§ 8.34 p.m.
§ THE EARL OF BALFOUR rose to ask Her Majesty's Government whether the Scottish rent laws could be so altered that tenants and private landlords can enter into a lease, or renew a lease for a contracted number of years with the rent officer acting as arbiter. The noble Earl said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I would ask the indulgence of your Lordships' House on this my maiden speech, particularly as I am initiating a debate. This is, however, the fruit of two years' research.
§ My Lords, the subject matter of this question really applies to the whole of Britain and I am seeking the opinions of as wide a section of your Lordships' House as I can; but I must, because of the maze of Rent Acts and other Acts applying to rents in Scotland, limit my field to the rural areas of Scotland. I should like at this stage to thank the noble Baroness, Lady Tweedsmuir of Belhelvie, for introducing the consolidation of the Rent Acts in Scotland. I shall refer to the new consolidated Rent Act as the "1970 Act". From the first Rent Act of 1915 circumstances have changed, and legislation has been introduced which gives the tenant either complete security of tenure or no security at all.
127§ Let me assure your Lordships that, because of the rent laws in private property, there are people who are unable to get accommodation when there are, close to them, cottages standing empty. There are people who are tenants living in one half of a county and working in another part of that county who have no opportunity whatever of getting accommodation nearer to their work; they are prisoners in their houses. There are landlords who would like to have a rented house back in hand for an employee or a relative, or even for themselves, but who have no hope of ever getting their house back in hand.
§ Let me illustrate this statement, but first let me remind those of your Lordships who may not be familiar with all the implications of the Rent Acts that many of the sections, particularly those giving security of tenure, do not apply to houses or fiats owned by a local authority, the Scottish Special Housing Association, a New Town Development Corporation, or other housing associations, as well as a few specific cases where a house is in private ownership. The procedure for a person wishing a local authority house is that he must be domiciled in that authority's area, or employed in that area—in most cases for not less than one year—before his name can be entered on the waiting list. Even after his name has been entered on the list, a further waiting period of two years may be involved.
§ My Lords, I should like you to consider what you would have done if you had been in my position a year ago. I do not want to bring personal experiences into your Lordships' House, but I have found no better example. A married man, with two young children, had been living in England for some years and very much wanted to move back to Scotland. He had been offered an ordinary job in my county, but as he had not previously lived in that area he was not eligible to be considered for a local authority house until he had lived there for one year; and then after his name was on the housing list he would probably have to wait at least a further two years. I had a house which I wanted to reserve for a maintenance worker when my present maintenance worker retired, and I was prepared to let this family 128 have this house during the intervening period.
§ I have taken a serious and expensive risk, possibly ending in court. If I entered into a contracted lease for four years (which is the maximum period of time I can spare that house), the tenant would have every right at the end of that period, under the Rent Acts, to convert that contracted tenancy to a regulated tenancy which would provide not only him with complete security for the rest of his lifetime, but his children as well. If I transfer the registration of the rates to his name then I have acknowledged him as tenant, and if I had to take him to court to regain possession, the court would evict him only if it was satisfied that I was suffering the greater hardship. I could seek no protection under Section 14 of the 1965 Rent Act for owner/occupiers, because I had not actually lived in the house; nor under Section 16, because the person I wanted the house for was not covered by the Agricultural Wages (Scotland) Act 1949.
§ I cannot afford to let that man live there both rent-free and rates-free, but again I must be careful. The court would almost automatically evict him under Section 12(7) of the 1920 Rent Act, or Section 2 of the proposed 1970 Act, if I did not charge him a rent of more than two-thirds of the rateable value that was applicable in 1965—which means that, to safeguard myself, the maximum contribution towards the rates payable by this tenant is only £8, whereas the present rateable value is £30. So he is not only living rent-free, but is contributing only about one-third of the rates.
§ My Lords, would you in similar circumstances have let this family have this House? I had not the heart to see that family living in "digs", or being prevented from returning to Scotland. But I may still end up in court when I want that house back in hand.
§ Next I should like your Lordships to consider the case of a tenant being a prisoner in his own house. In most counties, and certainly in my own, an engaged couple are not considered eligible to have their names entered on the house waiting-list for a local authority house, and can enter their name only after they are married. There is a great demand for two-apartment houses, so they usually have to wait three years. I provided such 129 a couple with a cottage—and there are in rural Scotland a number of two-apartment cottages at present standing empty. The husband has to travel 15 miles to his work, almost to the other end of the county. If he became a statutory tenant he would not then be considered for a local authority house, because most authorities would regard him as adequately housed; whereas, if he had been a council tenant, he could have put his name on a transfer list for another part of that county closer to his work. The result is that he does not want to become a regulated tenant; and it was agreed between us that no rent should be paid.
§ How nice it would have been if he and I could have entered into a contract for a lease of three years, with a rent fixed by the rent officer. He would then have been living under a restricted tenancy, which would not have excluded him from a council house, and I should have been reimbursed in rent and rates. Nothing in any of the Rent Acts allows us to do this with any security to me. So this is a case where a private tenant can so easily become a prisoner in his house. Yet I know of a man who sold his house, moved into rooms, demanded a council house and got a council house. At present there are almost no facilities enabling a council tenant living in one burgh to seek a council house in another burgh, and an applicant for a local authority house is forbidden by most authorities to have his name on any other burgh or county housing list.
§ The next case I should like your Lordships to consider is that of a house owner. It is quite common for headmasters or janitors of local authority schools to be compelled to live in a school house, or for employees in bridge building firms or other public works contractors to live in other areas than they would eventually like to retire in. I shall assume that these people would like to retire to Ayrshire. I know quite a number of contractors who buy and sell houses fairly regularly as they move from contract to contract around the country, and it is not uncommon for a head teacher or a janitor to transfer from one school to another. A headmaster or a contractor, or such person not domiciled in any one area, is usually earning a good salary and could easily, but for the 130 rent laws, obtain a mortgage while he is working, to build or buy a house for his future requirements; but, as we all know, it is very difficult for a person to obtain a mortgage after he is retired. Many of these people have said to me how much they would like to buy or build a house for their eventual retirement and let it for the period of years that they did not require it.
§ In the case of a headmaster, who would be paying an ordinary rent for a school house and would be automatically evicted if he left his job, if he had bought or built his house in Ayrshire, and let it, he might on the grounds of hardship persuade the court to allow him to gain possession of his house back again. But in the case of a contractor who might have had a house in Bedfordshire, the courts, if they followed the wording of the Rent Act, would not grant him possession of his house in Ayrshire, on the grounds that he already possessed a house. So, what happens? The headmaster who possesses, as many do, a house of his own, if it is mortgaged has to sell it, because the mortgagors would not allow him to let it, and when he retires he gets a council house from the last authority he worked for. The contractor also sells his house if he is keen to move to Ayrshire, then moves into rooms for the domiciliary period, and gets a council house.
§ Here, my Lords, is a case where two families who might have been able to rent a house for possibly 15 years are being deprived of accommodation. But, what is worse, here are two families retiring into council property who should be living in their own homes. Even under the Consolidated Rent Act 1970, in Schedule 3, case 12, possession of a manse or vicarage can be obtained only by a minister of religion; but this section does not cover the case of anybody else who is necessary for the efficient running of the church. Yet quite recently a gravedigger employed by a local authority was sacked and evicted from his house, although he was paying a rent well over the gross annual value.
§
Having criticised the Rent Acts, I shall now describe how I should like to have them improved in a way which would give the tenant security of tenure, but would also make it possible for private
131
lairds to rent their property without the serious pitfalls and hardships which exist at present. This is, briefly, that a clause should be inserted into the Rent Acts to allow a tenant and landlord to enter into a lease, or renew a lease, for a contracted number of years without resultant further security of tenure. It might read something like this:
A tenant and landlord shall be permitted to enter into or renew a lease for a contracted number of years, which shall be registered with the rent officer, under the following conditions:
§ If your Lordships accept my recommendations, I am sure that many estate owners in Scotland would then allow their tenant farmers to sub-let any of the farm cottages under a contracted lease. But at present many of the tenant farmers are not permitted to sub-let any of their cottages, and many of these cottages are falling into disrepair, because only the landlord is covered by Section 16 of the Rent Act 1965, and the position of the tenant farmer was not very clear until case 15 of Schedule III of the Consolidated Rent Act 1970 made this position clear.
§ Some noble Lords may feel that my proposals defeat the purpose of providing 132 a tenant with security of tenure, and that people should not be allowed to contract out of the law. In this case I hope that I have illustrated how I should like people to contract into the law, because at present the rent laws either give the tenant complete security of tenure or no security at all, and, as I have already stated, a local authority or housing association is expressly excluded from these Acts and has the power to move or evict tenants. A private landlord has no such powers, and I am not asking that he should, except at the expiry of the regulated contract period.
§ In the cases I have illustrated I am not thinking of the man who can afford to buy his house. I am thinking of the ordinary man who does not have much money behind him and who can only afford to rent a house. I am also thinking of the man who would like to buy or build a house in the area in which he would eventually like to retire but who cannot get a mortgage because he will not be moving into the property immediately, and who cannot let the house during the period that he does not require it, because of the rent laws.
§ Let me put this whole matter into a nutshell. If a clause could be inserted into the Rent Acts whereby a willing landlord and a willing tenant could agree to enter into a lease for a contracted period of years, with the rent officer acting as arbiter, I am certain that no rural cottages would remain vacant and that Her Majesty's Government would, by this one clause, do more to prevent the depopulation of rural Scotland and the Highlands than any other thing I can suggest. I thank your Lordships for listening to this speech.
§ 8.53 p.m.
§ LORD HUGHESMy Lords, it is the pleasing custom of your Lordships' House that a succeeding speaker should regard it as his first duty to congratulate the maker of a maiden speech, no matter what he may think of the content of that speech. I am certain that there must have been occasions in the past when this weighed rather heavily on the consciences of some people. The fact that I do not agree with what the noble Earl has said and the remedy he proposes does not in any way detract from the pleasure I have had in listening to him, 133 and I am sure that I speak for all of your Lordships when I say that it has indeed been a delight to listen to a speech resulting from a great deal of hard study and an attempt to find a solution to a problem which undoubtedly exists.
The fact that I do not agree with the noble Earl's solution does not mean that I differ from him in the facts which he has placed before your Lordships. It is undoubtedly the case that there are houses in the country parts of Scotland which are difficult to let because of the circumstances which the noble Earl has recounted. However, in a country where still the majority of people live in rented accommodation, the houses which are standing empty in rural parts form a very small minority of the total number of houses available for renting in Scotland. If one knew for certain that the landlords of Scotland were all animated by the same kindly thoughts as the noble Earl has given voice to this evening, then we could take the kind of risks that he suggests; but it is a fact of life that many of the properties in Scotland are not in the possession of landlords like the noble Earl, Lord Balfour. In fact, in many cases they are not in the possession of individuals at all but are in the possession of companies whose desire it is to maximise the profit which they can get from this perfectly legitimate commercial enterprise, but one which is not necessarily in the interests of their existing or their would-be tenants.
I do not know that we ever suffered from the worst aspects of the letting of property that came to be known in this part of the world as "Rachmanism", but we did have some landlords who approached that kind of attitude, and there are some property companies in Scotland whose reputation is perhaps not of the best. They may be in the minority, but unfortunately in some of these cases they own large numbers of houses. If we were to accept the solution put forward by the noble Earl, it would not be merely the kindly disposed who would take advantage of it. In fact, it would be an open door to the abandonment of the Rent Acts entirely so far as these people were concerned.
None of these people, when giving a new tenancy, would contemplate for one moment entering into a tenancy which 134 would become a regulated tenancy. Every one of these houses would be let on a lease for a period of two years, three years, five years—whatever it might be—and at the end of that time, no matter how great the need of the tenant, no matter how great the difficulty he might have in getting alternative accommodation, he would have no right to remain in the house, and no court could, or would, give him protection in those circumstances. So what the noble Earl suggests would be to remove the undoubted difficulty of—I would go so far as to say remove the undoubted injustice which is being done to—a small minority of people, by placing at hazard a very large number of people, particularly in our cities where housing is still in short supply, where many people are still living in houses totally unfit for habitation. Their chances of getting not merely a council house but a decent house in private ownership would be very much diminished it anything of this kind were done.
I do not for one moment expect that the noble Baroness, Lady Tweedsmuir, will be able to give any assurances to the noble Earl that amendment of the law along these lines could be forthcoming. I am certain that if she does she will then have a battle on her hands very reminiscent of the battle over the Rent Acts in the 1950s, and I am sure that the Government have enough trouble on their plate at the present time without searching the highways and byways of Scotland for new ways of getting more. However, in conclusion, I would say to the noble Earl that he is to be congratulated on having applied so much thought to this subject. If it is the view of your Lordships generally, as it is mine, that he has come up with the wrong solution, he should not be dismayed, but perhaps look around and try to find another solution which does not transfer the difficulties to a much greater number of people in other parts of the country. Whether he does so or not, I hope that having ventured into speaking in your Lordships' House and having done so in the difficult way of asking this Unstarred Question, he will be encouraged by the reception which we have given him, and will be led to favour us frequently in future with his contributions.
§ 8.59 p.m.
§ BARONESS TWEEDSMUIR OF BELHELVIEMy Lords, I should like to join with the noble Lord, Lord Hughes, in congratulating the noble Earl, Lord Balfour, on his maiden speech; and in particular I would congratulate him on the enormous amount of research into which he has quite clearly gone in what is a very difficult and complex branch of the law. Indeed, I think it is a subject that often defeats many professional lawyers, and it is for that reason that I was particularly grateful that he was good enough to send me a copy of his speech. I would say to him—as indeed the noble Lord, Lord Hughes has said—that I am sure the whole House will be grateful to him for having gone into this subject, which affects so many people so intimately, so carefully, with all his knowledge, as I understand it, of eight years on his own County Council and on the housing committee. That knowledge showed through all his speech and, as I say, I am sure the House as a whole will be grateful to him and will wish to consider more carefully the various questions which he has raised to-day.
I think the noble Earl has chosen rather a good time to make his maiden speech, because, as your Lordships know, a Bill consolidating the Rent Acts for Scotland is now before your Lordships' House, and in addition a Committee under the chairmanship of Mr. Hugh Francis, which was established by the previous Government to review the workings of the Rent Act 1965, has just reported to Ministers, and the Report will be published in about a month. I can assure the noble Earl, Lord Balfour, that in considering this Report, we will take very carefully into account the various matters of great concern which he has raised.
His speech, of course, had one clear purpose: to ensure that houses now standing empty can be used. The tenor of the noble Earl's argument has been that the Rent Acts, in seeking to give security to tenants, had gone too far, and that some amendment should be made to meet the particular problem which he detailed with such care. Perhaps I should first make clear to whom the Rent Acts apply. Your Lordships will recall that they apply to houses owned by the nationalised industries in exactly the same way as they apply to houses owned by 136 private landlords. They do not, however, apply to houses owned by local authorities, the Scottish Special Housing Association, the New Town Development Corporations or housing associations. In Scotland, however, no tenant, whoever his landlord may be, can be evicted without a court order. This, I am proud to say, has been the law of Scotland since 1555. It applies to local authorities and to the S.S.H.A., as to any other landlord. Of course, the sheriff is bound to grant an order for possession, provided that the local authority has served the proper notice to quit. Perhaps I should just say, in passing, that the English came into line only in 1965, over 400 years later.
The Rent Acts have always had two interlinked functions: to control increases in rents and to give tenants security of tenure. The purpose of giving tenants security of tenure is to make effective the limitations of rents and to prevent the landlord from avoiding rent restriction by evicting the tenant. As the noble Earl has pointed out, one of the effects of security of tenure for the tenant is to discourage landlords from letting houses which otherwise would become available. The problem is without doubt a very real one, and the difficulty is to find a right balance. The object must be, in the country as a whole, as the noble Lord, Lord Hughes, has pointed out, to prevent tenants from being unreasonably evicted while at the same time enabling landlords to obtain possession of their own houses.
The noble Earl suggests that a landlord and tenant should be able to enter into a contract for a lease for a definite period, with the rent officer acting as arbiter. There is nothing in the present laws to prevent contractual tenancy when the tenant eventually leaves at the end of the agreed period. But, of course, the problem arises if the tenant refuses to leave and then becomes a statutory tenant, with security for himself, his widow and children. If an amendment on the lines suggested by the noble Earl were made to the Rent Acts, it would in effect enable people to contract out of the Rent Acts; and it would clearly be very difficult to draft an amendment that would at the same time give adequate protection to tenants. It is therefore for this reason, and because we have to consider the laws as they affect the whole country, not only the rural areas but also 137 the industrial areas, that I am afraid I cannot say to-night that the Government have considered what really would be a major change in the Rent Acts and one that would affect security of tenure.
The noble Earl has done us all a service, because he has given the House an opportunity to give their opinion on the subject, and perhaps read this debate at leisure and consider it again. The noble Earl also mentioned the very important problem of a house that is bought or built by a man for his own occupation after retirement, and who cannot gain possession of it if he has let it without first having lived in it himself. When the Rent Act 1965 was going through Parliament, this matter was extensively debated in both Houses, and your Lordships inserted a clause to allow such a house to be repossessed when required. That clause was removed in another place, but the Government of the day expressed considerable sympathy with its object. In the debate in your Lordships' House the late Lord Mitchison said that the then Government had made great efforts to find a formula but had failed. I can assure the noble Earl that we will certainly look at this problem again and, difficult though it is, see whether it is possible to devise a way of meeting the problem which he has raised.
The noble Earl also asked about estate houses, and whether landlords could not be put in the same position in relation to estate houses for maintenance workers as they are now in relation to houses for agricultural workers. Under Section 16 138 of the Rent Act 1965, an agricultural cottage let to someone other than an agricultural worker can be recovered when it is required for such a worker, provided that the tenant has been given notice that this may happen. The Government will certainly examine the noble Earl's suggestion that the definition of an agricultural worker might include other estate workers such as those engaged on maintenance.
The noble Earl mentioned restrictions on the allocation of local authority houses, but there is nothing in the Rent Acts or in the Housing Acts, or in any directions of Government, which prevents a local authority from providing houses for those people he mentioned if they wish to do so. The Scottish Housing Advisory Committee, in their report called Allocating Council Houses recommended strongly that residential qualification requirements should be abolished and that the current housing need in each individual case should be the overriding criterion in allocations.
The noble Earl has given us an opportunity to consider some very important questions. I should like to say that I am grateful to him for that opportunity and for the fair way in which he has addressed himself to a very difficult and what can be a very politically controversial subject. I would only add that we shall study carefully all that he has said, and that we all hope that it will not be long before we hear from him again.
House adjourned at eight minutes past nine o'clock.