HC Deb 09 June 1988 vol 134 cc1019-28
Mr. Waldegrave

I beg to move amendment No. 72, in page 5, line 12, after 'landlord", insert 'or the tenant'.

Madam Deputy Speaker

With this it will be convenient to take Government amendment No. 73.

Mr. Waldegrave

Clause 6, as hon. Members know, provides that, where a statutory periodic tenancy arises at the end of a contractual fixed-term tenancy, either the landlord or the tenant may, within 12 months, serve a notice on the other proposing a variation in the terms of the tenancy. The party on whom notice is served may, if he wishes, refer the notice to the rent assessment committee to consider whether the proposed variation is reasonable.

These amendments introduce two small but useful changes to the procedure, which I hope will be welcomed. As drafted, the Bill provides that in serving a notice of variation of terms the landlord may propose an adjustment in the rent to take account of the variation. It seems to us, on reflection, that it should be equally open to the tenant to propose an adjustment of rent in this way, and amendment No. 72 provides the tenant with just such a facility.

Amendment No. 73 extends from one month to three months the period allowed for the party on whom the notice is served under clause 6 to refer that notice to the rent assessment committee. Here we are moving exactly to meet an undertaking given in Committee. I am glad to see the hon. Member for Hammersmith (Mr. Soley) and the hon. Member for Southwark and Bermondsey (Mr. Hughes) nodding on that point. I hope, therefore, that that will be welcomed.

Since this is the first occasion I have had to refer to the hon. Member for Hammersmith, I will depart from the normal rancour and asperity of party politics to offer him the congratulations of the House on the birth of his son, who is called Benjamin I believe, which is a name with very good Tory credentials.

Mr. Allan Roberts

We welcome the concession that the tenant can ask for the rent to be reassessed. Can we have an assurance that if the tenant initiates the reassessment the rent will not be put up?

Mr. Waldegrave

The procedure is symmetrical now and the rent assessment committee can make its own judgment either way. It is the same the other way round —if the landlord puts it in the rent may go down.

Amendment agreed to.

Amendment made: No. 73, in page 5, line 16, leave out `one month' and insert 'three months'.

Mr. Grist

I beg to move amendment No. 14, in page 5, line 18, after 'may', insert 'by an application in the prescribed form'.

Madam Deputy Speaker

With this we shall take the following: Government amendment No. 67.

Amendment No. 228, in clause 12, page 9, line 39, at end insert— '(3A) A notice served under subsection (2) of this section shall— (a) be in a form prescribed by regulations made by the Secretary of State by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament: (b) contain a statement, in characters not less conspicuous than those used in any other part of the notice,

  1. (i) that the tenant, if he does not agree to the increase, may refer the notice to a rent assessment committee, within one month of service of the notice:
  2. (ii) that the tenant is entitled to refer the notice to a rent assessment committee to fix a market rent;
Government amendments Nos. 15 and 26.

Mr. Grist

So far as the Government amendments are concerned, a number of points were raised by hon. Members in Committee about the provisions in the Bill which involve the service of notice. In the light of the comments made, we undertook to have a further general look at these provisions. One result of so doing has been to identify the need for three further forms to be prescribed by the Secretary of State. Amendments Nos. 14, 15 and 67 make the necessary provision for this. They relate to an application to the rent assessment committee under clauses 6 or 12 and to the notice of proceedings for possession under clause 8.

I trust that hon. Members will welcome these new provisions as introducing greater clarity and certainty into the procedures concerned.

Amendment No. 26 is purely a matter of drafting. It removes an unnecessary definition in respect of the shorthold notice served under clause 18(1).

Opposition amendment No. 228 reopens an issue which we discussed at some length in Committee—whether it is sensible for a statute to specify the detailed points to be included in a notice which the Secretary of State is empowered to prescribe. Our firm view is that such a course is not sensible.

We entirely agree that it is desirable for the prescribed notice to contain essential information on the tenant's statutory rights. We shall be giving very careful consideration to what information should be provided. It may well include at least some of the points referred to in this amendment, but we do not want to prejudge the whole issue by spelling out the details in the legislation itself. That would constitute a wholly inflexible and unwieldy approach and would not, in our view, be of any service to tenants.

The Government accept the need for the principal notices under the Bill to be in a prescribed form; indeed, our own amendments extend this requirement to three further provisions. We accept, too, the need for notices to provide essential guidance for the tenant. But we resist very strongly the argument that the details of such guidance should be laid down in statute. I therefore hope that the Opposition will not press their amendment.

Mr. Allan Roberts

Clause 12, which the Government are amending and the Opposition are attempting to amend, implements the high-rent policies behind the Government's legislation. It is the clause that spells out the mechanism by which the Government are to allow landlords to change rents from fair rents to market rents. It is therefore a significant clause. It matters to all tenants of private landlords throughout the country who will receive notices that their rents are being increased, sometimes by massive amounts, to market rents. It will affect the level of rents in relation to council housing and especially those houses that are handed over to the private sector or to bodies other than local authorities. And it will have an influence on the level of rents and how that is dealt with in relation to housing associations.

So it is a very important clause and the Government amendments, while welcome, go nowhere near far enough. They do not meet the requirements that the Opposition spelled out in Committee. The Minister is correct in saying that we debated them in Committee. We debated amendment No. 192 at the ninth sitting, on Thursday 21 January—columns 361–71—and we had some assurances then from the Under-Secretary—whom I wish well in Finland, which is, as I said from a sedentary position, obviously the western equivalent of Siberia for the period of the Report stage and Third Reading of the Housing Bill.

We were given some undertakings in Committee along the lines that the Minister has just repeated, except that there was some implication in what was said then that the changes would be even more significant on Report than those we have before us in the form of the Government amendments. The Under-Secretary said that she agreed that the notice should give the tenant some information about his statutory rights. Very little is given in the way that the Government have tabled their amendments. She also said: The key piece of information that we would want to include in the prescribed form of notice is that the tenant, if he does not agree to the increase, may refer the notice to a rent assessment committee, and that he has a fixed period within which to do so. That essential point does not appear in the amendment. We shall want to think further about what else should go into the notice, but we should certainly not want our hands to be tied by the shopping list set out in the amendment.

The Under-Secretary went on to say: I hope, therefore, that the amendment will be withdrawn in the light of my assurance that the notice needs to give the tenant some basic information."—[Official Report, Standing Committee G, 21 January 1988; c. 366.] On the basis of that and other assurances given by the Minister in Committee, the Opposition withdrew the amendment. But we should not have withdrawn it; we should have pressed it to a vote, because the Government have not come forward with the results of the assurances that they gave us in Committee. So we want to press amendment 228; we want to keep it before the House and not withdraw it. It would give the tenants the rights and the knowledge that they need. We are talking about the notices that will go out to increase rents massively and change fair rents into market rents.

First, the tenant, if he does not agree to the increase, should be able to refer the notice to a rent assessment committee within one month of service of the notice. Secondly, the tenant is entitled to refer the notice to a rent assessment committee to fix the market rent, rather than its just being fixed on the basis of what the landlord or the Secretary of State for the Environment thinks the market rent should be—and I am sure that his idea of the market rent would be higher than anybody else's. Thirdly, the tenant's security of tenure under this Act should not he affected by his referring the notice to a rent assessment committee.

It is the shorthold assured tenancy that is difficult, because, if a tenant starts to be awkward and refers things to a rent assessment committee, when the shorthold period of six months is up the landlord can throw him out anyway and get someone who is not as awkward and does not take these issues to a rent assessment committee. However, that is another issue in relation to our opposition to the concept of shorthold tenancies.

We believe also that the tenant should be entitled to agree with the landlord a variation different from that proposed in the notice or to agree that the rent should not be varied. The Government claim to be in favour of agreements and negotiations between the two parties in terms of property, without any Government impositions; that is their justification for the whole concept of shorthold tenancies. The Government claim also that tenants and landlords are equal partners, but they know full well that that is not the case. The tenant often has to accept, as a supplicant, the landlord's offer because if he does not do so he will be made homeless.

5.30 pm

We believe also that no further notice should be served under subsection (2) in respect of the tenancy until after the first anniversary of the original notice's date of service. In other words, there should be at least one year's breathing space before the landlord may initiate proceedings to push up his rents even higher. Such is not unreasonable or bureaucratic, and it should be written into the legislation. We cannot just accept Ministers' bland assurances that at some future time a code might be produced which will incorporate such safeguards but that they need not be in the Bill. When the courts interpret any legislation, it is only what is in the Act that matters. Codes of conduct and notes of guidance are not legally binding and are not necessarily enforceable in law. Ministers' assurances cannot be quoted in courts of law in order to justify a tenant's action or an attack on those of the landlord. Therefore, we ask the Government to accept amendment No. 228; if not, the Opposition will not withdraw it.

Mr. Simon Hughes

My name is also appended to this amendment, and I remember well the debate in Committee. I take a slightly different position from that of the hon. Member for Bootle (Mr. Roberts), because I do not necessarily argue that such provisions should be included in the substantive Act. However, I seek from the Minister assurances additional to those which he has already given.

The House has been reminded that we pressed in Committee that certain matters should be made explicit when the notice is served. The Minister's assurances, coupled with those given by his hon. Friend in Committee, do not go far enough. Nobody should underestimate the potential effect of this clause on private sector tenants, who will be taken out of rent control and into a free market system. The reality of that could be substantial rent increases.

We ask that when tenants are informed of potentially enormous rent increases the document giving that information should state in bold lettering—and, as is said in the amendment, the wording of which comes from other Acts, in characters not less conspicuous than those used in any other part of the notice"— that the tenant may refer the matter to the rent assessment committee and state the time in which he is allowed to do that. It should state also that the rent assessment committee has power to fix a market rent. That may still not provide any great security, but at least the rent may be reduced from being extortionate to one that is truly a market rent. It should be made clear also that if, a tenant goes to the rent assessment committee, that will not affect his security. Many tenants are terrified that if they go to what they think of as a court, that they will lose everything; that is a common fear of tenants. The notice should make plain that the tenant is free to negotiate with his landlord, and that no further notice or regular demand can be served until after the first anniversary of the earlier notice.

I am sure that the Minister accepts that those are perfectly proper concerns. It is vital that a notice which may be put through the letterbox of a multi-occupancy property, and which might be received by people who do not have English as their first language, should be clear as to its implications and about the opportunities which exist for the tenant thereafter. I ask the Minister to assure the House that, whatever may be the final form of the notice, it will include the information which the amendment suggests. It is one of the most important documents that tenants in the private sector will receive. That information needs to be presented clearly and boldly, leaving no room for uncertainty. The House must be given such an assurance, if it is to be satisfied.

Mr. McCartney

As the person who moved the original amendment in Committee, and as it forms 50 per cent. of the concessions I have achieved during the three months of debating the Bill, I am bitterly disappointed that the Under-Secretary of State for the Environment is not in her place. I prepared for today's debate a savage indictment of her failure to make adequate proposals confirming her clear and unequivocal promise, given on the morning of the debate in Committee. However, I am relieved that the Under-Secretary is holidaying in Finland rather than in Iceland. Had she chosen Iceland, I would have waited for the Government to introduce proposals for low-cost housing in the United Kingdom, including igloos. Some people, because of cuts in capital allocations, are suffering from heating conditions such as those which exist in igloos; one might then ask the Government to provide resources for heating assessments.

The Minister will understand that, in directing my fire at his hon. Friend the Under-Secretary of State, I am directing it at him also. In Committee, we sought with our amendment to assist the Government, as we did during the whole 180 hours of debate. On every occasion, I and my hon. Friends attempted to improve the Bill, despite our fundamental opposition to the Government's proposals. We tried in practical ways to assist the people who will have to live with the consequences of the Bill. We attempted to improve the Bill in the best ways we could, in terms of clearly setting out the rights of the individual to assessment and advice, be it from housing organizations —and I shall not name those in Leicester in case I fail to mention anyone—law centres and so on.

It is essential that the Government respond more adequately to amendment No. 228, which is coupled with Government amendment No. 14. It is important to consider rent arrears that will result from the changes made in housing benefit, and the effect that will have on schedule 2 to the Bill. One must consider also the implications for security of tenure and the draconian effect of the introduction of market rents on the budgets of low-income families, as well as the role of the rent assessment committee and its direct influence on rents and related matters. It is important that tenants' rights should be clearly set out in statute and that their security of tenure in rented accommodation should also be safeguarded.

In Committee, I quoted a promise given to my hon. Friend the Member for Manchester, Withington (Mr. Bradley). The Under-Secretary stated: the question of information is being considered. I see no reason why that should not be done as it would be helpful to both landlord and tenant."—[Official Report, Standing Committee G, 12 January 1988; c. 50] Subsequently, my hon. Friend the Member for Bootle (Mr. Roberts) was, as he so eloquently highlighted earlier, given assurances that on Report the Government would bring forward specific improved arrangements that would be satisfactory to the Opposition.

The Minister's latest assurances are inadequate because they do not answer the grievances expressed by myself and by the hon. Member for Southwark and Bermondsey (Mr. Hughes). At one point, even the hon. Member for Mid-Staffordshire (Mr. Heddle) commented about his feeling of uncertainty about the way in which the Bill was drafted. I hope that the Minister will not proceed as he has done earlier but will give an assurance that he will consider seriously what has been said.

In Committee the Under-Secretary played a game called "Give us a clue". Each time she got up to utter soothing words she gave us another clue. We wanted to know what the Government's concessions meant, what precisely they would put in the notice and what they intended to do to alleviate the worries expressed by us and by the housing associations and organisations involved with tenants in the private sector. We waited from March until now and the Government have offered us nothing, not a single dot or comma in answer to the points raised in Committee.

The Minister has taken the place of the Under-Secretary. He has indicated that it is not normal practice to set out in detail the information we require and that the Secretary of State does not seek such powers in legislation. That is rich coming from a Government who, every time they introduce legislation, give draconian powers to the Secretary of State to cover almost any circumstances they can think of. The wording is so loose that on many occasions the Secretary of State's powers cover circumstances which were not thought of when the legislation was drafted.

We are not in that ball game on housing. There are clear precedents in legislation for the Government to set out in detail the rights of tenants. For example, section 83 of the Housing Act 1985 sets out tenants' rights in detail in the notice seeking possession. In sections 51 and 52 of the Rent Act 1977 the arrangements for security of tenure and rent levels are set out specifically. Therefore, our proposals in Committee and again today are in line with current Government thinking.

The Minister knows that one thing I could not be accused of is naivety. If I could be accused of anything, perhaps it would be of reading too much into what the Minister and the Under-Secretary said in Committee. I might be accused of being moderate and of putting aside some of my opposition to what was said by the Government in the hope that they would come forward with genuine proposals.

Are not the Government operating double standards? The Minister is not prepared to insert a simple provision which would make clear the rights of private tenants, yet during the eight years that the Government have been in power they have dealt specifically with every aspect of tenants' rights under local authorities. They have been prepared to detail the rights and obligations of tenants in local authority housing. As a member of a local authority involved with housing I have no objection to that, but I object to double standards. A local authority tenant has protection and rights; the tenant in the private sector has few rights and under this legislation he will have fewer still. My hon. Friends and I are not prepared to accept those nauseating double standards.

As my hon. Friend the Member for Bootle said, in Committee I set out in detail the principles behind our amendment. The debate is recorded in columns 361–371 of the Official Report of the Committee's proceedings on 21 January. Because my hon. Friends wish to speak in this debate, I shall not repeat those arguments. My hon. Friend the Member for Bootle has put forward many of them today. Therefore, I simply point out to the Minister that it is essential that tenants' rights are protected. There is no point in the Minister making a spurious argument about supporting tenants' rights if the tenant cannot exercise those rights because they are not set out in statute and there is no detail about how he can seek advice.

5.45 pm

The Minister conceded in Committee that we are not dealing in the market place with bodies of equal opportunity. The landlord has significantly greater power to determine the level of rent and the condition of the property. The tenants' negotiating strength is non-existent. The Minister conceded that fact in Committee, and he and the Under-Secretary indicated on numerous occasions that they would produce practical proposals to take account of what I and my hon. Friends had said.

When I moved the amendment in Committee I said: The amendment is practical and does not undermine the fundamental thrust of the Government in relation to the Bill but puts a little meat on the bones of the statement made by the Under-Secretary of State on 12 January. I hope that the Minister will respond positively and either accept the amendment or give an assurance that she will come forward with proposals at a later date. Anything other than that would be a negation of the promise that she gave in the debate, and would undermine our understanding of the promise given to the Committee by the Minister for Housing and Planning that he would consider amendments that were practical and which assisted the passage of the Bill, assisted tenants and their rights and resulted in good relations between tenants and landlords. We cannot get any more sympathetic, moderate or practical phraseology. The Minister has had from 21 January until now to make good the promises of the Under-Secretary of State. She promised: The key piece of information that we should want to include in the prescribed form of notice is that the tenant, if he does not agree to the increase, may refer the notice to a rent assessment committee, and that he has a fixed period within which to do so. That essential point does not appear in the amendment. We shall want to think further about what else should go into the notice". Later she said in a poignant whisper: I hope, therefore, that the amendment will be withdrawn in the light of my assurance that the notice needs to give the tenant some basic information."—[Official Report, Standing Committee G, 21 January 1988; c. 365–66.] I accepted in faith what the Minister said and, despite the concern of some of my hon. Friends, I dutifully withdrew the amendment. I have to ask the Minister again not to give me empty promises, as the Under-Secretary did in Committee, but to come to the Dispatch Box and produce the goods for once in his life. The Under-Secretary could not do so. The Secretary of State is not here. The Minister has an opportunity to speak his own mind for once. So often we have seen the young leviathan harpooned behind the Speaker's Chair. For three months the Under-Secretary gave promise after promise. Then, almost at the end of the Committee, the Secretary of State put his little head round the door and a look was enough. The leviathan was harpooned.

I ask the Minister to go back to the Dispatch Box and give a firm commitment. Without a commitment, the reality in the market place will be that tenants' rights and their ability to challenge ruthless landlords will be eroded. The Minister's soothing words will be of no use to many of my constituents, some of whom I mentioned in Committee. I referred to genuine cases of hardship. They will be affected by landlords who are ruthless in the extreme. Landlords will pressure tenants and affect rent levels, conditions and other matters that we are trying to improve and get out of the public and private housing sectors. Unless the Minister gives a commitment, his words will be no more than empty promises, and hundreds of thousands of private sector tenants will surely face not only the effects of increasing rents but the real possibility of harassment and losing their right to continued occupation of their properties. We shall not countenance that. We shall press the matter if the Minister does not come up with some proposals.

Mr. David Winnick (Walsall, North)

Perhaps the lesson for my hon. Friend the Member for Makerfield (Mr. McCartney) is that he should not be so moderate. Perhaps he should not listen to and take promises from Tory Ministers. That is particularly so, as he indicated, because there seems to be a running battle between the Secretary of State and the Minister. The press would have us believe that the Minister is the moderate in this game, but he recognises the potential for Rachmanites and so on. Whenever he wants to put forward some basic protection for private sector tenants, the Secretary of State makes it perfectly clear that that is out of the question. My hon. Friend was absolutely right. With this legislation, in which, in effect, protection and security for private sector tenants is being thrown overboard, it is perfectly right and proper that we should do our utmost in Committee and on Report, as we are not doing, to try to provide some basic protection and security, especially when landlords propose increases.

It is perfectly clear that, in most cases, the proposed increases will be quite substantial. To a large extent, the whole Bill is based on the fact that rents should be market rents. As I said on Second Reading, in certain parts of the country—certainly in greater London—many market rents will be higher than mortgage repayments, except that the people concerned will not be able to claim tax relief on their rent payments. We know also that the responsibility of rent officers will be to see to it that, in many cases, housing benefit will not apply to the rents that are demanded by private landlords.

If there were an adequate supply of accommodation, our fears would be less justified, but we all know that demand is far greater than supply. If a private tenant is asked for a rent increase under clause 12, it is perfectly understandable that that tenant and his family will be absolutely terrified about what will happen unless he pays that rent increase.

We are suggesting that there should be certain basic protections, that the notice should be quite clearly set out, and that a tenant's security of tenure will not be affected by referring the notice to a rent assessment committee. Surely there is nothing wrong with such safeguards. Surely they do not undermine the purpose of the Bill. The Under-Secretary gave my hon. Friend a promise; it is quite clear that no such promise will be implemented. To a large extent, it is a test not for the Secretary of State but for the Minister. The Minister has done his utmost to get maximum publicity. He has said that there will be adequate safeguards against harassment and Rachmanites, and that all kinds of things will be done so that tenants will be able to claim compensation in court and so on.

Mr. Keith Bradley (Manchester, Withington)

They would be able to apply for compensation only after they had been thrown out of their properties.

Mr. Winnick

As my hon. Friend says, if they are thrown out, they will not get back into their accommodation.

Of course, Mr. Ingham and co. have done their utmost to get the most favourable publicity this week for the Minister's various statements. What we have said is not rhetoric, statements or publicity handouts by information Ministers; it is what will be done to try to protect the tenants. What will we do to ensure that tenants and their families receive at least some basic protection against eviction and finding themselves homeless? One of the tests of the sincerity of the Minister's publicly declared wish that tenants should not be subject to harassment is whether the Government are willing to accept amendment No. 228.

Mr. Grist

I do not know whether Opposition Members are sirens of beguilement or alarm. Unfortunately, they serve to raise alarm among current tenants who will not be affected by the changes. Therefore, Opposition Members sow despondency where it should not be sown. They beguiled by telling me—I was not on the Committee, although I have read the Committee debates—that my hon. Friend the Under-Secretary gave promises that were not met in the Government amendments. What was promised then has been met by the Government this evening.

We are following the precedent of the Rent Act 1977. Again, prescription has been made by the Secretary of State—for instance, in orders and notices such as this—in considerable length and detail, which I shall read if hon. Members wish, but which is not included in the Act itself. We are discussing whether prescription should be on the face of the Bill. We believe that we should follow the precedent of the Rent Act and that we should take great care about what goes into the legislation. I assure Opposition Members that much of the information in amendment No. 228 will be included in the prescribed form under clause 12, but we do not want to put it in a form that may not be suitable later.

Mr. John Battle (Leeds, West)

On innumerable occasions in Committee we asked about rent and whether the Minister would be prepared to assure us that a rent increase for people on housing benefit will be matched by a housing benefit increase. Will he assure Opposition Members and those who are interested in the fact that their rent may go up that such increases will be met by housing benefit? It seems to some of us that the reduction in housing benefit will mean that market rent levels will not be met by housing benefit.

Mr. Grist

Assurances have been given over and over again, but I do not see how they arise from this group of amendments.

Mr. Simon Hughes

As the Minister will have heard earlier, I accept the point about the matter going into regulations. Perhaps it is the lawyer in me that is more used to dealing with such matters, but I still do not quite understand why the Minister cannot explicitly say that what is in the amendment will be in the regulations. There is nothing unreasonable in that request. It is quite reasonable to ask for an assurance that the request in this amendment will be accepted for inclusion in the document and in the notice. I should be grateful if the Minister would say what, if anything, he finds difficult. If there is nothing difficult, surely the Government should now be in a position to say that they accept it, and their position would be much better.

Mr. Grist

That seems rather otiose. The situation has worked perfectly well with the Rent Acts. I should have thought that that would have given the assurance that the hon. Gentleman and other hon. Members are seeking.

Amendment agreed to.

Amendment made: No. 74, in page 6, line 13, at end insert `or if the tenancy has come to an end'.—[Mr. Waldegrave.]

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