§ 3.20 p.m.
§ LORD GARNSWORTHY
My Lords, on behalf of my noble friend, I beg to move that this Bill be now read a second time. Its main purpose is to extend to the majority of those who live in rented furnished accommodation the full protection under the Rent Acts which is already available to unfurnished tenants. There are some exceptions to which I will come later. Your Lordships will no doubt be aware that the 1965 Rent Act (subsequently consolidated in the 1968 Act) which created the system of regulated tenancies subject to fair rents and established the rent officer service, excluded furnished tenancies from full protection and left them only with the limited protection afforded by the rent tribunals.
When the 1965 Act came into operation, furnished lettings accounted for a comparatively insignificant part of the private rented sector and interest in them was concentrated largely on those instances which were most typical, that is to say, lettings by owner-occupiers and winter lettings of holiday accommodation in seaside resorts. Since then however we have seen a change. Over the last few years, the private letting of dwellings has fallen. Whatever the reasons for this, there can be no doubt 240 that there has been a considerable decline in the availability of rented accommodation.
The Government—and indeed most experts in the field of housing—believe that this trend is unlikely to be reversed. From now on we must look elsewhere for a solution to our housing difficulties, and this indeed is what the Government are setting out to do in our programme, to increase the rate of local authority house building, and to encourage social ownership of rented accommodation. But meanwhile there can be no doubt that the decline in the privately rented sector adds to the difficulties of those who are dependent on renting. This contraction is, as we all know, conspicuous in the unfurnished sector, and those who have sought to find their homes in this market have been increasingly compelled to make do with furnished accommodation.
This means that the furnished sector is to-day catering for a much wider variety of tenants than was previously the case. It is now taking in not only the mobile individual seeking a temporary home, but we are finding that young couples, families, and old people who are not in a position to buy a home of their own, and who cannot obtain a council house or flat, are also having to make their homes in furnished lettings. For such people the fact that furnished lettings are not protected constitutes a very serious hardship. It means that landlords can demand high rents with impunity. It means that tenants too often feel that they dare not apply to the rent tribunal for a reduction in the scarcity rent they are forced to pay. It means that they have such incomplete security of tenure that many live in permanent fear of eviction and subsequent homelessness. It is for such people that this Bill is designed to provide help.
I readily admit to your Lordships that, taken by itself, the Bill as printed is difficult to understand, and I have to apologise for presenting a piece of rent legislation which is involved and difficult. But, as so often in the past, we are faced with the task of producing urgently needed legislation on a complex subject in a piecemeal fashion. In this case I ask the House to accept that the urgency is acute, since the knowledge that we intend to legislate may well be a stimulus, to landlords to regain possession from 241 furnished tenants before the law comes into force. There are already hints and reports in the Press that this is happening, In such circumstances speed must take precedence over the evolution of a polished piece of legislation.
It is for this reason that the Bill works by reference to the existing law rather than as a self-contained measure. It can only be understood by reference to the main legislation—that is the Rent Act 1968 and the Rent (Scotland) Act 1971. What it does is to remove, by virtue of Clause 1, the exclusion in the main legislation which denies to furnished tenants the security of tenure and rent-fixing facilities available to unfurnished tenants. It gives them the indefinite security of tenure which they so desperately need. It provides the right to go immediately to the rent officer to have a rent registered. These tenants will have the right of appeal to the rent assessment committee if they consider the rent officer's assessment too high. These rent-fixing procedures have been in operation for many years now for tenants of unfurnished accommodation. I ought to say that the Government have it in mind to review the whole question of the future of renting policy, including the fair rent system, in the light of their proposals for housing generally. In the meantime, we are extending the existing system to cover an additional class of tenant.
It has been necessary to make a number of amendments to the existing law to take account of this extension in its scope. We have, for example, to create two additional grounds on which a landlord may apply to a court for possession of a dwelling which is subject to full Rent Act protection. The Bill provides in Schedule 1 that possession may be granted where the tenant ill-treats furniture provided for his use, and in Clause 3 that possession must be granted where holiday accommodation has been let on a short out-of-season tenancy and where the landlord has given notice that he will claim possession on this ground. There are consequential amendments to the existing grounds for possession specified in the Rent Acts, together with adjustments to the formula for fixing fair rents to take into account the provision of furniture, and an amendment to deal with the situation where a regulated furnished tenancy is a sub-tenancy and, on the coming to 242 the end of the intermediate tenancy, the sub-tenant becomes the tenant of the head landlord.
There are a number of necessary transitional provisions, mostly of a purely technical nature, with which I need not trouble your Lordships at this stage. But I think I ought to mention the special provision we are making to preserve existing tenancies where a notice to quit has been served and where a court order for possession has already been made, but not executed. The tenant in the latter case will have the right to go back to the court which will be empowered to rescind the order if they would not have made it had the Bill already been in force.
I turn now to the remaining parts of the Bill, which are concerned chiefly with certain classes of tenancy which the Government think it right to exclude from full protection and leave subject to the existing provisions. The first two of these are lettings to students by educational institutions to be specified by the Secretary of State and also lettings for holiday purposes. I think your Lordships will agree that neither of these exclusions require much explanation or justification. So I come immediately to the third and major exemption, which consists of lettings by resident landlords. The Government have taken the view, which, I think, will be widely shared, that if an owner-occupier is forced to share his home with a tenant when he does not wish to, that in itself would probably be sufficient to guarantee a permanent state of hostility between them. The Government have certainly no wish to discourage the owner-occupier from letting off part of his home when he is in a position to do so. Such lettings make good use of the spare accommodation many people have in their homes—for example when families have grown up and moved—and these homes are particularly suitable for meeting the needs of those who require accommodation for a limited period. It would in our view be a matter for regret if, by curtailing unreasonably the freedom of resident landlords, we were to cause this supply of lettings to dry up. I might add that the introduction of a distinction between protected and unprotected tenancies, based on whether landlord and tenant live under the same roof, has the advantage of being easily understood by both. This is no 243 small advantage in an area where many people affected have little understanding of the law.
My Lords, the Bill provides in Schedule 2 that, in addition to existing furnished lettings by a resident landlord, new lettings—whether furnished or unfurnished—shall be treated as Part VI contracts and come within the jurisdiction of the rent tribunals. This exemption will extend to all new periodic tenancies let by resident landlords, but only to the first fixed-term contract let by a resident landlord to any particular tenant. I should explain the reasoning behind this restriction to one fixed-term contract. A fixed-term tenancy expires by the effluxion of time and does not require the service of a notice to quit to terminate it, and that puts the matter beyond the control of the Rent Tribunal. The noble Baroness looks a little puzzled. I do not know whether she would like me to repeat that last remark. A fixed-term tenancy expires by the effluxion of time and does not require the service of a notice to quit to terminate it, and that puts the matter beyond the control of the Rent Tribunal.
I have to say that while it seems reasonable to allow a landlord to let fixed-term once, we do not wish to encourage the repeated use of contracts under which the tenant has no recourse to the rent tribunal at the termination of his tenancy. All these tenants, whether fixed-term or periodic, will have access to the rent tribunal for the fixing of a reasonable rent, and the periodic tenants will, of course, be able to ask for periods of temporary security. The maximum period for the rent tribunal's suspension of a notice to quit is extended by Clauses 7 and 9 of the Bill from 6 months to 12 months. Tenants who do not enjoy full Rent Act protection may now have at least the benefit of an extended period of temporary security, which con of course be further extended for up to 12 months at a time on second and subsequent applications. We have every confidence that rent tribunals will continue in the new situation to exercise their discretion with the wisdom they have long shown.
It is, perhaps, appropriate to mention here that the Bill raises for England and Wales the rateable value limits within 244 which furnished dwellings come within the scope of rent tribunal jurisdiction to bring them into line with the limits of unfurnished dwellings. Noble Lords will remember that the limits for furnished and unfurnished protection were the same in 1965, and whereas the last Government extended protection in the unfurnished field they did not do so in the furnished field. The Bill brings the limits for Part VI contracts and protected tenancies into line once more. The limits for both kinds of dwellings in England and Wales will now be £1,500 in Greater London and £750 elsewhere. This will ensure that all dwellings for which some measure of protection is appropriate are brought within the scope of the Act. This increase does not apply to Scotland, since the rateable value limits there are already the same for furnished and unfurnished tenancies.
My Lords, the Government believe that the resident landlord exemption set out in Schedule 2 to the Bill achieves a reasonable balance between the needs of the tenant and what can realistically be expected of resident landlords if they are to continue to provide much-needed accommodation. We also believe that it is a logical way to proceed in as much as it represents a substantial step towards the complete merging of the furnished and unfurnished codes into a coherent whole. The present distinction between one tenant's security and another's depending on whether or not furniture is provided, has become increasingly unrealistic and outdated in recent years, and we have therefore established instead a new distinction based on whether the landlord is an absentee or lives on the same premises. This distinction has the merit of simplicity in that both landlord and tenant know where they are and it should therefore remove one possible source of had relations.
I am aware that there are some who argue that the provision in this Bill may well lead to a further reduction in the number of private lettings available and that it will, therefore, exacerbate the serious housing shortage faced by this country to-day. To such I would say that I doubt that the Bill will cause tile private rented sector to contract any further than it is doing anyway. But, even if we accept this as a risk I sincerely believe that it is one worth 245 taking for the sake of bringing immediate relief to many who are forced to live in private rented homes and who could otherwise never be free of the threat of imminent eviction. This is a necessary and a humane measure and I commend it to your Lordships.
In conclusion I would add that I have referred to the involved form that the Bill takes. We shall of course take vigorous steps to ensure that its effects are widely known and understood. I beg to move.
§ Moved, That the Bill be now read 2a.— (Lord Garnsworthy.)
§ 3.38 p.m.
§ BARONESS YOUNG
My Lords, I should like to begin by thanking the noble Lord, Lord Garnsworthy, for explaining this Bill to us, particularly the relationship of this Bill to the Rent Act 1968, and for the help which his office have given me in sending me notes on clauses, although as they arrived only this morning I have not had time to study them at all thoroughly. Once again the House is being asked to work to a very tight timetable. As I have already indicated privately to the noble Lord, Lord Garnsworthy, we on this side of the House do not agree with the principle behind this Bill, and although in the course of its passage through the House we would not wish in any way to be needlessly critical, it is only right that the House should have the opportunity to look at it carefully and the time for proper consultation and consideration in an unhurried atmosphere. This consideration is all the more important as the Bill bears all the marks of hasty drafting.
Perhaps this is not surprising, as I quote from a document called Labour's Programme 1973, page 47 of which reads:The next Labour Government will extend security of tenure to furnished tenants, but this will he just a stop-gap until the programme of municipalisation has been carried out.I do not intend to comment at length in this debate on the merits of a society in which it might be possible only to be an owner-occupier or a council tenant, except to say that in such a society people will be more restricted in their choice of accommodation, more rigidly disciplined and far less mobile, with all the disastrous consequences for industrial 246 growth which that might imply, and in which, I much regret to say, there will be far greater opportunities for corruption.
But it is important to have adequate time for discussion, because housing is so important in the life of everyone. Because this is so, I believe that it would be totally irresponsible for anyone in public life to advocate any course of action in housing without the most careful consideration. Therefore, in preparation for this debate to-day, I have discussed this Bill not only with officers in local government to see what effect it would have on council house waiting lists, but with the director of a housing aid centre, with estate agents and with the chairman of a rent tribunal. As a consequence, I am not at all clear what consultation or discussion the Government have had with anyone before introducing the Bill.
I have discovered that a week before the publication of the Bill the chairmen of rent tribunals were summoned to London to meet a Minister at the Department of the Environment to be told of the contents of the Bill. It might well be thought that such a group of men, with extensive practical experience in the field of both furnished and unfurnished tenancies, would have had something constructive to say. If they had we shall not know, for their advice was not sought. This seems all the more regrettable in view of the number of people likely to be affected. My figures may be out of date, because I have had considerable difficulty in finding anything very recent, but I can quote from the Economist of three weeks ago which said:At the time of the 1971 census, there were about 800,000 furnished tenancies, containing under 5 per cent. of all households, or about 1.7 million people.If one needed only one reason for opposing the Bill, it would be that it is entirely contrary to the basic philosophy of the Francis Committee's Report, which is surely a report which must be compulsory reading for anyone who tries to understand the problems of housing. The Committee was, after all, set up by the former Labour Government in 1969. What it said, in general terms, was that, if one grants automatic security of tenure to tenants of furnished accommodation, one is most likely to dry up completely 247 the supply of furnished tenancies. I quote from the Committee's Report:The eventual overall reduction in the supply of privately rented accommodation would, as we think, be substantial… greater security for those in occupation when the extended security code came into force could well be bought at the cost of greater hardship and difficulty for the much larger number of households seeking such accommodation in the following weeks, months and years…. For the reasons we have indicated, we cannot recommend such an extension. On the contrary, we venture to sound a solemn warning against it.This view was supported by a leading article in the Observer two Sundays ago. Again, I quote:Unfortunately, there is a strong likelihood that its effects"—that is, the effects of the Bill—will be to worsen the housing problem, rather than to alleviate it. Present tenants of furnished flats and houses will undoubtedly benefit, but the probability is that the new legislation will lead to a drying-up in the supply of furnished flats, just as similar earlier legislation has almost completely dried up the supply of unfurnished flats.Indeed, I am sure that this view is supported by no less a person than Mr. Reginald Freeson, now Minister of Housing, for when he spoke in the debate on the Second Reading of the Furnished Lettings (Rent Allowances) Bill, he said—and he was quoting figures of tenancies—Between 1966 and 1971 rented accommodation fell by just under 68,000 tenancies. In the unfurnished sector the fall was 122,000-plus and in the furnished sector there was a growth of 54,500 tenancies."—[OFFKIAL REPORT, Commons, 23/1/73; col. 334.]If I understand the argument of the noble Lord, Lord Garnsworthy, on the point of the supply of rented accommodation, there is less unfurnished accommodation; it has decreased year by year. We all know this to be a fact, and we all know the basic reason why it has decreased. It is because it is no longer an economic proposition to let unfurnished. But, much more to the point, if a landlord lets unfurnished he cannot get rid of a tenant should he wish to do so. It is this fear that a landlord will not have freedom to use his property that has caused the supply of unfurnished property to diminish so much in the housing market. We now have a Bill dealing with furnished accommodation, which will have precisely the same effect on the whole 248 furnished letting market. Any landlord knows that when his tenants leave his only option, once the Bill has been passed, will be to sell his house if he wants to keep its value.
My Lords, this is a short Bill of only 13 clauses, but it is right in a Second Reading debate that I should, in fairness, try to weigh up the advantages and disadvantages of giving security of tenure to tenants of furnished accommodation, with certain exceptions. It is quite true, as the noble Lord, Lord Garnsworthy, has said, that some people will benefit. They will be those who are at present living in self-contained furnished accommodation. They alone will have security of tenure under Clause 1. But against this must be balanced those who will not be helped. Perhaps the most tragic fact is that it is just those tenants in the worst type of furnished accommodation who are unlikely to be helped.
For example, let us take the case of a landlord who buys a house in which he himself lives, and who lets off most of it as furnished accommodation. This is frequently the poorest type of furnished accommodation, and the only accommodation which newcomers and many of the poorest members of the population can get. Those tenants will not have security, because the landlord is living in the house. Many of those landlords are the very worst of the landlords in the furnished property market, and by giving preference to them this Bill could well be a recipe for more squalid furnished accommodation. Indeed, this morning I received in the post a memorandum from Shelter, which made precisely the same point, that this Bill may not help those tenants who, it could be argued, are most in need.
But equally important in consideration of the Bill are the unknown thousands of people who are trying to find accommodation, and for whom furnished accommodation is the only answer. In my opinion, the most hard-hit in this group, will be newly married couples. They cannot afford to buy a house and they certainly will not be eligible for a council house. Where can they go, except into furnished accommodation? A small flat or rooms will be their first home and I am sure that this group of people, above all, will find it increasingly difficult to obtain self-contained furnished 249 accommodation in which they can start their married life. We all know enough of the social consequences of starting married life in cramped unsuitable accommodation shared, usually, with parents. I should like to know whether the Government have any evidence at all as to the number of people who will be put at a severe disadvantage as a result of the Bill and because of this problem, and what they will say to those getting married this year and in the next few years who will search desperately for an ever-diminishing supply of furnished accommodation.
§ LORD AVEBURY
My Lords, I wonder whether the noble Baroness will allow me to interrupt. She probably remembers the discussions we have had on security of tenure and regulation of the rent of people who live in caravans. It occurs to me that young married people who are not able to afford to buy a house, and who cannot get on to local authority waiting lists, will frequently look to the caravan sector for their first home. So is it not equally important to give consideration to their needs as well as to those who rent furnished flats?
§ BARONESS YOUNG
My Lords, the noble Lord, Lord Avebury, has raised a quite separate point about caravans. I should like to consider what he has said before commenting on it. But, so far as I can see, if security of tenure is given to everybody in caravans, there will be fewer caravans to let, and precisely the same argument will apply in their case as will apply to furnished accommodation.
In general, I welcome the extension of the fair rent principle, though I should say in passing that I cannot understand why the Government are prepared to extend this principle to furnished tenancies and not to council house tenants. I also welcome the extension of the higher rateable value limits, which are explained under Clause 5. However, the Bill makes no reference to the different obligations of landlords in the case of unfurnished and furnished tenancies. In the case of an unfurnished tenancy the landlord is responsible only for the fabric of the building and the external decoration; in that of a furnished tenancy the landlord is responsible for everything, outside and inside, including structural repairs and internal decoration. Any fair rent must surely therefore take into 250 account this increased obligation. Indeed, it may well be that the term "furnished accommodation" in Clause 1 needs to be much more clearly defined, for furniture is included in a fair rent calculation. So far as I can see, nothing is said about the cost of services, whether these are provided, either of light, heat, repairs or possibly of a porter. Surely these general services must also he taken into account when determining a fair rent?
My Lords, I turn now to Clause 2 which contains the exemptions, those tenants who will not have security of tenure. It is easy to see the reasons behind these for, I believe, the exemptions are based on the recommendations of the Francis Committee Report. They are designed to help students who, by definition, are temporary residents, and landladies who let holiday accommodation. I think, however, that a further definition is necessary of what constitutes a course of study. For example, does it cover a secretarial course? However, only certain students will benefit, those who will be in specified educational institutions. Those that will he hard done by under this clause, and indeed by the Bill generally, are students presently living in furnished flats which are privately owned, and other young single men and women, many of whom arc still studying. such as nurses, apprentices at technical schools, young social workers, those training to be solicitors and doctors; the list is almost endless. All of these young people who come to the larger cities to work will need accommodation. It is extremely unlikely that they will be able to afford to buy a house, even if they wanted to; and they will certainly not be eligible for a council flat because they are unlikely to be permanent residents. They need furnished accommodation. Frequently to-day they do not want to be in"digs"with a landlady; they prefer the freedom of a flat. They are most unlikely to find one once the Bill becomes law.
There is however one notable omission from Clause 2. While Clause 1 gives security of tenure to all tenants of furnished accommodation, there is no reference in Clause 2 to fixed term tenancies. These are tenancies usually agreed in writing between the owner of a house who lets it for a tenant while he is away for a fixed period and as it is the owner's 251 only place of residence he must have it back when he returns. Under the present law, as I understand it, there is no power for a rent tribunal to grant security to the tenant. The fact is, therefore, that if an owner returns home and wants his house while the tenant may refuse to leave lie nevertheless knows that he will have to go because he has no security. However, he may think that the landlord must go to the rent tribunal, and as there may be some doubt on the point he may not be willing to leave. I think that this is an important matter because there are a number of categories of people who, for one reason or another, want to let their house. I refer to service people, particularly those serving overseas, those possibly in the Foreign Office and, if I may strike a personal note, those in universities who go on Sabbatical leave.
I do not intend to go through the Bill clause by clause, my Lords, but I should like to ask a number of questions. I shall be glad to know whether the noble Lord, Lord Garnsworthy, can say what is the position of the tenants of a completely self-contained flat in a house in which the landlord is resident. Has the tenant security of tenure in such circumstances? Secondly is my understanding of the Bill correct, that if the landlord is resident tenants in unfurnished accommodation let within the house do not have security of tenure on a first letting? If that is a correct reading, it is a provision which I welcome because it means the freeing of some part of the market in unfurnished accommodation.
I do not see anywhere in the Bill the right of a landlord to turn out his tenant for non-payment of rent, but perhaps the noble Lord, Lord Garnsworthy, could comment about that. However, I welcome the power in Clause 6(1) to increase the rent. This I believe follows a recommendation of the Francis Committee; otherwise tenants could well be given protection at a completely uneconomic rent. The noble Lord referred to the provisions in Schedule I whereby a landlord may turn out a tenant if the tenant damages the furniture. This reads very well, but I suspect it will be a completely unrealistic provision. Unless there is a complete schedule of accommodation when it is let the landlord will go to court and say that the furniture has been dam- 252 aged while the tenant will claim that the landlord was responsible, with the landlord counter-claiming that the tenant was responsible. It will be exceedingly difficult to determine who is right. But perhaps this matter has been gone into with a great deal more detail than would appear from a first reading of the Bill.
As the noble Lord, Lord Garnsworthy, said, it is a technical Bill. In concluding my remarks I think it only right to try to weigh up the balances of advantage and disadvantage. The advantage goes to those at present in self-contained furnished accommodation who will have security of tenure. The disadvantage will be to those looking for accommodation which will, I believe, be increasingly difficult to find. The Bill will not help young married couples, young people starting out to work; it will not help the poorest section of tenants in the worst accommodation where the landlord is resident. Because of this it is difficult to see that it will reduce the number of homeless families. On the contrary it could well make a contribution to there being even more of them. It could well lead to the under-occupation of large houses because, once again, it is a Bill aimed largely against the private landlord, making people fearful of letting in case they should suddenly be unable to ask tenants to leave if the situation becomes unbearable. It is this fear that will prevent landlords from letting and will, as a consequence, mean there will be much less furnished accommodation to let. It is not a Bill that will provide one more house or flat. For all these reasons we on the Opposition side of the House cannot support it.
§ 3.59 p.m.
§ LORD GIFFORD
My Lords, the Bill is about security of tenure, and in view of parts of the speech of the noble Baroness, Lady Young, which we have just heard, it is necessary for the House to consider carefully, and to remember, what the phrase"security of tenure"means. It means something which everyone in this House no doubt enjoys and which every family in Britain should enjoy—the right to be free from arbitrary expulsion from one's home. It is a right taken for granted by owner-occupiers; it is a right which in practice is enjoyed by all council tenants. It is not enjoyed under the law, which always seems to me 253 to be strange, and council tenants should have the protection afforded by the Rent Act as well. However, in practice it is enjoyed by council tenants. The right is enjoyed at present by tenants of unfurnished accommodation who cannot be evicted except by an order of the court, and such an order cannot be made unless certain circumstances have arisen. Briefly, those are either that suitable alternative accommodation has been provided, or the tenant has arrears of rent or is in breach of some obligation, or has been a nuisance or an annoyance.
My Lords, something of the thinking of the Opposition Party was revealed in the speech of the noble Baroness when she talked about landlords not wanting to let their property because they would not have the freedom to get rid of their tenants. A little later she talked of the right to ask tenants to leave if the situation became unbearable. The freedom to get rid of one's tenants is exactly the philosophy of great numbers of landlords who let property in the City; and I am not one who believes that it is any joy for the tenant, particularly if the tenant has a family, if the landlord is in a position to get rid of him when he has done nothing wrong, and when he has nowhere to go—all this purely at the whim of the landlord, who may want to sell with vacant possession at a profit or do up the house so that, equally, he can make a"killing ", as so many property companies have done. The Bill at least brings to an end the distinction between furnished and unfurnished accommodation, and will—and I applaud it for this—give security of tenure (which is something I should like to see extended to every family in this country) to a number of families who do not have it at present.
My Lords, the existence of a class of people—and my information is that it extends to over half a million lettings—who do not have the right not to be arbitrarily expelled from their homes is a social evil of the most scandalous kind. It is an evil, not merely for a man to own another's home but to be the master, the arbiter, of how long he is allowed to stay in it. It is an evil where, as in the case of the distressed areas of London, according to the Francis Committee, 49 per cent. of furnished tenants are not young students or young married couples but families. Sometimes the Labour Party 254 and those who speak in favour of tenants are accused of being anti-landlord, of having prejudices against landlords. I confess to that prejudice, not because of any sinful aspect of the character of persons who own property, but because of the nature of the relationship, which inevitably leads to exploitation by the dominant party, the landlord, of the weaker party, the tenant.
Let the noble Baroness and others of her persuasion know that the law gives ample protection to landlords against bad tenants. In the Rent Acts the grounds are specified on which the landlord of a protected dwelling can gain possession, and being a bad tenant is one of them, whether you are a nuisance, whether you do not pay the rent or whatever, subject of course to fair judicial control. But the law does not give adequate protection to good tenants against bad landlords, and far more social abuses stem from that. My own experience shows that every loophole of the law will be used by landlords who wish to have—and I quote the noble Baroness again—" the freedom to get rid of their tenants"whenever they can do so in order to obtain more money at less cost. The best loophole, of course, is the right to evict someone because, for instance, he complains that the rent is too high or because he tries to enforce obligations to repair, or because in some other way he stands up for his rights; and, of course, what we have seen over the last years is that, since the law allows it, understandably enough more and more property owners fill their flats with a collection of shoddy, unwanted furniture in order to preserve that position of power. The distinction between furnished and unfurnished tenancies is utterly without logic, and I am delighted that it is to disappear.
However, my Lords, a new distinction is introduced, between tenants of resident landlords and tenants of nonresident landlords. Again taking the statistics of the Francis Committee. I understand that that will account for 27 per cent. of the present furnished tenants, and in the distressed areas, where the problem is most acute, it will account for 39 per cent. of those who are now furnished tenants; and, of course, it will bring into the area of non-protection many thousands more dwellings which 255 are at present let on unfurnished tenancies. The justification given by my noble friend was, I think, that "it is undesirable that an owner of property should be forced to share his home with somebody he does not get on with." Another justification which my noble friend indicated or hinted at, and upon which the noble Baroness relied strongly, was that without such an exemption owner-occupiers would not let out spare accommodation.
As to the second of those objections, I would dispute the premise that small landlords, owner-occupying landlords, would not let out their accommodation if the letting was to be a protected one. These are, of course, by definition, as the noble Baroness in fact said, the small landlords, and the small landlords are likely to be those who need the income most. Just as in the past landlords have accepted, because it is the law, that if, for instance, they buy a property with controlled tenants, those tenants have the right to remain and to continue to call the place their home unless suitable alternative accommodation is provided. so, in future, if there is no choice the owner-occupier would treat those who live in his house or in the dwelling in which he lives as people who had a right to stay.
But even if the premise is justified, the remedy is not to perpetuate insecurity for thousands more families, but to increase the powers of local authorities to nominate tenants for properties which are left empty deliberately. But if a concession has to be made—nd it may have to be made for the limited grounds argued for by my noble friend Lord Garnsworthy; namely, that"it is undesirable that people should have to share their homes with tenants they do not get on with "—then there is absolutely no justification for making the exemption as broad as it has been made in the Bill. As I understand the Bill, no matter how large the building is, even if it is a block of flats with 50 flats inside it, if one flat is occupied by the landlord then the rest of the tenants in the building would have no protection. I can readily imagine that there will be a spate of conveyances from property companies into the names of individuals—relatives, friends of the controller of the company;"stooge"nominees—who will move in 256 and occupy one little part of a much larger building in order to come within the terms of this exemption.
If a distinction is needed to cover the particular area of which my noble friend spoke, then there is a perfectly good precedent in the Race Relations Act of 1968. Parliament had to consider there whether to limit the provisions against discrimination in cases where people were living in close quarters, and a definition of"small premises"was enacted—small premises in which it would not be unlawful to practice discrimination. Such premises were limited to those where there were normally no more than two units of accommodation, besides that of the landlord, and to cases where the landlord shared facilities, other than access and storage facilities, with his tenants. In cases of shared accommodation in the real sense of the word, where the landlord and tenant have to use the same kitchen or the same bathroom, I would certainly agree with an exemption, but no more than that.
§ LORD AVEBURY
My Lords, will the noble Lord forgive my interrupting him? In the case where the landlord shares the kitchen or the bathroom it probably is not a tenancy at all. But to return to the large block of flats which the noble Lord mentioned, which is at present in the name of the property company and where the noble Lord suggests that the controlling shareholder in the property company might move into one vacant flat and thereby acquire exemption under the Bill, surely such a man can do so only if at the same time the lease is taken out of the name of the company and put in his own name; and would the noble Lord not agree it is very unlikely that that would be accomplished?
§ LORD GARNSWORTHY
My Lords, I wonder whether it would help (and it might save me coming back to the matter) if I were to say that it would have to he taken up as the main residence of the person occupying the flat, and that he may be called upon to prove this.
§ LORD GIFFORD
My Lords, I recognise that in the case of a block of flats the real owner would not immediately be able to deprive the tenants of security but be could arrange a conveyance from 257 the company's name into his own name, or the name of his relative who would hold it for him, and any new lettings made within that block would be lettings outside the protection of the Rent Acts. I shall perhaps come back in Committee to my noble friend's point as to whether it has to be his main residence because I do not think the Schedule actually says so. He has to occupy it as his residence, and no doubt if it was one of two or three residences he may well get by unless there is some amendment to that provision.
My Lords, I come back to the possibility of a more limited definition of the category of exempted persons; namely, that which was laid down by Parliament in the Race Relations Act. It is somewhat absurd if, while a resident landlord may not discriminate in his letting if it is outside the terms of that Act, nevertheless he is in a position where he may lawfully evict subject only to the rent tribunal's power to give extra security to anybody he does not like. In the majority of these lettings by resident landlords, the landlord has a self-contained unit in the basement or on the top floor, the tenants have self-contained units, and there is absolutely no reason why, if the Rent Act grounds do not exist and if the tenant is a perfectly good tenant, his tenancy should be put at risk in the way I described earlier. I claim that while the Bill gives generously with one hand it takes away far too broadly with the other and unless amended it cannot be supported very warmly by those who have to deal with the miseries of insecurity of tenure, because undoubtedly, particularly in the cases of small resident landlords, those miseries will persist.
My Lords, I had thought that there was another major flaw in the Bill; that is to say, that it did not deal with the abuse of granting fixed-term tenancies. As I understand what my noble friend Lord Garnsworthy said—and I hope he will confirm it in winding up—the abuse now practised by landlords, to grant a succession of three-monthly or six-monthly tenancies in order to avoid having to submit to the Rent Tribunal jurisdiction, will not be possible under the new Bill and that a landlord who tries to do that will find that his tenant is a protected tenant and has the full protection of the Rent Act. 258 The Bill cannot end the many injustices caused by the malpractices of landlords —the winkling out of tenants, the overcharging of rents, the refusal to do repairs. Only a determined policy, as my noble friend mentioned, of public ownership of rented property can do that. If improved, however, the Bill can give to that most depressed class of furnished tenants, and to those in law centres, Shelter, and Housing Action Centres who try to defend their interests, more weapons to fight against the greed and callousness for which developers of property are regrettably notorious.
§ 4.14 p.m.
§ LORD BALERNO
My Lords, I apologise to your Lordships in general and to the noble Lord, Lord Garnsworthy, in particular for being unable to be here at the start of the debate. It is not my intention to follow the noble Lord, Lord Gifford, who dealt mainly with the principles of the Bill. I wish to deal with certain aspects, minor aspects one might say, that come out of it.
My first point is to raise a query for my own education. It may be a rather silly question, but we have before us at the present moment the Land Tenure Reform (Scotland) Bill and that Bill puts a limit of 20 years on tenancies. Will the limit put on by this Scottish Bill, when it becomes an Act, in any way cause an anomaly in this Bill? Would it not be logical for it to mean that a continuing tenancy under this Bill could not go on for a longer period than 20 years? If it could not go on for more than 20 years with a formal lease, should it be allowed to go on for more than 20 years with a renewing lease such as this? That is one point, and I do not necessarily expect to get the answer to it to-day.
My main interest lies in how this Bill will affect the universities and other educational establishments. I strongly support what my noble friend Lady Young said about the numbers of students who are now living in flatted houses. The student who cannot get into a residence or who does not want to get into a residence, no longer wants to go to the private landlady and be looked after by the private landlady. That is against the feeling of independence of the modern student. In Edinburgh we say that the day of the bunk wife is over. 259 Instead, the students are moving into flats—two, three, four, five, six or if possible more, students are renting a flat and living in it. Under the Bill it is clear that those public-spirited landlords who have been and still are meeting this demand for student accommodation in flats which has sprung up only within the last 10 years in any magnitude, will most certainly stop because of the hazards of any student in whose name the flat has been taken over, getting married—as so many students do—going on to take a postgraduate degree and raising a family in the flat that was rented as a student's flat. That means that that landlord has his flat"sterilised ", as it were, for another purpose altogether.
I wonder whether the Government appreciate the magnitude of this problem and the numbers of students who are living in flats. I had time only to make inquiries about Edinburgh, but so far as I can make out 30 per cent. of all students in Edinburgh and Heriot Watt Universities are living in such flats. The number is of the order of 3,000 to 4,000 students. If one adds the colleges of education, the colleges of art, the colleges of physical education, technical colleges and others, there must be at least 5,000 students in Edinburgh living in flats. No further accommodation can be built by the universities. The arrangements with the University Grants Committee are such that the universities must discover the money for building any further residences. Universities will not borrow money at 15 per cent. in order to put up student residences. When money was cheaper they could do it and hope to make a reasonable commercial proposition of it, but as things are now, the building of student accommodation by universities has stopped and is unlikely to be increased. The bunk wife has gone and we have only the flats to take over for the students and to a certain extent we have council houses that happen to be surplus and are not otherwise required.
This is a very serious situation. If there should be any reduction in the number of flats available for students or if there should be no further expansion in the numbers, then the universities are going to be faced with great difficulties. 260 I have given the example merely of Edinburgh. but your Lordships need only multiply the Edinburgh figure by the number of other university centres and it is easy to realise that there will be something like 50,000 students whose living accommodation would be placed in jeopardy as a result of this Bill. I beseech the Government to take another look at this point. I can quite understand why they have slipped up on this. They have made certain exemptions in respect of the residential accommodation provided by the universities and educational establishments but not in respect of that provided by, as it were, private enterprise. I think it would be quite easy for the Government to put down an Amendment which would put this right.
Another point affecting universities was also touched upon by my noble friend Lady Young: the sabbatical year. This is becoming increasingly important and it is also becoming less and less of a sabbatical year—in other words, it is occurring with much greater frequency than once every seven years, which was its original definition. University staff are being encouraged to go abroad for a sabbatical year with greater and greater frequency. It is greatly to their advantage, as a member of the staff, to increase their knowledge and eventually gain promotion. It is also greatly to the advantage of the universities that a staff member should come back from another university, in another country perhaps, with a better knowledge of his subject. Unless such members of staff who go on sabbaticals can be quite certain they are going to get their home back when they return to their own university, they will not go away. They could not possibly risk going away with their children and then coming back to no decent home because their tenants are still sitting tight in it.
My third and last point concerning Scotland refers to the minister in his manse. There are still, as in England many charges and the majority of them have a tied house. Of recent years it has become increasingly common for a minister to anticipate his retirement by buying a house, frequently on mortgage, for himself and his wife to retire into in the place where they eventually wish to live. So far as I can make out from the 261 Bill, this practice will be entirely stopped. Therefore, I again suggest that the Government might slip in an Amendment during the Committee stage. It should not be beyond their wit to devise such an Amendment and I hope that they will do this, because to make Amendments on the three points I have mentioned would be rather tricky for anyone who has not at his disposal the services of a Parliamentary draftsman. Parliamentary draftsmen are fully acquainted with the intricacies of the law regarding rent. So I would beseech the Government, for their own sakes and in their own defence, to put forward suitable Amendments during the Committee stage and thereby avoid having"amateur"Amendments put forward by myself and my friends to put these things right.
§ 4.26 p.m.
§ LORD MELCHETT
My Lords, I warmly welcome this Bill. It has been urgently needed almost ever since the 1968 Rent Act was passed. I do not intend to follow the tactical points on the Scottish situation which were put forward by the noble Lord opposite. So far as I can see, the only real objection to the Bill has been raised by those who, like the noble Baroness, Lady Young, claim that bringing furnished tenants under similar controls to those for unfurnished tenants will dry up the supply of furnished accommodation. I can only speak for the area in which I live—Pimlico—which, incidentally, is a fairly typical inner-city housing stress area.
I would have some sympathy with the argument that this Bill will lead to a reduction in the availability of furnished flats, if it were not for the fact that for many years now property owners and developers have been ruthlessly emptying furnished flats. As soon as developers have seen the chance to make"a quick buck"by emptying a property of furnished tenants and converting it into flats for sale, no airy-fairy worries about diminishing the total stock of furnished dwellings have held them back. I, for one, am not at all sorry to see several property companies in difficulties at the moment. The fact, earnestly and endlessly repeated by their apologists, that these companies have the savings of large numbers of ordinary men and women invested with 262 them, through pension funds and so on, does not, in my view, alter the fact that many of these companies made their money by destroying poor people's homes and building in their place office blocks, hotels, shopping precints and rich people's homes.
The urgent need now is to preserve what is left of the rapidly dwindling stock of cheap rented accommodation. Furnished premises represent over 25 per cent, of all households in an area like Westminster, and over 10 per cent. of all London's households. The number of applications to the rent tribunals rises by leaps and bounds every year—for example, in London alone, from 9.500 in 1970 to over 15,000 last year. Eighty per cent. of these applications were concerned with security of tenure. Housing problems are by far and away the major preoccupation of people living in inner-city areas, and approximately two-thirds of the families in London who become homeless are coming from the furnished sector.
My Lords, it is vital that this Bill is passed into law as soon as possible. During its passage through Parliament, many furnished tenants will be at risk. But it is equally important that the Bill, when it becomes law, does not contain any readily-useable loopholes—because I regret to say it is my belief that, if there arc loopholes available, they will be used by landlords. Here I agree with my noble friend Lord Gifford.
There are three areas in particular in which I feel that the Bill could be strengthened and improved. In the first place, the Bill omits any provisions relating to the form of notices to quit. I think that the Government should have implemented the recommendations of the Francis Committee in this respect. The Francis Committee recommended that notices to quit should be in a prescribed form and that this should contain various items of information—first, that tenants could not be compelled to leave except under a court order; and, secondly, that they may apply to the rent tribunal for security of tenure at any time before their notice to quit expires. I would add something not mentioned by the Francis Committee but of practical value; namely, the address of the relevant rent tribunal.
263 An amendment may be included in the Housing Bill at present being considered in another place requiring anyone who issues a notice to quit to inform the relevant local authority, so that local authorities are alerted in advance of impending homelessness in their areas. That requirement should apply to notices to quit issued under the 1968 Rent Act and under this Bill.
The Francis Committee were told in evidence by the Association of Municipal Corporations that:... due to ignorance of the security provisions available and a lack of supply of suitable accommodation, tenants will quickly feel intimidated by relatively minor pressures from landlords.The Committee went on to say:... many ignorant tenants are led by the common law form of notice to quit (which calls on a tenant ' to quit and deliver up possession ' at the expiration of the notice or on a specified date at least one month hence) actually to leave their dwelling, notwithstanding the fact that they are protected, or, if furnished, are entitled to apply to the rent tribunal for a period of security.The Committee doubted whether or not this"misapprehension"was widespread. Information on this point is very difficult to obtain, but a survey of 101 properties in Pimlico, all owned by one property company that was attempting to clear them for redevelopment, showed that since 1971 over half the people who had left these properties had not gone to the rent tribunal; this in spite of a very active local campaign against the evictions and the redevelopment.
My Lords, it is my firm conviction that it is very little use Parliament passing Acts designed to help people unless it also ensures that these people are informed about their newly conferred rights. It will halve the effectiveness of this Bill if. after it is passed, half the people who are told to leave furnished premises think they must do what they are told, just like that.
The second aspect of this Bill that I am not happy about is the new case, Case 3A in Schedule 1. This enables landlords to get rid of tenants who damage furniture provided by the landlord, just as they may currently get rid of tenants who damage the fabric of the property. Damage to furniture is thus placed on a par with damage to the property itself. I do not think that this is fair to the tenant. 264 Furniture may be old and dilapidated when supplied, or removed or exchanged by the landlord during the tenancy. Landlords may not fulfil their implied covenant to repair or replace items that are not usable because of fair wear and tear. And the final difficulty, mentioned by the noble Baroness, Lady Young, is that there will often be no inventory of the furniture as supplied by the landlord at the start of the tenancy. My own view is that landlords may already have sufficient rights to sue for damages at common law. If not, at the very least the courts should have to give tenants a chance to repair or replace damaged items before eviction is considered.
Thirdly, there is this problem of premises with a resident landlord. This is a difficult area, and as the Francis Committee was told in evidence,Both complaints of offences and actual offences (by no means always the same things) are particularl), likely to occur where landlord and tenant share accommodation.Here the Bill, on my understanding, exempts from its provisions all furnished lettings, and all new unfurnished lettings, as my noble friend Lord Gifford said, of whatever size. Like my noble friend Lord Gifford. I favour the recommendations of Miss Evans contained in her excellent Minority Report to the Francis Committee's recommendations. This would involve a provision along the lines of Section 7 of the Race Relations Act. If this were done, existing unfurnished tenancies in"small"premises would have to be excluded from the Bill so that they would retain their existing protection. And, to answer a point that the noble Lord, Lord Garnsworthy, made, I do not really think that this would be too complicated a provision to enact for people to understand it. My Lords, there is a very real need to distinguish between householders who let rooms that are surplus to their own requirements and the resident landlord who lets to make a
Having dwelt on what are, in my view. some particular weak spots in the Bill, let me say that overall I think this is an excellent Bill. The Government have done very well to bring such a complex piece of legislation before Parliament so soon after taking Office. This Bill implements yet another of the Labour Party's pledges in the Election Manifesto; and I would urge your Lordships to give the Bill the speedy passage that it desperately 265 needs through all its stages in your Lordships' House.
§ 4.35 p.m.
THE EARL OF BALFOUR
My Lords, I regret that I am seldom in your Lordships' House, the sole reason being that 1 cannot come to London very often. However, I am glad to have an opportunity to take part in this debate, but my speech will not be short because the real purpose of this Bill requires explanation. May I say at this stage that it was very interesting to listen to the other speeches, particularly that of the noble Lord, Lord Melchett, who spoke so well about London and the South of England. He mentioned the Francis Committee's Report, but I do not think the effects of the Rent Act 1965 had really"bitten"when that Report came out.
I ask your Lordships to accept this Bill and to give it a speedy passage through this House. But I hope that this Bill will not be extended or amended in such a way as to give security of tenure beyond what is already provided for. The reason why I ask your Lordships to accept this Bill is that it introduces nothing that the average landlord has not expected; and let me make it perfectly clear that the real purpose behind this Bill is not to give security of tenure to the tenant, but to reduce the availability of rented accommodation. This Bill is not designed to hit the landlord. It has, after all, been part of the Labour Party's Manifesto for a long time and only a fool would have expected otherwise. The whole purpose of this Bill is to restrict the movement of people from one local authority area to another. This Bill is skilfully designed to prevent the prospective tenant from moving out of the local authority area in which he is domiciled. If a Government want to prevent people doing something, or to reduce the availability of something, they put restrictions on it. In this case, if Her Majesty's Government wanted to encourage landlords to let their property, they would relax the restrictions, not tighten them up. This Bill is merely to increase the restrictions that already exist in the various Rent Acts, particularly the last Rent Act of 1965.
In order that your Lordships may fully comprehend the reasons why this Government have introduced this Bill, it is necessary for me to go back in history to the 266 reasons why the then Government introduced the 1965 Rent Act. Most of that Act, and the earlier Acts, were consolidated in the Rent Act 1968 and the Rent (Scotland) Act 1971. From the tenants' point of view, these Acts divide them into two distinct groups giving the tenants either complete security of tenure or absolutely none at all. By far the largest property owners, if you take them as a group, are the local authorities and the housing associations, amounting to some 55 per cent. of the houses and flats available to rent. These authorities and associations are expressly excluded from the provisions of the Rent Acts, and their tenants have no security of tenure at all. In fact, these landlords are the only landlords who can charge a rent on a tied house; for example, a groundsman or school caretaker would lose his house if he left or was sacked from his work, although he could he charged almost the same rent as a similar tenant of any other local authority house. Similar tenancies which are not protected at all are tenancies of Government Departments or held in trust for Her Majesty, or of property belonging to the Armed Forces or the National Health Service et cetera, amounting perhaps to a further 5 per cent., but this does not cover a nationalised industry.
The next largest group whose tenants have security of tenure are the National Coal Board and the big insurance companies. The N.C.B. must have more tenanted houses than any other company in Britain and are certainly one of the largest landowners in this country. These companies have a large number of tenants and probably cover a further 20 per cent., but they have one great advantage over the individual landlord: they never die and are therefore not involved in death duties. When any of their property becomes vacant they can either sell it or relet it depending on whether they need capital or are prepared to wait. The next group of landlords are the private individuals and, although there are many such people, they collectively cater for a steadily decreasing number of tenants for three main reasons: death duties, capital gains tax, and the rent restrictions. The private individual does not normally want to tie his heirs to agreements he made in his lifetime, and he also has to think, because of taxation, about all his assets, particularly capital.
267 A tenant of a private landlord has complete security of tenure, not only for himself but for his wife and his children, except in a few specific cases. In these specific cases everything depends on the last occupant. The cases are briefly, first, the owner occupier again requires the house for himself or any member of his family who occupied the house before it was let; secondly, the house was last occupied by a minister of religion and is again required for a minister; thirdly, the house was last occupied by an agricultural worker and is again required by an agricultural worker.
The individual landlord having a house vacant can usually sell it at a handsome profit, but if he lets that house to a family with children its capital value drops to approximately one-fifth of its open market value the day after he has let it, which in itself is a serious deterrent. Therefore, he usually chooses tenants who do not have children.
Now I should like your Lordships to look at the position of the prospective tenant, and again for the sake of simplicity I shall illustrate this with two examples. First, a man with a wife and three young children who has become redundant or who is ambitious and seeks a job in another area from the local authority area in which he lives; and secondly, a middle-aged barren couple who are looking for a house to retire in. First, these two men apply to the local authority, but they are unlikely to be seriously considered for a house unless they or their wives have been born in the area, have lived in the area, or work there, and even then they may have to wait several years. For example, a Member of your Lordships' House has little chance of getting a council house or flat in Westminster or any of the surrounding boroughs, and certainly would not be considered in front of anybody actually living or working in this area. The prospects of these prospective tenants are unlikely to be much better if they apply to a housing association or the N.C.B. But even then the barren couple are more likely to be accommodated first because any house, small or large, would meet their needs.
268 The prospective tenants then try the big insurance companies, who are much more likely to offer any accommodation they have to the barren couple than to the family with children, for the simple reason that the family without children will die first. Next they try the private landlords. The man with three children could be, as many are, lucky and find a kind-hearted farmer who allows them to move into a farm cottage and live there rent free. But one thing is certain. The first question either of these prospective tenants is asked is,"Have you any children?"How often do we see an advertisement for a house or flat with the remark, "No children. No pets "? To the barren couple,"Yes, sir! No, Sir! Three bags full, sir! "; a negotiated rent will be fixed very quickly. But the chances of the man with children are very slim. So in desperation he seeks the only accommodation available to him—the furnished room, or the few cases where the tenant has no security of tenure under the Rent Acts.
This Bill, in giving security of tenure to a tenant living in furnished accommodation, has removed one large group of house owners from ever letting their houses—those who have a mortgage. A person buying his house with a mortgage like a minister, as my noble friend Lord Balerno mentioned, cannot let his house under the Mortgage Restriction Acts which go back to the 1920s, but up to now such a person could let his home fully furnished if he got a job overseas, or his job took him elsewhere in the country, and the mortgage companies would agree to this because, even if he was killed in an accident, the mortgagor could evict the tenant, and sell the house. Under this Bill, unless the owner has a life insurance policy greater than the value of the house the mortgagor will not in future allow him to let that house even if it is fully furnished and the owner will in future have to sell his home, put his name on the local authority housing list and hope to get a council house when he returns to this country, or returns home.
Above all. I ask your Lordships to contemplate the awful position of the ambitious man with children wanting to move to another area; the difficulties and hardships that face him at every turn. He 269 has to leave his wife and family behind. On his own he can get"digs"almost anywhere. Even the local authorities who forbid subletting turn a blind eye to the single man boarding in a council house. Unfortunately, in his loneliness he often drinks a little too much and may go along a dangerous road into the hands of other women, perhaps ending in divorce. That would be another split family.
However, I try never to criticise anything without attempting to put forward ideas to improve the position and the answer is in the hands of the present Labour Government and no others: by making further use of the rent officer, the very officer they introduced in 1965, and by using that officer to fix the rent payable, depending upon the length of the lease. As I hope I have pointed out, vast numbers of people require a lease for a comparatively short length of time. In a great many cases it takes three years to get a council house. In some areas the waiting list is shorter and in some a little longer. But one thing I can say for certain. No local authority will continue to build houses when it ceases to have a waiting list, for the simple reason that the ratepayers would be up in arms if the local authority had houses standing empty. Another difficulty for the prospective tenant seeking a council house is that if he is a tenant in private property the local authority will not consider him, on the perfectly sound basis that he is already adequately catered for. So here is another case where the tenant is a prisoner in his own house.
I should like to suggest that one ought to allow the landlord to let his property for a contracted number of years. In other words, the tenant has complete security of tenure for the length of the contracted lease, but he may terminate the lease by giving the landlord two months' notice in writing. This contracted lease should be agreed between the landlord and the prospective tenant. with the rent officer acting as arbiter and having the final say in any dispute. Once the period of years is agreed the rent officer shall fix the rent. For a lease of not more than five years the maximum rent shall be not more than two-thirds of the current rateable value, which, if your 270 Lordships remember, on March 23, 1965, was considered to be a rent below that of the Rent Act. For a lease of not more than 10 years the maximum rent shall be not more than the gross annual value, less 10 per cent. For a lease of not more than 15 years, the maximum rent shall be a fair rent less 10 per cent. or the gross annual value plus 25 per cent., whichever is the least.
For a contracted lease of over 15 years a full fair rent may be charged. When the lease has expired the landlord may apply to court for re-possession of the house and the court must grant repossession at a period of not more than 6 months after the landlord's application. This may itself not be attractive to some of your Lordships, but do not think of the existing tenant. Think of the poor man looking for somewhere to live. Think of the children. It is the children who prevent him from finding accommodation. It is something like this that is needed to allow landlords, particularly in the country, to let their property to families with young children so that those children may be brought up in the country which is the best place for them. But with the law as it is, nobody can afford to do this.
However, I suspect that Her Majesty's Government will never agree to such an idea and will persevere in restricting tenancies. They have already frozen rents. If the property is a little below standard, the local authority can slap a demolition order upon it under the Housing (Scotland) Act, 1969. I am not sure what the English equivalent is, but I think it is the Housing Act 1968. Then it cannot be re-occupied. Or perhaps they can bring back owner's rates which caused the removal of hundreds of roofs of country cottages in Scotland. It costs a great deal of money to improve a cottage that is below standard or has been damaged by vandals, and the average landlord has little hope of recouping that expense by letting it, particularly if rents are restricted or reduced.
My Lords, it is for these reasons that I hope this Bill is given a speedy passage through your Lordships' House. But for the sake of the prospective tenant I hope that this Bill is unamended, with the 271 exception of its Title in Clause 10 which should read:This Act may be cited as the House Confinement and Rent Restriction Act of 1974".This is at least giving the Bill its true Title.
§ 4.57 p.m.
§ LORD GISBOROUGH
My Lords, I must declare an interest as the owner of a very small number of furnished lettings. In parts, I did not find this a very easy Bill to understand. I found also that it was an unneccessary Bill and I am not convinced by the noble Lord, Lord Garnsworthy, that it is necessary. He said how fearful people were of eviction. But he produced no figures to prove that there is any incidence of evictions, other than saying that the fear of this Bill has set off the prospect of some evictions as people try to beat the Bill. The noble Lord, Lord Gifford, said he had a prejudice against all landlords, and 1 think it is just such prejudice that brings on this damaging legislation. I must confess that I look at this Bill from the viewpoint of a country landlord near a typical dormitory town outside an industrial city where furnished accommodation is in demand by the staff of contractors temporarily in the area, people building their own houses on moving to the area and a proportion of permanent tenants, often single people or single people sharing together.
Landlords usually only furnish their lettings to keep the control which they feel they need for the protection of themselves and of their other tenants. Removing this control will encourage landlords to remove their furniture which will reduce the supply of furnished lettings from the market and deter the provision of further furnished lettings. I know that this has been said over and over again but I think that it must be said again: what landlord will bother to buy and risk his furniture in the future? The needy, prospective tenants will find increasing difficulty in finding furnished accommodation, and the rents, subject to freezes, will correspondingly rise. A tenant on occasion may become a nuisance and irritation to other tenants in a house made into flats to an unacceptable degree. I can think of one tenant who may by noise cause other tenants repeatedly to complain to their 272 landlord. In future, the nuisance tenant, who could have been evicted subject to control by the court, will have security under this Bill unless his nuisance can be proved to be adequate for his eviction to be sanctioned by a long and costly civil action.
The satisfactory and respectable tenant—in other words the vast and overwhelming majority—will, if he can find a furnished letting, have legal security which is little needed in practice and have to put up with his unruly neighbour who cannot be got rid of. The cost of this security will be that as the market dries up others will be quite unable to obtain furnished lettings. However, if one accepts the inevitability of this Bill, then perhaps it can at least be improved. Ill-treatment of furniture might allow the landlord to obtain possession, but this would be after a court hearing obtainable only after several months—such is the delay for a civil action. There would be further months awarded for the tenant to obtain new accommodation. As this would apply only to a bad tenant, anyhow, the further damage to furniture in that period could be considerable even if the court actually awarded the landlord possession. Would ill-treatment also cover lack of maintenance, because wilful lack of maintenance and failure to report to a landlord minor breakdowns of furniture can be as destructive as ill-treatment.
The attempt to cover holiday cottages may not succeed. What if the winter out-of-season tenant refuses to leave in spring, claiming protection under this Bill? By the time the court has given possession, it will be August and the holiday-booked families will have had to go elsewhere. What of the occupier—and this has been mentioned more than once—who goes away from his flat on business? Will he no longer be able to let his flat for fear of not getting repossession when he returns? It is, of course, right that a landlord should retain control of lettings in the building in which he resides. But there are many places in the country where stabling has been made into fiats which are not actually part of the landlord's house, yet are part of the premises. A bad tenant in such a place could be disastrous to the landlord and to other tenants, but not being actually in the landlord's building the nuisance 273 tenant would have protection and could not be got rid of.
There are thousands of houses converted to furnished flats where the landlord does not reside in one of them. Yet tenants are often carefully selected so that they are reasonably compatible with one another living in the same house. If one tenant turns out to be a petty nuisance the landlord can do nothing and the other reasonable and well-behaved tenants—again, the vast majority—must just put up with it. This Bill will give protection to a tiny majority of bad tenants who could have been, would have been and probably should have been ejected from furnished lettings, at the expense of the vast majority of prospective tenants who will find it increasingly difficult to obtain furnished accommodation as a result of the disincentive to landlords. There is a need for furnished lettings, the provision of which should be encouraged, whereas this Bill will discourage such provision. That will be the obvious and not very constructive result of this Bill.
§ 5.3 p.m.
My Lords, I hope your Lordships will forgive me for saying a few words, not having put down my name to speak. But I have listened to some of this debate and it reminds me of what has been going on for many years in respect of Rent Acts and properties being protected. I was reminded of my maiden speech which was made on a similar subject 40 years ago. During the period that has intervened there has always been a desire on the part of those who are reasonable to see to it that the Acts, in so far as security of tenure is concerned, shall be extended to furnished apartments. We are asked to declare an interest in this House, as in the other place. I have an interest which is rather against me and my clients, but I think it only fair to present to the House some indication of why I feel that this change is essential.
At long last, a Bill is being introduced into the House which gives to the tenant of a furnished apartment protection similar to that given to a tenant who has no furniture in his tenancy. I do not understand the kind of argument that is being used against this change, and I say that with the greatest respect to the noble Lord who has just spoken. 274 Furnished apartments to-day have certain restrictions placed upon them which apply even if there is a change of tenancy. Indeed, if the tenant of a furnished apartment applies to the appropriate officer and finds that his rent is beyond the amount that should be charged for that apartment, the rent decided upon applies not only to that tenant but to all subsequent tenants. So the argument that there will be less accommodation available is hardly sustainable, because a subsequent tenant has to pay the same registered rent. So there is no question of a landlord being better off with another tenant than with his present tenant.
§ Loan GISBOROUGH
My Lords, that is true. Therefore, there is no earthly reason why anybody should give notice to quit to his tenants. So there is no problem. The argument against the Bill is that when there is protection the landlord will not bother to furnish his flat.
My Lords, I am coming to the question of protection. What is the present position with regard to protection? The tenant has a right to apply for an extension of the period after a notice terminates. At present six months can be given, but further periods of extension can also be given. It is true that under the present Bill the period is being extended to 12 months. But what I am driving at is that if a person is prepared to let his house as furnished apartments, he is no better off with another tenant than with the one he has at present, in so far as his financial position is concerned.
I concede that at times there are difficulties with regard to tenants being nuisances. But I do not hold the same view as the noble Lord, Lord Gisborough, that it would take so long to have a tenant ejected on the grounds of nuisance. Does the noble Lord not realise that this is a matter which can be decided in a county court, and the period would not be so long before a decision could be given? So I do not think that argument holds. The only argument that holds—and here I agree with those who put forward this view—is with regard to the person who does not want to live in his house. In some cases there may be hardship, as there was when tenancies were not furnished. But the fact of the 275 matter is that one has to balance the advantage to the community as a whole with the disadvantage to the few. So that it resolves itself into this position. I hope I am not over-simplifying it, but I think this is what the position actually is.
If a person is prepared to let, he suffers no disadvantage under this Bill—none at all, unless he is not prepared to exercise his right to have the tenant ejected on the grounds available. The person who could derive no benefit from it would be the person who desires to let his place for a particular period, and wishes at some time or another to sell at a higher price. As I said before, this applies in all kinds of lettings, whether they be furnished or unfurnished. It is true that at the present moment it does not apply to furnished lettings, but frequently the term given to a tenant to retain his tenancy, even under the present Acts, would prevent a sale except for a fairly long period, and consequently, sales would drop.
We have to consider whether a furnished tenant should have the fear of being dispossessed removed from him. I fought for this for many years, right through the Rent Acts in the other place, from 1945 onwards. I remember the position in the First World War, when the extremely serious conditions prevailing in consequence of the raising of rents, and so on, produced the 1915 Rent Act. We have coped with that, to a certain extent, with regard to furnished apartments. Any person who at present takes a furnished apartment could apply to have the rent adjusted. Frankly, weighing up the position and the difficulties which prevail at present for tenants in getting alternative accommodation, think that we must extend to furnished apartments what now applies with regard to unfurnished apartments. It is long overdue. Of course, the exceptions contained in the Bill cover important matters. If we read the Bill carefully, we see that careful consideration has been given to what the exceptions should be; but apart from that, and ideas which may emerge during Committee stage, see no reason why we should not accept the Bill as it stands.
TILE EARL OF KTNNOULL
My Lords, before the noble Lord sits down, 276 may I say I listened with great interest to his speech. The noble Lord has wide experience of the subject. From his wide experience and practice, could he say whether in cases of furnished tenancies he has ever come across hardship in the sense that tenants have been evicted against their wishes and despite application to the court, as against hardship in unfurnished tenancies? Is the noble Lord trying to draw a distinction between hardship under furnished tenancies as against hardship under unfurnished tenancies?
My Lords, that is a difficult question to answer. May I put it this way: In my own profession one comes across the exceptional cases: one does not come across the general run of things. To give an answer to a question like that of the noble Earl, Lord Kinnoull, is difficult. Of course there is hardship at times; there is no doubt about that. But as I said in the course of my speech, and I hope I made it clear, the situation is not entirely all black or white. One has to compare what is the benefit to the community as a whole with the exceptional cases. Certainly I have seen hardship in respect of cases of widows or people who have inherited properties, where the old argument has been used. Unfortunately, one cannot really in an Act cater entirely for the exceptional cases. One has to accept that there will be hardship in certain cases, but that in the main it is essential to have a Bill and a system.
§ 5.16 p.m.
§ LORD AVEBURY
My Lords, I too must apologise for not having given notice that I was going to speak. I have been prompted to do so by some of the speeches that i have listened to during the course of the afternoon, and in particular by the remark made by the noble Lord. Lord Janner, and others before him, that this legislation is long overdue. In dealing with furnished accommodation we should have adopted many years ago the procedures that apply already to unfurnished accommodation. I think the noble Lord, Lord Melchett, mentioned the 1968 Rent Act, which was, of course, a consolidation Act and included the provisions of the 1965 Rent Act that preceded it. On the 1965 Rent Bill in I Standing Committee I put down an 277 Amendment providing for this very thing to be done, for furnished houses to be assimilated with unfurnished. I was told at the time that this was inappropriate because the late Aneurin Bevan had said there was a distinction in principle between furnished and unfurnished accommodation, and the Government at that time were not prepared to consider it, in spite of the fact that I drew attention to the risk which the Government of 1965 were placing upon these tenants, that landlords would simply instal a few sticks of furniture in order to escape the provisions of the Bill.
As your Lordships know that is precisely what has happened, and it is the reason for the figures given by the noble Baroness, Lady Young, earlier in the debate. It is the reason why there has been a reduction in the total amount of rented accommodation between the censuses of 1966 and 1971. But within the total, there has been an increase —a small increase, it is true—in the supply of furnished accommodation, and a much larger decrease in the supply of unfurnished accommodation. I think the noble Baroness will probably agree that the reason is obvious—that as landlords got vacant possession, if they did not wish to sell off the properties, then they did put in a few sticks of furniture, to which I referred in 1965, and thereby escaped the provisions of the 1968 Rent Act. I am sure the noble Baroness would agree that to be true. Like the noble Lord, Lord Janner, I cannot understand how we have gone on for so long, making this spurious distinction between furnished and unfurnished accommodation. There is no logic in that distinction.
My Lords, I think the Government have been quite right to bring this legislation before us as quickly as possible, although I, too, am anxious that it should have been so complicated, because of the need to express it in a form of legislation by reference, which the late Mr. Crossman deplored at the time of the 1965 Bill. He said at that time (and I think it is still very true to-day) that particularly where one is concerned with a measure of social reform, the import of which it is vital that millions of ordinary people should understand, one does not want, if one can possibly avoid it, to legislate by reference. I was interested 278 to hear the noble Lord, Lord Garnsworthy, say that there was underway a comprehensive review of the whole of this legislation. One hopes that the Bill, when an Act, will be on the Statute Book for only a short time and that it will be followed, as was the 1965 Rent Act, by a consolidation measure which will be more clear and simple for those affected to understand.
I want to touch on one or two of the other points raised by the noble Baroness, Lady Young, in the course of her criticisms of the Bill. She said first—and this is an important point for us to answer—that the Bill was going to result in restriction of choice for the less mobile and for young married people who had no other possibility of finding a home. She said—and this is a very important matter at this time—that it was going to increase the opportunities for corruption. I am not quite sure what the noble Baroness meant by that, whether it was that in the situation of having only local authority housing to go for the young married couples would attempt to bribe the housing officers, or whether she had something else in mind. If it was the former, I do not think she need have any anxiety, because in the period of acute housing stress such as we have experienced ever since the war I do not recall—although I may be corrected by other noble Lords—any instance where a housing officer has been convicted of accepting a bribe in order to place somebody on the list or to give him preferential treatment when he had already had his application registered.
With regard to the noble Baroness's other criticism, that it implies restriction of choice for the young married couple, I do not think that is a very realistic criticism. Young married couples would obviously try to place their names on the local authority list because the accommodation which they would ultimately get would be very much cheaper than anything else. They only go in for furnished accommodation, as the noble Baroness recognises, because they have no other choice, even though it is much more expensive than if they were able to get a council house. Surely the answer to this problem is to increase the supply of council houses. I agree with the noble Baroness that the Bill does nothing to achieve that, and it was not intended to do so. That is another matter that we 279 ought to tackle with urgency, but not in the course of the proceedings on this Bill.
§ BARONESS YOUNG
My Lords, perhaps I may say to the noble Lord that I made my remarks in the context of what I think is an undoubted fact, that as a result of this Bill there will be less furnished accommodation to let, and we will therefore get into the position, which I understand the Government wish to do, in which the only choices available will be to buy and become owner-occupiers or to become council tenants. I think it is a very serious matter indeed for young married couples, who will find it increasingly difficult to find anywhere to live. They will have to be on the council list for about a year as a minimum requirement before getting a house, and so far as I can see neither the Government nor the noble Lord, Lord Avebury, have given any indication as to where they will live in the intervening time.
§ LORD AVEBURY
My Lords, there is a third choice, which the noble Baroness did not mention and which I would expect her to give attention to, and that is the growth of housing associations, which I hope the Government will continue to encourage. This is a possibility which is open to young married couples which does not involve them in relations with a landlord, which sometimes cause acute anxiety at the beginning of married life. I speak from personal experience, because I am probably the only Member of your Lordships' House who has been evicted from furnished accommodation at the beginning of my married life. In fact I was evicted for damaging the landlady's furniture. I placed a soda-water syphon on a table in the single room which I occupied at the vast cost of £4 a week, which was quite a lot of money in the early 1950s. The landlady was in the habit of coming into this room while we were out, because she had a separate key, and when I caught her there one day, having returned unexpectedly on a Sunday morning, she said that she was not going to have her furniture wilfully abused and gave me notice to quit on the spot. So I think I can speak with some experience on this matter.
Going back to the noble Baroness's criticisms, young married couples do not go into furnished accommodation unless 280 there is no other choice open to them. I hope she will bear in mind that housing associations are there as a third choice, of equal importance to local authority accommodation, or buying a house if they can possibly afford it.
§ THE EARL OF KINNOULL
My Lords, I am grateful to the noble Lord for giving way. Does he know what percentage the housing associations represent in the rented furnished or unfurnished market?
§ LORD AVEBURY
My Lords, I think the figures are available in the Census. I tried to look them up just before I came into the Chamber, but unfortunately we have not got the ten-year tables of the Census in our Library; they are only in the Library of another place. That is a matter to which one might call attention on another occasion. But I agree with the implication of the noble Lord's question: that the housing associations are a very small percentage of the total. I am saying that we ought to see whether any measures can be taken by the Government to increase it, as a substitute in the long term for furnished accommodation, which I agree is going rapidly to decline. If one looks at the figures over a number of years, this is what is happening under any legislation. Prior to the 1965 Rent Act, there was a decline in the total supply of rented accommodation, and since then it has gone on at the same pace.
I can at least give the noble Lord some overall figures of the amount of privately rented accommodation: 1960, 4,297,000 dwellings; in 1965 it had gone down to 3.6 million; 1970 2.9 million; 1972—the latest figures in the social trend—2.68 million. So the noble Lord can see that there has been a steady decline over the last fifteen years, and that has proceeded irrespective of the kind of legislation on the Statute Book. I think we shall find that when this Bill becomes law it will not in any way affect the total amount of accommodation available for private tenants. There may be an alteration in the mix. And the practice of landlords, to which the noble Baroness drew attention, of putting a few sticks of furniture in and calling the flat furnished and thereby escaping the provisions of the 1968 Act, may decline, so that we do not get an increase in the provision of furnished accommodation accompanied by a correspondingly larger decrease in the 281 volume of unfurnished accommodation available. I certainly do not agree that there will be a drying up of the supply of furnished flats, if only for the reason that landlords will still be able to get a slightly larger rent for furnished flats than for the equivalent unfurnished. If landlords have already provided furniture, it is very unlikely that they will take it out and let the property unfurnished.
As regards the criticisms of the noble Lord, Lord Balerno, in regard to university accommodation, I think personally that landladies in places like Edinburgh, where the volume of accommodation required by the universities may be quite large in proportion to the total, will continue to let properties furnished, as they have done in the past, in the knowledge that most students when they finish their university course will go to some other part of the country. I think the noble Lord was rather exaggerating when he said that most of them would get married and would go in for further degrees, and that therefore they would tend to remain in the accommodation, and, as he put it, sterilize it for any other use. I should have thought that if one was a landlord in Edinburgh and one was anxious about recovering possession of a flat, one would, if anything, tend to prefer students to other people in the community in the light of the fact that one was likely to recover possession at the end of their university course when they went down and sought employment in some other field.
LORD BALER NO
My Lords, may I inform the noble Lord on this point? I would not be here to-day speaking on this Bill if it were not that I have received a series of telephone calls and messages from the accommodation officers and the Chairman of the Edinburgh University Students Accommodation Committee expressing dire distress at the provisions of this Bill. I have come down especially because of the pressure in the university circles in Edinburgh, which I believe to be reflected in other universities in Scotland.
§ LORD AVEBURY
My Lords, I am certainly not denying what the noble Lord has said, that many of the people he has consulted, and others in university towns elsewhere in the United Kingdom, feel anxiety about the effects of this Bill. 282 What I am suggesting, however, is that these anxieties are perhaps a little exaggerated. Students are not, as a class, likely to remain in furnished accommodation as long as other kinds of tenant. The persons in Edinburgh who are giving preference to students in letting their accommodation are in a much better position to recover possession in the long run than people who are letting to nonstudents. I should have thought that that stands to reason. I think that when the experience of Edinburgh is examined after a few years one will find that these anxieties have really not got the force which the noble Lord has expressed this afternoon.
§ LORD BALERNO
My Lords, if the noble Lord will excuse me once again, may I say that the very fact that the owners of these flats which arc being let furnished are now exceedingly apprehensive will mean that they are going to unload them, and that they will sell them and be clear of the trouble of owning them under the new circumstances. Their apprehension may or may not be justified, but it is there, and in consequence of that apprehension there will quite definitely be fewer furnished flats to let for students.
§ LORD AVEBURY
My Lords, I was coming on to the question of landlords being encouraged to sell the accommodation in the way that the noble Lord and also the noble Baroness, Lady Young, has mentioned. I am going to upset them by saying that I personally believe that it is a good thing if they sell to the local authorities. I should like to see this measure accompanied by encouragement given to the local authorities to buy up accommodation which landlords no longer wish to let themselves on a completely voluntary basis, because I think that if one looks at the tendencies of the last fifteen or twenty years the private landlord is a dying animal; he is disappearing off the face of the earth. I am making no criticism of private landlords. I do not agree with the noble Lord, Lord Melchett, who thought that all landlords were evil.
I ought to have declared an interest at the beginning of my speech because I own a small number of unfurnished properties. Whether one likes it or not, the fact stares us in the face that the 283 private landlord of residential accommodation is disappearing off the face of the earth. It is our task, as a responsible Legislature, to see how we can replace him in the scheme of things.
I am suggesting to your Lordships, not in connection with this measure but concurrently with it, that we should give encouragement to local authorities to take this property into their ownership, and to ensure therefore that it continues to be used for the same purposes. I cannot see why the Edinburgh Corporation should not offer to buy out any of the landlords who are feeling the anxieties that the noble Lord, Lord Balerno, described, because then everybody would be happy. The landlords would be happy because they would have got back their capital (and at the moment they can invest it at a much higher return than they would get from the students); presumably the local authorities would be happy because they would increase the stock of rented accommodation for their own purposes; and the students would be happy because they would be dealing with the local authority as a landlord instead of a private individual.
Generally speaking, I think that most tenants would prefer to deal with a local authority rather than a private individual who is not governed necessarily by the same rules of conduct—I agree that many of them are—and who are also subject to a democratic control which cannot be exercised in the case of a private landlord.
§ THE EARL OF KINNOULL
My Lords, may I ask the noble Lord, for the benefit of the House, whether a tenant of a local authority has any security of tenure?
§ LORD AVEBURY
My Lords, I think that the noble Lord, Lord Gifford. mentioned that he has practical security of tenure, if not theoretical. Is it the Small Tenement Recovery Act 1838 that enables a local authority to regain possession of a dwelling without going to the county courts? The noble Lord, Lord Gifford, who is much more of an expert on these matters than I am, will correct me if I am wrong, but I believe that it is not current practice for local authorities to exercise their rights under the Small Tenement Recovery Act, so in practice a council tenant has absolute security of tenure.
THE EARL OF BALFOUR
My Lords, I really must interrupt the noble Lord, Lord Avebury. I always enjoy listening to him. He will find (and I am fairly certain that it is in several of the Rent Acts) that local authorities are expressly excluded from the provisions of any of the Rent Acts—certainly the 1965 Rent Act, the 1971 Rent (Scotland) Act, and the 1968 consolidation Act. If a local authority, or a housing association, such as the Scottish Special Housing Association, applies to the court to evict somebody, the court must grant that order. In almost every other case with a private landlord the court may grant an eviction order. There is a big difference between"may"and"must ". This, I promise you, is the law.
§ LORD AVEBURY
My Lords, I am sure that the noble Earl is right. He reminds me that it was the case in the 1965 Act that local authorities were not subject to the same restriction as the private landlord, but they have this power under the Small Tenement Recovery Act 1838 which, in practice, I do not think they ever use. The point is still valid that the local authority is subject to democratic control, and if a housing officer were to evict somebody unjustly there would be an enormous row about it in the locality. The local newspaper would take it up, councillors would be able to intervene on the tenant's behalf, and it is likely that if any injustice had been done it would be swiftly rectified by the influence of public opinion in that locality. That is why I say that a tenant of a local authority is generally much better off than a tenant of a private landlord.
I am sorry that I have been led astray by the multitude of interventions to speak far longer than I intended. I want to mention only one other point, and that is the question of sabbatical years raised by the noble Lord, Lord Balerno, and what happens in the case of a university lecturer who goes away once in seven years for a period at some overseas university and then comes back and wants to regain possession of a house he has let in the meanwhile. This a point that should receive the serious consideration of the House. In the 1965 Act the provision was that if somebody had lived in a house before he let it and announced his intention of recovering it after a stated period, then the court was bound to grant him an 285 order for possession. This provision was specifically designed to cater for cases such as the noble Lord, Lord Balerno, mentioned, and also those of officials of the Foreign Office, personnel of the Armed Forces, and so on. I thought that that was a useful exemption from the krestrictions on recovery of possession that applied to other landlords. I would hope that it would be read across from the unfurnished to the furnished properties.
Subject to these minor amendments that I have discussed, this is a good Bill. It should receive the welcome of the House, and I hope that your Lordships have paid close attention to what the noble Lord, Lord Garnsworthy, said about the risks of delay, and that we shall pass it through this House with great expedition so that it becomes law before the summer.
§ 5.39 p.m.
§ LORD GARNSWORTHY
My Lords, may I first apologise to the noble Baroness, Lady Young, for the delay in the arrival of the notes on the clauses. I think that she will understand that I did everything I could to expedite the matter. I gather that she has an urgent appointment that is likely to take her away before we have concluded the Second Reading debate. May I say before she goes that I listened carefully to the speech she made and I shall be returning to it and attempting to answer some of the points she raised.
Although the noble Baroness indicated that from the point of view of the Party for whom she speaks we need to deal with this Bill at a reasonably leisurely rate, I am much more impressed by the approach of the noble Lord, Lord Avebury, and some others. There is tremendous need for speed because whether or not we like the Bill if we take an undue period of time in discussing it we are likely to achieve many of the results that I think nobody in the House has indicated this afternoon that they want to see brought about. I think it is generally recognised, now that the Government have announced their intention of legislating, that the quicker we can get on with it the better for everyone concerned. That, as I said when I opened the debate, is the reason why we have not taken an overlong time in endeavouring to produce 286 a perfect Bill that would meet all cases. It is an urgent Bill and no one from this side of the House has pretended or will pretend that it will add to the stock of total housing accommodation. I repeat what has been said by myself and by others that is not the purpose of the Bill. The purpose of the Bill is to give a sense of security to those who have lacked it.
The noble Lord, Lord Gisborough, and one or two other noble Lords have raised the issue as to whether a case could be made out. If anybody is in doubt let him read this publication by Shelter, Priorities for Housing Action. From a brief glance at the statistics given in Table 8 on page 19 it is clear that a substantial number of our neighbours are evicted annually. A great many others are moving, and we have good reason to doubt whether all of them have known their rights or possessed the determination to take issues to court.
My Lords, the noble Baroness, Lady Young, quoted a number of organisations which have not welcomed the Bill. It was right and proper that she should so tell us. She referred to Shelter and I hope she will not mind if I make a special reference to what she said. I have in front of me a communication that I received shortly before I came into the Chamber which sets out Shelter's position. I am sure that the noble Baroness will be interested to know what they have to say. The first sentence reads—Shelter warmly welcomes the Government's proposals to extend security of tenure to furnished tenants.On that document the only Amendment of any significance that I have noted is that they wish that the Bill did not propose to exclude all tenants of owner-occupiers. This means that Shelter feels that this Bill does not go far enough.
The noble Baroness indicated that the Bill is opposed in principle by the other side, although the Opposition will not oppose the Second Reading. That comes as no surprise because when we come to deal with the matter of housing we often find that here is the great divide, the gulf where we take rather different views. We on our side see housing as a social service. On the other side, it seems to me—and I hope I do them no injustice—they see housing as a community need that can be exploited for 287 gain. Indeed, I believe it is their view that this is the way to overcome the problem of enough homes for people to live in—to allow people to make a profit out of supplying houses and to go on making it until they have satisfied the market. We on this side take a different view. I welcome the support we have received from my noble friends Lord Gifford, Lord Melchett and Lord Janner, and I welcome also the support which the noble Lord, Lord Avebury, has given the Bill.
A number of questions have been asked and I will do my best to answer them. If I miss any it will not be intentional, but if I try to answer all the points that have been raised we shall be here for a very long time. A number of the debating points that have been made have been answered as the debate has gone along. My noble friends Lord Gifford and Lord Melchett raised questions as to what we mean when we use the term"occupied as a residence ". In the resident landlord exemption clause we do this. They ask whether the landlord could evade the provisions of this Bill by moving into a residence for just a few days. Interpretation of this clause, as of all other provisions of the Bill, will of course be a matter for the courts. Many of your Lordships will know that there is already a substantial body of case law relating not only to Rent Acts but to other legislation as to what constitutes residence. A landlord claiming the rights afforded to a resident landlord will have to satisfy the court that the dwelling is genuinely his residence. The court will be expected to look carefully at all the facts of the case and would not, I venture to suggest, be likely to accent the claim where the circumstances were as dubious as has been suggested.
My noble friends Lord Gifford and Lord Melchett suggested that perhaps the Bill might have followed the example set by the Race Relations Act in regard to the position of landlords. I know that many people advocate the adoption of a resident landlord exemption based on the exemption from discrimination provisions in the Race Relations Act of 1968. Indeed, this was the solution recommended by Miss Lindell Evans in 288 her minority report advocating security of tenure for furnished tenants in the Francis Committee Report in 1971. Noble Lords have also suggested to-day that we should use this method. We considered seriously whether we should adapt it to meet the purposes of this Bill. I repeat what I said at the outset, that it has been our intention to make this law as simple as possible so that ordinary people can understand it and live with it without difficulty. That is the reason why we have dealt with the matter in that way. The noble Baroness, Lady Young, and the noble Lord, Lord Balerno—
§ LORD GIFFORD
My Lords, as my noble friend is leaving the resident landlord exemption could he repeat the purpose of the exemption? Is it, as he said in his opening speech, really the Government's intention to include in this exemption, lettings of 10, 20 or even 50 units in one building?
§ LORD GARNSWORTHY
My Lords, with regard to the last part of my noble friend's question, I do not know whether there will be many of the order of 50, but I think I am right in saying that the answer is,"Yes ". We have adopted the yardstick of which we have spoken because we believe it will be simple for everybody to understand what we mean by it. I would, however, draw my noble friend's attention to what I said at the beginning that it is our intention to look at the whole situation, and I hope we shall not have to wait too many months before we are able to undertake that. The noble Lord, Lord Balerno, the noble Earl, Lord Balfour, as well as the noble Baroness, Lady Young, indicated that in their view the measure will convert an increase in the supply of furnished dwellings available for letting into a decline. Whatever the reasons for it, the decline in the supply of dwellings to let by private landlords is an inevitable feature of the housing market to-day. There is no discouragement of lettings by absentee landlords, and in fact the Bill will maintain their position.
In our view, the proper providers of dwellings to let are the social landlords —local authorities and housing associations. The Government are already taking steps to expand the supply from 289 these sources, and to encourage the transfer of privately rented dwellings into social ownership. In 1974–75, an extra £350 million is to be made available to local housing authorities in England and Wales, £50 million of which will be allotted to municipalisation. The Housing Bill now under examination in another place includes measures designed to stimulate the provision of dwellings by the voluntary housing movement. We expect the rate of increase in supplies from this source to double by 1976. Thus, there is every hope that not only the existing loss from the private sector, but also any additional loss which might result from this measure, will be more than made up by the expansion of the sector in social ownership.
LORD BALER NO
My Lords, before the noble Lord moves on to the next point, may I ask him to add the University Grants Committee to the list of public bodies which can provide accommodation for students and others? Could it be given money to pass on to the universities for the construction of residences and flats for students? At the present time, there is no provision officially available to the universities from the University Grants Committee and private benefice has practically dried up.
§ LORD GARNSWORTHY
The noble Lord, Lord Balerno, will appreciate that that is not really my province, though I can undertake to pass on what he has had to say to the appropriate authority. There have been questions asked about the owner-occupier who lets his home while, for instance, he goes on a tour of duty overseas. Such owner-occupiers will continue to enjoy the protection which is already available to them under Schedule 3 of the Rent Act, which requires the court to grant possession of a building in which the landlord has previously lived as an owner-occupier, where at the commencement of the tenancy he has given notice to the tenant that he might wish to regain possession of his house in order that he can move back into residence. Owner-occupiers who are currently letting their homes furnished while they are temporarily absent will have up to six months from the passing of the Act to give the appropriate notice to their tenants. But if they have already given notice under 290 that part of the Rent Act which currently concerns furnished tenants, that will be sufficient to enable them to regain possession without further notice.
The noble Lord, Lord Balerno, and one or two others, raised questions about the situation in university towns, such as Edinburgh. If landlords were concerned about getting permanent tenants in place of temporary tenants, one would have thought they would be likely to continue catering for the student. However, I appreciate the point the noble Lord has made, that there may be some students who feel at the end of their studentship that they would very much like to stay on and there may be some difficulty. I think that the fairest thing I can say is that I will have the matter looked at and it will be considered by my right honourable friend. If I can write to noble Lords I will do so, but perhaps this is a matter to which we could return at Committee stage.
My noble friend Lord Melchett raised several matters, some of which I have dealt with because a number of other noble Lords asked similar questions. He raised the issue of whether local authorities should be made aware of the service of a notice to quit by a landlord. He suggested that such a notice to quit ought to be in a prescribed form. I understand that a notice to quit must already comply with Section 16 of the Rent Act 1957, which requires that it be given not less than four weeks before it is to take effect. We have never had reason to suppose that the absence of any requirement as to form in addition to this requirement as to period is causing uncertainty or injury to tenants. But if my noble friend has evidence of this I should be most grateful if he could let me or my right honourable friend have it. In the absence of evidence that the existence of such a requirement would be of real benefit to tenants, I should feel some doubt as to introducing one.
THE EARL OF BALFOUR
My Lords, if I may interrupt for just one moment, the problem facing a tenant under eviction or something similar is that he may either fail to get a court notice or fail to appreciate its importance, and in very many cases an eviction has gone through the courts without the tenant taking action and appearing in court. In Scotland, there is the Sheriff Court and not 291 more than three weeks ago there was a case in my own area in which this happened. I am a member of a local authority, as I think the noble Lord knows, and it is a problem when a tenant who might have been able to prevent an eviction does not bother to go to the court.
§ LORD GARNSWORTHY
I am grateful to the noble Earl for attempting to render some assistance on this point. My noble friend Lord Melchett will have listened to what he has had to say. However, I was saying that in the absence of evidence that the existence of such a requirement would be of real benefit to tenants, I should feel some doubt as to introducing one. The imposition of doubtfully useful obligations is always to to avoided, particularly where those who must comply with them are ill-acquainted with the law and unaccustomed to employing solicitors. This is particularly likely to be the case with people who let part of their own homes, because it is on the resident landlord that the burden of such a requirement would fall and, in general, a landlord under a protected tenancy needs to serve notice to quit only if and when he wishes to convert a periodic contractual tenancy into a statutory tenancy. I have dealt with that matter at some length, because I thought it desirable to place those points on the record.
The noble Baroness, Lady Young, asked a number of other questions. She drew attention to the fact that different obligations are imposed on furnished and unfurnished landlords, and she raised the issue of a definition of"furnished tenancy ". She suggested that such a definition was required to ensure that the landlord knows what his obligations are. I have to say that it is not quite clear what the noble Baroness has in mind. The landlord knows what contractual obligations he has undertaken, and there are no additional statutory obligations which depend on whether or not the tenancy is furnished. But if the noble Baroness can clarify the matter and is not satisfied with what I have said I shall be pleased to pursue it. She then asked—
§ LORD SOMERS
My Lords, I interrupt the noble Lord for one moment— I am sorry that he is being interrupted 292 rather frequently—to ask whether there is a definition of"furnished "? I heard of a case recently of someone who was evicted from his flat, which was furnished nominally. But the furniture was so rudimentary that it was unusable; most of it was rotten and the carpet was falling to pieces. That was all that had been provided.
§ LORD GARNSWORTHY
My Lords, if the noble Lord, Lord Somers, will read what I said at the beginning of the debate he will appreciate that the Bill is intended to deal with the kind of unsatisfactory situation to which he has referred. I welcome his interest. If he is not satisfied with what has been said this afternoon perhaps he will return to the subject when we reach the Committee stage.
The noble Baroness asked whether part of the landlord's home let unfurnished would be subject to security. New lettings of that kind will not be subject to full security; they will be subject to Part VI. The noble Baroness also asked why no provision had been made for repossession from tenants who do not pay the rent. The reply is that this is already a ground for possession under Case 1 of Schedule 3 of the Rent Act.
A good deal has been said this afternoon about the part that local authorities can play in providing homes for our people. Questions have been raised about the security of tenure enjoyed by council tenants. Of course they do not at present enjoy the same security as other people. I myself have long felt that they ought to enjoy as much security as the tenant of the private owner. But I have to say that it is seldom one finds local authorities evicting on any large scale. The number of evictions from local authority houses and flats is, I think, comparatively small in relation to the total number of evictions. We can rely on local authorities to show a sense of social responsibility. That is why we on this side of the House are glad to note that we are supported by others out-side. I gather that the noble Lord, Lord Avebury, supports us in that direction also. We feel that the ultimate solution to the problem of finding enough homes and to give people security of tenure in those homes lies largely with the local authorities and with the housing associations. I would not at this stage exclude the owners of properties 293 who Possess a sense of social responsibility.
If, as I understand, the Bill is to have an unopposed Second Reading, may I express my appreciation of that. I am sure many of the issues which we have discussed this afternoon will be dealt with in more detailed fashion when we enter the Committee stage. Before closing I should like to re-emphasise that we regard the purpose of the Bill as being extremely urgent. Those who feel that we should be leisurely will have to accept the consequences if the result of leisurely consideration—which none of us wants to see—leads to the kind of situation which was hinted at in the weekend Press.
On Question, Bill read 2a, and committed to a Committee of the Whole House.