HC Deb 23 January 1975 vol 884 cc1901-16

10.52 p.m.

Mr. Tony Durant (Reading, North)

I wish to discuss the effects of the Rent Act 1974 since it came into force about six months ago. I have said before that politicians generally do not have a good record on housing. Every time a Government have interfered in housing since the war their legislation has made the situation worse. Some of the legislation even goes back to the First World War and it still affects a considerable number of properties.

When the Minister introduced the Bill which subsequently became the 1974 Act he said that one of its purposes was to help relieve the situation of the homeless in the stress areas. I do not believe that has happened. In addition to the legislation I have described there has been a freeze on rents. A landlord who was interviewed on London Broadcasting this evening mentioned the case of two houses in the same street. The rent for one was £13 a week and for the other 59p. That is a ridiculous situation.

I am delighted that the Government are to examine the whole question of housing finances. However, tonight I wish to deal with rented accommodation and its control under the 1974 Act. I believe that that Act has given the rent officers an almost impossible task. They are having to deal with an enormous backlog of cases and inquiries. We were told in answer to a Question on 10th July 1974 that the cost before the Act was running to £3½ million, and the cost of the rent tribunals was £1½ million. Applications then were 19,000, and there is no doubt that there has been a vast increase since.

Another aspect is the tremendous delay. The delay between application and decision on 10th July was about three months, in London boroughs. I am sure that it is now worse, though I have no evidence. Perhaps the Minister will tell us.

I believe that the Act has dried up the supply of furnished accommodation. It has been in force for only six months. What are the results? Let us consider the categories of people who need furnished accommodation, beginning with students. When we debated the matter on 30th July I raised the question of student accommodation as it affected my constituency. I told the House that the students' magazine had said that there was great anxiety in the university about what would happen as a result of the Act. The Minister agreed that there were anxieties, but could see no problem. He said that he would keep an eye on the situation.

Today I spoke to the Vice-Chancellor of Reading University to discover what he felt about the Act, and he said "Thank heavens the intake last October was fairly small." That meant that the situation was not so serious, but the university expects a big intake next October and the Vice-Chancellor is worried about where they will be accommodated, because the supply of rented accommodation is drying up.

The rent officers, who are under pressure, are themselves putting on pressure to get early decisions. A professor at Reading University let his house to students on a very amicable arrangement at a nominal rent. One of the tenants behaved badly, upsetting the whole household, and the professor asked him to leave. An application was made to the rent tribunal, and the professor's house was investigated. He was put under duress and stress by the rent officer to make sure that all the tenants, his students, submitted their cases to the court. They did not want to. Most of them were quite happy where they were.

There was a happy outcome, because the rents were increased. But the incident created an unhappy atmosphere, and as a result the professor is considering whether to continue with that type of letting, which he had begun with the best will in the world towards his students.

The next category with which I want to deal is that of the young marrieds, who face a tremendous problem. Many of them do not have large incomes and cannot afford mortgages or high-rent unfurnished accommodation. They would therefore like to start their married life in, say, two rooms, as I did. I took a two-roomed flat in Notting Hill Gate. I doubt whether I should find such a flat today. The Act has done tremendous damage to the availability of that type of accommodation, which is required by most young people when they marry.

Another category is that of the single person. The single person who travels considerably wants furnished accommodation. The idea of digs is becoming unfashionable. People prefer to cater for themselves instead of having one room and being looked after by a landlady. I enjoyed that existence, but it does not seem fashionable. Most people who are mobile like furnished flats.

The opportunity to obtain furnished flats is much on the decline. In Committee on the Housing Rents and Subsidies Bill the Minister said that he wanted to see only two forms of housing, namely, publicly-owned and owner-occupied. He wanted to see the private landlord phased out as soon as possible. If that is his object he has set about putting it into practice extremely well. He has destroyed the desire to let out rented accommodation.

I wish to make a plea on behalf of private landlords. In the main they are not winklers and crooks but ordinary decent citizens, who probably have one or two houses to let out. They may have inherited them, or have put their savings into them. There may be many different reasons for their ownership. They are worthy people in our society, but they are now under vicious attack. That is a great pity.

When the Minister says that all he wants to see in the housing market are the publicly-owned and owner-occupied sectors, what will be the outcome? Between 20 per cent. and 25 per cent. of rented accommodation is still provided by the private sector. If that is to be abolished, I believe that the Minister is giving himself an enormous housing problem. I believe that the private sector should be allowed to continue.

As a result of recent legislation many small landlords no longer wish to let. They are being advised by the banks, for example, not to continue. They are advised to keep their property empty and try to sell it. They are told that the sooner they can sell it the better. Many of them have rented their houses at low rents and they have often ended up with bank overdrafts after trying to maintain them. The bank may have said "This is your only asset. If you want to clear your overdraft the best thing is to sell the property. Do not let it. If you let it you will not be able to get the tenant out."

The small landlords are fighting back. They have set up a new association. There was a report on the new association in yesterday's issue of The Times. At a meeting in London the secretary said: The small landlord has become a second-class citizen to the tenant. That is beginning to be the case. Small landlords no longer have the same freedom of action. They no longer feel that it is their property. The Acts that have been passed, the rent officers, and the investigations are making them into second-class citizens. I regret that very much. I believe that they are a valuable part of our society.

A number of letters have been passed to me from ordinary citizens who either want accommodation or rent accommodation, who are being hit badly by current legislation. I am on their side. I shall fight on their behalf as hard as possible. I urge the Minister to think again. He has a reputation for wearing nice, bright ties. I hope today that he will react to what I have said by putting forward some bright ideas to amend the Act and to help the small landlord.

I ask the Minister to consider the three categories of person who are worried about the Act—the students, the young marrieds and the single persons. What will happen to them on the housing market? In a Written Answer on 8th November the Minister said that he would give consideration to the position of students. I am pleased about that, but I urge him to consider the other categories that I have mentioned. Unless he faces the situation realistically more and more people will become homeless in the next few months. Every Member has to deal with homeless families. What advice do we have to give them? We have to tell them that the best thing to do is to ensure that they are thrown out on the street.

What a situation for young couples, with, perhaps, one child. I urge the Minister to re-think this and to relieve the pressure on rent officers, who are finding it increasingly difficult to do their job. In my constituency they are concentrating mainly, and regrettably, on the decent landlord who lets out rooms or small flatlets to students, and are not dealing with the multiple occupation problem. They realise that if they move in on that they will create a further problem for the local council. There is a tendency to go for the small landlord, and this is a great pity. I urge the Minister to re-think the workings of the Act and deal with its bad effects.

11.7 p.m.

Mr. Nicholas Scott (Chelsea)

It would be wrong to let this opportunity go by without congratulating my hon. Friend the Member for Reading. North (Mr. Durant) on raising some aspects of the operation of the Rent Act 1974. I hope that it will be possible in the not too distant future for us to have an investigation in more depth into this subject. The Government have been complaining that they have no evidence of the way in which the legislation is going. From a variety of sources evidence is beginning to build up as to the shortages which are being created and the distortions which are emerging as a result of an Act which was hurried through and which is turning out in practice to be anomalous and unfair.

I hope that the Minister will give us some idea of the Government's thinking. It would be intolerable if he were simply to repeat the expression of astonishment of the Minister for Housing and Construction and ask Conservative Members to do the Government's work for them. It was their legislation and they should now be monitoring the way in which it is working.

There are those who say that the way forward in housing is to abolish all controls, because that would somehow are create a new market in housing and would solve all our problems. I do not hold that view. I take the view that there was a case for extending control beyond the artificial divisions, certainly in terms of London, between furnished and unfurnished accommodation. In rushing legislation through in the summer of last year the Government—as Labour Governments so often do—allowed a rather unwise heart to rule their head. What has clearly emerged from the operation of the legislation is that sitting tenants have gained something from the Act at the expense of a great deal of heartbreak on the part of those seeking furnished accommodation in London and other big cities.

We have increasingly seen the stock of furnished accommodation being devoted to holiday accommodation and short lets. This has been a mistake. It looks as though the Government are still hell-bent on repeating the same sort of mistake in turning their attention to the question of tied housing. Here, again, for all sorts of reasons which arouse great emotion on the Labour side of the House, they have decided that tied housing is a bad thing and must be abolished. If they embark upon this road they will create disaster, just as they did in setting out this blanket control of furnished accommodation.

Their first mistake here is that they have again allowed their heart to rule their head. They have not thought through an initiative in the housing area and seen where the balance of advantage lies. I shall be corrected if I am wrong, but I believe that the Government have not provided any extra resources for the increased burden of work which will be placed on the rent officer service in extending control in this way. If extra provision has been made I hope the Minister will tell us about it.

I do not believe that, overall, in housing, the Government have any ideas where they are going. They repeat, time after time, phrases about the whole rented sector coming into what they are now pleased to call social ownership. They know perfectly well that the legislation they are passing, whether the Housing and Subsidies Bill or the Rent Act 1974, is turning the landlord out of this business, that councils cannot cope with the extra burden placed on them, and that they are in many ways unfitted to cope with it if this policy is carried through to its logical conclusion. Yet they are prepared to see housing in the rented sector decline.

By their policies they are creating new slums with which the community will eventually have to cope. My hon. Friend, in raising the question of this Act as well as that of the administrative burden, has done a great service. I hope that we shall be able to return to the matter in the not-too-distant future, but that tonight the Under-Secretary will be able to give some indication of Government plans to mitigate the extra burden which this hurried and thoughtless introduction has placed on the rent officer service.

11.11 p.m.

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

The House will be grateful to the hon. Member for Reading, North (Mr. Durant) for this opportunity to look, if only briefly, at the working of the Rent Act 1974, if only to give an opportunity to dispel some of the misapprehensions which have arisen over the working of the Act—misapprehensions which are embodied, as they have been tonight, in emotional language with little evidence behind it, as I shall be able to show in one respect in which the hon. Member for Reading, North raised it.

In the 10 months during which I have been a Minister I have sat through what have appeared to be countless housing debates, here in the Chamber and in Committee. I have yet to hear, on any occasion, an Opposition Member speak on behalf of tenants. The hon. Member for Reading North, was at his most typical, and repeated the kind of thing he said in Committee, namely, that he wanted to make a plea on behalf of landlords. Hon. Members opposite can never be accused of not making pleas on behalf of landlords.

Many landlords are seeking, perhaps in vain, to get a small return on a small property and the economic climate is highly unsatisfactory for them. At the same time, far too many landlords are still, in almost the last quarter of the 20th century, behaving in an almost legendary way—the way in which landlords behaved in the fiction of Charles Dickens and others. From my constituency, day by day, including today, I get letters from the constituents and at weekends I visit the homes of those who have been victimised in the most unscrupulous and appalling ways by absentee landlords who treat them badly and are not fitted to operate a tenancy of this kind.

I understand the reasons for the hon. Gentleman speaking as he does, but I cannot accept the spirit in which he and his party approach these subjects—landlords, landlords, all the way, and scarcely ever a word for tenants.

In addition, the Conservative Party operates far too much on the basis of conjecture and imagination rather than fact. If there was one phrase which occurred again and again during the speech of the hon. Member for Reading, North it was "I believe". Almost every extreme assertion of alleged fact was preceded by "I believe". The hon. Gentleman then went on to make statements which cannot be borne out. He spoke of "an impossible job for rent officers", "an almost impossible backlog", "the rent officer service being worked off its feet" and "tremendous delay". He is supported, not in his language but in his sentiments, by his hon. Friend the Member for Chelsea (Mr. Scott).

What is claimed by the hon. Member for Reading, North about the effect of our legislation on the rent officer service simply is not true. At the time of the passing of the Rent Act 1974 it was expected that some further strengthening of the service would be required, to deal principally with the further general decontrol work which would result from the Housing Finance Act 1972, and to ensure that the service could cope with the former furnished sector coming within its jurisdiction. It was estimated that a further 55 rent officers and 88 supporting staff would be recruited.

With the ending of general decontrol, these proposals have been dropped. The Conservative Party came to power with great claims about the way in which it would reduce the Civil Service, but the numbers employed in the Civil Service rose when the Conservatives were in power. In the rent officer service we do not intend to increase the numbers. We find that it is not necessary to do so. The present strength of the service is 550 rent officers and 900 supporting staff, and this complement is quite sufficient to deal with current work. Any further strengthening will be to meet short-term bulges in work, and will normally be met by temporary appointments.

In many areas existing backlogs have disappeared and rent officers are dealing with current work. Where there is spare capacity, it is wherever possible being used to help harder pressed neighbours. Two areas being helped in this way are Birmingham and Newcastle, which have the largest backlogs, but help is being given across county borders, and, indeed, across panel boundaries.

With the loss of decontrol work, in most areas, the former furnished cases are not being kept waiting. Six thousand two hundred former furnished applications have been received throughout the country, of which 2,000 have been dealt with, 1,400 have been withdrawn and 2,800 are in hand.

There is certainly no backlog in Berkshire. The 330 cases in hand are all current work; 91 furnished applications have been received, 14 withdrawn, 46 determined and 31 are in hand. There are no problems here.

At present we are at fullest strength in the service. I am convinced that the rent officer service is carrying out efficiently and compassionately the rôle assigned to it—to give the public a service it deserves and needs. I say to the hon. Gentleman—who is not given to rash charges and is moderate in his expressions, even if I cannot generally bring myself totally to agree with him—that I regret his language when he talked about "duress" and "stress" from a rent officer. That is a serious allegation. I have had the opportunity of meeting rent officers in conference, discussing their work with them in private and meeting them in other ways, and I have found that they are dedicated to what they rightly believe is a public service. Although it is possible to have subjective views about their behaviour, I think it was unfortunate for the hon. Gentleman to use the language he did about a rent officer who could certainly be identified.

Mr. Durant

I wish to make two points. First, for the greater part of my speech I spoke about tenants; and the minor part of my remarks dealt with landlords. I spent a considerable time on students, young marrieds, and the proportion of single people. Let us get the matter in proportion. Secondly, I did not wish to bring the case out into the open, but I will send the hon. Gentleman the details.

Mr. Kaufman

I am obliged to the hon. Gentleman. I shall ensure that anything he puts to us will be looked into.

Mr. Scott

Will the Minister say what is the average delay between approach and settlement?

Mr. Kaufman

Not without notice. I shall write to the hon. Gentleman and give him my best information.

The hon. Member for Chelsea chided us for not bringing forward evidence about the working of the Rent Act and rightly said that it was the Government's responsibility to accumulate such evidence. We shall take what measures we can to obtain evidence which we shall make available to the House. When allegations are made about the ill effects of the Rent Act, we say that they should not be based on nebulous statements but that facts should be brought forward to underpin the allegations. We are not saying that it is the responsibility of the Opposition or other bodies outside the House to provide us with evidence—evidence which it is our responsibility to collect, so far as we can—but if allegations are made about the disastrous effects of the Act—the effect on the rented market, on the homeless, on resident landlords who do not wish to let—it is only fair that those who make the allegations should buttress them with statistical information rather than intermittent anecdotal information. Everybody in the House can bring forward an anecdote, but the only information I have seen so far about the working of the Rent Act is a brief piece in New Society about cards in shop windows—a respectable piece of research but one from which no large conclusions could be drawn.

Mr. Scott

rose—

Mr. Kaufman

I hope the hon. Member for Chelsea is not going to refer to the Conservatives' bible "Putting Britain First" or Time Out which I think they cite these days.

Mr. Scott

I was going to ask the hon. Gentleman whether he had received any communication from the National Union of Students about the operation of the Rent Act 1974?

Mr. Kaufman

I shall come to the subject of students in a moment. The hon. Member for Reading, North was moderate on this topic, and, indeed, we had a moderate statement from the Vice-Chancellor of Reading. We are giving consideration to students following the undertaking we gave during the passage of the Rent Bill.

The hon. Member for Reading, North referred to young married couples. It is true that if they cannot get anywhere else to live they have to fall back on furnished accommodation, but there seems to be some delusion on the part of many Conservatives that most young people require that type of accommodation. It seems to be a phantasmagorical impression on the part of Conservatives—we used to get it at one time from the hon. Member for Hornsey (Mr. Rossi)—that the first thing a couple do when they get married is to look for a furnished flat. That is not so. Experience of my constituents who find themselves in such a position is that they do one of two things—they either try to buy a house, if they can get the deposit, or try to rent an unfurnished house, mainly through the local authority.

We have never denied that furnished accommodation is useful at the margin but it can never be more than at the margin. The main tenancy supply must be left to local authorities, for the very reason which the hon. Gentleman gave—that the private rented market has gradually declined, not because of legislation passed by this Government, but over a period, and inexorably. He was right to accuse his own party of having contributed to whatever problems there are in the private tenancy sector, because the most drastic loss of rented housing—about 300,000 a year—in recent years occurred between 1958 and 1964, when the Conservative Party was in power and during the period of greatest decontrol.

The graphs, as it were, of decontrol and the decline of rented accommodation do not march together. Whatever happens, whether a Government like ours bring in legislation to assist tenants, or a Conservative Government bring in legislation to assist landlords, the graph of rented accommodation declines, because it is no longer, and can never be again, a profitable field of investment. It cannot be, because landlords cannot secure, without rents being enormous, a return from tenants which will enable them to maintain their properties and at the same time secure a return on their investment. That is the reason why private rented sector is disappearing.

The hon. Member for Chelsea might have looked behind him when he was claiming, genuinely, that his party did not believe in decontrol and leaving tenants to fend for themselves. The hon. Member for Wolverhampton, South-West (Mr. Budgen), an admirable disciple of his right hon. Friend the Member for Down, South (Mr. Powell), shook his head in a severe manner when the hon. Member for Chelsea was saying that.

The hon. Member for Wolverhampton, South-West is right. The only way one will restore the private rented sector is by removing controls, allowing private landlords to name their own rents and removing protection from the tenants.

Mr. Nick Budgen (Wolverhampton, South-West)

indicated assent.

Mr. Kaufman

The hon. Member for Wolverhampton, South-West agrees. He is most straightforward in his views. One knows where he stands on all things, including this one.

The hon. Member for Reading, North referred to the student situation. We made clear during the passage of the Act that we would seek to set up a registration system for students and reduce the measure of control for students which exists in the Act. We asked the House to reverse the amendments put in by another place on the understanding that a registration system would be set up.

I regret that the Evening Standard, in a report which appeared a few days ago, implied that our proposal to set up a registration system and amend the Act in that respect only was something of a climb-down from the position we took during the passage of the Act. But my hon. Friend the Minister for Housing and Construction gave a commitment that we would do this, and it was only lack of time which prevented us from attempting to do it during the passage of the Act.

We are at work on it and are hopeful that we shall be able to introduce such a registration system in time for the new academic year. I cannot give an undertaking—Parliament will have to decide whether it passes the legislation—but it is our aim to bring it forward, if we can, in time for the new academic year, in order to allay precisely the kind of problems to which the Vice-Chancellor of Reading University referred when he was in conversation with the hon. Gentleman.

The hon. Member also claimed that landlords were withdrawing accommodation from the market. Here again, we have anecdotal rather than statistical information. I cannot say whether the hon. Gentleman is right or not. What I will say is that if landlords are withdrawing accommodation from the market, and if, in particular, resident landlords are withdrawing accommodation in their own houses, it is because they have been misled by the somewhat hysterical propaganda which has been got up by some hon. Members opposite and interests outside the House.

The right hon. Member for Penrith and the Border (Mr. Whitelaw), during the General Election, used a memorable combination of words about one of my right hon. Friends going about stirring up complacency. Nobody in this Government is going about stirring up complacency about the operation of the Rent Act, but some people are going about stirring up quite unnecessary fears among landlords, and particularly among would-be resident landlords, about what would happen to them if they let rooms in their houses.

Mr. Budgen

Going back to an earlier point about the whole position of landlords, the Minister rightly said that it was my view that rents must ultimately be allowed to rise to their market level. One of the other ways in which the landlord could be brought back into business would be by giving him some measure of tax relief. One of the difficulties the landlord has is that he is competing with the owner-occupier. The owner-occupier has his tax relief in respect of his mortgage interest payments, whereas the landlord has no tax relief. Even if rents were allowed to rise to the market level, the landlord would always be competing unfairly against the owner-occupier.

Mr. Kaufman

I am astonished and pained by the hon. Gentleman's intervention. That he of all people should suggest that we should interfere with the free working of the market by a subsidy to landlords, which is what he is proposing, is very hurtful to me. I thought that there were three or four Tories left in the House of Commons—of whom he was one. I shall now have to reduce that figure.

Mr. Scott

There is widespread misunderstanding among resident landlords. Part of it is a fear that the Labour Government may again extend the provisions of control and whip them in at some point in the future. As the Minister knows, I was not in the House in the summer when the Rent Bill became law. However, it was my understanding that at that time the Government undertook to consider the publication of a simple guide to the Act. That would help to remove these misunderstandings. I have seen no sign of such a guide yet.

Mr. Kaufman

That is a fair point. I know that the hon. Gentleman was not in the House at the time of the passage of the Act. If he had been, we would have had a much more agreeable time in Standing Committee and perhaps we would not have had to go through those ludicrous all-night sittings. The hon. Gentleman is a reasonable man. I will not say the same for all the opinions he proffers.

I agree that it is very necessary for us to make the position clear, and I think that it is right that we should look again at ways of making the position clear. I accept that entirely from the hon. Gentleman.

The hon. Gentleman said that this Government do not know where they are going in housing policy. We know exactly where we are going. We are attempting two things. First, we are attempting to expand the market for owner-occupation. We inherited the most appallingly disastrous situation for the private developers and builders, who came to tell us of the straits into which they had been plunged by the policies of the Tory Party. The market for private building had almost disappeared when we came into office.

Through the £500 million bridging loan, which was bitterly attacked by Tory Members when we brought it forward, we have now been able to bring about a much healthier mortgage position. There is now a great deal of mortgage money about. We are hopeful that before long we shall be able to bring forward further proposals which will give incentives to people to buy houses. But I must not stray into a later debate which we shall have on the Second Reading of the Bill and during which, with the leave of the House, I shall be able to reply to further remarks from the hon. Member for Wolverhampton, South-West.

One prong of our policy is the expansion of owner-occupation, but the other prong is the expansion of rented accommodation through what my hon. Friend the Minister for Housing and Construction vividly calls the social landlord—local authorities and the voluntary housing movement, whose efforts we have stimulated through the Housing Act 1974, an improved version of the Housing and Planning Bill introduced by the Conservative Party in its dying days in government.

I am happy to tell hon. Members opposite that while we have no cause for complacency and only a little room for optimism, at the moment, as regards owner-occupation—we must do a great deal more over the years to expand that sector—the number of starts in council house building is markedly up, and the number of council houses which will be started next year and the year after will increase in a way which will assist. This is the only way in which we can begin to make inroads on the problem of helping people who wish to rent houses.

Meanwhile, we have the Rent Act, which has been attacked by the Opposition for perfectly respectable ideological reasons but which we defend for equally respectable ideological reasons. We believe that it was right to introduce it. We have provided protection for about 80 per cent. of the 764,000 furnished tenants in the country as a whole and for about 75 per cent. of the 279,000 furnished tenants in London.

We built into the Bill protection for resident landlords, and I say without equivocation to the hon. Member for Chelsea that that protection will not be eroded. That protection stands. We built in that protection because we believe that the only sector for private landlordism which should survive in the long run is that of the resident landlord who lets rooms, whether furnished or unfurnished, in his own house. That is a useful contribution to making housing accommodation available, and we wish to provide the necessary protection for the resident landlord to continue to make it available.

The hon. Member for Reading, North and I sat through many long, weary and rather grubby hours in Committee while the Rent Bill was being dealt with. It was subject to attack at the time, and it has been subject to attack since. If I am associated with no other piece of legislation during the period that I am a Member I shall be proud to have been associated with that Bill, and I am satisfied that though it may from time to time have to be looked at again—as any legislation may have to be looked at—it is a worthy piece of legislation which has brought about a good deal of happiness to people who were under threat.

Mr. Durant

May I put the record straight? I did not serve on the Committee on that Bill.

Mr. Kaufman

I am sorry. That is a good illustration of the stress to which I was subjected by the hon. Member for Hornsey (Mr. Rossi). The hon. Member for Reading, North served on some Bill with me. It might as well have been that one for all the good he did in amending it.