreary hours spent discussing the Housing Finance Bill—
§ Mr. Stoddart
The hon. Gentleman asks who made those hours dreary. It was the Members of his own party who made the proceedings so dreary because they would not accept the Opposition's reasonable amendments. They would have saved themselves a great deal of time if they had listened to reason and heeded the warnings of the Opposition about increasing the costs of housing and if they had not brought forward the Bill at all. In my view the long dreary hours that we spent in Committee were the fault of the Government and their total inability to understand the true housing position.
Although I appreciate that a little will be done to help the tenants of furnished accommodation, I should have much preferred to see the Government taking the opportunity in recent months to reexamine their housing policy. I should have preferred the Minister, instead of talking about this Bill, to talk about ways and means of cheapening houses. I should have liked a reply from the hon. Gentleman to a letter I wrote him during the recess about a speculative housing firm in my constituency which within a year doubled the cost of houses built on land which bad been sold to it very cheaply by the local authority. I should have preferred that to this puny little Bill.
If we are to solve the problems of the tenants of furnished accommodation as well as those of other tenants and of owner-occupiers, we need more than a little Bill of this kind. We need a general shake-up of our housing situation. We do not want merely to put out £8 million to assist the tenants of furnished accommodation. We need to re-examine the whole basis of our housing policy because it is a policy which is based solely on profit, not only in the private furnished and unfurnished sector but, as a result of the Housing Finance Act, in the local authority sector as well.
309 If we are to provide better conditions for those living in furnished accommodation it is necessary to take the profit out of land and housing. The Minister ought to be giving a great deal of attention to that aspect bearing in mind the measures being brought forward by his right hon. Friends the Prime Minister and the Chancellor of the Exchequer to deal with the inflation which they have caused and which is largely taking place in housing.
I represent a provincial constituency where 62 per cent. of the population own their houses and 33 per cent. rent houses from the local authority. That leaves 5 per cent. who are in furnished or unfurnished private accommodation. The problem in Swindon is not all that serious. I appreciate, however, that the problem in London for the tenant of furnished accommodation is extremely grave. But I hope that I am not as parochial as the hon. Member for Rochdale (Mr. Cyril Smith), who appeared to resent the fact that many London Members intervened in the debate to highlight the special problem facing the Metropolis. I know that it is a very serious one.
I should not want to live in London, but recently I took the trouble to visit some furnished accommodation in Kensington. What I saw made me realise the almost insoluble problem that London has in its housing difficulties. Swindon is an expanding town, and we are doing our utmost to assist. We are building houses which I hope many Londoners will occupy if we can find jobs for them. We are trying to help solve London's problem by expanding our town and making good accommodation available to Londoners, especially to those living in deplorable circumstances in furnished accommodation.
I was surprised to hear of some of the rents that these people were paying. Very high rents are demanded for single rooms with facilities which ought not to exist in 1973. This is why I made a plea earlier in my remarks that we should be dealing with the housing problem on a very much wider and more radical basis. But the problem exists in the main in the Metropolis and I sympathise greatly with those who have to deal with it.
310 The question is whether the Bill will assist those whom it is meant to assist. My hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) related the experience that he and his local authority had been having in Birmingham. He outlined some of the difficulties that the city council had encountered in trying, through its powers under a Private Act, to put into operation housing rebates for both furnished and unfurnished tenancies.
There is no doubt that the administrative problems are very real and that the strain on local authorities and their officers will be very great. The Bill says for example that the amount of rebate will be based on 125 per cent. of a fair rent. But let us consider the situation of a local authority examining furnished accommodation and inevitably comparing it with its own accommodation and the rents paid for that accommodation. The Francis Report showed that the average price for a furnished room was £3.51½. Many of the local authorities in administering this legislation will find that the fair rent for a house built to Parker Morris standards is perhaps £5 or £6. What kind of fair rent will they apportion to a single furnished room or to other furnished accommodation which certainly will not have been built to Parker Morris standards?
My hon. Friend the Member for Aston had a very real point when he said that the amount of rebate that the tenants of furnished premises would be able to obtain under this scheme was very small. As a result many will not go to the trouble of applying to their local authorities for any rebate to which they may be entitled. People resent applying for means-tested benefits. Anyone who read the article in the Sunday Times last week about a poor family will understand that working people are proud. They believe that means-tested benefits put them in an inferior position. They do not want to do it; they have their pride. There is a real problem in trying to convince people of their right, perhaps their duty to their families, to apply for benefits which have been voted by this House.
When I talked to my local authority in Swindon about the Housing Finance Act before its operation, I was told that on the basis of its assumptions it expected 311 that between 60 and 70 per cent. of people in Swindon would qualify for a rent rebate. I said that the Minister did not agree; his figure was in the region of 35 to 40 per cent. The local authority said "As far as we are concerned, the Minister can say just what he likes. On the basis of our knowledge, between 60 and 70 per cent. of people in the Swindon borough area will qualify for a rent rebate."
Indeed, the local authority was so confident that when the time came to make estimates, because it applied the scheme in April—I did not quite agree with that—it based its rate contribution estimate on the basis of a 60 to 70 per cent. take-up of rent rebates. As matters turned out, the Minister was more accurate in his estimate than the local authority and the take-up, although estimated at 60 to 70 per cent., has been between only 35 and 40 per cent.
If in the sector of council housing—the council is in constant touch with the tenants week by week by rent collection and other means—the take-up is only 50 per cent., what will be the take-up by private furnished tenants, particularly bearing in mind that the rebate which will accrue to a tenant will be so small?
The views put forward by my right hon. and hon. Friends need to be taken into account by the Minister. He must have further thoughts about security of tenure. Without security of tenure the tenant of furnished accommodation, who is insecure enough in any event and probably at the poorest end, will simply be frightened to apply for his rights. Many tenants are already frightened to go to the rent tribunals because they know that if the landlord gets to know, they may have only a few months more to occupy the property. I therefore urge the Minister to heed the minority report of the Francis Committee by Miss Evans who put forward very cogent reasons why there should be security of tenure and, indeed, showed how this problem can be dealt with administratively. The Minister must take this point into account and give it a good deal of consideration.
The Opposition's reasoned amendment had to be put down because, without security of tenure, even the small amount which has been made available to furnished tenants will not be taken up 312 as a result of their fear of what their landlords can do if they find local authority officials floating around their properties and perhaps finding that they are charging rents which are far too high for inferior properties.
I hope that the Minster will understand what we are getting at. The Opposition are trying to assist him in this particularly difficult matter of being fair to a section of the community which has been hard done by for some time. I hope that right hon. and hon. Gentlemen on the Government side will see the sense of the reasoned amendment and will support it.
§ 8.5 p.m.
§ Mr. George Cunningham (Islington, South-West)
A reason often advanced for not proceeding with legislation on important matters as rapidly as some hon. Members have pressed for it is that there is always a shortage of parliamentary time. In the light of the nature of the debate tonight on this subject, that argument cannot be sustained. That relates to the reasoning advanced earlier by the Minister for this Bill, with its rather meagre provisions, not taking account of some of the recommendations in the Francis Report which it was suggested might have been included. It is possible that in the 18 months to two years since the Francis Report came out the Department has not had time to work out what it wants to do as a result of it. However, I do not believe that is so.
The only reason that could be advanced for not having fulfilled more of the proposals in the report is the shortage of parliamentary time. Surely it is clear from this performance tonight that there is no shortage of parliamentary Second Reading time. Whether we needed it or not, we have had probably twice as much time as was desired for debate on the Bill as it stood. This is becoming a not unusual occurrence. The idea that there is a shortage of parliamentary time is baloney. There is no shortage of time. If we organise it properly, we can get through twice as much legislation if it is brought forward.
I have a small number of points to make on the provisions of the Bill. It has been said that when a tenant of furnished accommodation appeals to the rent tribunal it is frequently the first step 313 to his ultimately being put out on the street. My experience in Islington is that it is not only the first step to being put out on the street, but it is a provocation to harassment. Frequently when a tenant has gone to the tribunal and got what for him is quite a satisfactory solution—either a period of security of tenure or, more important, a reduction in rent—he finds that is when the harassment begins.
The legislation on harassment, even with the increased fines which the Department co-operated in getting last year, is not effective. We cannot discuss this subject without realising that harassment continues. I will not say that it continues as strong as ever, because the devices used in Rachman's day do not continue. They have been sublimated into more legal, but no less effective, methods of getting people out of their homes.
Worse, the courts, due to some judges being too little aware of the social consequences of what they are doing, frequently co-operate by taking a view on what constitutes suitable alternative accommodation which certainly does not fit my view of particular cases and results in tenants being ousted from houses when the landlord's only intention is to sell the house for an enormous profit. I have witnessed cases where that motivation was openly acknowledged in court. Nevertheless, the tenant was required to leave the property.
The principle that we should subsidise private rents—and the principle is quite different in the case of municipal accommodation—is inherently wrong. I am not saying that the Bill is, therefore, unfortunate. I support the Bill as far as it goes. But there is an inherent difficulty about subsidising or providing an allowance towards meeting a private landlord's rent. We cannot take sufficient account of the fact that there will be deals between landlords and tenants. Landlords will say to tenants "We are going to put up the rent. But that is all right. You will not have to pay. We will come to a cosy arrangement between ourselves. We can both make a profit at the expense of the Government".
No one can tell how common that situation will be. However, it will hap- 314 pen. There are close connections between some landlords and tenants. If we were starting from scratch and building a paradise, we would not create a situation which would allow the landlord to charge a high rent and then give the tenant an allowance from public funds to help him meet that rent.
If we find that going rents and incomes are such that we are not prepared for social reasons to allow the tenant to find the rent from his income, we will in the long term have to look for a more radical solution. That means the phasing out or the dying out naturally of the private landlord and the substitution of various forms of publicly owned accommodation. I stress "various forms" because God forbid that the country or my part of London should be entirely in the ownership of one council or one council and the GLC, and that the only type of accommodation available should be the type which borough councils tend to build.
We experiment too little with other forms of communal ownership. The co-operative movement does far too little in that respect. There are co-operative housing developments, and many places are owned by tenants who form a cooperative. However, we do not have the kind of thing which is to be found in Scandinavia and France, where the national co-operative movement operates with the local authority and provides some variation in the methods used by a local authority. I should like to see housing associations directed either at the population in general or at particular professions—for example, students. I should like to see larger associations than are common now which would provide another part of the market. With those variations it would be possible to provide for the entire requirement without the private landlord, with all the disadvantages which he increasingly presents. I should like to see such provision in city centres to meet part of the demand.
The principle that the subsidies that will be paid to private tenants and others should be made in part, and an increasing part, out of rate money as against Exchequer money should be totally unacceptable. Of course, that is not a new point. In many respects we are asking local authorities to undertake redistributive 315 functions by taking on social welfare functions, which they can execute far better than a central Government agency. But the cost of that kind of operation properly belongs to the Exchequer and not to local authority rates.
The Government are increasingly asking rates to bear the significant part of that kind of burden. I hope on the grounds of general equity, and because we all know that rates are a kind of taxation which no one would dream of introducing if we had not inherited it from the 16th century, that the engines are reversed and that we revert to meeting more of that kind of expense from general taxation.
I now refer to the proposed devices to establish effective rents for furnished tenancies after making the reduction for the deemed cost of the procedure. I am at a loss to understand why that responsibility is placed directly upon the local authority. The Bill provides that rents are to be estimated by the authority for the purpose of estimating a fair rent. The authority is in a position to consult any rent officer.
Therefore, the local authorities will have the responsibility for that decision after, if they wish, consultation. That consultation with the rent officer is not mandatory. It seems that we are creating a situation in which there are about three dogs all chasing each other's tail in a circle. It is already difficult, and it was difficult before the Housing Finance Act, for those who are trying to establish fair rents in the private sector to do so without reference to the public sector. Now we are trying to establish fair rents in both sectors. They are each chasing each other's tails. We are saying that the local authority must make a guess about what the rent officer would decide if he were considering a hypothetical situation. They have to try to imagine what the rent officer would decide if that situation existed. That is enough to try to drive any local authority official stark raving mad. It will mean that different local authorities will operate on a different basis.
First, I understand that the reference to the rent officer and consultation with him is designed to detract from that and to bring some consistency into the operation. However, I cannot see why con- 316 sultation with the rent officer should not be made mandatory. Surely that is desirable. Secondly, I cannot see why the responsibility is not given to the rent officer. His office is where the expertise lies. The expertise does not lie with the local authority, which is a political body. No one would have dreamt of giving local authorities the responsibility for deciding fair rents. As we have two growing industries for the establishment of fair rents which operate on different administrative procedures, it is a bit daft to set up a third which will be made up of the officials of a local authority and supervised by the political heads of a local authority.
I hope that that matter can be looked at closely in Committee. I can see no administrative objection if it puts more work on to the rent officers' staff. It will take more work away from the local authorities' staff, and they will have their hands full enough with all the consequences of the Housing Finance Act, without giving them that extra and different function.
§ 8.19 p.m.
§ Mr. Frank Marsden (Liverpool, Scotland)
Like my hon. Friend the Member for Swindon (Mr. David Stoddart), who has unfortunately left the Chamber, I had not intended to speak, and the circumstances in which I have to speak are deplorable. I have had a busy day and have not listened to the debate. I have been in and out of the Chamber. The Mother of Parliaments is debating a matter which will affect, on a conservative estimate, 500,000 people; yet there are exactly eight members present.
The Grieve Report on homelessness in London, published in 1971, said that private furnished accommodation was by far the most common type of tenure prior to homelessness. Like most hon. Members, I interview my constituents every Saturday, and I know that if that is true of London, it is certainly true of Liverpool.
In Standing Committee E, on which I served for a short time, as early as the second sitting on 20th January 1972 we pressed the then Minister to include furnished tenants in the Housing Finance Bill. He gave his reasons for not doing so, one of which was administrative difficulty. I was not convinced then, and I 317 am not convinced now, and I have never fully understood the argument.
The Housing Finance Act is very complicated, but why it could not have included all tenants—council, private furnished and unfurnished—with everyone treated the same I shall never know. The Bill is designed to take care of the furnished tenant. The only conclusion to which I can come is that the Government do not wish the furnished tenant to have security of tenure because of the landlord-tenant relationship in that field. They want the landlord to be able to get rid of the tenant whenever he wants.
Party policy is normally stated from Front Benches, but I see no reason why a humble back bencher should not state what his party believes in. We in the Labour Party believe that most furnished tenants should have the same security as unfurnished tenants. It is as well to state yet again that, although the number of furnished tenants does not exceed 500,000, they are often the lowest paid, the least secure and pay the highest rents for the worst accommodation.
I cannot support the Bill because this provision could have been made quite easily in the Housing Finance Act; there is no need for the Bill.
§ 8.25 p.m.
§ Mr. Eric Deakins (Walthamstow, West)
Like some of my right hon. and hon. Friends, I have a constituency interest in the subject of furnished rented accommodation and in allowances which may be payable to tenants of it. In my constituency in North-East London about a third of the accommodation is provided by private landlords. Much of it is admittedly unfurnished—this is a diminishing quantity of accommodation in London—but there is also a fair amount of furnished accommodation.
Like many other hon. Members who represent large urban areas, I find that most of the requests for help that I get over rents, and especially evictions, come from people in private rented furnished accommodation.
The Bill will do something good, but our major criticism is that it does not go far enough. One might almost say that it is merely playing with the problem. Allowances should go right through 318 the private rented sector, and there is no logical reason—although there may be financial reasons—for excluding particular categories of furnished tenants who cannot prove hardship.
Admittedly, in a schedule there is provision for the Secretary of State to designate other categories, but if he intended to make vast extensions to the Bill they would be in the Bill because there would be a great deal of political capital to be made from such a generous move. So we can expect these reserve powers to be used very sparingly, if at all.
In considering whether allowances should be extended to all furnished tenants, one has to bear in mind the great disparities between the rents that they pay and those that others pay, particularly council tenants. In the Greater London area, the average rent, including rates, for a self-contained three-bedroomed council flat with lounge, kitchen, bathroom, lavatory and central heating is probably not more than £10 a week. For early post-war flats, with many of the same facilities, it would be considerably less—perhaps £5 or £6 a week.
If such council tenants are to be allowed rent rebates, it is surely even more important that tenants of private furnished accommodation, who are paying much bigger rents, in many cases for much worse accommodation, should also be eligible right across the board for these allowances. That is not what the Government suggest.
It may be said that I am exaggerating the disparity in rents. I want to give a few examples from one of today's evening newspapers, so that I am up to date with my information, of what private furnished tenants have to pay in parts of London. I discount districts such as Marble Arch and Maida Vale, where three-bedroomed flats with central heating, and so on, are going from anything from £40 a week to £60 or £70 a week. Neither side of the House would necessarily worry about the sort of people who can afford rents of that sort. Indeed, it is not the purpose of the Bill to take into account the interests of those tenants. But there is a great deal of other private furnished accommodation in the Greater London area in places where diplomats and top executives do not particularly want to live but where ordinary people 319 live and must find accommodation, especially if they live in areas such as mine, where there are long council waiting lists and there is little or no chance of them obtaining council accommodation in the foreseeable future.
I want to look at some of the less fashionable districts of London to make my point that wherever one turns in London one cannot find a district, geographical or otherwise, where private rents are not very much higher than they are in the council sector. In S.E.17, for example, which is becoming fashionable—although, as I used to live there, I can assure the House that parts of the district are extremely unfashionable—a fully furnished flatlet, with linen, is going at £30 per month. That is £7.50 a week. That is hardly suitable for a married couple, or certainly a small family. That compares very unfavourably with the rent I have quoted for council accommodation. Across London in Bayswater, which is very much a mixture, a modern furnished flat, of two rooms plus kitchen and bathroom, which would suit a couple, is going for 18 guineas. The figures I am giving are not untypical, as any hon. Member who has had opportunity or need to look for furnished accommodation will bear out.
Coming back to central London, W.C.1, again not a fashionable area, and where one might expect a rather more reasonable standard of rent, a flat of two rooms, kitchen and bathroom, said to be "luxury", although the advertisement does not say whether it has central heating, and "suiting two persons", is offered at £22 a week. That compares very unfavourably with the standard of accommodation and rents of the local authority sector.
Some districts in the advertisements are merely listed by their postal numbers, such as W.3, W.4, W.6, W.10 and W.12. I am sure that they are very nice districts, but the advertisers do not bother to give names. In S.W.16 and 17 there are self-contained modern "mansion" flats. That means that they will not be very modern. These flats are of two, three, four or five rooms, with kitchen and bathroom, for a minimum of two people sharing, at £5.25 per person. So even for the smallest mansion flat in those districts the rent is £10.50 a week. That 320 is above the Greater London average for a modern three-bedroomed unfurnished flat with central heating.
I know that one has to add a little element for furniture but, with the cost of land and housing in central London, I believe that is a very small element in the gross rent difference between furnished and unfurnished accommodation.
Perhaps a more unfashionable district is Kentish Town, where a double room and kitchen are advertised at £9 a week. In Hornsey a double room and kitchen cost £10 a week. In Cricklewood two rooms and a kitchen cost £11 a week. In Stamford Hill two rooms and a kitchen cost £12 a week. In Kentish Town two rooms, kitchen and a bathroom costs £14 a week. And so on.
Every day the newspapers are full of such offers of accommodation to let. But where are constituents of mine and, I suspect, of other hon. Members who represent urban conurbations to find accommodation in the columns of evening newspapers which advertise such accommodation for renting? They just cannot possibly afford such rents. I suspect that if they could afford them they could almost certainly afford the mortgage repayments on a house, provided that they could afford the deposit for a house.
The allowances, such as they will be, for furnished rented accommodation are likely to be completely inadequate, in view of the rents being charged for such accommodation throughout the London area. What is more, whatever the allowances are initially, they are bound to be overtaken by rising rents. One of the dreadful features of the Housing Finance Act, which we pointed out, is that it will drive more and more people into the private rented accommodation market, putting pressure on the dwindling amount of accommodation, furnished and unfurnished, in London and other large towns. There is bound to be more competition for furnished accommodation in particular, because if one does not have accommodation to start with one cannot build a home in terms of buying furniture and having it stored; one must start in furnished accommodation. Therefore, there will be more and more competition, particularly from young married couples, for this sort of accommodation as the 321 Housing Finance Act begins to bite and as fair rents are reviewed regularly and spiral upwards because of this process of competition in the private rented accommodation market. Therefore, although this is a first step, it is such a pathetic and inadequate first step in providing rent allowances to private furnished tenants that I almost believe it is not worth bothering about. But it is a first step, and it would be grudging of us not to thank the Minister for having taken it.
Let us hope that the Minister will be convinced, if not by hon. Members on this side of the House then by his hon. Friends, that such rent allowances, if they are to serve a useful social purpose, must not be the exact equivalent of those for tenants in local authority accommodation, where rents are lower and facilities are much better, but should be based on the need of the tenant, on the standard of the accommodation, and on the rent that he has to pay—not on the rent which, under the Housing Finance Act, is considered to be suitable to be paid by working-class people living in working-class districts.
It has been said by many hon. Members that this system of allowances introduces means tests, and the point has been made, particularly by my hon. Friend the Member for Swindon (Mr. David Stoddart), that when there are means tests it is rare for more than half or three-quarters of those eligible for benefits to apply for and get them. There is bound to be a residual number of tenants in furnished accommodation who will either not hear about the rent rebates or, if they do, will suspect them of being a ruse eventually to get them out because, as we know, it is the private furnished tenants who have the least security of all, and they are the ones who, when they are evicted, form the growing band of homeless in London and elsewhere.
High private rents for furnished accommodation could be justified if private landlords and those renting out private accommodation were investing the capital that they receive by way of rents into putting up more property for renting at reasonable prices, but we know that the tremendous rise in land prices in the last couple of years has virtually made 322 that prospect one that is just a mirage on the horizon.
There is nowhere in London—except, perhaps, through housing associations and co-ownership associations—where private landlords are putting up blocks of flats or houses for renting on a furnished basis at reasonable rents. Indeed, it would probably not be economic for them to do so. What is happening, particularly in my area, is that more and more landlords, tempted by the high property prices of recent years in London and other conurbations, are beginning to sell with vacant possession or to sitting tenants their existing stocks of rented accommodation.
The property boom in house and land prices during the last two years will indirectly make the shortage of rented accommodation even worse than it is now, and this, if it does nothing else, will on the pure law of supply and demand drive up rents even further in the private furnished and unfurnished sector. That in turn, under the Housing Finance Act, will influence the determination of fair rents whenever they are determined in a district, which in turn will force up proportionately the rents paid for council flats and housing, and we shall be on a merry-go-round of rising rents in the furnished and unfurnished parts of the private sector and in the local authority sector. This can have only one effect; namely, to harm the interests of those who wish to live in rented accommodation.
There are other factors in the decline of rented accommodation, particularly in the London area. A large amount of this accommodation consists of rooms with shared kitchen and bathroom in the landlord's own house. A rise in property values is leading to a growing realisation on the part of such private landlords that if they can get rid of their tenants—which is very easy to do after someone has been to the rent tribunal and obtained six months' security of tenure, which means that he is then at the mercy of the local authorities, most of whom in this respect do a good job—they are then able to sell their houses with vacant possession and take advantage of the situation.
The person who buys such a house will do so not in order to let off one or two 323 rooms but because it is the only accommodation that he can afford. We all believe in home ownership. Such a house will probably be bought by a young married couple with a family, and the last thing they want to do is to let the spare bedroom to a couple of old-age pensioners at £4 a week or something like that. So again this is going to increase the shortage of rented accommodation in the London area.
I would suggest, therefore, that in these circumstances what private tenants, particularly in furnished accommodation, need—and I am merely reiterating now, because it is very difficult to avoid reiterating these few simple points—is security of tenure above all and reasonable accommodation at rents which are related to the quality of the accommodation. I often wish that the large number of council tenants who sometimes complain about the facilities and the rents in council flats could see the housing cases that many of us have to see, where people who are very badly off are paying very high rents in private furnished accommodation. They might then realise that there is another section of the community which is much worse off than they are.
I think that only local authority control, certainly in the large conurbations, will be able to solve this problem of the supply of rented accommodation. I do not believe that the Bill at present before us will be more than a palliative. I do not believe that the Bill will lead to an increase in the supply of rented accommodation. Indeed, by virtue of giving rent allowances to people who otherwise might not be able to afford the accommodation it will have the effect of increasing rents. I think that this Bill will make the ultimate municipalisation of the rented housing market much easier, and for that reason I welcome it. I think there should be an eventual takeover of rented accommodation by local authorities, and this would end the stupid competition between local authorities and the private rental market whereby rises in rents in one sector where there is a great scarcity influence rents in the other sector, which is happening under the fair rent review and the Housing Finance Act, with the consequent vicious spiral of constantly rising rents in both sectors.
324 I believe that housing should be a social service, and we on this side of the House, if not some hon. Members on the other side, should have the courage to recognise this and treat it as such, and recognise also that ultimately subsidised rents, whether in the local authority sector or in the private rented sector as long as it exists, which I hope will not be for very much longer, are much cheaper than the social cost of homelessness, juvenile delinquency, and the other features of our urban society which in many cases stem from a bad home environment, the social consequences of the present free market in housing, from which we are beginning to depart. If this Bill is nothing more, it is a sign that this Government are now recognising that, in addition to interfering in the private unfurnished sector, they must start interfering, through rent allowances, in the private furnished sector. I welcome this and hope it will be the prelude to an ultimate takeover by local authorities generally throughout the country.
§ 8.47 p.m.
§ Mr. Reginald Freeson (Willesden, East)
Perhaps I should first formally move the amendment as by a technical oversight this was not done earlier in the debate.
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:this House declines to give a Second Reading to a Bill which makes only a restricted provision for furnished rent allowances and does nothing to provide security of tenure and improved rent regulation for tenants of furnished dwellings, the lack of which is the biggest cause of increasing homelessness in the stress areas of our cities.So far as I have been informed the form of words of our amendment, which was subjected to some lighthearted criticism earlier in the debate by, I believe, the Minister and one or two of his hon. Friends, represented the only way open to us technically to table a reasoned amendment to say that in our view this measure is quite inadequate. It would not have been in order for us to object to the limited move being made by the Government in this sector, and this was the only way we could put our view on record. If there is criticism it must be directed once again to the procedures of the House rather than to the views of the Opposition.
325 The Minister and some of his hon. Friends have described the Bill as a substantial advance. One hon. Member said that it was a major step forward in housing policy. That was more than gilding the lily. My right hon. and hon. Friends and I believe that the Bill is a sop to pressures that built up from both sides of the House and outside it when the Housing Finance Bill was published last year. It was forcibly borne in upon the Government that a large section of tenants who received the worst treatment received no consideration. To the extent that the Government have finally yielded to pressures and representations made to them from different quarters they have produced a Bill which, although welcome within its small ambit, is misleading. It does not deal with the problems of which the question of allowances for furnished tenants is one aspect.
In bringing the Bill forward in place of the more comprehensive measure which could and should have been introduced, the Government have shown once more their incoherence in housing policy. This is a puny measure which some hon. Members opposite hope will lull the public and interested groups and organisations into believing that action has been taken to protect furnished tenants and that thereafter we can all rest satisfied politically and socially that something has been done and nothing much further needs to be done.
I hope it will be clearly understood by the public and by organisations and pressure groups which interest themselves particularly in housing and related social problems that little is being done by the introduction of the Bill. The Government's smallness of mind is made all the more marked by the political context within which the Bill is introduced. It is not for us to discuss today the draconian measures which are being introduced following the Government's failures in prices and incomes. The Bill, welcome within its small ambit, does not go to the heart of the problems facing the 600,000 to 700,000 furnished tenants.
The main problems facing the inner areas of most of our cities, of which London has the biggest complex of problems, are the growing and not decreasing 326 problems of homelessness, exorbitant rents and the increasing shortage of good accommodation at reasonable rents. The personal and social stress which such conditions are creating increasingly for the families living in them is very largely induced by the constant insecurity of these families. Reports from our social workers who are involved closely in inner-city problems constantly point to this basic insecurity as being one of the causes of many other social and personal problems with which they have to contend.
Finally, in listing these main problems which should be identified and tackled, we have the problem of decay and obsolescence to be found mainly in private tenanted property and which, notwithstanding the expansion of improvement grants under the Housing Act 1969, continues almost on the same scale as before the Act, since only a minute proportion of the improvements taking place with the support of the Act are in properties which are tenanted by the sort of people we have been speaking about.
I want to go through these problems because they inter-relate and because to introduce a puny measure like the Bill without relating it to a number of policy aspects, some of which have been discussed in the debate, is to demonstrate the poverty of thought and action by the Government.
The Minister referred to a meeting with the London Boroughs' Association yesterday at which the problems of homelessness were discussed arising, I take it, from the two working party reports which have been circulated and considered by local authorities throughout London. First it must be said that the reports do not deal with housing as such. They are essentially if not wholly reports dealing with how local authorities should administer their welfare powers to deal with the problems of homelessness coming their way and leave to the Department of the Environment rent and housing policies relating to homelessness.
I was interested to hear the reply of the Minister to a question I put during his speech, when he said that only one person at yesterday's meeting had suggested that the biggest single immediate measure which could be taken to help 327 local authorities and the families concerned in the growing problems of homelessness would be to grant security of tenure. I do not know whether the person concerned was representative of others. But I was both surprised and interested to hear what the hon. Gentleman had to say because it does not reflect the views which I and my hon. Friends have been hearing from local authorities concerned in this question. I will certainly make it my business to get in touch with representatives of the LBA and local authorities in London and sound out their views, if need be bringing them back to the House.
§ Mr. Channon
This shows how unwise I was to answer a question about what was, I suppose, a private meeting. The fact that only one person mentioned the point does not mean that others did not share his view. Indeed, I believe that they did.
§ Mr. Freeson
I am glad to have that further explanation. I hesitate to pursue the point too far because I do not want to take up too much time from other aspects I wish to discuss. But in these two brief exchanges much lies. I take it from what the hon. Gentleman has just said that the majority view, if not the unanimous view, of the London boroughs is that security of tenure would be the biggest and most important immediate step which could be taken by the Government to help local authorities combat the problems of homelessness from which so many families suffer in London. That is the only interpretation that can be put on his further explanation. It is in line with the general impression—I put it no more strongly—that I have garnered from my conversations with local authority members throughout London, in particular throughout inner London.
More and more housing managers, housing chairmen and members of local authorities are saying, when their views are sought on the problem of homelessness, that the biggest single immediate cause is lack of security in furnished accommodation. I trust that although the Government have refused to act so far they will take note of these views and consider them further and that they will not regard the Bill as their last word. If they do not, when we return to power we 328 shall take note of those views and act upon them.
Before I proceed further to discuss the Bill in detail I must express my concern at the nature of a reply to a Question which I put to the Government on 20th December last year. It was in no way rhetorical or based upon a debating point, but was intended to seek information. It was tabled to the Secretary of State for the Environment but it was transferred quite correctly to the Secretary of State for Social Services and it asked what was his estimate of the number of families in homeless families hostels or rehoused by local authorities in 1971–72 whose previous accommodation had been in furnished dwellings. The reply I received from the Under-Secretary was:I have consulted my right hon. and learned Friend the Secretary of State for the Environment but regret that there is no information available on which to base an estimate."—[OFFICIAL REPORT, 20th December 1972; Vol. 848 c. 371.]That answer deliberately misled myself and the House because that information is available. There is plenty of information available in the Grieve Report, in the returns made by local authorities about the homeless families with which they deal, in the returns made to the Department of Health and Social Security and in all the other surveys and probings which I know the Department of the Environment has undertaken into the problem of homelessness. This is yet another example of the kind of treatment to which we are becoming more and more accustomed from the Government. That was a non-answer which was totally misleading. If I wanted to take up the time of the House I could give the information from the many statistics which are available in print and which flow into the Government regularly on special forms which the Government require the local authorities to send them. I shall pursue this matter on another occasion when it is more appropriate to do so.
I hope I shall be forgiven if, although speaking from the Opposition Front Bench, I illustrate my argument with a constituency point. I represent part of what is technically an outer London borough but one which is recognised as having a large degree of inner London borough characteristics. I am referring to the London Borough of Brent. I contacted my housing manager to ask for a 329 small sample to illustrate the position in our borough. Its problems are not untypical of those faced by all the other inner London boroughs and, at a lower level, by other big cities. I asked the housing manager to tell me how many homeless families had been rehoused by the local authority during the last 12 months who had previously lived in furnished accommodation and who had come to the local authority as a result of landlords taking action to get them out, whether it be notice to quit, court order proceedings or whatever else.
This is by no means a measure of what is going on in the district; it is a measure only of the families who have been rehoused. I will not weary the House with all the figures that I have with me. I simply say that according to the housing manager six out of every seven cases related to furnished accommodation. That goes well above the high figures published by the Grieve Report, which is presumably still the subject of Government consideration.
The Grieve Report published figures showing that something like 52 per cent. of applications came from people whose last homes had been privately rented furnished accommodation. That is well below the figure I have quoted for my own borough. I do not believe that my borough is worse than other inner London boroughs. In some ways it is better off as its northern half is not typical of inner London. It is the southern Willesden area which is typical. Other London boroughs wholly within the inner London area have much worse problems.
Other surveys have been undertaken. Shelter conducted a survey of 160 hearings at inner London rent tribunals. It found that 84 per cent. of cases involved notices to quit and that rent fixing was incidental to the problems. That is from a report prepared by David Bebb, "Rent rebates for the furnished tenant." The report went on to urge security of tenure for furnished tenantsto keep them one step away from homelessness.The Grieve Report, Shelter, the Labour Party, the minority report of the Francis Committee, the Child Poverty Action 330 Group and others have recommended and argued in detail from case material the need for security of tenure to slow down the rate of homelessness in inner London and elsewhere.
There is no question about the social and personal need for this scheme. All that we have had quoted in evidence against such a proposal is the weakest part of the Francis Report, the majority report. It was the worst argued section in the report; it produced no evidence. It expressed its view based upon a hunch, a feeling that to introduce such a scheme would reduce the level of furnished accommodation available. Without quoting all the reports and surveys and the recommendations which have been made by a variety of bodies I urge the Government to rethink what they are omitting today. It is the biggest single thing they can do immediately to tackle homelessness, apart from the medium to longer-term solutions of dealing with the basic provision of housing in the greater London area and other areas.
The second problem I listed was exorbitant rents. Just as the Bill does not deal with security of tenure and homelessness, so it does not deal with exorbitant rents. What is the position? In London, and I speak only of rents, excluding rates, according to the figures produced by the family expenditure survey—a Government survey—the latest figures show average net rents in greater London of £4.75 per week for furnished accommodation and £2.61 a week for unfurnished accommodation. In Great Britain as a whole the figures are £3.91 a week for furnished accommodation as compared with £1.55 a week for unfurnished accommodation.
As has been pointed out several times, families in furnished accommodation are generally those with the lowest incomes, living in the worst kind of housing conditions and paying the greatest sums. Will the allowances really tackle this?
§ Mr. Clinton Davis
Does my hon. Friend agree that perhaps the majority of furnished rents are not available in the statistics because they are not referred to rent tribunals? Will he further agree that the incidence of rents is considerably higher in almost every inner London borough than the figures he has quoted?
§ Mr. Freeson
I accept that. I would not necessarily accept that the figures produced by the family expenditure survey are based solely on the rents referred to rent tribunals which are only a minority—about 100,000 out of a total of something approaching 700,000. I certainly accept that all the samples and surveys so far conducted do not marry up with personal experience. My hon. Friend the Member for Walthamstow, West (Mr. Deakins) quoted a number of cases which are typical, not exceptional.
During the Committee proceedings on the Housing Finance Bill we had occasion to query the kind of so-called typical rent figures which the Government thought were accurate. In my experience the average rents in my area which appear in official documents do not marry up with the facts. If there is some way of more accurately recording the realities of the situation, we should all welcome it and it should be looked at by the Government. In quoting these figures I was being moderate, not wishing to overstate the case, but I accept that they must be handled with reservation because they do not tie up with personal experience.
Will the allowances help? I do not know whether the Government have done any exercises on this. They should at least have given to the House provisional illustrations of the impact of the Bill on typical cases. I have gone to an independent source for my figures without any preconceived idea of what they would produce. I went to our excellent House of Commons Library statistical division and asked for a calculation of the impact of the Bill on a person who applied for a rent rebate according to its procedures. The example that was taken was of a family in greater London, with the husband earning an average industrial wage of £32 a week, the wife not in employment and two children of school age, living in furnished accommodation at a reasonable rent of £4.75 a week net of rates.
Following the Prime Minister's grand announcement about the increase in the needs allowance under the White Paper proposals still to be debated, I find that the rent allowance for that family would be 56p and the net rent £4.19. According to the official figures of the family expenditure survey the net rent for an 332 unfurnished dwelling would be £2.61. For a family outside greater London where the earnings would be an average of £29.70 with the wife not in employment and with two children at school, paying a net rent of £3.91, the rent allowance would be nil—rent payable £3.91. That is after the introduction of the increased needs allowance.
I am prepared to make these tables available to the Minister because no doubt they will need to be examined to make sure that there is no error in calculation. The tables have been produced by a statistician who did not know the political use to which they would be put. If the figures are correct, they show that once more we are being conned into believing that grand assistance is being given to the people in greatest need, whereas at the end of the day they will still be paying highly excessive rents. If the people live in greater London they will receive marginal help but in other parts of the country they will receive a nil rent allowance. The Government should come clean and give typical examples of the help which they calculate will be given to the people in greatest need.
Even 56p in greater London is worth having if it helps a family in need. Prior to the Prime Minister's announcement about the White Paper and the prices and incomes policy, this grand assistance to furnished tenants would have produced a nil rent allowance in greater London for the family I have instanced. The upshot of the Prime Minister's announcement is that that family will get an allowance of 56p to produce a net rent, ignoring rates, of £4.19.
If a tenant gets a fair rent assessed by a local authority as the basis for a rent allowance, what is to stop the landlord putting up his rent? The Minister says that there will be confidentiality, but will there? That view does not accord with the experience of many of us in local government and in dealing with case work. When a local authority assesses as a basis for the rent allowance a much lower fair rent than that which is being charged, should it not also be the duty of the local authority and of any public representative or social worker to encourage the tenant to go to the rent tribunal to get his rent reduced? That is 333 what the rent tribunal is for. Under the law as it stands, however, and as it will remain when the Bill becomes law, if the tenant does that he will get notice to quit.
Should not the local authority use its powers—powers which are rarely used—to refer cases direct to the rent tribunal when it discovers that the assessment of a fair rent shows that present rent is excessive? Do the Government agree that a local authority should use the powers which it possesses? These are specific points to which I should like the Under-Secretary of State to reply. These powers are granted by Parliament. Do the Government believe that a local authority should make direct reference to the rent tribunal to bring rents down to a reasonable level?
Furthermore, if the powers are used, would not a notice to quit be issued by a landlord? As long as there is no security of tenure, it is inevitable that there will be a low take-up since tenants will be aware of what they are risking. Certainly local authorities, Members of Parliament and councillors who advise tenants will be fully aware of the risks they are creating for tenants. Many of us had experience of these problems years ago in trying to advise people to bring in public health inspectors under the provision of the 1957 Rent Act. Many health inspectors brought in resulted in notices to quit and that position will obtain as long as there is no security of tenure. It is no use our burking this issue. There must be security of tenure if a rent allowance scheme is to operate properly. The Government have a duty to explain why these powers are not being used and to give their view on the use of those powers in reasonable circumstances.
I turn to the question of the contraction of the rental market, which is a subject directly relevant to furnished accommodation. This was a major argument in the majority report of the Francis Committee and was used as a basis of objection to the principle of security of tenure being adopted in this area of legislation. The Minister began by saying that he would give evidence on this topic, but he ended by giving only assertions that there would be a contraction of the market. The Francis Committee said that there was no evidence one way or the other.
334 Perhaps it is relevant to quote the figures which apply to the present situation. Between 1966 and 1971 rented accommodation fell by just under 68,000 tenancies. In the unfurnished sector the fall was 122,000-plus and in the furnished sector there was a growth of 54,500 tenancies. What is interesting to note is the fact that in the Census returns the figure where the type of tenure was not stated rose from 73,000 in 1966 to 171,000 in 1971. I believe that that figure is made up wholly of furnished tenancies. I believe that the number of furnished tenancies in greater London is much higher than the figure of 250,000 quoted by the Minister. I believe that the figure of furnished tenancies in greater London is in the region of 400,000.
If I am correct, in the five years that we are discussing the number of furnished tenancies has increased by more than 152,000. In such circumstances we shall be talking about a figure approaching 400,000 tenancies concentrated in the main in inner London. There are about 900,000 dwellings in inner London. It means therefore that we are discussing 40 to 45 per cent. of all the households in inner London. That is no small problem.
A broad assessment of the position in my constituency reveals that about one-third of the families living in that part of the borough are in furnished accommodation. What good is the Housing Finance Act to them? What benefit will rent allowances bring to them? In view of what I have said about insecurity, what good are the rent allowance proposals in this Bill to them? If my assessment of the position in my constituency is correct—and I made it for other purposes long before the introduction of the Bill—the sort of figure that it reveals is applicable to every inner London borough as well as to certain pockets in our other major cities where similar problems arise.
That is the situation. We see a total reduction in the amount of tenanted accommodation that is available and in that sector an increase in the availability of furnished accommodation, most of which is substandard, for which exorbitant prices are being charged and in which there is no security of tenure. The Government propose to do nothing about these problems in this or in any other legislation.
335 The Minister has argued that presumably even if what I say is correct about the present contraction, if security of tenure were introduced for the furnished sector the situation would be exacerbated and would become disastrous overnight since there would be a considerable further contraction. The logic of that is that the very limited control over the market which exists at present means that there will not be a contraction, and the further logic of that is that the same principle should be applied in the unfurnished sector. But we had such logic in 1957, and I do not say that to make an old, hoary political point. At the time of the 1957 Rent Act which decontrolled rented accommodation it was argued by the right hon. Member for Wolverhampton, South-West (Mr. Powell) who was then Parliamentary Secretary to the old Ministry of Housing and Local Government, that in order to provide the necessary incentive to get more building to rent that Act was essential—to stop the contraction in tenanted accommodation and that Act was essential if we were to solve the country's housing problems. It did not solve our housing problems. They are still with us. It did not stop the contraction in the availability of tenanted accommodation. Between 1957 and 1965 there was a reduction of 1 million dwellings throughout the country which previously had been tenanted.
The Minister said that all the evidence of history shows that if security is given the result is the loss of a proportion of rented accommodation. The evidence points the other way. When there was decontrol there was massive selling out of the rented property market, and it will continue along this road unless other steps are taken which I shall list.
As my hon. Friends have argued, supported by Miss Lyndal Evans in the minority report of the Francis Committee where some figures were quoted and proper logic was used in the argument on this score compared with the majority of the committee, there is no reason to believe, on the facts so far available, to put it no stronger, that most furnished dwellings will be sold into owner-occupation should security of tenure be introduced. Most of the property concerned is of a kind which is not in prospect to be sold into owner-occupation 336 as is happening, largely in stress areas, regarding unfurnished accommodation. Contraction is taking place now and the Government are doing nothing to stop it. Indeed, without pursuing it too far, by constantly pressing local authorities to sell off rented properties indiscriminately, they are deliberately encouraging a contraction of the rented property market when they know that there is a need to expand it, at least in stress areas.
There is no evidence to support the idea that if we introduced security of tenure we shall have a disastrous cut-back in the rented accommodation that is available. On the contrary, if anything, the evidence points the other way. There is plenty of evidence, to which I and others have pointed, which shows the need for action to help people living in rented accommodation.
I close my remarks on this score by listing the points that we wish to see taken up as policy by the Government, and which we will pursue when we are returned to power, in dealing with housing stress in our big cities. First, it is clear from what I have argued that we would introduce security of tenure for all tenants in furnished accommodation, other than those sharing owner-occupiers' homes and certain other categories which have been discussed in detail by certain hon. Members. Second, we would introduce rent regulations for such tenants. Third, we would ensure action by local authorities to hold the rental market, particularly in the stress areas of our cities, by buying privately rented dwellings directly or by registered housing associations being used in co-operation with the local authorities concerned.
Fourth, we would introduce what we describe as tenants' enfranchisement to put a stop to the buying and selling of rented accommodation over the heads of tenants, with constantly spiralling prices and pressures being put upon them, so that they could register as co-operative housing associations and, with the help of local authorities, buy they own homes instead of being bandied about by property speculators. Fifth, we would encourage public authorities by action, not just by talk, to buy land in outer city areas to meet the property needs of families in the congested areas of our 337 cities whether by municipal lettings, by housing associations or by co-operatives, as well as owner-occupation which already takes place in these areas.
These five points which I have listed should be seen in their totality. They must be inter-linked. To treat this problem as if we are giving major assistance to furnished tenants by this paltry Bill is to mislead the public and to deny political responsibility for any sensible housing policy in tackling the problems of stress areas in our cities.
§ 9.29 p.m.
§ The Under-Secretary of State for the Environment (Mr. Reginald Eyre)
We have had a useful debate, perhaps a longer debate than some hon. Members expected. I shall endeavour to reply to the points of principle which have been raised. Before doing so I should like to thank my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), who has a considerable knowledge of the housing problems in his constituency, for the welcome that he gave to the Bill on behalf of his constituents who will benefit under the Bill's provisions.
Security for furnished tenants has played an important part in the debate. I wish to make it clear that the Government are not prepared to contemplate any measure which might have the result that tenants ended up not better off but worse off. That does not mean that we are insensitive to the problems of families who are forced to make their homes in furnished accommodation. On the contrary, we want to help, as the measure shows. However, I must ask the House to look realistically at the risks of further intervention.
First, what would be the effect of giving security to tenants on the availability of accommodation? We already know that in many areas, particularly in inner London and the centres of the other great conurbations, rented accommodation is in desperately short supply. In the light of experience in the unfurnished sector, and with the solemn warning of the Francis Committee before us, the Government believe that a lot of furnished accommodation would rapidly go off the market.
In the light of experience of recent matters which were partly dealt with by the Francis Committee—
§ Mr. Eyre
Perhaps the right hon. Gentleman will let me continue and make my speech. I listened to the right hon. Gentleman's speech with great interest. He will understand that existing tenants would have greater protection. However, as tenants moved out, and furnished tenants include a high proportion of migrant workers, transients, and young couples who spend a few months in rented accommodation as a stepping stone to their own house, so will property cease to be let. In a short time we could be faced with a widespread dearth of such accommodation to let. The Government believe that that might lead to a critical situation.
I should like to emphasise that the Government are concerned to tackle at their roots the considerable problems which exist in the stress areas. That means increasing the supply of accommodation generally within the critical areas through local authority building and the work of the housing associations. I noticed that the right hon. Gentleman emphasised during the course of his speech the importance of the contribution which the housing associations can make in that respect. The Government want to take the stress off stress areas. Regulatory intervention alone will not solve the supply problem. In fact, it could make it worse, and it might be widely unenforceable. These are the realities of the situation, which the House should keep clearly in view.
The Bill is a measure to help furnished tenants. It is not a vehicle through which the law—
§ Mr. Crosland
The Under-Secretary of State is courteous in giving way. However, the hon. Gentleman, as did the Minister, has referred to evidence and experience without advancing the proposition that security of tenure would diminish the supply of rented accommodation. References are made to evidence and experience, and we long to hear either of the evidence or of the experience, but we get neither. We get nothing but assertions.
§ Mr. Eyre
If the right hon. Gentleman will bear with me for a few moments, I shall try to return to the more specific items that he quoted and the main theme.
339 I was saying that these are the realities of the situation which the House should keep clearly in view. The Bill is a measure to help furnished tenants. It is not a Bill through which the law on security should or could be changed. Of course the Government are aware of the strength of the sort of arguments which we have heard today, but I repeat that we are not prepared to do anything in the furnished field which might leave the tenants worse off.
It seemed to me as I listened to his speech that the right hon. Member for Grimsby (Mr. Crosland) recognised the difficulties of the situation in the matter of security of tenure. He fairly conceded that security had not been put into effect by the Labour Administration. If one considers the 1966 Census and the situation up to 1970, one wonders why, had it been such an easy solution as the right hon. Gentleman seemed to imply, the Labour Government should not have gripped this matter.
The right hon. Gentleman then referred to the "huge financial advantages" of selling rather than of continuing to let. I believe that what he said was right. The words that he used qualified any support that he expressed for the minority report by Miss Lyndal Evans, which rested upon the proposition that landlords are unable to sell their property. It interested me that, having reviewed the balance of evidence on either side, as he did extremely well, the right hon. Gentleman should have concluded that a decision on security was a matter of judgment.
The right hon. Gentleman went on to mention a further factor against the introduction of security. It was the danger that landlords, having to accept that furnished tenants would get security, would become much more selective in their choice of tenants and would tend to avoid so far as possible those with obvious disabilities, such as coloured tenants or single mothers, and would tend to choose others. I was very impressed by his argument in that respect, because it adds up to my own knowledge and experience of these matters in Birmingham.
§ Mr. Douglas-Mann
Would the Minister at least undertake to consider the detailed figures, which show that there 340 has been a steady decline in rented accommodation ever since the war but that there have been two bumps in that decline? One was an acceleration of the decline immediately after the 1957 Rent Act and the other was a slowing down in the decline after the 1965 Rent Act? If my interpretation of these figures is correct, do they not show that increased security reduces the decline and that reduced security increases it?
§ Mr. Eyre
With respect, the introduction of further measures of security temporarily interrupts the rate of decline, but if the hon. Gentleman looks at the record of protection and security against the historical background of tenancies, he will have to concede that during this time the imposition of security, the requirement that rents shall not match the cost of repair or a reasonable return upon the capital value and other factors, added together, have caused landlords to move out of rented properties as rapidly as possible. That is what has happened over the last 50 years, and it has been only temporarily interrupted by attempts by the Legislature, for understandable social reasons, to deal with the situation.
§ Mr. George Cunningham
In that case, do the Government intend to abolish security for unfurnished accommodation in order to enlarge the market for it?
§ Mr. Eyre
The hon. Gentleman should not dismiss this argument, because it is a serious one. One looks at Sweden, where there was evidence, too, of a similar decline and housing problems, even in the rich city of Stockholm, again acknowledged by many experts to have been brought about by a persistent and unreasonable form of control. In trying to make an honest analysis of the cause of the decline in the rented sector, the fact is that if the mass of properties providing rented accommodation cannot produce an income which matches the needs 341 for proper care and maintenance and for a reasonable return on capital, inevitably there will be a movement out of that kind of property.
The hon. Member for Kensington, North (Mr. Douglas-Mann), in a speech which showed great awareness of tenants' difficulties in London, referred to Miss Lyndal Evans and the report which claimed that 46 per cent. of furnished premises consisted of single rooms which were not saleable. The hon. Gentleman has considerable experience of property matters and I am not presuming to say that I know his part of London nearly as well as he does. But just over a year ago, before I came to my present job, I was taken to visit a house on the fringe of the hon. Gentleman's constituency. It was a substantial older-type house that had been converted some time ago into five flats. The five flats were subdivided and let as single rooms. I therefore assumed that they would have been single rooms which appeared in the statistics that the hon. Gentleman quoted. I must tell him that the flats—from his experience he will know of hundreds of similar properties—of which the single rooms were part were eminently saleable. The owner at that time, whom I did not know well—it was not my special concern—expressed the intention of selling those flats if protection in the form of security was imposed upon the situation he had with these furnished lets.
§ Mr. Douglas-Mann
Surely the landlord could sell the flats in question only if he got possession of all of them. If the furnished tenant had security, he would not be able to do so.
§ Mr. Eyre
With respect, the hon. Gentleman's argument was that 46 per cent. of furnished accommodation consisted of single rooms that were not saleable by themselves. I am merely saying that here was a concrete example of a situation, which I believe is repeated many times in his part of London, where the single rooms are often saleable units. I am trying to take the most serious notice of the arguments of right hon. and hon. Members of the Opposition. There is a considerable danger that many of these 342 properties would be sold off. As the right hon. Member for Grimsby (Mr. Crosland) said, that balance of argument and evidence and so on, is a matter of judgment in deciding this important matter. I am bound to feel cautious in the interests of many tenants in these circumstances.
It has been suggested during the debate that the only effect of the Bill will be to line the pockets of landlords, who will simply raise rents when their tenants are in receipt of a rent allowance. I was very glad that this argument was firmly rejected by my hon. Friend the Member for Hemel Hempstead (Mr. Allason) in his excellent speech. The first point to be emphasised is that there is no reason why a landlord should know that his tenant is receiving an allowance in the normal course of events. However, I grant that this will not always be so; for example, in a case where there is an out-of-date rent on the register, which might need to be brought up-to-date for a full allowance to be paid. But wherever possible we want the whole question of allowances to be a matter between the tenant and his local authority alone.
§ Mr. Eyre
The register of furnished rents. We want the whole question of the allowance to be a matter between the tenant and his local authority, and we shall be asking local authorities to respect this confidentiality. I hope that that will help the constituents of the hon. Member for Paddington, North (Mr. Latham) in the circumstances that he described.
§ Mr. Latham
The point I was making was that the rents of many of the tenants in my constituency are not registered. If the amount has to be determined for registration, how can that be done without involving the landlord?
§ Mr. Eyre
Where there are no registered rents a local authority will be entitled to ask for the advice of the rent officer. I stress again that the same confidentiality will apply, and there will be no need for the landlord to know that the rent officer has been consulted informally in this respect.
§ Mr. Nigel Spearing (Acton)
Many of my constituents will be in this situation. 343 Does the hon. Gentleman mean that the registered rent will not be registered in the statutory sense in which it is now, but will be a notional registration by which the rent officer will give his opinion as to what the rent might be if there were a proper registered rent?
§ Mr. Eyre
The hon. Gentleman knows that many furnished tenancies do not have registered rents. It is often at the wish of the parties to the agreement that they are not so registered. In those circumstances, the rent officer can advise the local authority informally about the rent payable in the terms of the Bill, upon which will be based the rent allowance. That can be done on a basis of confidentiality, and I hope that that will help the constituents of London Members.
§ Mr. T. L. Iremonger (Ilford, North)
Surely Part VI contracts are referable to the tribunal, and not to the rent officer?
§ Mr. Eyre
We are talking about cases where no reference has been made to the tribunal. I was discussing the administrative system upon which the rent allowance would be based.
Secondly, it will be easier for a tenant in receipt of an allowance to get a rent registered by the tribunal. Non-payment of rent is one of the main reasons why a landlord gives his tenant notice to quit, and, of course, the allowance scheme is intended to help tenants who have difficulty finding the rent. An otherwise good tenant, therefore, who might have faced eviction for non-payment of rent will now be able to ask the rent tribunal for a registered rent in the knowledge that the tribunal is unlikely to be presented with convincing evidence from the landlord that the tenant should not enjoy six months' security and full extension of that security for further periods. I certainly hope that the tribunals will recognise the important rôle which they will have to play in this respect.
The Government thus acknowledge that there is a risk that in the minority of cases some landlords may seek further to increase their rents in the hope of getting the benefit for themselves. But the Government believe that confidentiality between tenant and local authority and the rent tribunals will go a long way towards preventing such abuse. 344 The Government do not subscribe to the view, implicit in the allegation, that the allowances will turn out to be a landlords' bonanza, that landlords generally are interested only in exploiting their tenants. As the Francis Committee showed, the majority of landlords and tenants are on good or reasonable terms with each other, and it would be strange indeed if the availability of an allowance for a tenant itself destroyed a good relationship where one already existed. We hope very much, therefore, that there will be no scaremongering on this issue, for such scaremongering could do nothing but harm, especially to those most vulnerable in terms of tenure.
The hon. Member for Willesden, East (Mr. Freeson) posed a series of what the right hon. Gentleman the Leader of the Opposition used to call hypothetical questions about local authorities. I will reply to him on the general principle, and, as he knows, I should be only too glad to help him later on if he wanted further details.
The power of a local authority to refer the rent of a furnished letting to the rent tribunal is discretionary. There is no obligation on it to do so, and in a stress area it will know whether this would be a reasonable course. Where it is not, the power will not be used.
The right hon. Gentleman the Member for Grimsby asked whether the help was adequate, and mentioned, on the basis of the new allowances, a particular case. The example he quoted was one in which the tenant would receive 82p as an allowance—not 22½p, which was printed earlier before there was the change, as the right hon. Gentleman acknowledged. The right hon. Member based his argument on one case. The hon. Gentleman the Member for Willesden, East also asked me to give further examples. I will certainly look in detail at the special case he quoted.
The first example I want to give is of a married couple with three children, with an income of £30 and a gross rent of £8 for five rooms. The estimated fair rent plus 25 per cent. would be £5.50; therefore the allowance would be £2.7l—a very useful allowance. The next case is that of a married couple with one child, an income of £25 and a gross rent of £8 for four rooms. The estimated fair 345 rent plus 25 per cent. would be £5, and in those circumstances the allowance would be £2.32. The third case is that of the mother of one child with an income of £20 and a gross rent of £7 for two rooms. The estimated fair rent plus 25 per cent. would be £4.50, and the allowance in those circumstances would be £2.95. Then I would quote the case of a married couple with no children, an income of £18 and a gross rent of £8 for three rooms. The estimated fair rent plus 25 per cent. would be £4, and the allowance in those circumstances would be £2.34. I think it will be acknowledged that those allowances would be of substantial benefit to tenants in the circumstances I have described.
Several hon. Members thought that the estimated fair rent plus one-quarter would fall too far short of the actual rent to be fair to the tenant and to give him effective help. I accept that this is a difficult matter and it is not easy to get hard evidence, but those with whom we discussed the matter—local authority officers and members of rent tribunals—were agreed that this was the best and fairest way of proceeding, at least to start with and until any evidence for a different formula emerges from experience. I am trying to be perfectly honest about this situation. We are making a good start in dealing with a difficult social problem, and I maintain that this is a reasonable starting point. We have taken power to amend the formula either for all local authorities or for a group of authorities if experience suggests that it should be different, and this should help to meet in some degree the reservations raised by the hon. Member for Rochdale (Mr. Cyril Smith), who made a most attractive speech in this debate and indicated his support for the Bill subject to reservations, with the most substantial of which I have just dealt.
A number of hon. Members have raised important questions about the take-up of rent rebates and allowances. Based on information from the family expenditure survey, an estimate was given to the Standing Committee that about 35 per cent. of all council and new town tenants—about 1¾ million—would be eligible for rent rebates in 1972–73. From preliminary reports received from every region about the number of rebates 346 granted, it appears that this estimate has proved remarkably accurate and that there is a very high take-up of those eligible.
A high take-up of council tenants was expected, because authorities are in close contact with their tenants and are required to furnish details of rent rebate schemes at least once a year and also when they vary their schemes or increase their allowances.
Some examples of the take-up of rebate in different authorities are: the County Borough of Dudley, 40 per cent. of tenants; Warrington, 33 per cent.; the London Boroughs of Brent and Bromley, 36 per cent.; Altrincham, 25 per cent.; Reigate, 31 per cent.; Northfleet, 32 per cent.; Sandbach, 30 per cent.; Sevenoaks Rural District Council, 26 per cent.; and Stroud, 37 per cent.
Authorities were required to introduce their rent allowance schemes for unfurnished tenants only by 1st January 1973, so the schemes have only just started. Initial reports indicate that the number of applications have been fewer than expected, but it is hoped that the take-up rate will increase as the scheme becomes more widely known through publicity by the Department and by authorities. This will continue until satisfactory take-up figures are achieved. The estimated number of private unfurnished tenants eligible for allowances is between 700,000 and 800,000 in 1972–73. Of these about 260,000 already receive help with their rent from supplementary benefit.
The right hon. Member for Grimsby asked what proportion of tenants will he eligible under the Bill and will claim. There are about 600,000 furnished tenants. Approximately 120,000 of them already have the benefit of supplementary benefit. This leaves 480,000 tenants of furnished premises, of whom it is estimated that about one-quarter or 120,000 will be eligible.
If we assume a good rate of take-up—say, 100,000, though I admit that we have to go some way to reach that level—and have about £8 million available, that would work out at approximately £80 a head, which is not a trivial sum. If we succeed in this policy we shall be glad to go on and give further help, and we would not mind if the total cost rose in 347 those justifiable circumstances where we knew that help was going to those who deserved it.
This is the first Bill in this field, and this is the first time that any Government have attempted to provide help of this kind to furnished tenants. We are not seeking in the Bill to provide a complete new charter for furnished tenants. We recognise the realities of the situation in the furnished rented sector. Our purpose in bringing the Bill forward is more
§ limited. Our aim is to give help quickly to furnished tenants who need help. The Bill will provide furnished tenants with a very substantial measure of help. This is a novel, compassionate and important measure to which I hope the House will give its full support.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 163, Noes 193.349
|Division No. 35.]||AYES||[10.0 p.m.|
|Abse, Leo||Gourlay, Harry||Orbach, Maurica|
|Albu, Austen||Grant, George (Morpeth)||Orme, Stanley|
|Archer, Peter (Rowley Regis)||Grant, John D. (Islington, E.)||Oswald, Thomas|
|Armstrong, Ernest||Hamilton, William (Fife, W.)||Parker, John (Dagenham)|
|Ashton, Joe||Hamling, William||Parry, Robert (Liverpool, Exchange)|
|Atkinson, Norman||Hannan, William (G'gow, Maryhill)||Pendry, Tom|
|Barnett, Guy (Greenwich)||Hardy, Peter||Perry, Ernest G.|
|Bishop, E. S.||Harrison, Walter (Wakefield)||Prentice, Rt. Hn. Reg.|
|Blenkinsop, Arthur||Hattersley, Roy||Prescott, John|
|Boardman, H. (Leigh)||Heffer, Eric S.||Price, J. T. (Westhoughton)|
|Booth, Albert||Horam, John||Price, William (Rugby)|
|Bottomley, Rt. Hn. Arthur||Howell, Denis (Small Heath)||Reed, D. (Sedgefield)|
|Brown, Ronald (Shoreditch & F'bury)||Hughes, Robert (Aberdeen, N.)||Rees, Merlyn (Leeds, S.)|
|Buchan, Norman||Hughes, Roy (Newport)||Roberts, Albert (Normanton)|
|Buchanan, Richard (G'gow, Sp'burn)||Irvine, Rt. Hn. Sir Arthur(Edge Hill)||Roberts, Rt. Hn. Goronwy (Caernarvon)|
|Callaghan, Rt. Hn. James||Janner, Greville||Robertson, John (Paisley)|
|Campbell, I. (Dunbartonshire, W.)||Jeger, Mrs. Lena||Roderick, CaerwynE.(Brc'n & R'dnor)|
|Carmichael, Neil||Jenkins, Hugh (Putney)||Rodgers, William (Stockton-on-Tees)|
|Carter-Jones, Lewis (Eccles)||Johnson, Walter (Derby, S.)||Roper, John|
|Castle, Rt. Hn. Barbara||Jones, T. Alec (Rhondda, W.)||Ross, Rt. Hn. William (Kilmarnock)|
|Clark, David (Coins Valley)||Kaufman, Gerald||Rowlands, Ted|
|Cocks, Michael (Bristol, S.)||Kerr, Russell||Sandelson, Neville|
|Concannon, J. D.||Kinnock Neil||Sheldon, Robert (Ashton-under-Lyne)|
|Crawshaw, Richard||Lambie David||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Crosland, Rt. Hn. Anthony||Lamborn, Harry||Silkin, Rt. Hn. John (Deptford)|
|Crossman, Rt. Hn. Richard||Lamond, James||Sillars, James|
|Cunningham, G. (Islington, S.W.)||Latham, Arthur||Silverman, Julius|
|Dalyell, Tarn||Lawson, George||Skinner, Dennis|
|Davidson, Arthur||Leonard, Dick||Spearing, Nigel|
|Davis, Ifor (Gower)||Leonard, Dick||Spriggs, Leslie|
|Davis, Clinton (Hackney, C.)||Lewis, Ron (Carlisle)||Stallard, A. W.|
|Davis, Terry (Bromsgrove)||Lipton, Marcus||Stewart, Donald (Western Isles)|
|Deakins, Eric||Mabon, Dr. J. Dickson||Stoddart, David (Swindon)|
|Dell, Rt. Hn. Edmund||McBride, Neil||Stonehouse, Rt. Hn. John|
|Dempsey, James||McCartney, Hugh||Strang, Gavin|
|Doig, Peter||McGuire, Michael||Summerskill, Hn. Dr. Shirley|
|Dormand, J. D.||Mackintosh, John P.||Thomas, Jeffrey (Abertillery)|
|Douglas, Dick (Stirlingshire, E.)||McMillan, Tom (Glasgow, C.)||Tinn, James|
|Douglas-Mann, Bruce||McNamara, J. Kevin||Torney, Tom|
|Duffy, A. E. P.||Mahon, Simon (Bootle)||Tuck, Raphael|
|Dunn, James A.||Marks, Kenneth||Urwin, T. W.|
|Dunnett, Jack||Marsden, F.||Varley, Eric G.|
|Eadie, Alex||Marshall, Dr. Edmund||Wallace, George|
|Edelman, Maurice||Mayhew, Christopher||Watkins, David|
|Edwards, Robert (Bilston)||Meacher, Michael||Weitzman, David|
|Ellis, Tom||Mellish, Rt. Hn. Robert||Wellbeloved, James|
|Evans, Fred||Mendelson, John||White, James (Glasgow, Pollok)|
|Faulds, Andrew||Millan, Bruce||Willey, Rt. Hn. Frederick|
|Fitt, Gerard (Belfast, W.)||Miller, Dr. M. S.||Wilson, Alexander (Hamilton)|
|Fletcher, Ted (Darlington)||Milne, Edward||Wilson, William (Coventry, S.)|
|Ford, Ben||Mitchell, R. C. (S'hampton, Itchen)||Woof, Robert|
|Fraser, John (Norwood)||Morris, Alfred (Wythenshawe)|
|Freeson, Reginald||Morris, Charles R. (Openshaw)||TELLERS FOR THE AYES:|
|Galpern, Sir Meyer||Murray, Ronald King||Mr. James Hamilton and|
|Gilbert, Dr. John||Oakes, Gordon.||Mr. Joseph Harper.|
|Golding, John||O'Halloran, Michael|
|Adley, Robert||Atkins, Humphrey||Benyon, W.|
|Allason, James (Hemel Hempstead)||Awdry, Daniel||Berry, Hn. Anthony|
|Archer, Jeffrey (Louth)||Balniel, Rt. Hn. Lord||Biffen, John|
|Astor, John||Bennett, Dr. Reginald (Gosport)||Biggs-Davison, John|
|Boardman, Tom (Leicester, S.W.)||Haselhurst, Alan||Page, Rt. Hn. Graham (Crosby)|
|Boscawen, Hn. Robert||Hastings, Stephen||Pardoe, John|
|Bossom, Sir Clive||Hawkins, Faul||Parkinson, Cecil|
|Bowden, Andrew||Hayhoe, Barney||Percival, Ian|
|Brewis, John||Heath, Rt. Hn. Edward||Pounder, Rafton|
|Brinton, Sir Tatton||Hill, John E. B. (Norfolk, S.)||Powell, Rt. Hn. J. Enoch|
|Brown, Sir Edward (Bath)||Hill, James (Southampton, Test)||Price, David (Eastleigh)|
|Bryan, Sir Paul||Hordern, Peter||Prior, Rt. Hn. J. M. L.|
|Buck, Antony||Hornby, Richard||Pym, Rt. Hn. Francis|
|Bullus, Sir Eric||Hornsby-Smith, Rt. Hn. Dame Patricia||Raison, Timothy|
|Burden, F. A.||Howe, Rt. Hn. Sir Geoffrey||Ramsden, Rt. Hn. James|
|Butler, Adam (Bosworth)||Howell, David (Guildford)||Redmond, Robert|
|Campbell, Rt. Hn. G.(Moray & Nairn)||Howell, Ralph (Norfolk, N.)||Reed, Laurance (Bolton, E.)|
|Carr, Rt. Hn. Robert||Hutchison, Michael Clark||Rees-Davies, W. R.|
|Channon, Paul||Iremonger, T. L.||Rhys Williams, Sir Brandon|
|Chapman, Sydney||Irvine, Bryant Godman (Rye)||Ridley, Hn. Nicholas|
|Chichester-Clark, R.||James, David||Rippon, Rt. Hn. Geoffrey|
|Jennings, J. C. (Burton)||Roberts, Wyn (Conway)|
|Churchill, W. S.||Johnston, Russell (Inverness)||Rost, Peter|
|Clegg, Walter||Jopling, Michael||Russell, Sir Ronald|
|Cooke, Robert||Kaberry, Sir Donald||Scott, Nicholas|
|Cooper, A. E.||Kellett-Bowman, Mrs. Elaine||Scott-Hopkins, James|
|Corfield, Rt. Hn. Sir Frederick||Kershaw, Anthony||Shaw, Michael (Sc'b'gh & Whitby)|
|Cormack, Patrick||Kimball, Marcus||Shelton, William (Clapham)|
|Costain, A. P.||King, Evelyn (Dorset, S.)||Shersby, Michael|
|Crouch, David||King, Tom (Bridgwater)||Sinclair, Sir George|
|d'Avigdor-Goldsmid, Sir Henry||Kinsey, J. R.||Skeet, T. H. H.|
|d'Avigdor-Goldsmid, Maj.-Gen. Jack||Knight, Mrs. Jill||Smith, Cyril (Rochdale)|
|Dean, Paul||Knox, David||Soref, Harold|
|Dixon, Piers||Lamont, Norman||Speed, Keith|
|Dodds-Parker, Sir Douglas||Lane, David||Spence, John|
|du Cann, Rt. Hn. Edward||Le Marchant, Spencer||Sproat, Iain|
|Dykes, Hugh||Lewis, Kenneth (Rutland)||Stanbrook, Ivor|
|Eden, Rt. Hn. Sir John||Longden, Sir Gilbert||Steel, David|
|Elliot, Capt. Walter (Carshalton)||Loveridge, John||Stoddart-Scott, Col. Sir M.|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Luce, R. N.||Stokes, John|
|Eyre, Reginald||MacArthur, Ian||Stuttaford, Dr. Tom|
|Fell, Anthony||McCrindle, R. A.||Tapsell, Peter|
|Fenner, Mrs. Peggy||McLaren, Martin||Taylor, Edward M.(G'gow, Cathcart)|
|Fidler, Michael||McMaster, Stanley||Taylor, Frank (Moss Side)|
|Finsberg, Geoffrey (Hampstead)||McNair-Wilson, Michael||Taylor, Robert (Croydon, N.W.)|
|Fisher, Nigel (Surbiton)||Maddan, Martin||Tope, Graham|
|Fletcher-Cooke, Charles||Maginnis, John E.||Trafford, Dr. Anthony|
|Fookes, Miss Janet||Mather, Carol||Trew, Peter|
|Fortescue, Tim||Maude, Angus||Tugendhat, Christopher|
|Fowler, Norman||Maudling, Rt. Hn. Reginald||Turton, Rt. Hn. Sir Robin|
|Fox, Marcus||Meyer, Sir Anthony||Vaughan, Dr. Gerard|
|Fry, Peter||Mills, Stratton (Belfast, N.)||Waddington, David|
|Gardner, Edward||Mitchell, Lt.-Col. C. (Aberdeenshire, W)||Walder, David (Clitheroe)|
|Gibson-Watt, David||Moate, Roger||Walker-Smith, Rt. Hn. Sir Derek|
|Goodhart, Philip||Molyneaux, James||Ward, Dame Irene|
|Gower, Raymond||Monks, Mrs. Connie||Weatherill, Bernard|
|Grant, Anthony (Harrow, C.)||Monro, Hector||White, Roger (Gravesend)|
|Gray, Hamish||Montgomery, Fergus||Wiggin, Jerry|
|Green, Alan||Morgan-Giles, Rear-Adm.||Wilkinson, John|
|Griffiths, Eldon (Bury St. Edmunds)||Mudd, David||Woodnutt, Mark|
|Grimond, Rt. Hn. J.||Murton, Oscar||Worsley, Marcus|
|Grylls, Michael||Nabarro, Sir Gerald||Younger, Hn. George|
|Gummer, J. Selwyn||Nicholls, Sir Harmar|
|Gurden, Harold||Normanton, Tom||TELLERS FOR THE NOES:|
|Hall, John (Wycombe)||Onslow, Cranley||Mr. Kenneth Clarke and|
|Harrison, Col. Sir Harwood (Eye)||Owen, Idris (Stockport, N.)||Mr. Victor Goodhew.|
§ Question accordingly negatived.
§ Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on second or third reading) and agreed to.350
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).