HC Deb 14 January 1975 vol 884 cc369-74
Mr. Marcus Fox (Shipley)

I beg to move Amendment No. 11, in page 7, line 8, leave out 'the coming into force of this section' and insert '27th July 1972'.

Much to the disappointment of the Government Chief Whip, I regret that I shall have to spend a few minutes on the amendment. But the Opposition have been extremely contained, bearing in mind the provocation from certain hon. Members on the Government side of the House.

On this amendment we return to a matter which we discussed in Committee. The new amendment is a compromise in that we seek to cover a period dating only from the introduction of the Housing Finance Act 1972. There is a particular purpose in doing this in that we believe that since that time the situation in the rented sector has got worse.

Certainly, on the part of the Opposition—and, I hope, certain hon. Members on the Government side of the House—there is a reluctance to accept anything which would remove housing stock from this sector. Therefore, we regret houses being taken from the rented sector, for whatever reason.—[Interruption.] There are, perhaps, moves afoot to accept the amendment at an early stage. I should be happy to give way if that is so.

As politicians we have dabbled in housing on too many occasions. There has been too much legislation, with very little result. People are bewildered by the rapidity with which we in this place introduce successive pieces of legislation, each piece to be superseded by the next. No one is more bewildered than the landlord who in good faith has improved his property on the assumption that he will be able to get a fair rent.

For a change, I shall not talk about St. Mary's Mansions. Perhaps we can leave that block of flats alone. It has had a fairly good exposure.

Mr. Arthur Latham

As we have had, in one sentence, some reference to this problem from the Opposition, am I to take it from the statement which the hon. Gentleman has just made that his policy and that of the Opposition would be to leave those Freshwater rents as they are, with increases of £9 a week?

Mr. Fox

The hon. Gentleman knows that I detest the activities of certain people in these matters just as much as he does. But in the short time that we have at our disposal it is not unreasonable to look at the large majority of landlords who provide accommodation, many of whom do so accepting the social responsibility to try to keep their property in good repair. It is these people I have in mind in introducing the amendment.

Many people many years ago thought that the best investment they could make was to buy one or two houses in the belief that these would provide them with an income in retirement. Over the years the situation has developed so that, far from being provided with an income, the houses have become a liability to their owners who see no hope of getting back the money they put into that asset. They are thoroughly disillusioned and many landlords have taken fright at successive legislation. In all fairness they can see no hope. The Bill puts another nail in the coffin of these people.

We appeal to the Minister to give us an instance of a change of attitude. Surely we must accept that landlords have a part to play in the provision of private rented accommodation. Surely it cannot be right not to take the side of the people who took the 1972 Act for what it was and carried out the repairs that were needed. Our proposals would ensure that these people were not penalised. The clause as drafted will penalise them.

In Committee the Minister said: On the general point, I make the further observation that, in so far as one is talking of incentives, and accepting, as I have argued on an earlier clause, that there has been no evidence in the past to suggest that general freeing into the rental market, or indeed into the regulated market as occurred in the 1972 Act, has produced this upsurge of modernisation and good maintenance in this area".—[Official Report, Standing Committee A; 12th December 1974, c. 306.] If he is saying there that there has been very little upsurge, the commitment we are entering into is a very limited one. Surely these are the landlords the Minister is seeking to encourage by introducing the factor of 12½ per cent. on repairs.

During 1972–74 there were particular problems in the building industry. I am not making a political point here. It is well known that economic overheating or whatever we may call it made it impossible for many small landlords to get repairs done. All available labour was attracted to new work, where the wages were considerably higher. Therefore, through no fault of their own, the landlords found that completion of improvements or modernisation was delayed and they now find that they are outside the scope of the Bill. I hope that my plea will not fall on stony ground.

I refer the Minister to what he said in Committee in reply to my hon. Friend the Member for Chelsea (Mr. Scott) who pressed him to look at the plight of these people: I am predisposed towards such treatment, but I see great practical difficulty in undertaking it. Surely a large part of that difficulty has been removed by virtue of what the Minister said in reply to his lion. Friend the Member for Salford, East (Mr. Allaun). He said, Hon. Members will bear in mind that I have undertaken to look at the point raised with me by my hon. Friend the Member for Salford, East (Mr. Allaun) at a previous sitting, that is, to try to establish some means whereby there can be a check made on the expenditure undertaken to establish the basis for the rent increases".—[Official Report, Standing Committee A, 12th December 1974; cc. 314–5.] That yardstick is further instanced in a letter sent on 6th January by the Minister to those of us who served on the Committee. He said, The landlord will not of course be entitled to an increase simply by claiming that he has spent money on repairs. A tenant doubtful of the justification for any increase claimed under this section will be able to bring the issue before the courts—either by his own action or by refusing to pay the increase without evidence in support of it—where the landlord must prove his right to it. I accept that point and therefore the Minister will be doing a great service in accepting the amendment. The safeguards are there for the tenant. There must be evidence to support any claim. I ask the Minister, in the name of equity, to see that these people are cared for.

12.15 a.m.

Mr. Freeson

The amendment, like the attempts to move in this direction in Committee, is broadly in line with what the Government have proposed in the Bill. I expressed some sympathy for the proposal in Committee, as the hon. Member for Shipley (Mr. Fox) said, but added that there was serious practical difficulties, as there still are, in accepting the proposal as the Opposition have moved it. The difficulty is the improbability that genuine evidence of expenditure on repair would still be available two years or more after the work had been carried out. It is essential that documented evidence of expenditure should be available for the settlement of dispute.

I am still looking into the possibility of including in the Bill an entitlement for the tenant in those circumstances to be given access to the relevant documents, without having to challenge the increase through the courts, as a means of securing evidence for the justification of the rent increase claimed in connection with supposed repairs expenditure. It would be anomalous, therefore, for the right to recover increases in respect of repairs costs to be extended back beyond the period for which the evidence of those costs is likely to survive.

However, it is reasonable to suppose that documentation of repair costs will normally be kept—for tax reasons, if for no other purpose—for the year after the carrying out of the works. Therefore, I propose to introduce in another place, because I have not yet had time to work out these matters fully, an amendment which would create an entitlement to an increase in rents on the 12½ per cent. basis, for the dwellings under the clause, in respect of repairs carried out in the year preceding the coming into force of the Bill. That is the period for which we can reasonably expect documentation of expenditure still to be available in order that tenants or the county court can, if need be, check the accuracy of, and justification for, the proposed increase.

I hope that in view of this assurance, which is in line with my general reaction in Committee, and which would keep the matter fully in line with the Bill as now drafted, the Opposition, will agree to withdraw the amendment.

Mr. Fox

I am grateful for the Minister's concession. I take it that it is the previous tax year, the year 1973–74—

Mr. Freeson

We have not yet worked it out in detail, and it may vary by the time it is dealt with in another place, but what is in mind is to cover the year preceding the enactment of the Bill. We have a definite and clear 12-months' period. I gave the point about the income tax year to illustrate that it is a period for which one can reasonably expect documentation to have been held for other purposes than the administration of the property. To go back beyond that would be to move into an indefinite period and create all sorts of uncertainty about documentation.

Mr. Fox

We accept the Minister's proposals, but I do not accept for one moment that landlords dispose of receipts as quickly as is suggested. To many people the expenditure of £100 or £200 is a considerable sum. It is my experience in my part of the world that people do not part with receipts of that kind for many years. Be that as it may we must be grateful for small mercies. I thank the Minister for what he has said.

Mr. Hal Miller

I wish to take the Minister up on the subject of repairs and perhaps refresh his memory. In the case of improvements, where I believe percentage increases have been operating since 1920, there have been no difficulties experienced about the actual improvements and their costs according to the people I have consulted. Any vouchers necessary have always been produced to the tenant in case of dispute.

There is, as the Minister is no doubt aware, a considerable volume of case law as to what constitutes repairs. If he is relying on such case law for the determination of reasonable repairs, I do not see why he should not also be guided by the same case law relating to other aspects of repairs. I hope that he will bear that in mind when he considers the amendment that he has been discussing.

There was discussion in Committee about the cost of borrowing money to effect necessary repairs or desired repairs. When we were discussing the possibility of increasing the figure of 12½ per cent. I do not think that the members of the Committee were aware that in other spheres it is already allowable. I should like the Minister to consider that matter when he is considering the amendment that will be determined in another place—namely, that the cost of borrowing money to carry out the repairs should be allowable.

Mr. Freeson

I shall read carefully the points that have been made so that we can give further consideration to them in introducing the amendment in another place, on which I have given an undertaking. For the present I stand by the undertaking that I have given to the House. If there are grounds, on reflection, for varying it somewhat in the direction suggested, I shall consider them. There is at least a firm undertaking that we shall act on the basis of one year. I cannot guarantee that we shall go beyond that, but I shall consider the matter further in the light of what I read in the record.

Amendment negatived.

Back to
Forward to