PHASING OF RENT INCREASES (Hansard, 14 January 1975)

§ Mr. Kaufman
I beg to move Amendment No. 33, in page 18, line 34, after 'means', insert: ',subject to sub-paragraph (1A) below,'.

Mr. Deputy Speaker
For the convenience of the House, perhaps we might debate at the same time Government Amendment No. 34.

§ Mr. Kaufman
These amendments would alter the definition of "period of delay" so that, in the case of a rent registered on or after 8th March 1974 but before the coming into force of the provisions phasing rent increases in the private sector, the period of delay would begin on the date on which Clause 7 comes into force. The anniversary for phasing purposes in these cases would then date from the date of the coming into force of the section and not the date of registration of a rent.
These amendments ensure that tenants who have had rents registered during the freeze will not be faced with two phased increases in a single year, the first coming shortly after Clause 7 comes into operation and the second coming on the anniversary of the date of registration, as would otherwise have been the case.

§ Mr. Arthur Latham
This is the third of the responses to which I referred earlier. One appreciated the spontaneous 395 response of both Ministers in Committee when it was realised that, because of the Bill, some people would face a two-thirds increase immediately and a one-third increase subsequently—a nonsensical form of phasing. The amendment will get rid of that anomaly.
However, will the Minister confirm that, as a result of the amendment, re-registration will take place when only two instalments of the phasing have been passed on to the tenant? This means that there will be an overlap between the three years of phasing of a current increase which is due at the end of the three years and a subsequent increase which is due as a result of re-registration.
Can my hon. Friend make it clear that my understanding is correct that the third instalment will be added to any new total rent increase and then divided by three for a further period of phasing? It is important to establish this and to get it on the record, otherwise it could mean that tenants could be faced with a double increase at the end of three years, which would simply have shifted the anomaly from the beginning to the end of the phasing.
At the fifth sitting in Committee, in response to my suggestion about a five, six, or even seven-year phasing in some cases, the Minister said: I believe there are serious problems raised by extending phasing beyond the three-year period, or a two-year period …" [Official Report Standing Committee A, 10th December 1974: c. 253.] As I understand the arguments from private discussions I had with the Minister, one of the problems concerning the extended phasing would be that a fair rent would be fixed but might never be reached as a consequence of extended phasing.
Having now accepted, in consequence of this amendment, that an unfulfilled stage of the first set of phasing can be carried forward, after re-registration, and included in a new phasing, does not that remove the objection to extended phasing and, in a number of circumstances, meet the problems of excessive rent rises?
In further observance of the undertaking to reconsider this matter which 396 the Minister gave in Committee, will he see, between now and the time the Bill goes to another place, whether there might still be a case for considering extended phasing where there are three grossly excessive rent increases, any unfulfilled phases being carried forward to any subsequent re-registration?

§ Mr. Kaufman
I am obliged to my hon. Friend for the graciousness with which he accepted the concession that we have felt able to make. I fear, however, that I cannot tonight offer him any further concession along the lines he requests, for the reason which emerges from my answer to his question—namely, what happens if a completely fair rent has not been reached because of the concession which these two amendments embody? The Bill already caters for that situation.
Schedule 2 provides in paragraph 4(1) that where re-registration starts in the period of delay—that is, before a fair rent is reached—the new phasing starts from the date of re-registration, and the rent recoverable at that date becomes the previous limit for the new phasing. This means that the fair rent which would have been reached will not be reached. It does not mean that the result will be extended phasing. It means that the landlord loses a certain amount of the rent which he would otherwise have received but that the new fair rent comes into play not literally in the middle of the period of delay but at a stage in the period of delay when the new phasing for the new fair rent starts. This does not mean an extended phasing situation. It means that the previous phasing will have been truncated or unfulfilled.
Therefore, while I am highly grateful to my hon. Friend for the way in which he has received these amendments, I am afraid that I cannot offer him anything further at this stage.