§ 11.2 p.m.
§ Sir John Eden (Bournemouth, West)
I want tonight to speak briefly on behalf of landlords—not the property companies, for some of which I have no time whatever, or for those whose main business activity is the ownership of buildings for letting. The landlords I have in mind are those who own one or two houses besides the one in which they live or the man who may be the owner-occupier of a home which is divided into flats. These people can best be described as small private landlords. They include a high proportion of retired people whose life savings have been invested in the property as a hedge against inflation and to provide some security for their old age. Many live in my constituency and there are doubtless thousands throughout the country. All have been adversely affected by the Government's order freezing rents, and in several cases known to me there is evidence of real hardship.
I ask the Minister to try to set on one side his undoubted prejudice against the private landlord as such and to comprehend the extent of the injustice for which his order is directly responsible.
I want to put my remarks into balance by making clear that I am fully alive to the widespread unhappiness caused by inadequate housing conditions. People come to my constituency who find it necessary to draw attention to the plight of the homeless by illegally squatting in private premises.
I am aware of individual cases of hardship and I am ready at any time to take up the cudgels on behalf of tenants where there is evidence of unscrupulous intimidation by private landlords. I do not want to make out that all small private landlords are good, but I 1979 emphasise that only very few are bad. In my constituency I know of more cases of abuse by the tenant than by the landlord. It is regrettably such a common experience that many people are deterred from letting rooms which would otherwise come on to the market. That applies to all forms of letting including, most unfairly, instances in which the owner of holiday accommodation has agreed to a cheap short-term let for the winter months only to find that when summer comes the tenant refuses to leave. The consequences of such a breach of faith can be a costly nightmare for the owner, as I am sure hon. Members will understand.
There is no doubt in my mind that so heavily is legislation now loaded against the landlord that many people who would otherwise make rooms available are deterred from doing so by fear of being victimized by a bullying tenants exercising the muscle-power which the protection of the law undoubtedly gives him.
On top of all that I have described, there is now the rent freeze. When I raised this matter in the House at Question Time on 8th May the Minister told me that he was examining the effects of the rent freeze order. Perhaps he will now explain just what has been involved in that examination and, more importantly, what has been the outcome. Has he yet come to any conclusions? If so, will he share them with the House? Will he tell us what the position is for those who under the Housing Finance Act 1972 registered a regulated rent which provided for increments to be paid over the period covered by the freeze? If a fair rent was fixed in 1971, it is clearly becoming progressively less fair as the rent freeze continues.
The hon. Gentleman will be aware of the way that costs have risen in the past few months. I know that there is dispensation from the operation of the rent freeze in respect of rates and in respect of any genuine improvements which are made to the premises, but what has the Minister to say about the average increase of 30 per cent. on electricity charges, the 70 per cent. increase in night storage heater tariffs and the 100 per cent. increase for heating oil? Will he cast his 1980 mind forward to the circumstances which are likely to arise this winter and the effect that those increases are likely to have on the return that landlords can expect to get from the capital they have invested in the premises they have put out to let?
It would be only fair if, in assessing rents under the Rent Act, rent officers were to pay more regard to the upward movement of costs and values at a time when, because of the operation of the rent freeze, no increase can take place which has regard to the way in which costs have gone up. We are told that the purpose of the rent freeze is to help to counter inflation. I have had letters from the Minister and from his hon. Friend the Minister for Housing and Construction explaining that while they recognise that in the operation of the Rent Act difficulties are undoubtedly being caused, such difficulties have to be endured in the overriding interest of countering inflation. I hope that tonight I shall not have from the hon. Gentleman a catalogue of statistics. I just want the briefest of comments from him, and I shall be very brief myself.
We are told that the rent freeze has been designed to help to counter inflation. The hon. Gentleman will recognise how hollow that sounds to my constituents and others like them when they have to contemplate cost increases on the scale I have indicated. This is an exercise in futility.
What is to happen this winter? Why should these people, many of whom have smaller incomes than those of their tenants, be even more out of pocket? Is this the Socialist concept of equality, which requires an elderly, low-income landlord to subsidise the rent of a young, able-bodied, wage-earning tenant? That is not a figment of my imagination. I have many examples where that is exactly the situation which has been brought about by the operation of the order.
I emphasise again that it is for the small landlord that I speak tonight, for him and his kind who provide tens of thousands of homes throughout the country and who are being done a great injustice. They certainly deserve better treatment than that. Is there the slightest chance that they will get it from the present Government?
§ 11.12 p.m.
§ The Under-Secretary of State for the Environment (Mr. Gerald Kaufman)
The right hon. Member for Bournemouth, West (Sir J. Eden) has put his case with considerable strength of feeling. He was a distinguished member of the previous Government, which in 1972 introduced a similar rent freeze—in violation of the manifesto upon which his party was elected. We brought in a rent freeze three days after we became the Government. We did it under the legislation of the right hon. Gentleman's party and in fulfillment of our election pledge.
The right hon. Gentleman's Government's rent freeze came in at the beginning of the winter, when the need for fuel services to which he referred was at its height. Our rent freeze came in at the end of the winter, and on present plans, provided we get our legislation for the first stage of the repeal of the Housing Finance Act through the House, it will end on 31st December.
When the Government of which the right hon. Gentleman was a member introduced a rent freeze, we did not hear him protest at the impact on his constituents.
§ Sir J. Eden
The hon. Gentleman said that the freeze will end on 31st December. Am I correct in taking it that no form of order or restraint will take its place?
§ Mr. Kaufman
What I said was that, provided we got our legislation through the House for the first stage of the repeal of the Housing Finance Act, the rent freeze would lapse. Otherwise, we shall have to look at the situation again. It will depend on whether our legislation is through in time.
The right hon. Gentleman did not protest at the impact of his Government's rent freeze, nor did any other Conservative Member campaign on behalf of the landlords to get it lifted. It was regarded as an indispensable part of that Government's counter-inflation policy. Nevertheless the present Government recognise that housing associations and good landlords who supply services involving heating and hot water have a case.
As regards housing associations, which are non-profit-making organisations fulfilling a recognised social function, we have decided to compensate them for the 1982 rent freeze by amendments to the Housing Bill, which this evening completed its Committee stage. This is possible and fairly simple because housing associations are eligible for subsidy.
My right hon. Friend the Secretary of State for the Environment pointed out at the annual general meeting of the National Federation of Housing Associations on 29th May thatWe are proposing to provide some relief from the effects of the rent freeze in circumstances where housing associations have incurred inevitable increases in fuel costs for central heating and hot water and which are currently irrecoverable under the freeze.My hon. Friend the Minister for Housing and Construction reaffirmed that this was what we were going to do in the Standing Committee on the Housing Bill, which was completed today, when he said on 23rd May:I am concerned that the measures we are already taking may not go far enough in dealing with the immediate problems facing some associations. My aim therefore is to introduce an amendment to tackle these properly … in a way consistent with, and to pave the way towards, any general switch to a deficit financing subsidy system for housing associations which might emerge as a result of the review which I have told the Committee is in hand. I cannot produce the amendment immediately, but I hope to do so as a new clause or at least on Report."— [OFFICIAL REPORT, Standing Committee B, 23rd May 1974; c. 165.]That is still the Government's intention. That deals with housing associations.
I recognise that the Conservative Party believes in subsidizing private landlords. It did it in the Housing Finance Act, under which the landlord receives the full rent and the rent allowances are paid out of the public purse. The present Government do not believe that it is right further to extend subsidies to landlords, and the only other way to compensate landlords for the increased fuel costs, which without question they are having to bear, is by amendment to the counter-inflation order which we introduced in March. I advise the right hon. Gentleman and the House, however, that such an amendment is very difficult to devise in a way which would not provide a loophole which would allow bad landlords to frustrate the rent freeze.
The right hon. Gentleman has spoken about good landlords. I do not deny his right to refer to them. But he will also recognise—I shall have occasion to refer 1983 to this matter—that there are bad landlords as well. The rent freeze to which the right hon. Gentleman refers with such strength of feeling also arouses strength of feeling in my hon. Friends, many of whom say that in any case it is decidedly not watertight. They are dissatisfied with the way in which it operates on behalf of tenants.
The right hon. Gentleman has stated the case for good landlords—and there are good landlords. There are similar landlords in my constituency, and they have made representations to me of the nature of those which the right hon. Gentleman has put tonight. If all landlords were as innocuous and as deserving as those for whom the right hon. Gentleman has spoken and those who have written to me, there would be no problem. We could introduce an amending order with no difficulty. But many landlords are far from deserving, far from altruistic and far from the vulnerable widows and orphans who, the right hon. Gentleman implied, are victimized by the swaggering bullies who live in the accommodation which they provide. Indeed, even the landlords for whom the right hon. Gentleman speaks are not always as public spirited as he would imply. I refer, for example, to a lady whom the right hon. Gentleman will know very well. She is Mrs. Doris Johnson, of the Bournemouth and South-West Landlords' Association. The right hon. Gentleman is the Member for Bournemouth, West and, justifiably, has connections with that association and with that lady. She wrote a letter to the hon. Member for Bournemouth, East (Mr. Cordle) which was sent to me, and I commented on it in a letter to him of 14th May. She said:All we really seek is that tenants (in addition to the landlord) keep to their contract, then there would be no need for tribunals, rent officers, court cases, etc.I think that that letter demonstrates the basic unwillingness to accept the very principles underlying the legislation on rents, and it is an attitude which we find totally unacceptable.
§ Sir J. Eden
Is the hon. Gentleman now deliberately implying that the main purpose of the order is to get at the bad landlords—or is it, in his view, a genuine act to help to counter inflation?
§ Mr. Kaufman
It is an order to fulfil the pledge we made in the General Election, namely, that until we had repealed the Housing Finance Act we would stop the progression in both public and private rented accommodation to what the Conservative Government quaintly called "fair rents" when they introduced the Housing Finance Bill. There is also a counter-inflationary element in it. We have introduced it under the previous administration's own Counter-Inflation Act.
I have spoken about bad landlords. Every day, including today, I receive letters from my constituents about the most appalling cases of harassment and ill treatment of tenants in my constituency. Only this week a landlord in my constituency, in order to evade the provisions of the legislation which protects tenants, has tumbled my constituents' furniture out into the streets, poisoned their goldfish, kidnapped their pet cats and vowed to get them out regardless of the law. Another landlord in my constituency refuses to carry out repairs to a decrepit house inhabited by a bed-ridden old lady of 90.
There are others besides the landlords of whom the right hon. Gentleman speaks so feelingly. Landlords like this are only looking for a way to dodge and fiddle their way round this Government's rent freeze. If these landlords were allowed to put up rents to take account of increased service charges, without the most stringent safeguards being implicit and written into any amendment, we would be giving them a licence to exploit tenants by putting up rents at will and blaming the increase on service charges.
The right hon. Gentleman can imagine it very well. The landlord would go to his tenant and say "I have to put up your rent. I know that there is a rent freeze, but the Government are allowing me to put up rents where service charges or fuel charges are in question. The costs of oil and electricity have gone up. The cost of coal may go up. There are rum ours about the cost of gas. I have to put up your rent." The increase would be in no way commensurate with the increase in charges, and the landlord would be able to violate the rent freeze and violate the policy on which this Government were elected.
1985 This is our dilemma, and it is a difficult one. It is how to provide an easement, which we acknowledge should be considered for good landlords in genuine difficulties, without at the same time opening the door to bad landlords.
Consequent upon the reply which I gave the right hon. Gentleman on 8th May, he asked me what we were doing. I shall tell him. We are doing our best to find a way of helping the good landlords. Within the Department of the Environment a number of consultations are in progress about how this can be done. We are not simply shying away from this matter. We accept that it is one at which we must look very carefully.
We cannot be sure whether we shall succeed. Meanwhile, if we have to strike a balance, in my view, as a Minister in the Department responsible to landlords as well as to tenants, if we have to strike a balance we must strike it in favour of tenants who, despite the heartrending picture that the right hon. Gentleman painted, are more easily open to exploitation. I have files in my room full of examples of tenants viciously and heartlessly exploited by landlords— elderly people just like the landlords for whom the right hon. Gentleman speaks with such sincerity.
All rent legislation recognises that the tenant must be protected while the landlord receives consideration. Our Rent Bill, to provide security of tenure for furnished tenants, which has received its Second Reading in another place and will shortly be coming to this House, goes a step further.
The problems and even the plight of some landlords emphasise the inescapable fact that private landlordism is not only unsatisfactory to the overwhelming majority of tenants but is troublesome and unrewarding to many landlords as well, not least the small landlords. The collapse of the Stern Group over the last few days shows that the property companies which the right hon. Gentleman rejects are not up to private landlordism.
The case that the right hon. Gentleman has made underlines the need to remove rented property, apart from let-tings in the landlord's own home, from fixed commercial relationships and to treat it instead as a response to social need.
§ Mr. Peter Viggers (Gosport)
I am grateful for the Minister's reply to my correspondence on the subject of housing associations and I should be grateful if he could add anything to the correspondence. When will the Government announce the concessions to housing associations? It is unfair of the hon. Gentleman to make a flagrantly political point out of a fair question by my right hon. Friend. Landlords must be given consideration—
§ Mr. Deputy Speaker (Mr. George Thomas)
Order. Is the hon. Gentleman intervening or making a speech?
§ Mr. Viggers
Will the Minister give the same concession to private landlords as to housing associations?
§ Mr. Kaufman
I do not know whether the hon. Gentleman was present when I said that it was not possible to give the same concession to private landlords. As non-profit-making public organisations, housing associations are eligible for subsidy, which the Minister for Housing and Construction has said will be made available to help them with their problems through the rent freeze. Private landlords are in it for the money. They have an investment on which they wish to receive an income. It would be absurd to subsidise them in the same way.
Before the hon. Gentleman so ingeniously tried to make a speech, I was saying that we believe that rented property must be taken out of the commercial nexus and instead be treated as a response to social need. This can be done only by social ownership, to which the Government are committed. Landlords will undoubtedly be grateful to the right hon. Gentleman for stating their case so winningly. We on this side are grateful to him for so graphically illustrating the relevance of and the need for the policies on which we hold office.
§ Mr. Kaufman
The right hon. Gentleman has been a distinguished—I would not dream of saying "discredited"— Minister in the Department of Trade and Industry. He supported the helping of lame ducks over stiles. His Government finally acknowledged, in defiance of the views of himself and his hon. Friend the Member for Cirencester and Tewkesbury 1987 (Mr. Ridley) that there must be a response, even by private industry, to social need and by the Government to the needs of private industry in the interests of the economy.
We strongly believe that housing must be a social service, that everyone needs a roof over his head, not so that a profit can be made out of him but so that he and his family can live their lives in com- 1988 fort and happiness without feeling that they will be exploited by a landlord.
I am grateful to the right hon. Gentleman for giving me the opportunity to conduct a mini political seminar at this late hour and for having initiated this debate.
§ Question put and agreed to.
§ Adjourned accordingly at half-past Eleven o'clock.