HC Deb 16 July 1985 vol 83 cc188-94 4.26 pm
Mr. Francis Maude (Warwickshire, North)

I beg to move, That leave be given to bring in a Bill to amend the Rent Acts to make new provision in relation to the supply of private rented accommodation. I hesitate to suggest new legislation in view of the horrifying list that we have just heard you read out. Mr. Speaker. It is already a very complicated Session. I am sure that the House will be glad to know that there is very little prospect of this measure reaching the statute book in this Session.

We have in this country a substantial net housing surplus, but at the same time a large number of people are homeless. The explanation for this apparent paradox is quite simple. Enormous numbers of houses and flats remain empty. A trip down the high street of any town will reveal that a number of flats above shops are generally empty. Unless the shopkeeper lives in the flat, it will generally be empty. The same applies to farm cottages. I know of one farm which has 12 cottages, all of which are empty. In London alone there are estimated to be 200,000 empty dwellings.

We have to ask ourselves why they are kept empty. If one examines the Rent Acts, the explanation becomes quite simple. If a landlord allows a tenancy to occur in any of those dwellings, he runs the risk of losing control of the dwelling for up to 100 years because not only will the present tenant have absolute security of tenure but so, too, will two generations of successors. A small business man, a shopkeeper or a farmer does not know what the state of his business will be in two years' time, let alone in 100 years' time. How on earth can he justify ceding possession and control of the property in that way? The farmer may easily decide in two years' time that he wants possession of a farm cottage. If he wants to take on an extra employee, he must have that accommodation available. Therefore, he keeps the dwelling empty, and another homeless person is kept homeless.

Even if he allows a tenancy to occur, a state official is empowered to intervene to set a so-called fair rent. Fair rents throughout the country now represent a net yield of some 1 or 2 per cent. on the investment. That is a bad return in anybody's book. It is approximately one third of the market rent, and it goes a long way to explain why a number of private landlords allow their properties to become dilapidated and to fall into bad repair.

My proposal would allow all new lettings to take place on terms agreed between the landlord and the tenant. It would affect no existing tenancies. All existing tenants would retain security and the ability to have their rents set by the rent officer.

Under my proposal, new landlords and tenants would be able to agree that the tenancy should run for, say, a period of two years at a rent agreed between the two of them. This would be an ordinary agreement enforceable in the courts by either party in the ordinary way, and the tenant would have absolute security of tenure for the period of that tenancy.

There is no reason why in a free society Parliament should take from responsible adults the power to make agreements on terms acceptable to both parties. It would be outrageous if we were to suggest that state officials should have the power to intervene between the buyer and seller of a house or a car and to say, "You cannot sell it for that price because it is not a fair price. You must sell it for this price." That would be monstrous. It is a concept that is quite alien in a free society. It is time that we got rid of this ridiculous control that prevents landlords and tenants making arrangements to their mutual advantage.

By drying up the supply of private rented accommodation, the Rent Acts have done untold damage to the homeless and the low paid, especially to the young and the single homeless for whom the private rented sector has traditionally provided accommodation. Indeed, the Labour party is now the only party—perhaps apart from the Communists and all points Left—that does not accept the need for reform of the Rent Acts. Even the late Mr. Anthony Crosland, the Minister who piloted through the 1974 Act, was apparently persuaded that it would dry up the supply of rented accommodation. How right he was. We are now reaping the fruit of that.

This artificially created housing shortage has desperately damaged the mobility in the labour market on which we so desperately rely. Many of my constituents in the west midlands have told me that they have found jobs in the south and south-east. They want to take those jobs but cannot move there because there are no houses to buy that they can afford, no chance of getting a council tenancy and no private rented accommodation to be had. We have lost that crucial flexibility in the housing market that is so important for flexibility in the labour market. The result is that we maintain high levels of unemployment in some parts of the country while there is a growing scarcity of labour in others. That cannot make sense.

I am sure that some bright spark on the Labour Benches—[HON. MEMBERS: "Bright?"] I agree that the material is not promising, but I am sure that a Labour Member will raise the spectre of Rachmanism. But the fact is that the Rent Act created Rachmanism. That was at its peak in the 1950s when rents were frozen—eventually for 18 years—and absolute security applied. Rachmanism survived the 1957 Act only in the remaining controlled sector. The plain fact is that if we deny landlords the right to claim possession of their property through the courts the unscrupulous landlords will turn to alsatians and the scrupulous landlords will keep their dwellings empty. It will be the homeless who will suffer.

If lettings are made on terms agreed between the parties, so that the landlord gets a reasonable return on his investment and knows that at a fixed date he can obtain possession of the property, there is absolutely no incentive to go outside the law, and that would be extra protection for the tenant.

Someone else will no doubt mention the 1957 Act and the fact that the decline in the private rented sector increased after that. Of course it did, because that was a time of great growth in owner occupation when there were enormous incentives on landlords to sell previously rented accommodation into owner occupation. That no longer applies to the same extent, and anyone who does not believe that the decontrol of rents will stimulate the growth of new accommodation is living in cloud-cuckoo-land.

One of the effects of rent control and security of tenure has been to push many tenants into "loophole" tenures—company lets, holiday lets and licences. That is unsatisfactory for both parties. The tenant does not know where he stands. It would be much better if he could agree a tenancy with the landlord for a fixed term at a fixed rent so that he knows where he stands for that period.

Similarly, by denying landlords an economic return on the property, rent controls have caused a large number of properties to fall into disrepair. They have discouraged landlords from improving property. By allowing them an economic return, we shall enable the tenants to benefit by encouraging landlords to improve and repair properties.

The Government took a small and timid step by introducing the shorthold tenure. They spoilt that potentially beneficial measure by including it within the fair rented sector. Again, landlords were discouraged from embarking on letting new properties. We must go further than that. The Government also introduced assured tenancies, a marginal measure that could be improved and increased by extending it to rehabilitated property. That would be particularly helpful in the inner cities.

It should be recognised that the decontrol of new lettings would increase incentives on landlords to remove tenants to enable them to create other new lettings. Therefore, my Bill would substantially increase the penalties for harassment. It would also extend to licensees the Protection from Eviction Act, and that would fill an existing gap.

The Government have announced that they believe that this type of reform is essential, and the White Paper that has just been issued confirms that. However, they said that they propose to defer this essential reform until after the next election. This is a desperately needed and urgent social reform. The present system does untold damage to mobility, to the homeless, to the weak and to the vulnerable. The Government should reinstate this measure into the next Session of Parliament and make it the flagship of the next Queen's Speech. It should be given a high priority. The remedy for the present scandal of empty houses and homeless people lies within the power of this Parliament, and we should take steps to use it. I urge the Government to add rent control to the bonfire of controls that has just been announced, and the sooner the better.

4.36 pm
Mr. David Winnick (Walsall, North)


Mr. Speaker

Is the hon. Gentleman seeking to oppose?

Mr. Winnick

Yes, Mr. Speaker.

The first question to ask is why Tory Back Benchers use the ten-minute Bill procedure to argue for a change in law on the Rent Acts? After all, their Government are in office. Moreover, they are a Right-wing Tory Administration who have made a particular virtue of deregulation and privatisation. Surely the Prime Minister needs no lectures from the hon. Member for Warwickshire, North (Mr. Maude) about deregulation in the privately rented sector, yet the Cabinet has decided to shelve any such proposal during the lifetime of this Parliament—[Interruption.] The Secretary of State for the Environment has told us so, and if some Conservative Members bothered to come into the Chamber more regularly they would have heard the Secretary of State do so.

That statement caused much upset to the Minister for Housing and Construction, the hon. Member for Eastbourne (Mr. Gow), who is just as enthusiastic as the hon. Member for Warwickshire, North (Mr. Maude), but the Minister lost the battle.

Why has the Cabinet concluded that it will not act, at least during the lifetime of this Parliament, along the lines advocated in the proposed Bill? The simple explanation is that the Prime Minister and her Cabinet colleagues know how electorally unpopular it would be to accept the hon. Gentleman's suggestion. They have not forgotten the notorious Rent Act 1957. When the hon. Member for Warwickshire, North, like so many others, argues that deregulation would produce more rented accommodation, he should remember what the right hon. Member for South Down (Mr. Powell) said in 1956. The right hon. Gentleman was then a junior housing Minister in a Conservative Administration, and on 21 November 1956, when he was helping to pilot through what became the Rent Act 1957, he said that the Bill will halt the drain upon rented accommodation, it will release additional accommodation that is under-used or wasted, it will arrest the deterioration of millions of houses for lack of maintenance, and it will give to persons who are moving or setting up home the opportunity to find accommodation in the market. They were virtually identical to the words used by the hon. Member for Warwickshire, North today. However, things did not quite work out that way.

In June 1956 privately rented dwellings numbered nearly 6.5 million. In December 1961 that figure had decreased to 5 million. The Rent Act 1957 did not do what the hon. Gentleman says his present Bill will do. It did, however, create a tremendous amount of homelessness, misery and injustice. As a result of that Act a large number of people lost their homes. The local authorities, including the one of which I was then a member, had no alternative but to rehouse the people forced out by the 1957 Act. That Act will always be remembered for the injustice and misery it caused, and we on the Labour side have no intention of forgetting it.

Shocking abuse and injustice, which became known as Rachmanism, were the product of that Act. Rachman and his gangster colleagues acted as they did because they knew that if they could dislodge from his accommodation a tenant who had Rent Act protection that accommodation would then be available for letting at any rent that Rachman and his colleagues wanted to set. The 1957 Act became so discredited that when the Conservative party went into opposition in 1964 it could not bring itself to argue against the Labour Government's repeal of the legislation.

That Act of course was a large issue in the 1964 election campaign, and some people would argue, bearing in mind Labour's majority in that election, that Labour would not have won without the effects of that Act. That is one of the reasons why the Prime Minister is so reluctant to act. In her constituency about 20 per cent. of the electorate live in privately rented accommodation. I wonder how many people in Finchley would want the hon. Gentleman's Bill? [Interruption.]

Hon. Members


Mr. Speaker

Order. It is for me to say "Order."

Mr. Eric Heffer (Liverpool, Walton)

About time too, Mr. Speaker, with all due respect.

Mr. Winnick

We know that many Conservative Members—

Mr. Nicholas Baker (Dorset, North)

On a point of order, Mr. Speaker. The speech by the hon. Gentleman is giving rise to some lack of attention on the part of many people in the House. That is because he does not seem to be addressing his remarks to the substance of the Bill.

Mr. Speaker

I am listening very carefully. The hon. Gentleman is in order and I think that he is about to finish.

Mr. Winnick

A number of right hon. and hon. Members clearly have property interests, though I am not suggesting that the hon. Gentleman has. They are therefore very keen to support the measure proposed by their hon. Friend.

Shorthold tenancies, about which the Government boasted at the time, have been a complete failure. So have the other provisions that the Government made for deregulation. The real need at the moment is not what the hon. Gentleman is suggesting but to provide rented accommodation in the publicly rented sector. How many people now in bed-and-breakfast accommodation and homeless or near homeless would be helped if the hon. Gentleman's suggestion were implemented? What is needed by people who are not able to obtain a mortgage is decent and adequate accommodation at a rent that they can afford.

It is a scandal that so few dwellings are now being built in the public sector. In the present year, it is estimated that no more than 30,000 new council dwellings will be built. We need more council dwellings, not another 1957 Rent Act, not another provision to enable the Rachmans of this world to make a lot of money. We require public sector and voluntary accommodation for people who desperately need housing. I hope the House will reject the Bill, and I hope also that the country will discover, as we have discovered today, that a majority of Tory Members of Parliament are willing to impose on many private tenants who now have protection all the harm, insecurity and possible homelessness that would result from the passing of this Bill.

Question put, pursuant to Standing Order No. 15 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 159, Noes 160.

Division No. 278] [4.45 pm
Adley, Robert Brown, M. (Brigg & Cl'thpes)
Amery, Rt Hon Julian Browne, John
Ashby, David Bruinvels, Peter
Aspinwall, Jack Bryan, Sir Paul
Baker, Nicholas (N Dorset) Buck, Sir Antony
Baldry, Tony Budgen, Nick
Banks, Robert (Harrogate) Carlisle, Kenneth (Lincoln)
Beaumont-Dark, Anthony Chapman, Sydney
Beggs, Roy Clark, Sir W. (Croydon S)
Bellingham, Henry Clegg, Sir Walter
Bendall, Vivian Cockeram, Eric
Benyon, William Colvin, Michael
Best, Keith Corrie, John
Bevan, David Gilroy Couchman, James
Biggs-Davison, Sir John Cranborne, Viscount
Blackburn, John Douglas-Hamilton, Lord J.
Blaker, Rt Hon Sir Peter du Cann, Rt Hon Sir Edward
Bottomley, Mrs Virginia Eggar, Tim
Bowden, Gerald (Dulwich) Eyre, Sir Reginald
Bright, Graham Farr, Sir John
Brinton, Tim Fookes, Miss Janet
Forman, Nigel Monro, Sir Hector
Forsyth, Michael (Stirling) Moynihan, Hon C.
Forth, Eric Murphy, Christopher
Fox, Marcus Neale, Gerrard
Franks, Cecil Nicholls, Patrick
Fry, Peter Onslow, Cranley
Gale, Roger Osborn, Sir John
Galley, Roy Ottaway, Richard
Gardiner, George (Reigate) Pawsey, James
Gardner, Sir Edward (Fylde) Pollock, Alexander
Gorst, John Portillo, Michael
Grant, Sir Anthony Powell, Rt Hon J. E. (S Down)
Gregory, Conal Powell, William (Corby)
Grist, Ian Powley, John
Ground, Patrick Prentice, Rt Hon Reg
Grylls, Michael Price, Sir David
Hamilton, Neil (Tatton) Prior, Rt Hon James
Hannam,John Proctor, K. Harvey
Hargreaves, Kenneth Ridsdale, Sir Julian
Harris, David Rippon, Rt Hon Geoffrey
Haselhurst, Alan Robinson, Mark (N'port W)
Hawkins, Sir Paul (SW N'folk) Roe, Mrs Marion
Hayes, J. Rowe, Andrew
Hayward, Robert Rumbold, Mrs Angela
Hickmet, Richard Ryder, Richard
Hill, James Sayeed, Jonathan
Hind, Kenneth Shepherd, Colin (Hereford)
Hirst, Michael Silvester, Fred
Holland, Sir Philip (Gedling) Sims, Roger
Holt, Richard Smith, Sir Dudley (Warwick)
Hordern, Sir Peter Spicer, Jim (W Dorset)
Howard, Michael Stanbrook, Ivor
Howarth, Alan (Stratf'd-on-A) Steen, Anthony
Howarth, Gerald (Cannock) Sumberg, David
Howell, Rt Hon D. (G'ldford) Temple-Morris, Peter
Howell, Ralph (N Norfolk) Terlezki, Stefan
Jessel, Toby Thorne, Neil (Ilford S)
Key, Robert Thornton, Malcolm
King, Roger (B'ham N'field) Thurnham, Peter
Knight, Greg (Derby N) Trotter, Neville
Knowles, Michael Twinn, Dr Ian
Latham, Michael Vaughan, Sir Gerard
Lawler, Geoffrey Walden, George
Leigh, Edward (Gainsbor'gh) Walker, Bill (T'side N)
Lilley, Peter Wall, Sir Patrick
Lord, Michael Waller, Gary
Lyell, Nicholas Walters, Dennis
McCurley, Mrs Anna Ward, John
MacKay, Andrew (Berkshire) Warren, Kenneth
Maclean, David John Wells, Bowen (Hertford)
McNair-Wilson, M. (N'bury) Wells, Sir John (Maidstone)
McQuarrie, Albert Wiggin, Jerry
Marland, Paul Wilkinson, John
Marlow, Antony Wolfson, Mark
Maude, Hon Francis Wood, Timothy
Meyer, Sir Anthony Yeo, Tim
Mills, Iain (Meriden)
Mills, Sir Peter (West Devon) Tellers for the Ayes:
Mitchell, David (NW Hants) Mr. Michael Fallon and Mr. Christopher Chope.
Molyneaux, Rt Hon James
Anderson, Donald Bidwell, Sydney
Archer, Rt Hon Peter Blair, Anthony
Ashton, Joe Boothroyd, Miss Betty
Bagier, Gordon A. T. Boyes, Roland
Barnett, Guy Brown, Gordon (D'f'mline E)
Barron, Kevin Brown, N. (N'c'tle-u-Tyne E)
Beckett, Mrs Margaret Brown, R. (N'c'tle-u-Tyne N)
Beith, A. J. Brown, Ron (E'burgh, Leith)
Bell, Stuart Bruce, Malcolm
Benn, Tony Caborn, Richard
Bennett, A. (Dent'n & Red'sh) Callaghan, Jim (Heyw'd & M)
Bermingham, Gerald Campbell-Savours, Dale
Carter-Jones, Lewis McCartney, Hugh
Clark, Dr David (S Shields) McDonald, Dr Oonagh
Clarke, Thomas McGuire, Michael
Clay, Robert McKay, Allen (Penistone)
Clwyd, Mrs Ann McKelvey, William
Cocks, Rt Hon M. (Bristol S.) MacKenzie, Rt Hon Gregor
Coleman, Donald McNamara, Kevin
Conlan, Bernard McTaggart, Robert
Corbett, Robin McWilliam, John
Cowans, Harry Madden, Max
Cox, Thomas (Tooting) Marek, Dr John
Craigen, J. M. Marshall, David (Shettleston)
Crowther, Stan Martin, Michael
Cunliffe, Lawrence Maxton, John
Cunningham, Dr John Maynard, Miss Joan
Dalyell, Tarn Meacher, Michael
Davies, Ronald (Caerphilly) Meadowcroft, Michael
Davis, Terry (B'ham, H'ge H'l) Michie, William
Dewar, Donald Millan, Rt Hon Bruce
Dixon, Donald Miller, Dr M. S. (E Kilbride)
Dobson, Frank Morris, Rt Hon A. (W'shawe)
Dubs, Alfred Morris, Rt Hon J. (Aberavon)
Duffy, A. E. P. Nellist, David
Dunwoody, Hon Mrs G. O'Neill, Martin
Eadie, Alex Orme, Rt Hon Stanley
Eastham, Ken Park, George
Edwards, Bob (W'h'mpt'n SE) Parry, Robert
Evans, John (St. Helens N) Patchett, Terry
Fields, T. (L'pool Broad Gn) Pavitt, Laurie
Fisher, Mark Pike, Peter
Flannery, Martin Powell, Raymond (Ogmore)
Foot, Rt Hon Michael Radice, Giles
Forrester, John Randall, Stuart
Foster, Derek Redmond, M.
Fraser, J. (Norwood) Richardson, Ms Jo
Freeson, Rt Hon Reginald Robertson, George
Freud, Clement Robinson, G. (Coventry NW)
Garrett, W. E. Rooker, J. W.
George, Bruce Rowlands, Ted
Gilbert, Rt Hon Dr John Sedgemore, Brian
Gould, Bryan Sheldon, Rt Hon R.
Hamilton, James (M'well N) Shore, Rt Hon Peter
Hamilton, W. W. (Central Fife) Short, Ms Clare (Ladywood)
Hardy, Peter Short, Mrs R.(W'hampt'n NE)
Harman, Ms Harriet Skinner, Dennis
Harrison, Rt Hon Walter Smith, Rt Hon J. (M'kl'ds E)
Haynes, Frank Soley, Clive
Heffer, Eric S. Steel, Rt Hon David
Hogg, N. (C'nauld & Kilsyth) Stott, Roger
Home Robertson, John Strang, Gavin
Howell, Rt Hon D. (S'heath) Straw, Jack
Howells, Geraint Thomas, Dafydd (Merioneth)
Hoyle, Douglas Thomas, Dr R. (Carmarthen)
Hughes, Dr. Mark (Durham) Thompson, J. (Wansbeck)
Hughes, Roy (Newport East) Thorne, Stan (Preston)
Hughes, Sean (Knowsley S) Tinn, James
Hughes, Simon (Southwark) Torney, Tom
Hume, John Wainwright, R.
Janner, Hon Greville Wareing, Robert
Johnston, Sir Russell Weetch, Ken
Jones, Barry (Alyn & Deeside) Wigley, Dafydd
Kennedy, Charles Williams, Rt Hon A.
Kilfedder, James A. Winnick, David
Lambie, David Wrigglesworth, Ian
Leighton, Ronald Young, David (Bolton SE)
Lewis, Ron (Carlisle)
Lewis, Terence (Worsley) Tellers for the Noes:
Litherland, Robert Mr. Jeremy Corbyn and Mr. Harry Cohen.
Livsey, Richard
Lloyd, Tony (Stretford)

Question accordingly negatived.