PROHIBITION OF PREMIUMS ETC. ON ASSURED TENANCIES (Hansard, 26 October 1988)

§ Lord James Douglas-Hamilton
I beg to move, That this House doth agree with the Lords in the said amendment.
344 The hon. Member for Glasgow, Garscadden (Mr. Dewar) spoke with some passion about this on Second Reading and the amendment meets the point that he made.
Along with succession rights, which we have already discussed, I think that the issue relating to assured tenancies that caused most concern was premiums. The Bill, as introduced, contained no provisions relating to premiums. We felt that the operation of the market would work in due course to prevent the charging of unreasonable premiums. We still hold that view, but we recognise that in Scotland there has in effect been a full prohibition on premiums for tenancies for many years—since 1920.
We have also taken on board the many representations against premiums we received from hon. Members, from the other place and from organisations that have daily contact with those involved in the private rented sector. Therefore, we tabled this new clause, which simply applies the relevant provisions of part VIII of the Rent (Scotland) Act 1984 to assured tenancies as well as regulated tenancies. These provisions prohibiting premiums are already well established in Scotland, so there should be no difficulty in ensuring that they are fully understood by those involved.
I am sure the new clause will be welcomed by the House.

§ Mr. Home Robertson
Although the Minister has confirmed that the prohibition on premiums has been well established in Scotland, that did not prevent the Government from trying to exclude the principle from the Bill. The fact that this is being presented as a concession must therefore highlight the oppressive nature of the legislation.
This is a sellers' market. There is a shortage of housing to rent in Scotland and, therefore, anyone with a decent house to rent can be certain that, if the house is in a desirable area, there will be many people wanting to rent it. Without such a safeguard, there is nothing to stop a landlord asking for rent in advance or a deposit which would be returnable at the conclusion of the tenancy. Without that provision, there would be the possibility of demanding key money from tenants who were desperate to find housing, given the present shortage.
The Minister has acknowledged that we have pressed the Government on this matter, both on the Floor of the House on Second Reading and in Committee. Although there is rejoicing in heaven when a sinner repents, the Minister will have to do better before there will be any rejoicing among tenants in Scotland. There was a serious risk that unscrupulous landlords would exploit the opportunity to extort key money from desperate prospective tenants. That practice should be illegal and I welcome the fact that the Minister has at least made this significant concession in respect of assured tenancies. However, I wish to press him a little further because, as I understand it, the prohibition does not apply to short assured tenancies. Perhaps he will confirm that it will still be possible for a landlord wanting to let a property on a short assured tenancy to demand key money.

§ Lord James Douglas-Hamilton
It is my understanding that the ban on premiums applies generally.

§ Mr. Home Robertson
That was not clear from my reading of the amendment and I am grateful to the Minister for confirming that point.
This is a significant step in the right direction. It should not have been necessary to drag the Government kicking and screaming into such a concession, but we welcome it.

§ Mr. McAllion
I was grateful to hear the assurance given by the Minister to my hon. Friend the Member for East Lothian (Mr. Home Robertson) that this would also apply to short assured tenancies, but I see nothing in the Lords amendment that states specifically that it will apply to such tenancies. As I have often told the Minister, I have good grounds for not believing anything that Tory Ministers say with regard to Scotland, so the fact that he has said this tonight is not sufficient assurance. I would like him to tell me where in the Bill it is stated that there will be a prohibition on key money, not only for assured tenancies, but for short assured tenancies. It must be stated in the statute, if the Minister is going to make it stick in the Scottish courts. The fact that he might refer to it during a debate does not represent sufficient grounds upon which a tenant could go to a court and obtain a successful decision. The Minister has yet to address that central problem.
In the housing market in Scotland, where there is a shortage of housing and a sellers' market, there is every incentive for unscrupulous landlords to avoid the assured tenancies and to go for the short assured tenancies. We want to see in the Bill a prohibition on premiums or key money for short assured tenancies.

§ Lord James Douglas-Hamilton
Perhaps I can assist the hon. Gentleman. He may not he aware that a short assured tenancy is a form of assured tenancy. That is the answer to his question and he can be reassured on that point.

§ Mr. McAllion
It may well be that a short assured tenancy is a form of assured tenancy, but the phrase "short assured tenancy" does not appear in the amendment. Various words are defined at the back of the Bill. The Minister is saying that it is defined in the Bill that assured tenancies include short assured tenancies, but there is nothing to that effect among the definitions at the back of the Bill.

§ Mrs. Fyfe
Before I comment on that matter, may I draw the attention of the House to the fact that 226 hon. Members voted against a previous amendment. That means that more than 220 people who walked through that Lobby voted to throw bereaved people out into the streets, without having heard a word of the debate.
The title in respect of amendment No. 16 on page 3 of the Lords Amendment Paper reads: Prohibitions of premiums etc. on assured tenancies". If that means all tenancies, would it not be clearer to say so? Like my hon. Friend the Member for Dundee, East (Mr. McAllion), I am not at all certan whether what the Minister has just said at the Dispatch Box is the case and whether he intends the provision to apply to all tenancies.

§ Mr. Doran
I want to pursue that point because the Minister appears to be saying that, wherever there is a reference to assured tenancies in the Bill, that includes short assured tenancies and that that should apply to all tenants' rights. May we assume, therefore, that the short assured tenant has the same rights as the assured tenant, with the exceptions made in the Bill? I should be happy if the Minister could give me that assurance.

§ Lord James Douglas-Hamilton
The answer is yes.