HC Deb 14 July 1978 vol 953 cc2026-38

Motion made, and Question proposed, That this House do now adjourn.—(Mr Thomas Cox.]

4.14 p.m.

Sir Brandon Rhys Williams (Kensington)


Several Hon. Members


Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

I must point out to hon. Members that the points of order that they intend to raise will be taken out of the time which has been given to the hon. Member for Kensington (Sir B. Rhys Williams) for the Adjournment.

Mr. Norman Buchan (Renfrewshire, West)

On a point of order, Mr. Deputy Speaker. I said earlier that I would raise a point of order and you accepted that it would be in order to do so. I hope that it will not be necessary to take up time on my point of order or to take time from anyone else.

We have seen a most peculiar situation developing in the House. I do not speak about the merits of the Post Office Workers (Industrial Action) Bill. We all recognise the merits of the Bill that was blocked—

Mr. Deputy Speaker

Order. If the hon. Gentleman has a point of order that is a matter for the Chair, will he indicate what it is as briefly as possible?

Mr. Buchan

I am trying to say what it is not, Mr. Deputy Speaker. I am not arguing on the merits of the Bill, because they are manifest. I am seeking guidance from you, Mr. Deputy Speaker, on what has happened. I am, therefore, required to explain the background.

The Bill with which I am concerned was passed in the House by a majority of 20 to 1. It went into Committee and went through all the processes of the Committee. That is because we were informed that the amendments would be withdrawn to let the Bill go through Committee so that amendments might be tabled on the Floor of the House. In good faith we proceeded to the Floor of the House today, only to discover that no amendments had been tabled. On the contrary, a blocking motion had been tabled. It seems to abuse the House when a blockage is used to prevent free discussion and the passing of a measure wanted by about 200 hon. Members.

Mr. Deputy Speaker

What happened in Committee is nothing to do with the Chair. In any event, the hon. Member for Renfrewshire, West (Mr. Buchan) was raising a point of order after 4 o'clock.

Mr. Michael English (Nottingham, West)

On a point of order, Mr. Deputy Speaker. It is extremely important. Surely any point of order may be raised at any time. The rule states that opposed business may not be taken after 4 o'clock. It does not state that points of order may not be raised after 4 o'clock.

Mr. Deputy Speaker

We were going through the list of Bills, and objections, if there were any, were being taken. That is all that was happening.

Mr. Hugh Jenkins (Putney)

On a point of order, Mr. Deputy Speaker. I was introducing a Bill to the House from another place. I wish only to make the point that an error has been made. The Bill was accepted by the Conservative Party in the House. The Opposition Deputy Chief Whip was in error, and I hope that he will take the opportunity to put the error right.

Mr. Laurie Pavitt (Brent, South)

On a point of order, Mr. Deputy Speaker. I know that the procedure is not a matter for the Chair. Clearly the slaughter of the innocent must be raised through other channels and brought to the notice of the Procedure Committee. I wish to raise a separate point. In my view the hon. Member for Woolwich, West (Mr. Bottomley) was guilty of a terminological inexactitude in a statement that he made before the House. My ears are not so good as they might be and, therefore, I am not pressing the charge. However, I believe that the hon. Gentleman misled the House. I ask you, Mr. Deputy Speaker, to investigate the matter to ascertain whether he said that there was no intention of blocking the Bill but merely a wish to improve it, after which he succeeded in blocking the Bill. If that is so, I should be grateful to have the opportunity of seeing you on Monday, Mr. Deputy Speaker, to learn whether I am correct.

Mr. Deputy Speaker

The hon. Gentleman will have the opportunity of doing that precisely on Monday.

Sir B. Rhys Williams

I wish to draw the attention of the House, especially that of the Secretary of State and Ministers in the Department of the Environment, to an urgent social problem that affects people living in mansion blocks. Naturally it is primarily a matter of interest to a certain number of constituencies in inner London and some other constituencies outside the centre of London where there are large numbers of such blocks, but it is also a matter of special concern to hon. Members of all parties who are concerned about the rights and problems of those who have decided to live in flats rather than in individual houses.

The problem was brought to my attention with great urgency by a group in my constituency—and others outside—who proved that something urgently needed to be done about it. I accordingly sought the leave of the House under the Ten Minutes Rule to introduce a Bill on 22nd February. I am glad to say that I was permitted to do so and that the Bill received distinguished all-party support. The Bill was not opposed.

Shortly afterwards, I was given encouragement by the Minister for Housing and Construction for my project. He said that he thought it might be useful if I took advice from the Department. Indeed, I did. I should like to pay tribute to the help that officials in the Department gave me, because it undoubtedly improved the Bill.

The Bill was put down for Second Reading on a day in May. Because I knew that it was in line with the Government's policy and, indeed, with the policy of the parties on the Opposition side, I thought that it would receive a Second Reading on the nod. I was appalled when I heard that no one in the House had opposed the Bill, except the Government Front Bench, acting on the instructions of the Minister for Housing and Construction.

The Minister's conduct over the Bill has been most singular. He agreed to meet me on 24th May to discuss the matter. However, without giving any explanation that I could comprehend, he refused my suggestion that he might meet representatives of tenants associations.

Late on the evening of 23rd May I received a letter from the Minister telling me that he was not prepared to see me the following morning. Knowing that he was in the House, because we were both waiting for a Division that might not take place for an hour or so, I knocked on his door and asked whether he could spare a few minutes to explain what had happened to change the Department's attitude to my Bill. He gave me no explanation. He insisted that he was ahead of me in devising legislation of this kind, and then turned me out of his office.

We know, however, from an interview that the Minister gave on Tuesday 16th May to Mr. Roger Todd in the Daily Mirror that the Government's attitude has not changed. I believe they still intend to do something on the lines of my Bill. We read in the newspaper that the Minister said: We want to help tenants by giving them the right to compulsory purchase when they hear their homes are to be sold over their heads. We are sorting out the legal difficulties now. He is quoted later in the article as saying: I hope that new legislation will put an end to tenants becoming the victims of speculation by landlords'. One way the tenants could become owners would be by forming themselves into a housing association and buying their blocks as co-operatives. That is precisely the object that is enshrined in my Bill, as I made perfectly clear in the speech that I made on 22nd February. I feel that I and all those who supported the Bill in the House, and, indeed, the people who live in mansion blocks, are entitled to an explanation from the Department regarding its intentions. The Minister has not seen fit to take part in this short debate. Therefore, I hope that the Under-Secretary of State has been empowered to commit the Department to legislation on the lines indicated in my Bill at the earliest possible date.

Since the unhappy clash that I had with the Minister in May, an interesting new development has caught the attention of Londoners—namely, the campaign by people living in Regency Lodge and in Northways to obtain powers to secure their future in their blocks by asking the Camden Council to intervene. This interesting development presents the Government with something of a challenge, because they will have to decide whether to endorse the use of compulory powers for this object.

I do not want to enter into further a matter which is not a constituency interest of my own. I draw attention to it because it shows the intense concern felt by people living in mansion blocks about their future when the policy of the tenants begins to differ from that of the owners or head lessors.

The problem is particularly acute in London. Rents and service charges are rising more rapidly than the incomes of the people living in these blocks and, as far as I am able to glean from the evidence, much more rapidly than the general rate of inflation of prices in the economy as a whole. There is an intense sense of injustice and a fear that the people living in the blocks, sooner or later, will be obliged to move out. That process is being rapidly accelerated by what appears to be a rush of foreign money coming into London for the acquisition of mansion blocks as a speculative venture for the maximisation of profit.

In general, I do not disapprove of people working for profit, but one has to examine the side-effects. In this case the side-effects are damaging to the social fabric of London. Settled communities are being driven out rapidly and the people who are replacing them are those who have only a short-stay interest in London and do not intend to settle here and set down roots. But those people are able to pay whatever rent is asked, because they can draw on company or foreign funds. For them the rents are acceptable, although they are higher than the old fair rents and completely out of range for the native population. Rapid change is taking place in London, which the Department is allowing to continue month by month without making it clear that ultimately it intends to intervene.

If a person has a house which he finds is becoming too expensive he has something which he can sell. He can move out of London or into a smaller place, because he has an asset which enables him to plan for the future to some extent. But if a person is living in a flat with only security of tenure and is then forced to leave, what has he got to provide for his future elsewhere, except perhaps his furniture? That is the problem that is causing such intense concern. I hope that the Minister recognises the need for something to be done at once.

When service charges are used to force betterment of a mansion block on unwilling tenants there is an immediate crisis and the relationship deteriorates between the tenants and the owners or the owners' agents. There is evidence that owners are using the opportunity to raise service charges and to force the tenants to pay to improve the quality of their blocks, so that when the tenants are eventually forced out, the asset has been improved by the very people who can no longer afford to remain in the property.

When rents rise rapidly many tenants are forced out. That creates vacancies in the blocks which provide the owner with the opportunity to change the character of the block by stealth, by introducing a new and discordant element, usually from overseas. The ways of life and habits of the new tenants often jar on the old tenants and they are increasingly inclined to move out.

Parliament has endorsed the principle of enfranchisement for leaseholders in housing. We stopped short at enfranchisement for the occupants of flats, partly because of the technicalities of the problem which cannot be approached in the same way as we approach the enfranchisement of people living in houses.

We are not held back by political controversy but simply by the Department's inertia and the lack of will to proceed. The Government have adopted the principle of co-ownership and they have endorsed that in their Green Paper. The Opposition parties are devoted to the concept of a property owning democracy and the virtues of home ownership. We want people to be able to own the bricks and mortar in which they live. We want people to have the self-respect which goes with security of tenure. This is not a matter of political dispute.

I draw attention to the signatures to the Bill. One is that of the hon. Member for Salford, East (Mr. Allaun) who frequently intervenes on housing matters and speaks on housing matters for the Labour Party on the national executive. He has given me the warmest support for my Bill.

Another signature is that of the hon. Member for the Isle of Wight (Mr. Ross), the Liberal Party spokesman on housing. I chose to ask only one of my hon. Friends to sponsor the Bill because I wished to preserve an all-party balance. Naturally, I asked my hon. Friend the Member for Chelsea (Mr. Scott), who represents the same borough as I and who is therefore fully as informed as I am about the problems of inner London.

The object of the Bill is to make it possible for tenants to form a co-ownership scheme under specified rules which would be workable and which would empower them to negotiate with the head lessor or with their freeholder with a view to acquiring the proprietorship of their block on terms which were fair to both sides. The Bill does not offer the tenants confiscatory powers—

Mr. Deputy Speaker

Order. The hon. Member will be aware that in an Adjournment debate he is not empowered to ask for legislation. He can concentrate on the administrative action which the Minister might take, which would be of assistance to him in dealing with the problem in his constituency.

Sir B. Rhys Williams

I accept your ruling, Mr. Deputy Speaker.

In suggesting to the Department what I feel it ought to do I should like it to look at the solution adopted in my Bill, because it appears to be floundering without knowing what it should do.

I implore the Under-Secretary to make a statement here and now to confirm that it is the Government's intention to act, that they intend to introduce legislation or to find some other method of proceeding. I do not mind what they do, but I want them to do something as quickly as possible. With the prospects of a General Election arising, perhaps before fresh major legislation can be introduced, it may be difficult for the Minister to give a commitment beyond saying that the Government are determined to act. That would be useful, and it is all I ask.

I want to reach the people who advise the owners of Euro-dollar funds and other assets which are likely to be invested in these blocks in central London. I want them to realise that the glitter has gone out of the opportunities for quick profit at the expense of people living in flats in central London because Parliament is united and determined to act. That is what we seek. We want an assurance that legislation is planned—or some other administrative measure which would have the same effect—and that the Government are determined to act quickly.

It was a decided set-back for all the people who support my campaign and for parliamentary colleagues who think as I do that the Department chose to have my Bill blocked officially from the Government Front Bench. However, in this short debate I have provided the Department with the opportunity to undo the damage that it did, and I hope that the Minister will not fail to take it.

4.34 p.m.

Mr. Geoffrey Finsberg (Hampstead)

I am grateful to my hon. Friend for allowing me a moment of his time to comment specifically on the tenure of mansion flats. Regency Lodge and North-ways are in my constituency. The phenomenon that we are seeing today is no longer the Freshwater-Stern syndrome. Today we see companies coming in which are registered in the Channel Islands with Luxembourg directors and are answerable to no one. I certainly support the attempts of the tenants there to find a way of buying their own flats.

I want to ask the Minister to read the Committee and Report stages of the Housing Act 1974, when several issues of major importance to tenants were raised. These included the questions of service charges, consultation and specific performance of landlords' covenants. On all these matters the then Ministers, the right hon. Members for Brent, East (Mr Freeson) and Manchester, Ardwick (Mr Kaufman) made noises. Today I ask the Minister to look at those proceedings to see whether, four years later, something can be done to make some progress in the interests of tenants.

4.34 p.m.

The Under-Secretary of State for the Environment (Mr. Ernest Armstrong)

I give the hon. Member for Hampstead (Mr. Finsberg) the assurance that I shall look very carefully into the matter that he has raised, and I shall write to him if that is necessary.

I think that the hon. Member for Kensington (Sir B. Rhys Williams) was rather unfair to my right hon. Friend. However, I do not want to go into the procedures that occurred. My right hon. Friend is always ready to meet hon. Members. However, sometimes it is inconvenient when a person bursts into one's room, and one is not able to give him the consideration that one would like to give.

The other thing is that certainly no one can accuse my right hon. Friend of being anything other than enthusiastic about finding a variety of tenures. He is very keen indeed. When, however, the hon. Member talks about taking action now, he should remember that the nearest parallel to the kind of legal procedure that he wants to go through now is the Leasehold Reform Act. That contains some 100 pages. As the hon. Member mentioned when he introduced his Bill, it is really a minefield of technicalities. It is more than that. There are various legal matters that must be gone into very carefully. We are pursuing them very urgently. We are having a review concerning mansion blocks and so on. There is no question of the Government dragging their feet concerning that matter.

I am as concerned as everyone else about rising rents and about any tenants who are in difficulties. I want to deal with what the hon. Gentleman has said about rents and, in particular, the working of the fair rent system.

We can all agree that no one in this world likes his rent to go up. There are no votes in putting up rents. So I can well understand why those who are not in office take up the complaints of their constituents on the subject of rent increases. Nevertheless, as a result of very biased articles which have appeared in parts of the press, there is a highly distorted picture of the situation. I want to put the facts on record.

I reject emphatically the notion that private tenants in London, for instance, or in some particular part of it, whose rents are fixed in accordance with the Rent Act 1977 are on average suffering higher levels of increase than tenants generally either in the private or in the public sector.

To put the matter in perspective, I should explain that once a rent has been fixed by a rent officer or a rent assessment committee—I know that the hon. Member was referring to service charges, and I shall come to that matter shortly—three years must elapse before a re-registration can come into effect. To see how current increases in fair rents compare with other increases, we have to look at the percentage increase in rents previously registered between three and four years before.

On this basis, taking England and Wales as a whole, unfurnished private rents re-registered in 1977 showed an average increase of 47 per cent. over three years. Breaking this down into areas, increases in 1977 were 50 per cent. in England and Wales, outside London; 39 per cent, in London as a whole; and 40 per cent. in Kensington and Chelsea. This last figure is less than the increase in council rents throughout the country between October 1974 and October 1977. It is significantly less than the increase in average earnings, the retail price index and the index of repair and maintenance costs.

On this basis of comparison, Kensington and Chelsea does not seem to have much to complain about, although I well understand that when we talk about Mr. Average there are obviously genuine cases of individual hardship, but this in no way justifies any attack on the fair rent system. Individual cases are alleviated in other ways, as the House well knows.

I want to make a brief comment on the effect of market rents in London. While it is true that the market for rented property in parts of London has been subject to an increase in certain types of demand and that some very high rents are being paid on the open market, I cannot see any evidence that this has artificially increased the level of fair rents. Indeed, all the statistical evidence I have already given suggests that it has had virtually no influence at all. Nor can I see how investment in rented blocks by overseas purchasers can have any effect on rent levels under the fair rent system. The personal circumstances of the landlord and the tenant play no part in the fixing of a fair rent. The hon. Member is totally mistaken if he imagines that Arab or any other investment can affect fair rents.

I want to make a brief comment about those who are in special difficulty, particularly elderly people who are on fixed incomes. I am concerned about those. But I remind the House that if one takes the case of a married couple paying the average fair rent in Kensington of £16 a week, supposing that their income is £55 a week, derived perhaps from pensions and investments, they would currently be entitled to £9.62 a week off their rent by way of allowance.

I turn now to the question of tenants or leaseholders of flats in mansion blocks who are dissatisfied with the standards of management and maintenance and who feel that they are not getting value for the money they pay in service charges. The Government are conducting a special study on this. We are not in any way dragging our feet. We want to get it right, and everyone knows the technical and legal difficulties of framing rent legislation. We are aware of that in our review of the Rent Act.

Part of the trouble arises simply from the age of many mansion blocks and the way that they are designed. I make no criticism of that, but blocks built around the turn of the century are now beginning to need very expensive renewal of features such as boilers, roofs and lifts. Some traditional landlords neglected their responsibilities for timely maintenance in the past, not through avarice but out of a misplaced readiness to keep rents down. When the burden of repair began to accumulate and the wherewithal was lacking, they were only too glad to cut and run by selling out to the speculators and the asset strippers of the property boom years.

These people had not the slightest interest in performing the normal functions of a landlord but were after a quick capital gain. The hon. Gentleman has said that that is happening now. It is nothing new. It is a continuing problem, and we want to deal with it. The method they adopted was to go for sale of individual flats on long leasehold in the type of operation known as "break-up".

There is nothing objectionable about the sale of long leases as such, where the buyer is willing and able. As the hon. Member has pointed out, it gives the occupier a stake in the equity value of his home in contrast to renting, which does not. But the methods by which many of the asset strippers have sought to achieve such sales in some of the older blocks have been highly questionable. They include deliberate failure to repair lifts and boilers and to provide services contracted for, the keeping of flats empty when renting tenants leave and incessant offers to tenants to purchase with threats of increased prices failing an immediate decision. When people have become leaseholders, they have too frequently found themselves saddled with very onerous leases about which they had little chance to negotiate and on which they seem to have received scant professional advice worthy of the name.

In this atmosphere it is not surprising that residents, be they tenants or leaseholders, should increasingly wish to have much greater control over the blocks in which they live. I am pleased that there are already a number of places where tenants have negotiated to purchase the freehold of their block and set up a management organisation under their own control to look after all the common parts. Where such schemes have a mixture of leaseholders and renting tenants, there is a need for possible conflicts of interest to be resolved, but the problems are not insuperable. There may be cases where purchase of the freehold is not felt to be necessary. Residents may simply feel that they want fair leases, more information about the costs incurred in providing services and more control over the appointment and functioning of managing agents.

In the Green Paper, we said that we would consider the scope for enabling private tenants to purchase their homes collectively where blocks were up for sale. We are currently giving urgent study to the legal and financial problems—and they are many—associated with this concept as well as to the other possibilities I have mentioned for improving the position of residents of mansion blocks. We are determined to take whatever action is necessary and possible, but I am sure that the hon. Gentleman will not disagree with me when I say that extending compulsory powers in an area of such legal complexity needs thorough analysis if we are to achieve the desired results. I look forward to his support for our proposals when we bring them forward.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Five o'clock.