§ 3.51 p.m.
§ Mr. Tim Renton (Mid-Sussex)I beg to move,
That leave be given to bring in a Bill to amend the Rent Act 1977 in order to increase the provision of private rented accommodation especially for the newly-married, the homeless and the single-parent family.Landlords and tenants alike have always regarded the 1974 Rent Act, now consolidated in the 1977 Act, as an Act of such labyrinthine complexity that, by comparison, the maze at Hampton Court seems to have been built in a straight line. Moreover, they have found it, above all, a singularly perverse Act—perverse because, although its intention was to create security of tenure for the bulk of tenants in the private rented sector, it was clear from the outset that the Act would have a contrary effect. It would remove much private rented accommodation from the market and that, in consequence, would put the private tenant in a worse position than he was before; he would have nowhere to go. There is no point in having security of tenure if, in practice, one has no roof over one's head—nothing to tenant.All the available statistics—and the Secretary of State has so far been loth to produce statistics for 1977—show that that is indeed what has happened. In 1976 the number of households accepted by local authorities as homeless was 763 33,680, a truly appalling figure. Private landlords were withdrawing from the market at a rate officially put as 150,000 units a year and the number of vacant dwellings in England and Wales was 775,000, compared with 640,000 in 1971.
Labour Members develop a Pavlovian reaction at any mention of the private rented sector. It is only necessary for those words to be mentioned and, at the first drop of the conductor's baton by the hon. Member for Paddington (Mr. Latham), they start to chant Rachman, Freshwater, Stern in a cacophonous chorus. But those who spent last night demanding the appointment of a Minister for London should think of the hundreds in their own constituencies who are in desperate need for short-term accommodation. They should think of the perversities of the consequences that have flowed from the fall-off in private rented accommodation. Houses prices have been driven up and those who wish to rent cannot find accommodation and therefore have to enter the home-ownership market before they would otherwise do so.
It is harder for Labour-controlled local authorities and housing associations to buy empty houses for conversion into units because the prices are higher than they otherwise would be. Mobility of labour has decreased since, if one has a house, be it council or private, one stays put because one cannot be certain of finding private rented accommodation in another part of the country while one seeks a new job there. Yet it is evident that at a time of high unemployment it must be in the interests of all parties to encourage mobility of labour so that people may move from areas where there are no jobs to search for jobs in other parts of the country.
Finally, it is equally clear that if rented accommodation is available in London the landlord is willing to let it to a foreigner who he knows will be in the country for only a few months, or in a job lasting only a year or two, and is loth to let it to a Britisher who has obtained a job and has come to London for the first time, because the landlord is frightened of creating security of tenure.
These consequences were all foreseeable at the time when the Rent Act was passed. If there is a legislative involve- 764 ment in market forces, it is inevitable that the market will react.
There is nothing unique in Labour legislation having a contrary effect to that intended. By removing Government help from the direct-grant schools, the Secretary of State for Education and Science caused two-thirds of those schools to go private, thus increasing fee-paying schools by a greater number at one stroke than at any time since the Reformation. Similarly, in his campaign against fee-paying beds within the National Health Service hospitals, the Secretary of State for Social Services has strengthened the growth of the private medical sector and has led to many more beds being made available through, for example, the Nuffield Nursing Homes Trust.
In order to help the private tenant who has suffered so much from Socialist dogma, I propose in my Bill some specific changes in the Rent Act. These are as follows. The non-resident landlord will always be able to give any individual or family one fixed-term tenancy of up to two years, at a market rent, without creating security of tenure. The resident landlord will be able to give any number of successive fixed-term tenancies to the same tenant, again without security of tenure passing to the tenant. Thirdly, where accommodation is let by a resident landlord in his own house, all new tenancies will automatically be exempt from all the constraints of the Rent Act unless both landlord and tenant agree in writing that the provisions of that Act should apply.
These changes are simple enough. They will be of immeasurable benefit to
young married couples, single working people, students, and those resident in an area only temporarily"—I quote those words from page 74 of the Government's Green Paper, "Housing Policy"—since they will greatly increase the supply of accommodation from the private sector.I realise that it would not be easy for my Bill to pass through all its remaining stages before the House rises. It will however, be far more popular in the country than the Dividends Bill which passed all its stages in one day last week—far more popular and far more useful. I hope therefore that it will get its First 765 Reading now and that the Government—aware at the eleventh hour of the follies of their Rent Act—will help it through all its remaining stages tomorrow. If the Rent Act is thus amended, "To let" signs will appear in every street overnight and the very number of those signs will ensure that rents stay within reasonable bounds.
§ 3.58 p.m.
§ Mr. Bruce Douglas-Mann (Mitcham and Morden)I can assure the House that I have no Pavlovian reaction to any mention of the Rent Act. But the hon. Member for Mid-Sussex (Mr. Renton), who was aware that I was going to oppose his Bill but would give me no indication of its content, has left me in some difficulty. I should have liked to deal with his specific points in more detail, but to the extent that I could hear his speech, they are still not quite clear to me.
Although the title sounds superficially admirable, it was obvious to me before hand that the objectives could not be attained by amending the Rent Act; and now that I have heard the hon. Gentleman's proposals, it is evident that only one of the proposals could have even a marginally beneficial effect, and that the other two would be extremely damaging. They might indeed produce "To let" signs all over central London—the tenants at present occupying the premises having been evicted. That would be the outcome of the Act.
I accept that there has been a decline in the number of units of accommodation offered to let. The cause of this decline is embodied in the structure of our housing finance. No amendment of the Rent Act would have any effect on it whatsoever. I draw to the hon. Member's attention the fact that the proportion of housing accommodation privately let has been declining at a virtually constant rate since 1914, that the only period when the pattern was significantly different was between 1957 and 1964, when the decline was sharpest, and that the evidence from the 1976 household survey is that the decline has been continuing at almost exactly the same rate since 1974, neither faster nor slower.
However, the cause of the decline is that mortgage interest is tax deductible and that rent is not. Therefore, any 766 given property is worth nearly 50 per cent, more if it is sold than if it is let. If a tenant is prepared to spend £1,000 a year out of his taxed income, the landlord gets £1,000 before tax and no more. But if a purchaser is spending £1,000 out of his taxed income on interest, the vendor, or previous owner of the house gets £1,500 a year, or its capital equivalent. That is the basic cause of the decline. No change in the Rent Act will make the slightest difference to that.
The actual effect of the Rent Act 1974 has been that families and low-income tenants have been able to keep their homes and if the hon. Member wants "To let" signs it can only be at the expense of such people. What would be achieved by what the hon. Member proposes is that one would have those families being evicted to make room for high-income transients, for overseas visitors, for students who are prepared to share six to a flat. Those people are obviously able to compete very much more effectively than a family which needs to live and work in a particular area.
In the hon. Member's own constituency, the University of Sussex is having difficulty in letting its university lodgings because the students prefer to live in flats. Good luck to them. My son is a student and he does the same. But I do not believe that we should make legislative changes which would make it easier for students to compete even more effectively with families who need to live and work on ordinary wages in the area. That is what the hon. Member is proposing.
There are defects in the Rent Act. Nobody disputes that. There are defects in the Rent Act so far as landlords are concerned. There are slow and unsatisfactory procedures for evicting bad tenants, and I would like to see those improved. My right hon. Friend the Minister for Housing and Construction shares my view on that matter and the Government have already announced that in the next Session they will be taking steps in the light of the Rent Act to review to improve the Rent Act to deal with those defects.
I agree with the hon. Member on one point—that the second fixed-term letting by the resident landlord needs to be dealt with.
767 But more important than those points, we need to change capital gains tax so that a resident landlord can let part of his house without fear that he will lose the capital gains tax exemption. We also need tax relief for improvements by private landlords. But these are fiscal arrangements, or arrangements to be dealt with through amendments to court procedures. Except for the second fixed-term letting, which is a very minor point, they are not to be dealt with by amendments to the Rent Act.
When we do amend the Rent Act, there are a great many defects that need to be dealt with so far as tenants are concerned, to prevent the abuses, the evasions of the Act, and the extortionate measures which are taken by many landlords. When the hon. Member talks about letting without security he must know that there are going to be absolutely no means by which any letting without security can possibly by at any form of controlled rent because a tenant will not dare to challenge the rent.
If I heard the hon. Member correctly—and he was slightly overwhelmed by his hon. Friends, who did not appear to
§ be that much interested in his speech, which made it difficult for the House to hear—he was advocating that rents should be totally uncontrolled. In other words, he would be producing a situation in which the ordinary working-class family, the single parent, the people to whom he refers in the Short Title of his Bill, would have not the slightest hope of obtaining rented accommodation. Rented accommodation would be available for the rich transient and the overseas visitor. If the hon. Member will look in the paper he will see what rented accommodation is available at £40 a week and upwards. It is the homes of those who can only afford ordinary rents that he would "release" for letting in our central city areas.
§ I invite the House to reject what would at best be a totally irrelevant, and at worst a disastrous Bill.
§ Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at the Commencement of Public Business:—
§ The House divided: Ayes 150, Noes 111.
769| Division No. 323] | AYES | [4.05 p.m. |
| Adley, Robert | Fry, Peter | Macmillan, Rt Hon M. (Farnham) |
| Amery, Rt Hon Julian | Gardiner, George (Reigate) | McNair-Wilson, M. (Newbury) |
| Atkins, Rt Hon H. (Spelthorne) | Gilmour, Rt Hon Sir Ian (Chesham) | McNair-Wilson, P. (New Forest) |
| Atkinson, David (B'mouth, East) | Godber, Rt Hon Joseph | Marshall, Michael (Arundel) |
| Banks, Robert | Goodhew, Victor | Marten, Neil |
| Beith, A. J. | Goodlad, Alastair | Mates, Michael |
| Bell, Ronald | Gow, Ian (Eastbourne) | Mather, Carol |
| Bendall, Vivian | Grant, Anthony (Harrow C) | Maudling, Rt Hon Reginald |
| Ber[...], Hon Anthony | Gray, Hamish | Maxwell-Hyslop, Robin |
| Biggs-Davison, John | Grist, Ian | Mayhew, Patrick |
| Blaker, Peter | Hamilton, Michael (Salisbury) | Meyer, Sir Anthony |
| Body, Richard | Harrison, Col Sir Harwood (Eye) | Miller, Hal (Bromsgrove) |
| Boscawen, Hon Robert | Hastings, Stephen | Moate, Roger |
| Bottomley, Peter | Havers, Rt Hon Sir Michael | Molyneaux, James |
| Boyson, Dr Rhodes (Brent) | Heseltine, Michael | Monro, Hector |
| Braine, Sir Bernard | Higgins, Terence L. | Montgomery, Fergus |
| Brittan, Leon | Holland, Philip | More, Jasper (Ludlow) |
| Brocklebank-Fowler, C. | Hooson, Emlyn | Morgan-Giles, Rear-Admiral |
| Brotherton, Michael | Howe, Rt Hon Sir Geoffrey | Morrison, Charles (Devizes) |
| Buck, Antony | Howell, David (Guildford) | Nelson, Anthony |
| Budgen, Nick | Hunt, David (Wirral) | Neubert, Michael |
| Carlisle, Mark | Hunt, John (Ravensbourne) | Newton, Tony |
| Channon, Paul | Hurd, Douglas | Onslow, Cranley |
| Clark, William (Croydon S) | Irving, Charles (Cheltenham) | Page, John (Harrow West) |
| Cooke, Robert (Bristol W) | Jenkin, Rt Hon P. (Wanst'd&W'df'd) | Page, Rt Hon R. Graham (Crosby) |
| Cormack, Patrick | Johnston, Russell (Inverness) | Paisley, Rev Ian |
| Davies, Rt Hon J. (Knutsford) | Kellett-Bowman, Mrs Elaine | Pardoe, John |
| Dean, Paul (N Somerset) | Kilfedder, James | Pattie, Geoffrey |
| Dodsworth, Geoffrey | King, Tom (Bridgwater) | Penhaligon, David |
| du Cann, Rt Hon Edward | Knight, Mrs Jill | Percival, Ian |
| Durant, Tony | Lamont, Norman | Prentice, Rt Hon Reg |
| Eden, Rt Hon Sir John | Langford-Holt, Sir John | Price, David (Eastleigh) |
| Edwards, Nicholas (Pembroke) | Latham, Michael (Melton) | Raison, Timothy |
| Fairbairn, Nicholas | Lester, Jim (Beeston) | Rathbone, Tim |
| Fookes, Miss Janet | Lloyd, Ian | Rees, Peter (Dover & Deal) |
| Forman, Nigel | Luce, Richard | Rees-Davies, W. R. |
| Fraser, Rt Hon H. (Stafford & St) | McCrindle, Robert | Renton, Rt Hon Sir D. (Hunts) |
| Freud, Clement | Macfarlane, Neil | Renton, Tim (Mid-Sussex) |
| Rhodes James, R. | Skeet, T. H. H. | Viggers, Peter |
| Rifkind, Malcolm | Smith, Dudley (Warwick) | Wainwright, Richard (Colne V) |
| Rippon, Rt Hon Geoffrey | Speed, Keith | Walker, Rt Hon P. (Worcester) |
| Roberts, Michael (Cardiff NW) | Spicer, Jim (W Dorset) | Walker-Smith, Rt Hon Sir Derek |
| Roberts, Wyn (Conway) | Spicer, Michael (S Worcester) | Wall, Patrick |
| Rost, Peter (SE Derbyshire) | Stanbrook, Ivor | Weatherill, Bernard |
| Sainsbury, Tim | Stanley, John | Whitney, Raymond |
| Scott-Hopkins, James | Steel, Rt Hon David | Winterton, Nicholas |
| Shaw, Michael (Scarborough) | Stradling Thomas, J. | Young, Sir G. (Ealing, Acton) |
| Shelton, William (Streatham) | Taylor, R. (Croydon NW) | |
| Shepherd, Colin | Tebbit, Norman | TELLERS FOR THE AYES: |
| Silvester, Fred | Thatcher, Rt Hon Margaret | Mr, Ivan Lawrence and |
| Sims, Roger | Townsend, Cyril D. | Mr. Allen McKay. |
| Sinclair, Sir George | ||
| NOES | ||
| Allaun, Frank | Hardy, Peter | Oakes, Gordon |
| Anderson, Donald | Harrison, Rt Hon Walter | Orbach, Maurice |
| Archer, Rt Hon Peter | Hattersley, Rt Hon Roy | Orme, Rt Hon Stanley |
| Bates, Alt | Hayman, Mrs Helene | Owen, Rt Hon Dr David |
| Bidwell, Sydney | Healey, Rt Hon Denis | Parker, John |
| Blenkinsop, Arthur | Heffer, Eric S. | Perry, Ernest |
| Booth, Rt Hon Albert | Hooky, Frank | Phipps, Dr Colin |
| Bottomley, Rt Hon Arthur | Hughes, Robert (Aberdeen N) | Prescott, John |
| Butler, Mrs Joyce (Wood Green) | Jackson, Colin (Brighouse) | Price, C. (Lewisham W) |
| Callaghan, Rt Hon J. (Cardiff SE) | Jager, Mrs Lena | Rees, Rt Hon Merlyn (Leeds S) |
| Callaghan, Jim (Middleton & P) | John, Brynmor | Richardson, Miss Jo |
| Carmichael, Neil | Johnson, James (Hull West) | Robinson, Geoffrey |
| Carter-Jones, Lewis | Jones, Dan (Burnley) | Rodgers, George (Chorley) |
| Cocks, Rt Hon Michael (Bristol S) | Judd, Frank | Rodgers, Rt Hon William (Stockton) |
| Cohen, Stanley | Kaufman, Rt Hon Gerald | Rooker, J. W. |
| Coleman, Donald | Lamborn, Harry | Roper, John |
| Concannon, Rt Hon John | Latham, Arthur (Paddington) | Rowlands, Ted |
| Corbett, Robin | Lee, John | Sandelson, Neville |
| Crowther, Stan (Rotherham) | Lestor, Miss Joan (Eton & Slough) | Sever, John |
| Cryer, Bob | Litterick, Tom | Shaw, Arnold (Ilford South) |
| Dalyell, Tam | Loyden, Eddie | Sheldon, Rt Hon Robert |
| Davidson, Arthur | Luard, Evan | Shore, Rt Hon Peter |
| Dean, Joseph (Leeds West) | Lyon, Alexander (York) | Silverman, Julius |
| Dormand, J. D. | McCartney, Hugh | Spearing, Nigel |
| Douglas-Mann, Bruce | McElhone, Frank | Stewart, Rt Hon M. (Fulham) |
| Dunwoody, Mrs Gwyneth | MacFarquhar, Roderick | Stoddart, David |
| Eadie, Alex | McKay, Allen (Penistone) | Taylor, Mrs Ann (Bolton W) |
| Edwards, Robert (Wolv SE) | MacKenzie, Rt Hon Gregor | Tinn, James |
| English, Michael | Maclennan, Robert | Torney, Tom |
| Evans, loan (Aberdare) | Magee, Bryan | Varley, Rt Hon Eric G. |
| Ewing, Harry (Stirling) | Mallalieu, J. P. W. | Wainwright, Edwin (Deanne V) |
| Flannery, Martin | Marshall, Jim (Leicester S) | Walker, Terry (Kingswood) |
| Foot, Rt Hon Michael | Millan, Rt Hon Bruce | Whitehead, Phillip |
| Forrester, John | Mitchell, R. C. (Soton, Itchen) | Williams, Sir Thomas (Warrington) |
| Freeson, Rt Hon Reginald | Molloy, William | |
| Garrett, W. E. (Wallsend) | Morton, George | TELLERS FOR THE NOES: |
| George, Bruce | Mulley, Rt Hon Frederick | Mr. Robin F. Cook and |
| Hamilton, James (Bothwell) | Newens, Stanley | Mr. John Tilley. |
| Hamilton, W. W. (Central Fife) | Noble, Mike |
§ Question accordingly agreed to.
§ Bill ordered to be brought in by Mr. Tim Renton, Mr. Tim Sainsbury, Mr. Ian Gow, Mr. Andrew MacKay, Mr. Neil Marten, Mr. Tim Rathbone and Mr. Mark Carlisle.
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- PRIVATE RENTED ACCOMMODATION 56 words