HC Deb 14 January 1975 vol 884 cc400-9

Amendments made: No. 44, in page 28, leave out lines 11 to 14.

No. 45, in page 29, line 17, column 3, at end insert—'Section 80'.

No. 46, in page 29, line 27, column 3, at beginning insert: 'In section 56(2)(a), the words from "or", in the second place where it occurs, to "purposes". In section 65(3)(a), the words from "except" to "apply"'.—[Mr. Kaufman.]

Motion made, and Question proposed, That the Bill be now read the Third time.

1.13 a.m.

Mr. Scott

It had been my intention now to move "That the Question be not put". In any event, the point I wish to make is that simply because, both tonight and in Committee, the Opposition have expedited the Government's business and given them the co-operation they required to get their Bill according to the time-table for which they asked, I hope the Government do not feel that we do not regard this as an extremely objectionable measure in many ways. We believe that in several ways the Bill is taking the public and those whom it affects for a ride.

The Bill was widely trailed by the Secretary of State and others as restoring local government autonomy in rent fixing. It has become clear as our discussions have proceeded, not least from those earlier tonight on Clause 2, that that is not the case. The Government are not restoring autonomy to local authorities to fix rents. In fact, they are now taking unto themselves reserve powers which, it may be, are for use only as a long stop.

Clearly, however, the Under-Secretary will be under considerable pressure from some of his hon. Friends who are totally, ideologically and in a doctrinaire way opposed to any increase in rents for any housing, whether it be in the local authority or the private sectors. No matter what burdens might be placed on landlords or on ratepayers, no matter what slums might be created in the process, they will always seek to oppose any increase in rents and will be constantly pressurising the Minister to use the long-stop powers he is taking in the Bill.

We know that local authorities feel that the reserve powers in Clause 2, if exercised, could cause havoc with their housing revenue accounts. The Government have refused to accept the arguments which would have placed the financial responsibility for any order under Clause 2 on the Exchequer rather than the ratepayer. All in all, we do not believe that the measure lives up to its promise of restoring autonomy to local authorities.

Secondly, the Bill continues the Labour Party's vendetta against the private landlord, both in its going back on the progress towards decontrol which was laid down in the 1972 Act and in the attitude it has taken towards ratepayers. We are grateful for the one small concession we got this evening. But the 12½ per cent. figure in the Bill which landlords will be able to recoup for any repairs they carry out is wholly inadequate. The 12½ per cent. was set at a time when Bank Rate was 4 per cent. With a minimum lending rate now of 11 per cent., no one is able to borrow money for this sort of purpose at less than 12½ per cent. Yet 12½ per cent. remains the limit of the return that a landlord can get. I hope that the Minister will consider whether it will be possible to include in the cost of repairs at least the cost of borrowing for a period of three or four years.

In this measure the Minister is failing to appreciate that even if eventually he is able to realise his dream of all rented accommodation coming into social ownership, for many years ahead we shall depend on the private rented sector. We shall not serve anyone well, tenants or the nation, if we allow the stock of housing at present in private hands to deteriorate. That means that landlords must be able to get a fair return.

We ought to be setting out to maximise the use we can make of our housing stock, both public and private. The way in which the Bill will affect the private landlord will be counter-productive in that respect.

Finally, the Bill was trailed as repealing the Housing Finance Act 1972. It does not do that. In large measure the 1972 Act will be intact when this Bill reaches the statute book. Certainly one of the main arches of the 1972 Act, the mandatory system of rent allowances and rebates, will remain in existence. The Bill insulates the public sector of housing against the fair rent system. If one had believed the horrific forecasts about the likely movement of fair rents made by hon. Members now on the Government side of the House when the 1972 Act was passing through Parliament, there might just have been some justification for insulating the public sector from the system. We know, however, that the movement of fair rents has been much more modest than hon. Members opposite forecast at that time. Even in the City of Westminster, which the hon. Member for Paddington (Mr. Latham) represents, we now hear that the average increase in rents registered during 1973 was 18 per cent. That covers at least a three-year period. There has, therefore, been an average annual increase of less than 7 per cent. In other words, the fair rents were rising at well under the rate of inflation at the time. I do not believe in the circumstances that it is right or necessary that we should insulate the public sector from the fair rents system. I believe that there are considerable advantages in having a common system of rent determination in both public and private sectors.

What would a change from fair rents to reasonable rents in the public sector achieve? We have pressed the Minister several times in Committee and he has been remarkably coy about what "reasonable rents" are likely to mean in practice. During Second Reading of the Housing Finance Bill, the Secretary of State said that the only proper and sensible principle is to set rents at a level people can pay without a means test and without a rebate."—[Official Report, 15th November 1971; Vol. 826, c. 54.] Nothing in this Bill will restore that situation, and I am sure that the Minister will not pretend that it will.

We know that the percentage of household income which is paid on average in council rents is 7½ per cent. That was stated in a Written Answer by the Under-Secretary this week. No one could say that this figure is unduly high or harsh or is one which cannot be borne. On the question of rents, as in the autonomy of local authorities, the Government in this measure are playing to the gallery and they will achieve very little by the passage of the Bill.

Since the end of the Committee stage we have seen publication of a book by Mr. Berry called "Housing—The Great British Failure". Both the major parties must share the blame for that failure but I am sad that by passing this Bill on to the Statute Book the Government will be compounding rather than mitigating that failure.

1.22 a.m.

Mr. Stephen Ross

I do not accept all the strictures by the hon. Member for Chelsea (Mr. Scott). The Bill certainly has its faults, and I agree with him about the terrible mess that exists in the housing situation. I also accept that his party bears some of the responsibility just as much as the Government must bear responsibility for past records. Anyone who has tried to work or understand the Rent Acts emanating from 1918 or even before lands himself in a complete and utter mess. The sooner we clear up that mess and have a radical rethink of the whole subject, the better.

I take heart from the fact that the Minister has said that he is to carry out some such reappraisal, and I hope that it will be a full-hearted reappraisal of the whole situation. There was a leading article in The Times last week on the question of the short-term lease, and bodies like Shelter have been putting forward suggestions which should be taken very much to heart.

I support the principle that the Bill is returning to local authorities much of the responsibility for dealing with their own affairs. That is absolutely correct. Although Clause 2 has been retained, I take the Minister at his word and I trust that he will not be implementing it. We shall, therefore, be supporting the Government in the Division that I presume is to take place on Third Reading.

1.24 a.m.

Mr. Arthur Latham

I make no apology for rising to put forward a few brief comments on on Third Reading. There should be no cause for complaint from my right hon. Friends if I do so, especially when one contrasts the situation which existed when the Housing Finance Bill was before the House and we spent many nights trying to resist it. There were 57 sittings to deal with that Bill in Committee and the whole process took about six months. My right hon. Friend the Secretary of State said on Second Reading that the Bill was cutting the throat of the Housing Finance Act. That Act has bled to death rather quietly, in contrast to its painful and protacted birth.

I cannot accept what the hon. Member for Chelsea (Mr. Scott) said. As one who served on the Committee dealing with that Act, he will recall that the points that were fought over at such length were the very ones of which the Bill rids us.

The Bill does what the Labour Party undertook to do for local authority tenants. I rise particularly to emphasise that it does not go as far as necessary for private tenants. I think that by a slip of the tongue the hon. Member for Chelsea referred to me as representing the City of Westminster. In fact I represent only one-third of it. But I think that I represent the views of tenants in all three constituencies of the City of Westminster on this matter.

I complained on Second Reading that the Bill as it then stood would simply mean that private tenants in Westminster and elsewhere would be as badly off in three years with a Labour Government as they would have been if the Tory Government had stayed in office. All that was offered then was the three years of phasing—execution by instalments rather than quick guillotining. There have since been three additions to the Bill which help. I hope that the new clause which we debated tonight will have the effect that my right hon. Friend the Minister intends. Amendment No. 34 means that for one-third of tenants the increases they face will at least be delayed for a further year.

Most important are the reserve powers in the private sector. If they had not been introduced, those of us who wanted to make representations on behalf of tenants could have been correctly told by the Minister "I have no power to intervene." The door is now there. It may not be open. It may be only just ajar, but I and others will be knocking very hard on it to get my hon. Friend to use those reserve powers in proper cases in the coming months and year or two.

I have offered my hon. Friend many congratulations tonight. Will he please re-emphasise that the Bill does not attempt to grapple comprehensively with the private sector problem? There is a need for far more comprehensive legislation dealing with the private sector within a relatively short time. Such legislation comes under three headings: new criteria for determining rents in the private sector; a different composition of the rent assessment committees, which seem in the main to be landlord-biased; and a system of appeal or moderation, so that there is not the present inconsistency between one rent assessment committee area and another.

The Bill may not be much comfort to local authority tenants in my constituency, who are at the mercy of the City of Westminster to a large extent. I hope, however, that my hon. Friend will accept the thanks of the private tenants for the Bill, so far as it goes, and reassure them that he and the Government will undertake a comprehensive review of private rents legislation and introduce a far more comprehensive measure as soon as they can.

1.30 a.m.

Mr. Freeson

I assure the House that my comments will be brief. I do not intend to take up in detail the points made by the hon. Member for Chelsea (Mr. Scott) despite his grumbling and rather carping approach. I accept and understand that he has to make some effort at this late stage because until now the Bill's proposals have had a quiet response from the Opposition. One day when we have time we shall try to probe, out of interest, why that should have been so.

I must state again, whatever reservations there may be about certain of the reserve powers in the Bill, that the Bill does its prime job—namely, to restore to local authorities a large measure of freedom of action which was destroyed by the Housing Finance Act 1972. It provides a subsidy system which will be directed towards getting more houses started and built as well as more houses purchased and modernised. It will provide a subsidy system which at the same time will help to restrain the impact of high rises in costs on rent levels. Whatever increases have to be introduced in future will be restrained to a relatively modest level by what we propose in the Bill.

I do not propose to labour such points in detail. We have been over this ground many times in the past. No doubt there will be a further opportunity to go over it again when the Bill returns from another place. For the future there is, as has been indicated on previous occasions, a very fundamental housing finance review now to be put in hand. It will go well beyond the conventional practice of reviewing only local authority rents and subsidy policy. That has been the main burden of finance reviews in the past. It will be a comprehensive review which will include a wide range of aspects well beyond the realms of local authority building and of rents and subsidies. The same may be said, although it will not be given the same urgency, in response to the last point made by my hon. Friend the Member for Paddington (Mr. Latham). It will be the Government's intention to undertake a review of the Rent Acts. I have stated that intention in the past year during the course of the legislation that we have been handling and I state it again.

I must make it clear that our first priority will take a lot of the resources of the Department's personnel. We hope to see the completion of the housing finance review during the next 12 to 15 months. Even that will be a tight timetable. It will leave a lot of work still to be done on an on-going basis. On the basis of such a review we shall be able to come to conclusions on future policy developments across the board. We shall be dealing with some of the points that have been put by the hon. Member for Chelsea, with which I have

to a degree some sympathy, although not in the way he has put them and not with the objections that he has put forward on behalf of his party.

When we have completed that sort of work we shall at some time—I cannot give a date—embark upon a review of the Rent Acts. We shall pick up the sort of points that have been stated once more by my hon. Friend the Member for Paddington. I hope that the House will give this measure a Third Reading and that we shall be able to proceed to our beds.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 161, Noes 107.

Division No. 51.] AYES [1.33 a.m.
Allaun, Frank Garrett, W. E. (Wallsend) Millan, Bruce
Archer, Peter George, Bruce Miller, Dr M. S. (E Kilbride)
Armstrong, Ernest Golding, John Murray, Ronald King
Ashton, Joe Grant, George (Morpeth) Newens, Stanley
Bagier, Gordon A. T. Grant, John (Islington C) Noble, Mike
Barnett, Guy (Greenwich) Grocott, Bruce O'Malley, Rt Hon Brian
Bates, Alf Hamilton, James (Bothwell) Orme, Rt Hon Stanley
Bean, R. E. Hamling, William Ovenden, John
Bennett, Andrew (Stockport N) Harper Joseph Park, George
Bidwell, Sydney Harrison, Walter (Wakefield) Parry, Robert
Blenkinsop, Arthur Horam, John Pavitt, Laurie
Boardman, H. Howells, Geraint (Cardigan) Prescott, John
Booth, Albert Hoyle, Douglas (Nelson) Price, C. (Lewisham W)
Bray, Dr Jeremy Hughes, Rt Hon C. (Anglesey) Price, William (Rugby)
Brown, Hugh D. (Provan) Hughes, Mark (Durham) Radice, Giles
Buchan, Norman Hughes, Robert (Aberdeen N) Richardson, Miss Jo
Buchanan, Richard Hughes, Roy (Newport) Roberts, Albert (Normanton)
Callaghan, Jim (Middleton & P) Irving, Rt Hon S. (Dartford) Roberts, Gwilym (Cannock)
Campbell, Ian Janner, Greville Roderick, Caerwyn
Cant, R. B. Jay, Rt Hon Douglas Rodgers, George (Chorley)
Carmichael, Neil John, Brynmor Rooker, J. W.
Cartwright, John Johnson, James (Hull West) Roper, John
Cocks, Michael (Bristol S) Jones, Barry (East Flint) Rose, Paul B.
Coleman, Donald Jones, Dan (Burnley) Ross, Stephen (Isle of Wight)
Colquhoun, Mrs Maureen Judd, Frank Rowlands, Ted
Cook, Robin F. (Edin C) Kaufman, Gerald Shaw, Arnold (Ilford South)
Craigen, J. M. (Maryhill) Kinnock Neil Short, Rt Hon E. (Newcastle C)
Cryer, Bob Lamborn, Harry Sillars, James
Cunningham, Dr J. (Whiteh) Lamond, James Silverman, Julius
Dalyell, Tam Latham, Arthur (Paddington) Skinner, Dennis
Davidson, Arthur Lestor, Miss Joan (Eton & Slough) Small, William
Davies, Bryan (Enfield N) Litterick, Tom Smith, Cyril (Rochdale)
Dempsey, James Loyden, Eddie Smith, John (N Lanarkshire)
Doig, Peter Lyon, Alexander (York) Spearing, Nigel
Dormand, J. D. Lyons, Edward (Bradford W) Spriggs, Leslie
Douglas-Mann, Bruce Mabon, Dr J. Dickson Stallard, A. W.
Duffy, A. E. P. McCartney, Hugh Stewart, Rt Hn M. (Fulham)
Dunn, James A. McElhone, Frank Stoddart, David
Dunnett, Jack MacFarquhar, Roderick Stott, Roger
Eadie, Alex Maclennan, Robert Swain, Thomas
Edge, Geoff McMillan, Tom (Glasgow C) Taylor, Mrs Ann (Bolton W)
Ellis, John (Brigg & Scun) McNamara, Kevin Thomas, Jeffrey (Abertillery)
Ellis, Tom (Wrexham) Madden, Max Thomas, Hon (Bristol NW)
Ennals, David Magee, Bryan Thorne, Stan (Preston South)
Evans, John (Newton) Mahon, Simon Tierney, Sydney
Ewing, Harry (Stirling) Marks, Kenneth Tinn, James
Fernyhough, Rt Hon E. Marquand, David Tomlinson, John
Flannery, Martin Marshall, Dr Edmund (Goole) Urwin, T. W.
Fletcher, Ted (Darlington) Meacher, Michael Wainwright, Edwin (Dearne V)
Ford, Ben Mellish, Rt Hon Robert Walker, Terry (Kingswood)
Freeson, Reginald Mendelson, John Ward, Michael
Watkins, David Wilson, Alexander (Hamilton) TELLERS FOR THE AYES:
White, Frank R. (Bury) Wise, Mrs Audrey Mr. Thomas Cox and
White, James (Pollok) Woodall, Alec Miss Betty Boothroyd.
Williams, Rt Hon Shirley (Hertford) Woof, Robert
Atkins, Rt Hon H. (Spelthorne) Hunt, John Pym, Rt Hon Francis
Biffen, John Hurd, Douglas Rathbone, Tim
Biggs-Davison, John Hutchison, Michael Clark Rees-Davies, W. R.
Boyson, Dr Rhodes (Brent) Irvine, Bryant Godman (Rye) Renton, Rt Hon Sir D. (Hunts)
Braine, Sir Bernard James, David Ridley, Hon Nicholas
Brittan, Leon Jessel, Toby Rifkind, Malcolm
Brown, Sir Edward (Bath) Jopling, Michael Roberts, Wyn (Conway)
Budgen, Nick Kellett-Bowman, Mrs Elaine Scott, Nicholas
Bulmer, Esmond Kershaw, Anthony Shaw, Giles (Pudsey)
Carlisle, Mark King, Evelyn (South Dorset) Shelton, William (Streatham)
Chalker, Mrs Lynda King, Tom (Bridgwater) Shepherd, Colin
Clark, Alan (Plymouth, Sutton) Kitson, Sir Timothy Shersby, Michael
Cockcroft, John Lane, David Silvester, Fred
Cooke, Robert (Bristol W) Lawrence, Ivan Sims, Roger
Cope, John Lawson, Nigel Skeet, T. H. H.
Costain, A. P. Le Merchant, Spencer Spicer, Michael (S Worcester)
Douglas-Hamilton, Lord James Lester, Jim (Beeston) Sproat, Iain
du Cann, Rt Hon Edward Loveridge, John Stanbrook, Ivor
Durant, Tony Luce, Richard Steen, Anthony (Wavertree)
Eden, Rt Hon Sir John Macfarlane, Neil Stokes, John
Edwards, Nicholas (Pembroke) MacGregor, John Stradling Thomas, J.
Elliott, Sir William McNair-Wilson, M. (Newbury) Taylor, Teddy (Cathcart)
Eyre, Reginald Marshall, Michael (Arundel) Tebbit, Norman
Fairgrieve, Russell Maxwell-Hyslop, Robin Thatcher, Rt Hon Margaret
Fowler, Norman (Sutton C'f'd) Mayhew, Patrick Thomas, Rt Hon P. (Hendon S)
Fox, Marcus Miller, Hal (Bromsgrove) Townsend, Cyril D.
Gilmour, Sir John (East Fife) Mills, Peter Trotter, Neville
Goodhew, Victor Moate, Roger van Straubenzee, W. R.
Grant, Anthony (Harrow C) Monro, Hector Vaughan, Dr Gerard
Gray, Hamish Montgomery, Fergus Viggers, Peter
Grist, Ian Morris, Michael (Northampton S) Walder, David (Clitheroe)
Hall, Sir John Neave, Airey Weatherill, Bernard
Hall-Davis, A. G. F. Nelson, Anthony Wiggin, Jerry
Hannam, John Neubert, Michael
Hastings, Stephen Page, Rt Hon R. Graham (Crosby) TELLERS FOR THE NOES:
Hawkins, Paul Parkinson, Cecil Mr. Michael Roberts and
Hayhoe, Barney Pattie, Geoffrey Mr. William Benyon.

Question accordingly agreed to.

Bill read the Third time and passed.