§ 3.44 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)My Lords, I should like to repeat a Statement on the National Board for Prices and Incomes Report on increases in council house rents which my right honourable friend the Minister of Housing and Local Government has just given in another place in answer to a Question. The Statement is as follows:
"My right honourable friend the Prime Minister announced at the time of devaluation that the Government were determined to protect the poorer sections of our people from the effects of rising prices. Rents are a large item in the family budgets of workers, and the very sharp increases in rents made by some local authorities clearly 751 conflicted with the overriding need for restraint on prices and incomes.
"The Government therefore referred to the National Board for Prices and Incomes last December the question of increases in rents of local authority housing. At the same time we advised all authorities to moderate and phase any necessary rent increases, and also to adjust rents to the needs of tenants by means of rent rebates—that is, using subsidies to help those who need help most. The great majority of local authorities have followed this advice and have done as much as they can to keep rent increases within reasonable limits.
"The Board's Report has now been received by my right honourable friends the First Secretary and the Housing Ministers associated with the reference. The Report is published today by Her Majesty's Stationery Office. Copies have been placed in the Library and are also obtainable from the Vote Office.
"The Government welcome the Report, which strongly supports the advice we had already given to local authorities on the need for moderation and phasing of rent increases. The Board recommend that, where rent increases, arising from increased costs, are necessary, increases in average weekly standard rents should not exceed 7s. 6d. in any one year, subject also to moderating any increases above the average, and that authorities wishing to provide for a larger average increase should be required to seek the permission of the Housing Departments.
"The White Paper on Productivity, Prices and Incomes Policy in 1968 and 1969 (Cmnd. 3590) emphasised that it is the Government's intention to introduce legislation requiring all local authorities to notify Ministers of proposed rent increases and enabling Ministers to direct local authorities to moderate or phase rent increases which they regard as too high in present circumstances. The Government propose that the new powers for which they intend to legislate should be applicable to any rent increases which took effect on or after April 1 this year and to increases referred to the National 752 Board for Prices and Incomes. We are issuing further guidance to local authorities on these matters.
"Under the legislation which the Government will propose to Parliament, Ministers will be able to give directions to any local authority proposing increases. Authorities will be advised that Ministers will not normally accept increases in average standard rents exceeding 7s. 6d. a week in any one year as the Board recommend. We shall also advise local authorities to limit the maximum weekly increase for any individual dwelling to 10s. a week in any one year.
"Some authorities have made or proposed rent increases since April 1 which substantially exceed these limits. We are asking these authorities, and those referred to the National Board for Prices and Incomes, to review their increases in the light of the new advice.
"In order to improve relations between local authorities and their tenants, the Board suggest the removal of the requirement to serve notice to quit at the same time as notifying rent increases—a matter already under review by the Law Commission—and the setting up by local authorities of a system for dealing with complaints from tenants. We welcome these proposals, which will be discussed with the local authority associations, together with other suggestions which the Board make on local authority housing finance.
"It is important that tenants should understand that all rents at present in force, including any increases, will remain payable unless and until the responsible Minister directs the local authority to revise its rents. Any such reduction will take effect from a future date specified in the direction.
"We are confident that local authorities will recognise the need to contain costs and to moderate rent increases. The Board's Report strongly endorses this policy, which the Government regard as an essential component of a successful and equitable prices and incomes policy."
§ LORD BROOKE OF CUMNORMy Lords, I should like to thank the noble Lord, Lord Kennet, for repeating the 753 Statement of the Minister in your Lordships' House. It is a very important Statement because it indicates that for the first time in history Government intends to take away from local authorities the unfettered power which they have held hitherto as popularly elected bodies to fix the rents of their tenants. As this whole problem revolves around holding the balance right between tenants and ratepayers, can the noble Lord explain why this Statement he has just read out concentrates exclusively on the interests of council tenants and makes no mention at all of the interests of the public as ratepayers?
§ LORD WADEMy Lords, may I join in thanking the noble Lord for repeating that Statement. I welcome the proposal to remove the antiquated notice to quit procedure. While 1 appreciate the effect of the rent increases on family budgets, may I ask whether the proposed curb on rent increases will apply to tenants who can afford to pay a full economic rent and who live in local authority areas where there is no rent rebate scheme and subsidies are not used primarily to help those who need help most? Secondly, if the restricted rent increases are insufficient to meet rising costs, how will the short-fall be met?
§ LORD KENNETMy Lords, I thank both noble Lords for their constructive comments. In answer to the question of the noble Lord, Lord Brooke of Cumnor, the Statement records only the receipt by the Government of the Report of the N.B.P.T. and states what action the Government propose to take about it. It was the question of council rents and no other question which was referred to the N.B.P.T. On the question from the Liberal Benches, I may say that the Government said in 1965 that they intended that Exchequer housing subsidies, now running at over £100 million a year, should be used chiefly to help poorer tenants who cannot afford the normal rent, but if subsidies are used mainly for this purpose and not just to keep everybody's rent low, the better-off tenant has to pay a rather higher rent. It is not the other tenants who pay for rent rebates but the taxpayers, through Exchequer subsidies. May I point out to the House that we shall have ample opportunity of debating this subject in greater depth at an appropriate time.
§ LORD STRATHCLYDEMy Lords, the noble Lord referred to the Housing Ministers. I take it that he is referring to the Minister of Housing and Local Government and to the Secretary of State for Scotland.
§ LORD KENNETThat is so, my Lords.
§ LORD BROOKE OF CUMNORMy Lords, I appreciate that there will be further opportunities to debate this matter, but can the noble Lord help me over one point now? In his Statement he said:
The Board recommend that, where increases arising from increased costs are necessary, …So far as I know the general reason for rent increases has not been so much increased cost as the fact that a number of local authorities have continued to subsidise tenants who did not really need subsidy, at the cost of the general body of ratepayers. Does the noble Lord's Statement apply to that as well as to the cases where the rent increases arise from increases in costs, because, if it does, then he must take into account the interests of the ratepayers?
§ LORD KENNETMy Lords, it is difficult in any given case to determine what element has given rise to the rent increase and, if there is more than one element, in what proportion each element has given rise to the increase. This is a fundamental point which differs very much from housing authority to housing authority and I submit one which would be better left to profounder debate later on.