HC Deb 14 January 1975 vol 884 cc329-47

'(1) The Counter-Inflation Orders are revoked.

(2) In this section "the Counter-Inflation Orders" means—

  1. (a) the Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974; and
  2. (b) the Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974.

(3) Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the Counter-Inflation Orders as it applies to an enactment which is repealed by another Act.

(4) Notwithstanding the revocation of the Counter-Inflation Orders by this section. Article 5 of the order mentioned in subsection (2)(a) above (recovery of excess rent) shall continue to have effect, for the purposes of both orders, so as to enable a tenant to recover rent at any time during which he would have been able to recover it if the orders had not been revoked.

(5) Notwithstanding the revocation of the orders, Article 8 of the order mentioned in subsection (2)(a) above (jurisdiction of the county court) shall continue to have effect, for the purposes of both orders, in respect of any proceedings commenced before the expiry of a period of two years from the date of the revocation.

(6) Subsections (4) and (5) above shall continue to have effect during the periods specified in them, whether or not Part II of the Counter-Inflation Act 1973 (under which the Counter-Inflation Orders were made) is in effect for the whole of those periods'.—[Mr. Kaufman.]

Brought up, and read the First time.

The Under-Secretary of State for the Environment (Mr. Gerald Kaufman)

I beg to move. That the Clause be read a Second time.

Mr. Deputy Speaker (Mr. George Thomas)

With the new clause it will be for the convenience of the House to discuss Government amendments Nos. 3, 4, 5, 6, 7, 8 and 9 and the following Opposition amendments:

No. 3, in page 2, line 9, leave out Clause 2.

No. 9, in Clause 2, page 2, line 41, at end insert— '( ) Nothing in this section shall empower the Secretary of State to make an Order restricting the rents of a particular named local authority or local authorities'.

Mr. Kaufman

New Clause 1 revokes an order which imposed a rent freeze from 8th March last year and the order which extended it after 31st December. It is designed to prevent the confusion which would arise if there were an overlap between the new provisions and the rent freeze. The Government amendments and new clause would extend the Government's reserve order-making power to limit rents to private sector rents as well as to rents in the public sector.

The power to make orders to restrict rents in the private sector under the Counter-Inflation Act 1973 will come to an end when Part II of that Act ceases to have effect in March 1976. The Government accept the arguments that as we have an order-making power for public sector rents it would be inconsistent not to have an order-making power for private sector rents, too.

Dwellings in a property subject to a business tenancy under Part II of the Landlord and Tenant Act 1954 are excluded from the definition of "dwelling." Tenancies of mixed premises of this kind are dealt with as business tenancies, and this exclusion ensures that they remain on that side of the business-residential dividing line. Tenancies of mixed premises which enjoy the protection of Part II of the 1954 Act have always been outside rent regulation. The rent-fixing machinery of the Rent Act 1968 is not suited to business premises. The order-making power continues for dwellings the power available under Section 11 of the 1973 Act.

Mr. Nicholas Scott (Chelsea)

The main question to which the House is addressing itself in all this is whether the powers which are contained in Clause 2, and now in new Clause 1, are appropriate to housing legislation or should more properly be in counter-inflation legislation. The Opposition hold firmly to the view which is apparently held by the Secretary of State who said on Second Reading, the general level of rents cannot be divorced from counter-inflationary policy."—[OFFICIAL REPORT, 18th November 1974; Vol. 881, c. 906.] We believe that it would be better to keep these powers to control rents, whether in the private or public sector, in legislation specifically for the purpose of countering inflation. The present counter-inflation measures continue until 1976 anyway and whatever succeeds them will be a matter for later discussion, but we do not accept that these powers should be part of a permanent system of housing legislation.

In addition to that first complaint we are also concerned that there might be a temptation for the Government to impose orders under Clause 2 on specific local authorities by one means or another. We discussed this matter in Committee but we were not satisfied with the outcome of those discussions. We were told that the whole concept of the Bill was that it restored autonomy to local authorities in rent-fixing matters. We should like an assurance that there is no question of the powers in Clause 2 being imposed on a single named local authority or a group of named local authorities, and that the powers in the new clause cannot be imposed on single named or groups of named landlords. We should like an assurance that the powers can be used only in an overall manner as part of a counter-inflationary package.

Will the Minister make it perfectly clear so that we may take it absolutely for granted that when the Bill receives the Royal Assent the rent freeze on residential properties will end and the phasing provisions can begin to operate? If that is the case it will clear up a lot of uncertainty, and once that fact is known outside it will settle a considerable number of worries.

Mr. Kaufman

That applies to private rents. The freeze on public rents ends on 31st March.

Mr. Scott

The fact that the business rent freeze was ended before the freeze on residential rents ended has already caused difficulties for some landlords whose lease from the head leasholder may be a business tenancy, whereas their rent onwards comes under the residential rent provisions. They have been caught by their main rent being put up with the ending of the business rent freeze. There is no way in which they can recoup that, as long as the residential rent freeze goes on. At least under the phasing provisions they will be able to recoup that extra burden that they are having to carry on their own.

We object in principle to these powers being in a housing measure. We are worried that they could be applied to individual local authorities or to individual landlords. We should like the Minister to deal with the second detailed point when he winds up the debate.

10.15 p.m.

Mr. Arthur Latham (Paddington)

I find it a little difficult to deal with so many aspects in one group of amendments.

I want to comment on three matters. First, with regard to the new clause, it has occurred to me that if, as is desirable from many points of view, the Bill becomes an Act before 31st March, the effect will be that for private tenants the freeze will end sooner than had been expected. There are two arguments why that should not happen. One is that there is a case for the period of the freeze on private rents being in accordance with the period of the freeze applied to local authority tenants. A common date for the phasing and ending of the freeze seems to be more equitable.

Secondly, as tenants in the private sector have been led to expect, since the announcement preceding the publication of the Bill, that their rent will be frozen until 31st March, they will have a natural feeling of disappointment if the Act should become operative sooner than 31st March and the new clause has the effect of unfreezing their rents sooner than they had reason to believe.

It is too late to do anything about that in this Chamber. I welcome the new clause and the general intentions behind it, but it might be desirable to insert 31st March for the revocation of the counter-inflation orders when the Bill reaches another place. If the Bill does not become law until after 31st March, the freeze will extend until it is operative. There is a strong case for ensuring that the freeze will not end earlier if the Act receives the Royal Assent before 31st March.

Next I want to comment on the Opposition's proposal to make it impossible to name an authority in an order made under reserve powers. I hope that my hon. Friend the Minister will confirm the assurance he gave in Committee that the reserve powers, while not directed at a single authority, could in effect bring into line an odd couple of authorities in, say, the London area which were proposing grossly excessive rent increases, completely out of line with the general pattern of the rest of the London boroughs. If under the Bill as it stands, an order could have the effect of being applicable to only one or two authorities out of a number to which it would theoretically apply, I do not see what the Opposition would gain with their amendment.

The only difference between the position as it would then be and the definition already given in Committee by my hon. Friends would be that the local authority concerned would lose the opprobrium of having its name cited in the order. The effect would be precisely the same—namely, that a general order could be made which might affect an individual or a couple of authorities whether or not the one or two authorities be named in the order. It is important that my hon. Friend underline too the assurance he gave in Committee about the use of the reserve powers.

I turn to the extension of reserve powers to private sector rents. The proposal is one of three welcome responses from the Government to representations made in Committee by Labour members of the Committee. It might be worth placing on record the description that my hon. Friend the Under-Secretary of State gave to our activity in Committee—namely, that we were not providing a substitute constructive opposition for Conservative Members but giving constructive support to the Bill. The extension of reserve powers to private sector rents is one of the three responses to the constructive support that we gave in Committee.

Having welcomed the extension of reserve powers and the fact that the Government agree that there is no reason to discriminate between the two sectors in the application of reserve powers, I suggest that the next step will be to persuade the Government to make use of the reserve powers which the House is being asked to write into the Bill.

I now ask for some specific assurances. New Clause 2 will deal with a problem which is symbolised by St. Mary's Mansions within my constituency. If the new clause goes into the Bill and has the effect that many of us hope it will have, the problem will have been resolved. But if the problem of tenants facing rent increases of £9 a week, as faces the tenants of St. Mary's Mansions, is not met by the new clause that we shall shortly be asked to consider, I want an assurance that my hon. Friend will agree that the reserve powers now being written into the Bill will enable or empower him to make an order affecting the tenants in the position of those in St. Mary's Mansions.

Secondly, having, I hope, received the assurance that the reserve powers will be adequate to meet the situation that I have outlined, I ask my hon. Friend for a political assurance that it will in general principle be the Government's intention to use the powers in such a way. I am trying to tread warily and not to put myself out of order by anticipating a new clause. I think that you understand the difficulty, Mr. Deputy Speaker. The use of reserve powers will be necessary only if the subsequent new clause is not written into the Bill or if it does not operate successfully. That is why I am seeking—I think with some justification—an assurance regarding the use of the reserve powers.

It seems that in tabling the new clause that we shall soon be discussing the Government have accepted that there may be instances where the proposed rent increases in the private sector are grossly excessive. I know that my hon. Friend feels—I want to comment on this matter when we come to the new clause—that the factor which has caused grossly excessive rent increases relates to neighbourhood amenities. By introducing such a new clause he is accepting in principle that there is something wrong with grossly excessive increases.

In Committee it was established that the probability was that about 15 per cent. of private tenants who might be affected in that way. If the Government accept that there are grossly excessive rent increases which should not occur and if their other method of trying to deal with such increases fails, it seems that the Government would be justified, on the basis of the opinion that is expressed by implication, in using reserve powers to limit grossly excessive increases.

I seek an assurance that the Government will have the powers and the will and determination to use their powers in such a way if it proves necessary to do so.

Mr. Nick Budgen (Wolverhampton, South-West)

I am grateful to you, Mr. Deputy Speaker, for allowing me to take up the point made by the hon. Member for Paddington (Mr. Latham) concerning the possibility that these powers might be used against an individual authority. With great courage and clarity, in Committee the Under-Secretary of State said: We specifically do not wish to take power to deal with an individual authority."—[Official Report, Standing Committee A, 3rd December 1974; c. 133.] In the light of his important position, we naturally believed that the Under-Secretary of State would adhere to that expression of opinion. But later, when he was pressed by his hon. Friends, it became clear that that was not his intention after all. He spoke movingly of enormous increases of £1 a week as a result of the Bill, adding: What I was saying in reply to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) was that if a pattern were to emerge of large cities imposing enormous rent increases—my hon. Friend said £1 a week was a possibility being mooted in his city—we should clearly have to consider action under Clause 2."—[Official Report, Standing Committee A, 5th December 1974; c. 196.] It is clear that an increase on average of £1 a week is regarded as enormous, reprehensible and wholly wicked for council rents, which would justify taking the most Draconian powers limiting local democracy.

The Under-Secretary of State must make clear whether he is saying that these powers can be used against an individual authority or can only be used generally. In many other areas of the country, an increase of £1 a week on the rents is not regarded as Draconian or reprehensible. In the private sector, the building societies work on the rough guide that an ordinary family will spend about one-third of its income on housing. I suppose that, on the basis of regarding a rise of £1 a week on average in council house rents as enormous, the Minister would be surprised if he heard that at any stage wages were rising by more than £3 a week, but in November they were rising at the rate of 3.4 per cent. in one month alone. Wage increases of 30 per cent. are quite normal.

It is reprehensible to describe as "enormous" an increase of £1 per week on average for council houses. Such a rise is a small way in which a section of the community—those who need it are supported by allowances if they cannot meet anything approaching a fair rent—can contribute towards paying off the enormous subsidies now being given to council tenants. In that respect, the House should know the quite extraordinary attitude that the Under-Secretary of State evinced towards public expenditure generally when he was talking about subsidies. I hope that his remarks about them receive widespread publicity, but in the national interest I hope that they will not be translated into Arabic, because if the Arabs were to know about the Government's attitude towards public spending they would cease to lend any more money to us.

As reported at column 180 the Minister said: It is clear that my right hon. Friend the Chancellor, for obvious reasons, would like every Department to spend as little as possible. That is the purpose of Chancellors of the Exchequer, certainly in the eyes of the hon. Member for Wolverhampton, South-West (Mr. Budgen). We are honing to confound my right hon. Friend. I have gone round the country addressing special conferences of local authorities urging them to build far more houses and —and this is the punch line, the great peroration of the responsible Minister— put my right hon. Friend the Chancellor in trouble."—[Official Report, Standing Committee A, 5th Dec., 1974; c.180.1 That is the attitude of a Government which has a borrowing requirement of £6.3 billion and which is crucially dependent on the good will of the Arabs. I hope that in the light of the enormous sums of money now being spent on indiscriminate subsidy of council housing the Government will not limit the local democratic right of those councils which take a different view on public expenditure and believe that the time has come for some sanity in our nation's finances.

Mr. Anthony Nelson (Chichester)

I support a number of the comments of my hon. Friends particularly those made by my hon. Friend the Member for Chelsea (Mr. Scott), dealing with the appropriateness of new Clause 1. The arguments against implanting such powers into Clause 2 have been well argued in Committee. In view of the intention expressed in Amendment No. 4 to extend these reserve powers to the limitation of private sector rent increases it is doubly important that the House should discuss this question.

It must be noted that such an innovative new clause has been introduced at this stage. It is an innovation which will have a widespread and important impact and which we should have had the opportunity of discussing fully in Committee. I would like to know whether the reserve powers can be used under Clause 2 to apply solely to the private sector while leaving unrestrained the level of rent increases in the public sector. I do not wish to imply that there might be a political motive for restraint in one sector as opposed to another but the opportunity is undoubtedly there. It is right that the House should question the implanting of this provision.

Reserve powers are, or should be, powers which the Government hope they will not have to invoke. Such powers should be of limited duration or at least subject to review. Their inclusion in an Act of Parliament makes them subject neither to duration nor review. It is the immortality of the power to control public and private sector rent increases which I find particularly objectionable. In Committee the Under-Secretary said: a power of this kind should be of a longer-term nature ".—[Official Report, Standing Committee A, 5th December 1974: c. 168] I do not think it should be.

Unless the Government are prepared to accept that the current high rate of inflation will be of a long-term nature they should leave open the possibility at a later stage of enabling local authorities and the private sector to set their own rents without Government intervention. As the main intention is to accord to local authorities the freedom and responsibility of setting their own rents it is fundamentally incompatible to introduce a clause which restricts such actions by local authorities. We have frequently been told that such powers will be used only as a long-stop. Once they become available we know how frequently these orders under reserve powers can be made.

The House and Committee have still to receive a satisfactory explanation of the circumstances under which orders under this clause may be made. We have been told that, following the expiry of the Counter-Inflation Act, the Government do not envisage further statutory wage provisions. If so, to what counter-inflationary criteria does the clause relate?

On 18th November last year the Secretary of State said: rents are a key price … in the context of the social contract."—[Official Report, 18th November 1974; Vol. 881, c. 910] But what provisions of that social contract relate to the point at which the Government will take up their powers under this clause? It is a degree of certainty that local authorities must have in forward planning and meeting their commitments and which the clause does nothing to provide.

In Committee I said that this clause was particularly relevant to my constituency, because Chichester has a substantial private housing sector. We have a large number of houses owned by people just prior to retirement and a large number of resort homes which are let on half-yearly rentals, for example. These people are having a very hard time indeed.

Last week one gentleman wrote to me saying that he was receiving rents on three properties, which he was obliged to maintain as a life tenant, of between 51p and 81p a week. Although these properties undoubtedly lack certain amenities, there can be no encouragement or incentive for him to maintain them in a satisfactory manner.

Furthermore, we have a council housing list of over 3,000 and at the same time large private sector residential accommodation left vacant. The network of Rent Acts and rent restrictions being immortalised in this clause is providing a good deal of vacancy in my constituency and a large increase in the number of homeless families and those awaiting coucil houses.

The more intervention we have with this system, the greater the anomalies which are created in the market. I urge the House sincerely to consider those specific arguments before importing into the Bill an important and immortal clause which, under the present counter-inflation orders, would at least be subject to review and limitation.

Mr. Stephen Ross (Isle of Wight)

I did not intend to intervene until Third Reading, but as the Liverpool City Council has been mentioned in Committee and on Report now by the hon. Member for Wolverhampton, South-West (Mr. Budgen) I should like to refer to some points which have been made to me. I do not want to throw fast balls at the Minister.

The Chief Executive of the Liverpool City Council has sent me a note referring to Liverpool's housing revenue account, to which this clause and Clause 3 relate, which states: From October 1973 rents have been collected at an average level of £3.80 per week per dwelling, but, pending a decision by the Rent Scrutiny Board upon fair rents, the difference between the rents collected and the Council's proposal for provisional fair rents has been held in reserve. This being so, the lower level of rents has been credited to the revenue account, and the maximum subsidies have been claimed and received. The Rent Scrutiny Board has now ceased to operate without making a decision upon the Council's proposal. Under the provisions of the Housing Rents and Subsidies Bill the Council could well be required —this may apply elsewhere— to bring into credit the amount of rents held in reserve, reducing the rising cost subsidy claimed for the single year 1974/75 by £2.4 million. As a result the basic element of grant under the Bill for 1975/76 and for each subsequent year would be reduced by the same amount. If such a shortfall of expected subsidy were to be met from rents it would call for an increase of 65p per week per dwelling. I am glad that that is below the £1 a week quoted elsewhere.

They are asking for an assurance that the amount already received by way of rising cost subsidies, of about £10 million, can be relied on as the final determination for this and subsequent years. If that is not possible, it would be helpful to have an assurance that, if the rents reserved have to be credited to the housing revenue account, they will give rise to a once-and-for-all adjustment and not to a recurring reduction in grant.

I find some of this fairly difficult to assimilate, and I am prepared to pass on the letter to the Minister if he would rather reply in writing. After the comments that we have heard, however, this pinpoints some of the difficulties of local authorities, particularly Liverpool, which was singled out in Committee and has been mentioned tonight, although not in a derogatory way, by my hon. Friend the Member for Wolverhampton, South-West.

There is a discrepancy over lodger charges. It appears from a reply of the Minister to my hon. Friend the Member for Devizes (Mr. Morrison) that this will now be something for the local authorities to deal with themselves. Many people have been hit hard by the freeze on rents, which, for reasons that I do not understand, seems to have been applied to lodger charges. Will any directions or advice be given to local authorities? I have in my hand a reply from the Under-Secretary of State. If he could clarify this matter I should be grateful.

Mr. Michael Morris (Northampton, South)

I do not want to press the Minister much further on these reserve powers, but I should like to quote the interpretation of the matter that he gave in Committee: The power does not apply to individual councils.' He went on: If the hon. Gentleman will look at his bruised neighbour on his left, the hon. Member for Melton (Mr. Latham), he will see a man whose amendment to insert the word 'individual' was rejected by the Committee.…" [Official Report, Standing Committee A; 5th December, 1974, c. 171.] That of course means that it was rejected by the Government. So we should be grateful for a clear statement of exactly how these reserve powers will be applied. Either the hon. Member for Paddington (Mr. Latham) will be disappointed or we shall have to realise that we have been misled.

Amendment No. 3 comes ill from the Labour Party, who for some time have been the champions of local democracy. One is suspicious when one sees how much is made of reserve powers and when an additional element is brought in even on Report. Would it not be more truthful for the Government to say frankly that they wish to keep a pretty tight control over local authority rents, and that, as soon as they think that local authorities are stepping out of line, they will clamp down? If that is not the situation, I hope that these reserve powers will be clarified.

I raised in Committee the question of compensation in the event of the reserve powers being implemented. I have talked with a number of local authorities since Committee. In terms of the broad brush techniques which the Minister is happy to use in Committee, surely broad brush compensation would be better than having to rely on the Secretary of State's generosity in the rate support grant. If this cannot be considered tonight, I hope that it can be considered in the other place. Local authorities will have to force considerable hardships on their ratepayers if these reserve powers are implemented.

10.45 p.m.

Mr. Kaufman

Turning first to the points made by my hon. Friend the Member for Paddington (Mr. Latham), I congratulate him once again on the fight he has waged in this House on behalf of his constituents living in St. Mary's Mansions.

There are a number of matters which require clarification. My hon. Friend is concerned in case the end of the freeze on the rents of private tenants does not occur simultaneously with the end of the rent freeze for local authority tenants. Because of that, he seeks that the freeze for both kinds of tenants should end on 31st March. My hon. Friend said that tenants have been led to expect that the freeze on private rents would continue until 31st March. The private sector order provides that the freeze shall end on 31st March 1975 or the date immediately preceding that on which the principal order is repealed by, or revoked under, any enactment, whichever is the earlier. Therefore, I have never in pronouncements to my constituents told them that the private rent freeze would end on 31st March. I told them it was likely to end some time in March. Even if we were to end the private rents freeze on 31st March this would not mean that local authority rents and private rents would then start rising simultaneously, because it is now open to local authorities to decide when their rents shall rise. It is extremely unlikely that any particular single local authority rents will rise on 1st April.

Local authorities will make their decisions and the increases will be scattered over a period, according to the discretion of the local authority and what it wants to do. Therefore, not only will there be no simultaneity on this but there can be no simultaneity. What my hon. Friend seeks—and I recognise his motives in seeking it—is not in fact possible.

I should like to repeat and underline the assurances I gave in Committee about the way in which the power will be used. I cannot anticipate the use of reserve powers since the use of a reserve power cannot be anticipated. On the other hand, the fact that we are asking the House to agree to amendments extending that reserve power to the private sector means that we envisage the possibility that it will be used. One cannot anticipate the circumstances.

I assure my hon. Friend that what I said in Committee stands—that is about the emergence of a pattern being a signal for the possible use of the reserve power. Naturally I am willing for that to go on record in the House just as it did in Committee.

The hon. Member for Wolverhampton, South-West (Mr. Budgen) invented for me a most agreeable fantasy in which my words were to be reprinted in Arabic. I am happy and delighted for any words of mine to be reprinted in that extremely attractive language. On the other hand, I think that the hon. Member, although utterly consistent in what he says, would not wish his words to be printed in any Conservative Party election manifesto. When he described the kinds of reserve powers that we are proposing in this Bill as "most Draconian powers" he is, of course, as he often does, attacking his own Government which, when in office, brought in these powers which we readily used in the Counter-Inflation Act 1973.

The hon. Member for Chichester (Mr. Nelson) spoke extremely sternly about the need for local authorities to be able to settle their own rents rather than be confused by this wicked Labour Government. This Bill, which I trust will be passed tonight, will restore to the local authorities the right to settle their own rents which was taken away by his own Government in the Housing Finance Act 1972, which we shall be largely repealing tonight. That being so, I trust that the hon. Member's zeal for local authorities to settle their own rents will lead him into the Division Lobby with us, should there be a Division on Third Reading.

The hon. Member for the Isle of Wight (Mr. Ross)—

Mr. Arthur Latham

I hope that my hon. Friend will return to my points about the use of reserve powers and the scope of those powers as applied to the private sector.

Mr. Kaufman

I shall be coming back to the question of reserve powers. I was reserving as the bonne bouche of my speech my reply to the hon. Member for Chelsea (Mr. Scott).

Returning to my remarks about the hon. Member for Isle of Wight, whom I congratulate on coming so gallantly to the aid of that forlorn remnant who for the time being are running the City of Liverpool, I hope that he will pass to me the letter from the Chief Executive, and I shall be glad to give him a detailed reply as soon as possible. It is a complex matter, but I shall seek to assist him.

Mr. Stephen Ross

I must quote the hon. Gentleman's words in Committee when he said, referring to Liverpool, We should have to consider very carefully the use of Clause 2 if a local authority of the size of Liverpool were to put rents up by £1 a week, taking into account the generous subsidies we are making available. There is no reason why average rents should rise anywhere near £1 a week under the subsidy arrangements under this Bill."—[Official Report, Standing Committee A, 5th December 1974. c. 194.] That was why I intervened as I did. The letter to which I referred shows the problem of a city the size of Liverpool, which I believe will continue to be represented by an excellent party, but I am sure that there are other authorities in the same position.

I shall pass the letter to the hon. Gentleman, and I am grateful for his undertaking to reply as soon as possible.

Mr. Kaufman

I am obliged to the hon. Gentleman, though I must say that there can be no responsible authority which will find it necessary, with our subsidy arrangements, including the special element, to increase its rents by an average of £1 a week or anything near it. That will be embodied in my reply to the hon. Gentleman when I take account of what is in the letter from the Chief Executive.

As for lodger charges, I recognise that it is puzzling to hon. Members that local authorities can now make these decisions for themselves. It will be for local authorities to decide. The Government will no longer decide every scintilla of local government rent policy, and a happy outturn that is.

The hon. Member for Northampton, North (Mr. Morris) very much deplored what he called "the pretty tight control" of local authority rents. He was referring to the reserve power in Clause 2. But this description is far more aptly relevant to the Housing Finance Act, which laid down so rigidly every detail of the way in which local authorities should increase their rents.

As for the compensation point made by the hon. Member for Northampton, South (Mr. Morris), I cannot go further than what was said in Committee. If I gave the hon. Gentleman the assurance that he seeks, there would be a temptation for local authorities to impose very large rent increases, knowing that under the commitment which the hon. Gentleman seeks they would qualify for very large assistance from the Exchequer to compensate them for rent increases which they did not really intend and did not need to impose.

Mr. Michael Morris

How could that happen, when the Bill lays down that the housing revenue account has to be in balance, give or take a little? That safeguard is there, so that the hon. Gentleman's supposition does not stand up.

Mr. Kaufman

The hon. Gentleman is far too experienced in local authority finance to think that I shall fall for that one.

I turn now to the speech of the hon. Member for Chelsea, with whom I shall couple my hon. Friend the Member for Paddington in what might be a happy coupling, considering their previous associations.

The hon. Member for Chelsea should not be so appalled about the existence of these powers. They have been in a Housing Act before. It was a Labour Government's Housing Act. It was none the worse for that. We are merely going back to where we were before—namely, inserting these powers into where we believe they ought to be, that is, in a Bill which deals with housing and rents rather than the Counter-Inflation Act.

I would tell the hon. Gentleman—I say the same to my hon. Friend the Member for Paddington—that these are long-stop powers. In both the public and the private sector, they are long-stop powers.

Amendment No. 9 is unnecessary because the Bill as it stands already achieves what the Opposition seek. This is because the order-making power, Clause 11(5), may apply to any specified description of authorities or dwellings only. But the Bill goes no further as regards orders, in contrast to the determination-making power in Clause 11(6), which gives the Secretary of State the additional power to make determinations applying to individual authorities. The amendment is therefore unnecessary.

I assure the hon. Gentleman that—even if I repeat what I said to him and to my hon. Friends in Committee—this is a long-stop power. We hope that it will not be necessary to use it. If local authorities all show good sense in the way that they approach the fixing of their rents, it will not be necessary to use it. But at the same time, we have brought this in as a reserve power in order to deal with the kind of situation which I described in Committee, and that is the emergence of a pattern, a majority or minority pattern of the kind which we discussed in Committee. I stand absolutely by what I said to the Opposition in Committee—namely, that this is not a power designed to deal with individual named authorities, nor can it even if we wished so to use it. I say to my hon. Friend the Member for Paddington, on the other hand, that we have this power ready for use should a pattern of one kind or another—a majority or a minority pattern, as one can so describe them—emerge.

As for private rents, I recognise my hon. Friend's concern about the St. Mary's Mansions position. I cannot—he would not expect it of me—give him an assurance that we shall use this power if after the New Clause 2 to be moved has been tested, the St. Mary's Mansions situation is not to his satisfaction or to the satisfaction of his constituents. But I repeat that we are not asking the House to insert this power into the Bill idly. We are asking for it to be inserted in the Bill for use should the occasion require.

I hope that my hon. Friend will not seek to draw me any further, just as I hope the Opposition will not do so as I have dealt with the specific Amendment No. 9.

Mr. Arthur Latham

I shall not press my hon. Friend about the point on which he has asked me not to press. I do not expect to get very far with the question of the hypothetical situation in which the powers would be used. But I think that my hon. Friend is, and should be, able to answer the first of my two questions about the reserve powers in the private sector, including St. Mary's Mansions, and to say whether the powers are such that they could be used to deal with that situation if what many of us hope will be the effect of New Clause 2 proves to be disappointing.

I accept that these are long-stop powers. What I am asking, in effect, is whether they can be regarded as backstop powers. The Minister undertook to check that this was so, and if it is so, I want to get it on record tonight.

Mr. Kaufman

I assure my hon. Friend that there is technically no reason why we should not do what he asks us to do. It is open to us in the use of these powers, in both the public and the private sector, to deal with categories of dwellings. We need not deal with the whole range of private sector dwellings. We can take out a category of one kind or another.

I hope that that will help my hon. Friend, although I know that he would like me to give him far more specific assurances.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Mr. Scott

On a point of order, Mr. Deputy Speaker. We were given an indication that it would be possible to have a vote on Amendment No. 3.

Mr. Deputy Speaker (Sir Myer Galpern)

That is so. We shall have a vote.

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