§ 2.47 p.m.
§ THE LORD PRIVY SEAL (LORD SHEPHERD)
My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
§ Moved, that the House do now resolve itself into Committee.—(Lord Shepherd.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL OF LISTOWEL in the Chair.]
§ Clause 1 [Extension of protection afforded to furnished tenancies]:
BARONESS YOUNG moved Amendment No. 1:
Page 1, line 19, at end insert—
(bb) determination of fair rents shall be made by Rent Tribunals.
§ The noble Baroness said: I beg to move the first Amendment to this short 1134 but highly technical and somewhat complicated Bill. I am sure that the noble Lord, Lord Shepherd, will agree that almost every clause in it refers back to the 1968 Rent Act and therefore, by inference, when a tenancy under this Bill becomes a regulated tenancy, as it does under Clause 1, the fair rent will be determined by the rent officer. This is not stated, though it is implied.
§ In moving this Amendment I do not want to appear in any way critical of rent officers or the work that they have done; but the fact remains that there is no need for one to have any professional qualification or any relevant experience at all to become a rent officer. I have recently heard of two policemen who have been appointed as rent officers. In these circumstances there could be great variation in the calibre and experience of the people appointed. I have no doubt whatever that, over a period of time, they develop an expertise. I do not know whether or not they are issued with any kind of guidance from the Department of the Environment; but if they are, I should be most interested to see a copy of it.
§ What is needed in this Bill is confidence. Confidence is required, both on the part of those who are to let furnished property and of those who will become tenants of it. Therefore the landlord needs to have the confidence that when he lets furnished property, which will now command a fair rent, the rent will take account of what he is providing. The tenant needs to have confidence that he is getting a fair deal. Furthermore, this Bill adds more work and far more responsibility to rent officers in regard to the valuation of furniture. It seems to me fairer to the landlord and tenant if such valuation is carried out by the rent tribunals. These people are experienced in dealing with such valuations. Rent tribunals generally consist of three people, usually a lawyer, a valuer and a layman, unlike just a single person. I have tried to find out for the benefit of this debate the kind of variation of detail which they will have to consider in determining a fair rent.
§ Of course, there is a great variety of furnished tenancies. For instance, some furnished tenancies include quite a number of services. I was told of furnished flats which include a service of being 1135 cleaned every day, or indeed a laundry service. Services will automatically include internal repairs, which are something not done by the landlord of unfurnished property. Also, the landlord will be responsible for all the internal fitments concerning electricity, water heaters, cookers, et cetera. There is the responsibility for plumbing the central heating. When all these internal repairs are being carried out and when internal redecoration is being done—which is what we would want to see done by any good landlord—the property must almost certainly stand empty, or part of it must be empty, in order for the work to be done. Therefore, a furnished flat once again becomes somewhat different from an unfurnished flat. It seems that if the fair rent does not take adequate account of all this detail one can be certain there will be a steady deterioration in the property. The landlord will be unable to do the necessary repairs, which I am sure we would all regard as completely undesirable. Indeed, it has been a matter of criticism, sometimes justified, where repairs have not been done.
§ The second alternative could well be as a consequence of this: instead of there being furnished flats or houses to let, people would be offered full board and the house would become a kind of cheap hotel. This again is not what people necessarily want, but it could be a consequence. However, my principal reason for moving this Amendment is that a great deal of new work is being added to rent officers. This Bill could lead to a diminution in confidence on the part of those who are to let furnished accommodation. This in its turn could lead to there being less accommodation, with all the consequences that that could have for people seeking it. I feel that this Amendment is one way by which justice could be seen to be done to both parties to the agreement. I beg to move.
§ 2.53 p.m.
§ LORD SHEPHERD
I am sorry that the noble Baroness, with her long and notable experience and service in the Department of the Environment, should cast doubt upon the role of the rent officer in referring to possible loss of confidence if these new provisions in this Bill entail duties passing from the rent tribunal to the rent 1136 officer. The effect of this Amendment would be to leave protected furnished tenancies within the jurisdiction of rent tribunals for rent-fixing purposes, instead of transferring them to the rent assessment service; that is, the rent officer. Even if this proposal were desirable in itself, there would be one serious practical difficulty in the way. Noble Lords will no doubt be aware of a recent decision in the Court of Appeal in the case of Woodward v. Docherty, which has suggested that a number of tenancies which were regarded as furnished may in fact be unfurnished and thus already protected and subject to the jurisdiction of rent officers. In abandoning the distinction between furnished and unfurnished, and putting all protected tenancies within the jurisdiction of the rent assessment service, we are in effect giving statutory recognition to the situation that may have resulted from the Appeal Court decision.
The noble Baroness referred to the competence of rent officers in fixing rent. I should have thought that she would be one of the first to acknowledge that the rent officers over many years, ever since we have had rent legislation, have given a notable service both to the landlord and to the tenant. To the best of my knowledge, I have not seen any criticism of their service. A rent officer requires a degree of expertise and a degree of understanding. When she referred to two police officers, I should not have thought that their experience was something that could not be of great assistance to a rent officer. I am sure the noble Baroness will also remember that the rent assessment service now has a considerable amount of knowledge and expertise behind it. There is a central organisation, certainly in London, where knowledge is accumulated and where meetings are held for the purpose of avoiding variations from one district to another. If there is a question of confidence, there seems to me more advantage in having the rent officer procedure because here there is in fact a court of appeal; there is yet another body to which a decision can be taken, whether it is done on behalf of the tenant or whether it is done on behalf of the landlord. There is an appeal procedure beyond the rent officer, whereas under the rent tribunal system a decision is made and that is the end of it, whether the decision is right or wrong.
1137 In terms of numbers, the rent officers are a heavily burdened body of officials, but we believe they will be able to take on this added work, particularly in the early stages, as a consequence of the rent freeze. Nevertheless, the Government are undertaking an immediate and most careful consideration of whether the number of rent officers should be increased. We have gone into this matter with the greatest possible care. We think it is right and proper that we should now proceed to the rent officer procedure, and we believe we shall have sufficient numbers of officers with sufficient expertise, built over a long period, to give satisfaction not only to the tenant but also to the landlord—who is just as important as the tenant in this field of legislation in terms of equity.
§ LORD ROBBINS
Can the noble Lord give some idea of the increase in the number of rent officers necessary under this legislation?
§ LORD SHEPHERD
It is difficult at this moment to assess the numbers that will be required. We are, however, looking into the matter and if I can give the noble Lord some information on this matter, perhaps at Third Reading, I will do so. I myself did not specifically ask what the new numbers would be, but I have received information that we are looking at the whole problem to see what increase is necessary.
§ LORD LEATHERLAND
The noble Baroness was rather critical of the fact that two police officers had been appointed as rent officers. Can she tell us what were the ranks of those police officers?
§ LORD SLATER
I should like more clarification in regard to what determines a rent officer. What are his qualifications, and who determines what they shall be? If I were to take this matter to my wife and asked her opinion, I know she would say that the situation opens the door to criticism in regard to the rent officer who will determine what shall be the rents for furnished lettings, et cetera. I sincerely hope that my noble friend will be in a position to give us an answer as to what really determines how one qualifies to hold this appointment.
§ LORD SHEPHERD
I am afraid that I thought the position of the rent officer 1138 was so well-known that this was not an aspect that I myself should determine in detail before coming to this Committee. All I would say to my noble friend is that rent officers have been in existence ever since the last war when the first rent legislation was introduced. I said in my earlier speech that I had never yet heard criticism of the qualifications or the service which the rent officers have provided both to the tenant and to the landlord.
§ LORD SLATER
I hope that my noble friend will not take objection to what I am going to say in regard to the reply which he has sought to give. Like many other noble Lords attached to this Assembly, I was a member of a local authority prior to coming to your Lordships' House. We appointed rent officers. They were then known as rent collectors and they were appointed to go round these great estates that were built up by direct labour, et cetera. Their purpose and duty was to collect the rent imposed by the local authority.
§ LORD SHEPHERD
I think that my noble friend must have misunderstood me. The rent officer has got nothing whatsoever to do with the collection of rents. He is an official selected by local authorities. Sometimes I understand that he has some valuation experience. Certainly he has wide experience in the field of housing and his only duty is to decide what is the fair rent of the premises. It has got nothing to do with collection. It is merely an assessment of what is a fair rent both to the landlord and to the tenant.
§ LORD SLATER
He is going to be an assessor. He will have to assess what shall be the rent of the particular establishment which he has gone out to inspect. He will have to examine and determine what the position shall be. We ought to have this clarified, because as a past local authority man in rural authority development, I shall not be happy about this issue until I can get clarification.
§ LORD SHEPHERD
If my noble friend will read what I have said, this man is not a rent collector. He is, as my noble friend suggested, a rent assessor. He is an assessor of what is a fair rent on those premises which, over many years, have become involved under legislation on rents.
§ LORD LEATHERLAND
May I ask whether the noble Baroness is now in a position to answer the question which I put a few minutes ago about the rank of the police officers who are appointed?
§ 3.4 p.m.
§ BARONESS YOUNG
I am not in a position to give any more details about these particular people, nor do I think that it is necessary to do so in order to support my case. I was not quoting them to criticise them. I have every reason for supposing that they do their job as well as they can. My point in mentioning it at all is one which I hope will answer the questions put by the noble Lord, Lord Slater. Rent officers were introduced under the Rent Act 1965, when the principle of fair rents was introduced. This is a method of calculation and, as Lord Shepherd has explained, they are there to determine what is the fair rent of a property.
Under this Bill the fair rent principle is to he extended from unfurnished to furnished tenancies. It seems to me essential that one should create the right climate in order that both parties will come to an agreement about it. We are all agreed on this principle. The fact is that there are no particular qualifications necessary for being a rent officer. One might think that they ought to be qualified in some way, either by local government experience, or housing experience, or valuation experience, but they are not. I do not know whether they have this code of guidance—the noble Lord, Lord Shepherd, has not said—but I expect that they have something from the Department of the Environment. There is, therefore, the point that people may not have confidence in them when they are going to have a great deal more work added to what they already have to do. The noble Lord, Lord Robbins, asked a very good question. I was going to ask Lord Shepherd this question myself. Obviously there will be a tremendous amount more work for them to do. One of the criticisms, which I think is a real one, is the length of time which it now takes to get a fair rent assessed. This is a very important point if you are letting property. You do not want to wait an indefinite length of time before you know what the rent will be. I raise this point because one very serious issue is that 1140 there could be far less property to let. I am moving this Amendment because it is one way of trying to keep the confidence of both parties.
§ LORD AVEBURY
I am possibly the only Member of your Lordships' House who was on the Standing Committee of the 1965 Rent Bill when, as the noble Baroness has just said, rent officers were first appointed. To the best of my recollection, during the proceedings on that Bill there was no discussion of the point raised by the noble Baroness as to whether rent officers should have any formal qualifications. Probably there were very good reasons for the lack of any discussion on this point. It is hard to see at first sight what those qualifications ought to he. Among the several other headings which she mentioned, the noble Baroness said that perhaps they could be experts in the field of housing or valuation. This illustrates the difficulty. If one were to require some professional qualification, what should it be? Is not a police officer, who may have very considerable experience of dealing with the people in his own area, just as well able to understand the factors set out in the Rent Bill as somebody with a formal training in quantity surveying or some profession of that kind?
The formula in the 1965 Act, incorporated in the 1968 Act which was a consolidation measure, is of a very general nature. It speaks ofhaving regard to all the circumstances and in particular to the age, character and locality of the dwelling house and its state of repair".Anybody with common sense could interpret that formula in the light of what has been done elsewhere. The noble Lord, Lord Shepherd, mentioned that we now have very good machinery for coordination of the findings of rent officers in different parts of the country, and I think that, generally speaking, this has worked quite well. When you look at the legislation and you find that the landlords and tenants are about equal in the volume of their complaints against the system, then it is probable that a reasonable balance has been struck. I am rather surprised that the noble Baroness should have brought this point forward.
Appeal machinery was also provided, as mentioned by the noble Lord, Lord Shepherd. If either tenant or landlord 1141 disagrees with the recommendation of the rent officer, then they can take the matter to a rent assessment committee. If the Conservatives were dissatisfied they did, after all, have three and a half years in which to amend the 1968 Act and to bring forward their proposals on how rent officers should be qualified. The fact that the Conservative Government failed to do this illustrates that there is no substance in the point of the noble Baroness.
§ LORD ROBBINS
May I add a footnote to what the noble Lord has said, and to what was said by the noble Baroness, Lady Young. I am certainly not out to make any Party point here, but it would be a matter of common agreement that this proposed legislation extends tremendously the area of assessment. The point which I would urge on the noble Lord, Lord Shepherd, in which strong feelings of humanity, common sense and so on are concerned, is that a much greater element of subjectivity must enter into valuations where the furnishing and the interior of dwelling places are concerned. It is for that reason that I suspect that the noble Baroness, Lady Young, and some of us who sit on these Benches may feel that it is extremely important to scrutinise every clause of this Bill to see that it does not achieve exactly the reverse of what is intended; namely, to bring about a withdrawal from the market of accommodation which is urgently needed.
§ LORD SHEPHERD
May I explain to the noble Lord, Lord Robbins, and to the Committee my attitude whenever I am presented with a Bill in Committee. My officials were complaining on Friday because they wondered on which side of the fence I was falling, since automatically my nature is to be in opposition. Therefore, when the brief was put before me I questioned why we should resist the first Amendment tabled by the noble Baroness, Lady Young. My instinct was for speed and to accept the first Amendment, because in doing that one makes much progress. In the end I had to be convinced—and I was convinced—that the position that I put earlier was the right one.
First, it is said that rent officers have no experience in dealing with furnished premises. The noble Baroness knows 1142 that under existing legislation they are already involved, so they have experience. Therefore what they are being asked to do under this legislation is not new. It is true that there is a difficulty in terms of numbers and I was well aware of this difficulty. I do not have a note of the numbers—perhaps I should have—but I will see that the noble Lord has them at a later stage of the Bill. But I acknowledged that we are placing an increased responsibility on this service and, therefore, the service has to be adjusted according to its new responsibilities.
At the beginning I said that there was an advantage not only in using the rent officer procedure. There will now be two tiers both for the benefit of the tenant and the landlord. There will be the direct assessment by the rent officer who will go and look at the premises, but if at any time there is doubt on the part of either the tenant or the landlord then there will be the right of appeal to the rent assessment committee, and I suspect that in fact the rent assessment committee is not very dissimilar from the rent tribunal. Certainly it will have the same kind of professional service available to it as does the rent tribunal; the appointment and employment of valuation experts and the like. I suggest that the real problem is that put by the noble Lord, Lord Robbins, the question of numbers and the availability of the service to do what it is required to do under the Bill when it becomes an Act of Parliament. But I suggest to the Committee that having decided that furnished accommodation should now be treated in a similar way to unfurnished accommodation it would be right and proper to bring it within the normal assessment of a fair rent, and that is what the Bill suggests should be done through the rent officer procedure with its appeal to the rent assessment committee. I recognise the problem of the numbers and I will certainly ensure that the noble Lord. Lord Robbins, has that information at a later stage of the Bill.
§ LORD POPPLEWELL
Can my noble friend give any indication as to how often the rent assessment committee may meet, and also the rent tribunal?
§ LORD SHEPHERD
I always understood that these bodies met when the workload so demanded, in a similar way to a court of magistrates.
§ LORD LEATHERLAND
I regret that the noble Baroness, Lady Young, was unable to reply to the question that I put to her. I also regretted that she used the example of retired police officers to indicate that that type of person was not suitable to act as a rent officer. If the two police officers who have been appointed as rent officers happen to be retired inspectors or superintendents one must accept that they are very competent people indeed. Moreover they would have an intimate knowledge of the living conditions and the circumstances of the people on their particular manor.
I do not want to see every retired police constable made into a rent officer, but when a man has risen through the ranks of a highly disciplined force such as the police force, has passed the requisite examinations to become an inspector or a superintendent, then that man has something. Perhaps I may take a homely example, and I do so in the absence of my noble friend Lord Willis: which of us would object if Sergeant Dixon of Dock Green retired from the force and was then appointed a rent officer? He has an intimate knowledge of everybody in the district in which he operates, and I regretted that the noble Baroness tended to suggest that a retired police officer was not fit to become a rent officer.
§ LORD SHINWELL
Apart from the submission made by the noble Lord, Lord Robbins, on the matter of numbers—and of course that is a vital issue—the simple issue before the Committee is what are to be the qualifications of these rent officers. Apparently the noble Baroness finds policemen distasteful in this context. That is regrettable; I should have thought she might have had a word of praise for policemen. But let us consider what kind of policemen she had in mind. What information has she about the quality, the character and the period of service of these policemen? She ought not to conceal this information, and we are anxious to be made aware of it. Were the recruits "Bobbies" who had just arrived aged 19, 20 or 21—raw recruits? Were they sergeants or inspectors? Who can tell? This is what we want to know, but since she has raised this issue perhaps she will be kind enough to inform the Committee what in her view are the qualifications required.
1144 She referred to the matter by implication; she just mentioned the words "members of the rent tribunals", but we can rule them out, because if we are to employ lawyers for a task of this kind it will lead to more expenditure. Besides, I question whether there is a sufficient number of briefless barristers ready to undertake the task. They are really not available. What then is left? The valuers—"Ay, there's the rub". They can estimate whether the decor is worth a certain sum to be injected into the rent of the premises and they can decide whether the furnishings are expensive or inexpensive. But there is something more about the valuers: they are closely associated with the estate agent fraternity. There is a certain element of bias and generally speaking I think they would take the side of the landlord. Of course, if there is a case for the landlord, why should they not take his side?
The noble Baroness comes briefed by the Central Office, or a sub-Central Office, and she puts her case. She has not got the foggiest notion of the kind of expertise that is required; she only indulges in generalisations and that is really not good enough in an important debate of this character. So I pose these questions to the noble Baroness. Who are these two policemen with whom she has made acquaintance? Are they humble or are they superior? We ought to know, and over and above that, will she be kind enough to define, as closely as the circumstances demand, the kind of expertise that is required and the qualifications that are necessary so that we may come to a conclusion about this important matter.
§ LORD CLITHEROE
Have we not talked enough about this aspect of the matter, which is not really totally relevant to the point we are trying to decide. Whether the illustration given by the noble Baroness was the best that could be found is difficult for anybody to say, but the problem will be to find the people to do this work, and I do not think that anybody on either side of the House has really appreciated how difficult this will be.
§ LORD HYLTON
I hope that the nob!e Baroness will not press the Amendment. I have every confidence that the rent officers will be able to cope with this 1145 new volume of work. They have already developed very great expertise. For example, they are able to tell a housing association what will be the rent of a building not yet built, simply by looking at the plans and examining the neighbourhood. Secondly, it will be a very great benefit to the public if there can be one system rather than two for assessing rents. If my noble friend presses her Amendment, I am afraid that I shall not be able to support her.
Does the noble Lord appreciate the difference between furnished and unfurnished premises? It is an entirely different problem.
§ BARONESS SUMMERSKILL
I am sure that many noble Lords here will groan and say "Here she goes again", but the noble Lord has just said that it is an entirely different problem. How much I agree with him. We have in this context to value a place which is furnished and the quality of the furnishing. I would ask noble Lords here whether if they wanted a new flat which was furnished, they would rely upon their own assessment or their wife's assessment as to the quality of the furnishing which will determine the rent. I can think of nothing better than sending a woman to see some of these flats—a woman, not the policeman we have heard about. I ask the Government to consider this point very seriously. An entirely new aspect of valuation is called for here. Most men could not go into a flat and say, "The quality of those curtains is good", or "bad". The quality of the carpets is good, or bad. They are "fitted" or "not fitted", and so on. Therefore I ask the Government, instead of showing the prejudice that they usually show in regard to the employment of women in every sphere, to recognise that this is essentially a woman's job.
§ BARONESS YOUNG
I should like to thank those noble Lords who have spoken in support of this Amendment. We have listened to some very interesting speeches, including that of the noble Lord, Lord Shinwell, whose speeches I always enjoy. If I may make a comment, I think I once said to him in the course of our debate on joining the E.E.C. that he is one of the few Members of this House who speaks like a European, with all the 1146 gestures, emotionally and with conviction, and it is a shame that he will never have the opportunity of sitting in the European Parliament. Nevertheless, he has led us on a really splendid argument which I believe was totally irrelevant, so he will not be sad if I say that though I enjoyed it I do not wish to follow him all the way. I take this matter—
§ LORD SHINWELL
Does that mean that the noble Baroness is not going to answer the vital and salient question?
§ BARONESS YOUNG
I am going to answer all the important points that have been raised. I regard this as a very serious issue. We are not, if I may say so to the noble Lord, Lord Leatherland, trying to look into people's houses in order to know about their homes and the sort of people they are. We are asking someone to make an assessment of the rent.
§ BARONESS YOUNG
If I might complete my argument, we are trying to assess a fair rent for furnished accommodation. The noble Lord might look at the Acts of Parliament which show what determines a fair rent. Perhaps I may read a summary of them:To have regard to all the circumstances other than personal circumstances, and particularly age, character and locality of a dwelling and its state of repair",which the noble Lord, Lord Avebury, quoted, and something will now have to be added for the furnishing and, I hope. the services. This is a question of an agreement which has to be reached between the landlord and the tenant. The point I was making was that both parties must believe that justice will be done. The rent officer is a single person. whereas the rent tribunal consists of three people sitting together and usually it is three I named—the lawyer, the valuer and the layman. Therefore you are not relying on one individual to do this job. I hope that that indicates the kind of qualifications which I think would be very helpful.
I entirely agree with the noble Baroness, Lady Summerskill. I cannot at all see why women should not be employed, and I should welcome the employment of more women to do this job. 1147 It would be very helpful to know, and I hope that the noble Lord, Lord Shepherd, when he replies to the debate, will tell us what preparations the Government have made to meet this very real problem, perhaps by additional guidance to rent officers, by the employment of a greater number, and possibly by considering the kind of qualifications that a rent officer ought to have. If he can give us some of this information he may well allay fears which exist at the present time and which my Amendment is designed to meet.
§ LORD SHEPHERD
I certainly wish to be helpful to the noble Baroness. In order that we can have a full understanding of what a rent officer is, perhaps we can arrange for a Question, and I will then set out by Written Answer all the qualifications that one would wish to see within the rent officer procedure. My understanding is that the basic requirement here is general sympathy, general understanding and a sensible approach. The noble Baroness spelt out some of the benefits and advantages of the rent tribunal and referred to the professional expertise that is available. The noble Baroness did not acknowledge—and I hope she will now do so—that under the procedure in this Bill this will be available on appeal, where there is a sense of grievance either by the tenant or by the landlord about a rent officer's assessment. This appeal is not available under the rent tribunal procedure. In reply to my noble friend Lady Summerskill, I would say that women are of course employed in this service. I do not have the figures for England but I will get them. But, as usual, the Scots are more forthcoming with their information and general attitude, and I understand that 10 per cent. of the rent officers in Scotland are women.
§ LORD SHEPHERD
Too little maybe, but I expect a decided advance on what we will find are the English figures. I take the point which my noble friend has put, that this is a field in which women undoubtedly have a role to play. The reason they do not play it may not necessarily be the attitude of local authorities, but the decision of the women 1148 themselves not to come forward for this form of work. I hope the noble Baroness will feel satisfied with this debate. The Government are very conscious of the importance of this service. We feel that the procedure outlined in the Bill with, first, the assessment and, secondly. the appeal, has all the advantages. In particular, as the noble Lord opposite has said we are here bringing furnished tenancies under the general cover of legislation that has stood the test of time and I do not think anyone would question the service which rent officers have provided to this country since 1965.
§ BARONESS YOUNG
I should not like to pretend that I am completely satisfied by that answer. But I shall read very carefully what the noble Lord has said, and if I am still not satisfied I shall put down another Amendment at Report stage. In the meantime, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 3.30 p.m.
LORD GIFFORD moved Amendment No. 2:
Page 2, line 23, at end insert—
(e) in section 2(3) of the Rent Act, before the word 'attendance' in each place where it appears there shall be inserted the words 'board or'.
§ The noble Lord said: I beg to move Amendment No. 2. Before turning to the specific point of the Amendment may I, by way of preface to this and a number of other Amendments which stand in my name and that of my noble friend Lord Melchett, indicate to the Committee in essence what we have in mind by moving this afternoon quite a selection of Amendments. We do not in any sense wish to obstruct or delay the passage of this very important Bill through this House. Indeed, it is absolutely essential that the Bill passes through Parliament at the earliest possible moment so that the protection which it envisages can become secure. But for that reason, it might be of advantage if points which may have substance are raised here so that full time for consideration is available to the Government.
§ A great number of these Amendments deal with what we see as possible loopholes in the Bill or in the Rent Acts, as 1149 they will be, as a whole. This Bill takes away from unscrupulous landlords the one particularly convenient device which was available to them to let properties to tenants whom they could remove virtually at will, with only a limited amount of time lag being given by the rent tribunal. Now that that convenient method is being removed, there is absolutely no doubt that the landlords of the kind I have in mind, who make profits by letting in the poorer inner areas of cities, will be scrutinising, or their advisers will be, the Rent Acts and the Bill to see what kind of loopholes still remain. Every possible device will be employed, and it is our belief that the Bill, while in essence a very good one, does leave the way clear in a number of cases for unscrupulous landlords to exploit and thus to undermine the protection which the Bill seeks to give.
That is the case with regard to the first Amendment which I move. It concerns the provision of board, and the provision is this. Under Section 2 of the Rent Act as it stands at present, tenancies which are furnished are not protected—this, of course, will be changed—provided that the amount of furniture is substantial. Tenancies where the rent contains an element of payment for attendance are not protected, provided again that the element of attendance is substantial. Tenancies where the rent contains an element of board are not protected; but there is no requirement that the element of board should be substantial, and I would wish to ask, "Why not?" This is something which was given attention by the Francis Committee, who, on page 157 of their Report, said this:
The reason for this omission is not apparent. The result is that there is no specific statutory requirement, in relation to protected tenancies, that in order to exempt a tenancy from protection, the value of the board to the tenant should form a substantial proportion of the whole rent. We are inclined to think that there should he such a requirement, although, presumably, it is rare for board to be provided for unfurnished tenants, and the word 'board' in itself may well import an element of substantiality.
If that Committee thought that board would necessarily have to be substantial in order to qualify as board, I think they were wrong. The leading textbook of Mr. Justice Megarry says at page 141 that
the majority view of the courts is that the term is not confined to full board, but, subject to the de minimus rule, extends to any board.
I have already been made aware of cases where a modicum of board—a few tea bags, a few pints of milk, or half a dozen eggs a week—is being provided by landlords, its value being only a small amount of the rent. It seems to me that so long as some board of that nature—a few cheap breakfast articles—is provided, therby the tenancy is not a protected one.
§ I would ask that the Amendment be accepted, for what it does is to import into the Act the requirement of substantiality. That will cover, of course, and exempt from protection the genuine boarding house and the genuine provision of bed and breakfast, because obviously the provision of a breakfast is likely to amount to 10 per cent. or 15 per cent. at least of the element of rent, and thus would be regarded by the courts as being substantial. But it is easy to foresee that false board, the board which the tenant does not want and which consists of the provision even of vending machines for coffee, is the sort of dodge which the Committee would not wish landlords to get away with. I beg to move.
§ 3.37 p.m.
§ LORD SHEPHERD
Once again, this was a difficult matter to consider and to decide upon whether or not one should resist the Amendment. In the end I came to the view, with reluctance, that one would need to advise the Committee that this Amendment should be resisted. The question of board is particularly difficult. The only piece of case law one can fall back on occurred in 1923, when the Court of Appeal in Wilkes v. Goodwin was considering the first proviso to Section 12(2) of the Increase of Rent, etc. Act 1920, from the provisions of which Section 2(1)(b) of the Act of 1968 is derived, and it decided by a majority that partial board was sufficient to exclude the Act. This decision appears to have stood unchallenged for just over half a century. I think it was on this question that Sir Robert Megarry on The Rent Acts, which my noble friend Lord Gifford referred to, said thatthe dividing line appears to fall between the early morning cup of tea on the one hand and 'bed and breakfast' on the other".It was suggested in the newspaper the other day that perhaps the installation of vending machines in accommodation might provide exclusion. My advice is that we do not think for a moment that 1151 in the event of a landlord incurring expenditure on such provision and maintenance in order to evade the Act, the courts would hold that the sale of food by vending machines would in fact constitute "board".
In our view, and resting on the previous decision, "board" clearly means a meal, even if not a very substantial meal, served by the landlord to the tenant. I have some sympathy with the approach of my noble friends Lord Gifford and Lord Melchett in seeking to tighten up the Bill, perhaps giving more protection to the tenant. But I would suggest to my noble friend, as I will on later Amendments, that we need to seek a balance of what is right in terms of the tenant, the necessary protection we want to give to him, without making the legislation so tight that it is so much to the disadvantage of, or such a restriction on, a landlord that the number of furnished tenancies might be reduced.
I have looked at this matter. If I may say so, this is a matter more easily discussed across a table than across the Floor of your Lordships' House. If my noble friend is still dissatisfied with what I have put to him this afternoon, I would be very ready to have further consultation with him. However, I must say to the Committee that I am advised that if we were to accept this Amendment, we are unlikely to add to the protections which already exist by court decision, because it is in the end for the courts to decide what is fair board. As I say, I am quite willing to discuss this with my noble friend, but my advice to the Committee is that we should not accept this Amendment.
§ LORD HALE
The football correspondent of The Times this morning felicitously recalled Jerome K. Jerome's story of Three Men in a Boat, finding himself, after very hard rowing for a very considerable number of hours, looking up and seeing the same bridge over his head as when he started to row. I have precisely that feeling. I have been through this before; I have been through this more than once. We got up in another place and said: "We must include the furnished lodging, because if you do not, a little bit of furniture will be added and the protection you are now proposing to give will be destroyed"—and everybody knows that that has happened. Now we 1152 say: "But you must exclude the exemptions of board because everybody knows how simple it is to avoid it".
I had not intended to intervene, because the noble Lord, Lord Shepherd, put this so clearly and so fully that it is almost an impertinence to add anything from my inexperience of recent conditions. There are times when I listen to the noble Lord at the Box making exceedingly able speeches and very generous speeches and showing his own likeability, but he does run occasionally to the superlative. I did not even intervene when he said he had never heard anyone criticise a rent officer and that really he could hardly imagine such a possibility. Well, with all fairness to rent officers, somebody is bound to be dissatisfied with nearly every decision they make, however good they are. In Oldham they used to express it, and they are not really people who complain, they are people who submit. There is the lady who comes in and says: "They told me to go along and see the rent officer to get my rent reduced because it is excessive, and he has put it up". She smiles sweetly and says, "You know, Mr. Hale, it does not look as if we can win nohow". Many people feel like that. Of course, in places like that a lot of people do not even go to see the rent officer; they think it is the law, or they do not know what the law is, and they are anxious not to trouble anybody.
There is one point I want to make which I do not think the noble Lord, Lord Shepherd, made. I do not regard landlords as a class with the slightest hostility. I have been a tenant myself; I have been a landlord myself, at a peppercorn rent. Noble Lords sometimes complain that there is a certain bias against landlords on these Benches—and indeed to a certain extent there is a touch of truth in the fact that of course we are biased in favour of those who cannot argue for themselves, who, when they make a contract, make it under the duress of necessity or indeed under the duress of law. Nowadays if the average decent landlord lets a property, he thinks it is wiser to have a written agreement and he buys a printed agreement. The printed agreement, of course, will be revised the day after this Bill passes, because the printed agreements are certainly made for landlords; they are not 1153 made for tenants. They are made to sell to the landlords, and highly respectable law stationers would think themselves negligent if they did not supply their customers' needs.
The noble Lord the Lord Privy Seal says very fairly that "board" is not easy to define. When I first came to London on being elected to Parliament, my home remained in Leicestershire for a year or two until I could dispose of it and find out whether I had a reasonable hope of re-election before burning all my boats. I was found accommodation somewhere near Petit France; I forget the name of the street. I was provided with a furnished bedroom, a cup of tea in the morning, and, after a little discussion with the charming lady who cleaned the rooms and made the beds and did all she could, a couple of slices of bread and butter specially provided for us. It was an extremely generous letting; it was a friendly letting; it belonged to a trade union, I think connected with the Post Office although I am not sure. I got it through the intervention of another Labour Member of Parliament, and so far as I know I was paying less for it than the noble Lord, Lord Avebury, who was evicted for doing something with a syphon. Clearly the bad landlord who does want to exploit will easily be able to evade this clause; he will have a written agreement to show that he agreed to supply board and that he has supplied board. Thus he can settle the question of the definition. There is still the fact that the tenant is there to get a roof over his head; he does not have much chance to negotiate and he does not have much chance to argue.
I rose really to say that while the Amendment—backed by the gifted names of the noble Lords, Lord Gifford and Lord Melchett, who have obviously looked into this matter with the greatest possible care and speak with a good deal more current experience than I have—demands attention, I want to make this point clear to the noble Lord the Lord Privy Seal. If he talks to Lord Gifford, I shall be most happy that he has done so, but he did seem to assume that this Amendment did not have widespread support and might not command widespread support. I think on these Benches it would command widespread support. I 1154 appreciate the great difficulty in which the noble Lord is speaking, in view of the Parliamentary system and Parliamentary time, and in view of having produced another amending Bill which amends an amending Bill and corrects a codifying Bill and so on. This makes it quite impossible for me to understand the clauses, but I think I have just enough knowledge of the law to understand them more than most poor tenants in Oldham. I hope the noble Lord will listen to what the noble Lord, Lord Gifford, has to say; he might decide to press the Amendment, but at any rate the discussion should be continuous. I hope some information will be forthcoming in time to put down an Amendment at Report stage if the discussions do not give satisfaction.
§ LORD MELCHETT
I wonder whether I could obtain clarification from my noble friend Lord Shepherd of what he said in reply to my noble friend Lord Gifford when he moved the Amendment. As I understood it, he was saying that provided the landlord personally supplies a full meal, albeit a fairly small meal, that would be board within the accepted definition, relying on the court case, which, as he said, is now 50 years old. Am I right then in assuming that the Government's view is that where the landlord goes slightly further than putting in a vending machine, and, for example, orders a pint of milk for each of the tenants in his premises and provides a packet of cornflakes each week and half-a-dozen eggs—all of which would involve merely placing an order with the relevant tradesmen and the landlord doing no more than that—that would suffice as a perfectly good breakfast, and that that would be board?
§ LORD SHEPHERD
May I say to my noble friend Lord Hale that I not only sense what the Opposition are likely to feel sympathetic to; I am perhaps more conscious of what some of my noble friends will be sympathetic to. Therefore, I approached this Amendment with a degree of caution. As I thought I indicated earlier, it is one with which I had some sympathy. There are some difficulties here. Whatever you put into a Bill—and my noble friend Lord Gifford may speak with more authority than I, as he is a barrister—and even if you put 1155 in the word "substantial", at the end of the day it is for the courts to decide what is meant by "substantial". I can only say to my noble friend Lord Melchett that my advice—and I think it is good advice—is that "board" clearly means a meal. It would not be sufficient to provide a vending machine, or to provide a bowl of milk outside the door for the morning cup of tea. I think that a meal would definitely be required, although not necessarily a substantial meal.
§ LORD HALE
Would my noble friend allow me to draw on an example of which I have had considerable experience? In order to get a drink after twelve o'clock in London at one time, it had to be served with a meal. I wonder whether he remembers what one of those meals looked like, and how much there was, because they never weighed more than two ounces. The drink was very expensive, and the company was not always very good.
§ LORD SHEPHERD
Having been deputy chairman of the Erroll Committee on the licensing laws, I am aware of the difficulties of defining a meal within those laws. The advice I have had is that the provision of a vending machine, or something that is quite insubstantial, would not be acceptable by the courts. As I indicated, I should be very happy to pursue this point with my noble friend Lord Gifford. But I should not wish to give him any real belief that we shall be able to meet him, because I think he will recognise that at the end of the day one may have to rest upon the courts to define what is meant by the legislation. Even if the word "substantial", or some similar word, were placed in the legislation, we should still need to fall back on the courts.
§ 3.53 p.m.
§ LORD SHINWELL
If my noble friend means by his last few words that at Report stage he might find it possible to obtain a stricter definition of what is meant by the provision of a meal, I should be quite satisfied. However, I am bound to say that I wholeheartedly agree with the speech of the noble Lord, Lord Gifford. There are two sides to this question of landlords and tenants of furnished properties. To take an example, there 1156 are the landlords, who, with a very small financial competence, happen to possess a house with a number of flats and, who, for the purpose of maintaining their financial position, proceed to derive an income from the letting of those premises.
If one reads the advertisements in the evening papers, in particular—I shall not mention which; there is no reason why we should provide them with a gratuitous advertisement—one finds hosts of advertisements which indicate that many furnished properties are let at what are undoubtedly very low rents. I have had information conveyed to me by others who have been able to obtain furnished lettings at very low rents; the landlords and landladies have been most generous, and in some cases surprisingly generous. That is one side of the question. However, as we know—and, again, I refer to the advertisements in the newspapers—there are landlords of a quite different variety. There are the landlords who are in possession of vast properties, flats all over the place. Some of them—I shall not use the word "harassment". although it has been used on occasion and with some justification, because I do not have sufficient evidence to justify pressing the point—whenever an unfurnished fiat or property is vacant, seek to introduce a little bit of furniture, transform it into a furnished letting and charge the most exhorbitant rents.
I understand that one of the reasons why the rents of furnished properties on the higher rental side are accelerating rapidly is the number of diplomatic people in London. Most of the embassies employ vast numbers of clerks and attaches, and so on, and they can afford to pay very high rents. They are not themselves responsible for payment of rents; the rents are paid by the embassy. I also understand that the presence of Continental and American and other merchants in the United Kingdom, particularly in London, also contributes to this acceleration of rents for furnished properties.
We have to find some way of protecting all those who have to obtain furnished properties in the absence of other accommodation. I am not satisfied that this Bill goes all the way, but I understand the dilemma. After all, the Government have not been long in Office and they have had to introduce a great deal of 1157 legislation, some of it complicated, and some of it will have great difficulty in passing another place and your Lordships' House. This Bill has no doubt been hurriedly prepared, as I can understand, and the draftsmen have encountered difficulties because effective definitions do not seem to be available. But we have to consider the humanitarian side of this question, and I beg my noble friend the Lord Privy Seal to give the matter further consideration, and perhaps come along at Report stage with some more accurate and satisfactory definition which would satisfy my noble friend Lord Gifford.
§ LORD GIFFORD
To some extent, this is a lawyer's question and I certainly do not want to have Divisions on an interpretation of the law. What I urge upon my noble friend is that this matter should go back to those who advise him, in the light of the pertinent and strong comments that have been made, to see whether their advice is likely to stand up. I say this in particular, because the view that he has expressed about board needing to import at least a meal does not seem to he supported by the very authority which he has quoted—the author, Mr. Justice Megarry, saying that something less than bed and breakfast will be good enough to get by what the courts may determine "board" to be.
As my noble friend knows, I have afforded him details of one case where there was no cooking at all done by the landlord for the tenant, but the minimum requirements for breakfast were delivered toitim each week—eggs, evaporated milk, and tea-bags—which the tenant then cooked himself. That is rather more than a vending machine, but considerably less than a breakfast. Why should it not be left to the courts to determine whether this is a substantial amount of board, and not, as it was in this case, a racket?—because we have to be on our guard against rackets. It is for the courts to determine, but the requirement of substantiality has stood the test of time so far as furniture and attendances are concerned, and there is no reason why the courts cannot continue to cope with it.
The strongest reason of all why I am urging that this matter be reconsidered by my noble friend is that in the course of the debate neither he nor any other noble Lord has put forward any reason 1158 why the Amendment would do harm. I can quite see what my noble friend means by "striking a balance" and, if it were the case that the Amendment, by favouring tenants who deserve protection, prejudiced certain landlords, they might need to be exempted from the Rent Act; but, as I have suggested and as is not disputed, any genuine bed-and-breakfast lodging-house-keeper will be fully protected by the requirement specifying that the board should be substantial. "Substantial" does not mean anything like half or even a quarter, as the courts have interpreted it. I should like not merely the assurance that we shall talk about this matter again but that those advising my noble friend, and indeed my noble friend himself will think about the matter carefully before the Bill finally leaves this House or, at any rate, before it passes through another place.
§ LORD SHEPHERD
I can only say to my noble friend that, if I undertake to talk to him, clearly I shall think about the matter seriously. There are, however, as he himself indicated when he referred to the lawyers' problems, disagreements not on the principle but as to whether it is a practicality and whether it is possible in legislative form to meet the point which the noble Lord wishes to see in the Bill. However, I will with my officials certainly give the matter the most urgent and careful attention and I shall be happy to discuss it.
§ LORD GIFFORD
I can answer only that it is certainly possible because the Amendment does it and it is not suggested that it does not, but, with that assurance from my noble friend. I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 1 shall stand part of the Bill?
§ 4.4 p.m.
§ BARONESS YOUNG
I have put down this Amendment, which I have already indicated to the noble Lord, Lord Shepherd, I do not intend to press, because on re-reading the Second Reading debate I did not feel that the Government gave a satisfactory answer as to what they propose to do for the many people who will find themselves worse off as a result of the Bill. We have of course heard a great deal about those who will 1159 benefit, but his Government must feel, as we do, quite certain that as a result there will be less accommodation to let than there is at the moment and that, as a consequence of this, the various groups of people who are looking for furnished accommodation will be worse off. I have looked carefully to see what the noble Lord, Lord Garnsworthy, said on winding up the Second Reading debate. He says, in effect, and I quote:In our view, the proper providers of dwellings to let are the social landlords—local authorities and housing associations." —[OFFICIAL REPORT, 10/6/74; col. 288.]In effect, the Government are saying that the only accommodation for anybody will either be that available to owner occupiers or to council tenants or to those who are involved in some way in a housing association.
The first group of people who, I believe, will be seriously affected as a result of the Bill are young married couples. I accept that they, ideally, will want a house or at least a flat of their own, but it is most unlikely that they will be able to afford to buy one and they will certainly not be eligible for a council house as soon as they marry. I do not know whether the noble Lord, Lord Shepherd, has figures for the average length of time couples wait on the housing list, even if they have children, from the time they put down their name to the time they get a flat. Clearly, it varies from place to place but, in areas of housing-stress—which are very much what the Bill is concerned with—the wait will be quite considerable and, for a couple who have just married and who have no children, I should think it would be numbered in years—two or three years as an absolute minimum.
The argument which the noble Lord, Lord Garnsworthy, put forward is that the Government will give much more money for council housing and will provide money to buy the present privately rented furnished houses and flats. Leaving aside the second argument, as the noble Lord, Lord Shepherd, will know, even if every single council housing committee sat down to-day and decided to build another council estate, it would take at least three years from the time of deciding to build to the time that the housing would be ready for people to move into. 1160 It would take considerably longer, of course, if the housing authority had to acquire the land, possibly by compulsory purchase, and had to go through all the necessary consultative and statutory procedures before it could achieve the number of houses that it wanted to build. I do not think that it is any real answer to say that the local authorities will take care of the matter. There will inevitably be a time lag—and a very long time lag—in areas of housing stress for the practical reason that in many places there simply is not the land available for the housing.
I welcome the increase in the amount of building by housing associations, but, again, I think it is optimistic to think that they will make up the backlog or, indeed, that young married couples will necessarily be able to get into one of their flats, which are not always all so cheap and are, of course, unfurnished. Almost by definition, these people will require furnished accommodation because they are starting their married life and have no furniture of their own. The second group that I think will be affected consists of young people: I already have down on the Marshalled List of Amendments an Amendment which covers, at any rate, students and those young people seeking qualifications, but one must recognise that many young people, now that they are adult at eighteen, wish to have a flat of their own and, rightly or wrongly, think this is the way to live. They too will find it difficult to obtain information and one point is absolutely certain—they will not be eligible for council accommodation. I find it difficult to believe that in the foreseeable future councils will have available flats to let to young single people. I well remember that when I was in local government I tried hard to get my own authority to build flats for older single people, particularly for single women, who often found it difficult to find suitable accommodation, and I failed every time—and I can understand why—because it was said that priority must be given to families.
The third group which will be affected are those who are changing jobs. I have no idea how many people are on the move, but in the course of the Second Reading debate my noble friend Lord Gisborough said that he let flats to 1161 people who were employed, for instance, on motorway building and there must be a large number of people who are changing jobs and who seek furnished accommodation until they are able to buy a house or find a home of their own. I believe that there is considerable evidence to show that people are reluctant to change jobs now, because, if they are fortunate enough to have a council house, they dare not move out since they are most unlikely to get another, unless they are fortunate enough to be able to make a direct exchange with somebody from another authority.
This means that we have become a relatively immobile society and as a consequence of the Bill we shall be even more immobile. This is a serious matter when one considers that all political Parties want to see greater economic growth because we all know that, without it, we shall not have the council houses or anything else that we want. The Bill, by making it more difficult to get temporary furnished accommodation will make it more difficult for people to move, and this could have a real consequence for industrial growth.
Thinking about the difficulties, I hope that the noble Lord, Lord Shepherd, will be able to tell the Committee something about the proposals which the Government may have to deal with what I think will become or could become a difficult social problem for authorities which have a large proportion of council housing and virtually no private housing. When I was in local government, one of the most difficult problems arose when a family had to be evicted from council property for non-payment of rent. The difficulty of course was that if the family were evicted, in these circumstances the children nearly always had to be taken into care, while the parents went somewhere else, with all the social consequences of that separation. On the other hand, if the family was left not paying rent, clearly all the other tenants began to think, "Why should we pay our rent if nothing happens?".
Then, of course, if one felt that it was undesirable to separate a family, it became necessary to think of some kind of accommodation to which they could be sent—or even building something—which perhaps was not as good as the council accommodation from which they 1162 came. It creates many problems. It is a difficult question because these kind of people are not homeless because they cannot find a home, but because they suffer from a multiplicity of problems. I do not think that anyone has yet found a solution to this. But clearly finding a solution can well become increasingly difficult when there is less choice, fewer types of housing available and when we have become a kind of society in which almost everybody is either a council tenant or an owner-occupier.
I have raised these four points because I think they are important. The first three concern groups of people who will undoubtedly suffer as a consequence of the Bill. I think it is only right that the Government should indicate how they intend to deal with these problems.
§ TIDE EARL OF KINNOULL
It may be for the convenience of the Committee if I speak in support of the Amendment of the noble Baroness while speaking to my Amendment at the same time. Along with my noble friend I, too, have real fears about the value of the Bill. Personally, I find most unconvincing some of the statements made this afternoon, especially those comments about landlord rackets and the urgency of the Bill. I believe the fact to be the complete opposite of the case. Everyone knows—that is, everyone who takes an interest in housing affairs—of the shortage of housing in this country to-day. Everyone knows there is a shortage of housing to buy; that there is a shortage of housing for unfurnished tenancies and everyone knows there is a shortage of housing for furnished tenancies. Why, one asks, are the Government bringing forward a Bill now which in 1971 the Francis Report considered unwise? I do not think that this point was ever answered by the noble Lord, Lord Garnsworthy, on Second Reading. Perhaps the noble Lord, Lord Shepherd, will later explain why the Government consider that it is right and proper now to bring forward such a Bill when the Francis Report considered it to be unwise.
I should like also to know what value the Government attach to the furnished accommodation market. Do they consider that it does a valuable job? If they consider that it has a value and they accept the Francis Report's worry about the market drying up I should certainly 1163 like to know who they think will replace the market. Will it be the local authorities, or who?
A third question which I should to ask the noble Lord, Lord Shepherd, is what new evidence is there of hardship and harassment of tenants since 1965 and 1968 when his Party, the then Government, brought in two Housing Bills? Speaking specifically to my Amendment, the purpose of the noble Lord, Lord Shepherd—and I am sure of the Committee—is very simple. I should apologise about the drafting of my Amendment, which is in my own humble words. The purpose is to offer furnished tenants a limited security of up to 12 months, and indeed, to offer the landlords a limited confidence about their future. I hope the noble Lord may feel able to accept the principle of the Amendment which I believe goes somewhat between my noble friend's feelings—indeed I share her feelings—and the Government's purpose of the Bill.
§ LORD SLATER
When the noble Baroness talks about allocation of local authority houses to young people that have been married for only three years or so, is she not forgetting that we get a form of exchange from one local authority to another? We have had the Local Government Boundary Commission Report, which is now effective, and local authorities have much larger and more extensive boundaries than before. Three or four local authorities, previously units within their own right as local authorities, now have to build for the benefit of people living within their newly enlarged areas.
Another important feature is that of rents. We hear so much talk about the rent charges that have been fixed by local authorities. Who was responsible in the first place for the type of rent operation which is being looked upon as being so effective these days, where local authorities are concerned? It was not so much a Government proposal when differential rent schemes were introduced. The differential rent scheme, if my memory serves me correctly, started within the constituency that I represented for over twenty years in the other place. It was worked out on the basis of a differential rent scheme and it caused a great deal of chaos and much criticism, but nevertheless 1164 became adopted policy by Her Majesty's Government, which was a Tory Government at that time. The scheme has gone on.
When we talk about young people who have been married for three years, we must never forget that each local authority operates on a different form of basis. In some areas local authorities' housing allocations are based on a points system, for which one qualifies by having lived in the respective area for X number of years. In other local authority areas allocation is based on the years that an applicant has been married and living within that local authority area, and he has to take his turn in the queue. Therefore, the system differs from area to area. It is not as though it were just set out and based upon a points system or a yearly system of married life within a particular area of a local authority.
We must get this matter clear in our minds. So far as single people are concerned, another important factor is that when we talk about local authority building let us not forget that there have been many closures in big industrial sectors in this country, for example. British Railways. In my area I know that the local authority have recently, and even at the moment, had to take over streets and streets of houses that belong to British Railways—they had to take them off their hands. They did so to provide accommodation not only for the sitting tenants but also to discharge the liability of responsibility which British Railways wanted to cast to one side because they no longer had enough railway people to occupy those premises.
Not only that, but the means of alteration to many of these premises has taken up much of the time factor which the noble Baroness touched on—three years in starting and getting the land, introducing compulsory purchase of land for development, building of houses and so on. Not only does that apply to local authority building, it applies even to Post Office building. et cetera, through-out the whole ambit of operation so far as legislation is concerned. In the case of some local authorities in the area with which I have been concerned you will find that young people who have been married only three years have been able to go into empty accommodation, into council house property, as tenants; 1165 that is to say, they have been allocated a house after having been married for a period of only three years. On the other hand, in the case of another local authority it takes at least ten years before some applicants are able to find accommodation.
I know this is the situation in the great metropolis, in London, and I know that the great difficulties with which we are faced here are not present in many areas in the North and in the rural areas. However, I sincerely hope that while this Bill is being considered we shall not forget these important features which are relative to it, apart from what was said by the noble Baroness, who has had great experience in local government, as one gathers from the speeches that she made when holding the post that she had prior to going out of office. So far as our side, the Labour Government, is concerned, we still believe in a policy which has been condemned time and time again by the Opposition; namely, a direct-labour scheme for building local authority houses. Many of these schemes have been most effective as against private enterprise, which has been brought in to carry out certain contracts to build houses for local authority purposes.
§ 4.22 p.m.
§ LORD ROBBINS
May I return for a moment to the issue of general principle which was raised by the noble Baroness? I am sure that all sides of the Committee will agree that we are dealing with a subject of great complexity, of great perplexity, when one comes to consider the detailed matters which have been touched upon by the noble Lord who has just spoken. I am sure that all of us who were not born yesterday—and, looking round, I do not see anyone who falls into that category—have heard shocking stories of the kind referred to by the noble Lord, Lord Gifford. Who of us would not wish so to shape legislation as to preclude the frequency of stories of that sort? But surely the ultimate question that one has to ask in making up one's mind whether or not to support legislation of this kind is this: will the net effect of additional legislation of this sort mean that more or less accommodation on reasonable terms is going to be available to the categories of people who seek it? Frankly, although I can see 1166 arguments which perhaps relate to the long period (when, let us hope, the housing problem will be less acute than it is now, and when one might regard refinements in the law of the kind contemplated here as being desirable), having regard to the real position here and now I ask the noble Lord, Lord Shepherd: does he in his heart really believe that there is no danger that, as a result of what he is doing, the amount of accommodation coming upon the market will be substantially less for a considerable period of time?
I do not wish to take up more time at this Committee stage in discussing these general principles, but the noble Baroness referred, for instance, to an extremely important category of applicants for accommodation of this sort. I refer to university students. Now I was away when the preliminaries here were under discussion, but when I heard that these matters were coming before our Committee for revision I began to make inquiries in the world in which I have spent most of my life. On the whole, the result of those inquiries is quite unequivocal. I have heard it said—and I do not know what moral the noble Lord, Lord Shepherd, will draw from this—that there may be some slight bias in favour of students because some of them will be departing in three years. On the whole, the result of my inquiries, which have not been quantitatively exhaustive or anything of that sort, but which consisted just of asking knowledgeable people whose business it is to find accommodation for those young people coming up from the metropolis and seeking accommodation, is that the amount of accommodation available to them will be less. If I were a vice-chancellor beset with complaints about the insufficiency of accommodation already provided for students and anxious to be able to provide more residential accommodation of one kind or another, and knowing that in the present financial position it is not likely to be forthcoming, I should frankly be frightfully unhappy at the coming into operation of legislation of this kind at this moment.
§ LORD LEATHERLAND
I am glad that the noble Lord, Lord Robbins, has mentioned the question, and the great difficulties, of housing accommodation 1167 for university students. I have some interest in this because until a few months ago I was for over ten years the treasurer of a university. The treasurer of a university occupies an honourable and picturesque post, but it is also an honorary one. Nevertheless, the post has involved a great deal of work, particularly with regard to the housing of students; and in this regard I would ask the noble Lord, Lord Robbins, to bear in mind two points. First, there are hostels which the university itself provides, and which will be dealt with later on by my noble friend Lord Annan. Secondly, perhaps a larger number of university students take up lodgings in private houses. In that event this Bill will not affect the situation at all, because the landlady will be living on the ground floor and the students will be living up above. They are not affected, either for good or for ill, by the provisions of this Bill.
I listened with very great attention to the noble Baroness. I thought she made a most reasonable, persuasive and calmly-worded speech. I was almost persuaded to say that there was a lot of sense in what she said. I will still say that, but I will add that it was not quite relevant to the point which we are now discussing; because the essence of everything that she said was that there is not enough accommodation in the country for all the people who are seeking it. Let us investigate this shortage, and see how it has come about. The last Government deliberately cut down the amount of council house building; they deliberately acquiesced in a drastic reduction of building for private enterprise. That is one of the reasons for the present shortage. I am indebted to my noble friends of the present Government, first, for granting financial assistance to the building societies to help them to provide more privately-owned accommodation and, secondly, for trying to speed up the provision by local authorities of more council housing for renting. The proposals of the noble Baroness will not provide more accommodation for people who want to take lodgings unless the existing lodger is evicted by the landlord, and it is because this particular Bill will prevent landlords from evicting tenants on that scale that I think it is deserving of support.
§ LORD AVEBURY
I think it was my remarks on Second Reading that the noble Lord, Lord Robbins, referred to. Then I said that the owners of furnished properties would, if anything, be more likely to let them to students than to other types of tenants because they had at least the prospect of automatic recovery of possession after three years, when the students left the university. This was in answer to the noble Lord from Edinburgh, who was telling us that more and more students were staying on in accommodation, and were likely to do so in the future, as they went on from a first degree to a Ph.D. It was news to me that more and more students are being permitted to go on to take Ph.Ds. I rather thought that in the university sector there was a cutting down of the number who were being given grants by the research councils, and that the current thinking was that more students on completion of their first degrees ought to go out to work in industry, at least for a period, before going on to a Master's or a Ph.D. But I am subject to correction from the noble Lord, Lord Robbins, who knows a great deal more about this matter than I do.
I, too, appreciate the need for accommodation for students, because I have a son at university. He is at Birmingham, where I understand the shortage of accommodation is probably greater than in almost any other university city in England, and where the charges made by landlords for students are not at all modest. I can assure the noble Lord that an adequate provision of hostel accommodation by the university would be a much more sensible solution of the problem. But one appreciates, in an area where public expenditure generally has had to be reduced to meet the economic situation, that student hostels are among the other worthy matters of expenditure which suffer.
But the noble Lord said that the fundamental question was whether the net effect of the Bill would be the provision of more or less accommodation and I should like to come back to the point that I made on Second Reading on which I can now give the Committee some further information; that is to say, what has been happening in the privately rented sector generally. The noble Baroness quoted some figures which I believe came from 1169 the Economist, though it was not clear what was the ultimate source. Unfortunately, what has happened is that the figures in the 1961 and 1966 censuses were not compiled on the same basis as those in the 1971 census. Therefore, any comparisons made between these three censuses give one very little clue as to what has been happening. I believe the noble Baroness said that there had been a reduction in the number of privately rented unfurnished properties, and a corresponding increase in the number of furnished properties. That indicated to her, as one might have expected, that many landlords were taking their houses out of regulation by putting some furniture in them and thereby getting them transferred to the furnished sector.
At first sight, one might get that impression, because one sees that between 1966 and 1971 in Great Britain as a whole there was a reduction of 162,000 in the unfurnished sector and an increase of 256,000 in the furnished sector. The reason for this is that in 1966 there was a large number of dwellings in the "other tenures" and "not stated" categories which included service tenancies and some others amounting to 897,000 in 1966, and that went down to only 33,000 in 1971. What happened was that there was a reclassification from "other tenures" and "not stated", which obviously went largely into the furnished sector. That is the reason why one can draw very few conclusions from the figures that the noble Baroness gave us on Second Reading. All one can do is take the three categories together—furnished, unfurnished and other tenures. We then find that over the five-year period between the sample census of 1966 and the full census of 1971 there was a decline of 770,000, or about 16½ per cent.
This reinforces the point I was making that, irrespective of whatever legislation there is on the Statute Book, as they get vacant possession landlords will sell for owner occupation, because they can obviously get a better return even if they put the money in gilt-edged than by letting off property and incurring the bother and responsibility of being a landlord. This is indeed confirmed by the evidence given to the Francis Committee by a sample of 63 landlords who were involved in rent tribunal cases in London, who were asked the question: "If 1170 security were granted to furnished tenants as it is to unfurnished tenants, how would this affect your furnished lettings?" Sixteen out of the 63 said that they would not continue to let at all, which reinforces the point made by the noble Lord, Lord Robbins, and the noble Baroness on the Opposition Front Bench. But I say that when they are faced with this choice of leaving property vacant or continuing to let they may come to a different conclusion.
What somebody says in answer to a hypothetical question of this kind is not always the same as what he does when faced with the actual circumstances. If he would not have sold off for owner occupation when he obtained vacant possession under the previous legislation, then, equally, it is unlikely that he will fail to continue letting the property furnished simply because this Bill has been introduced. If he has a large house with a couple of flats empty in it, what is he to do? Is he likely to sell them off? Perhaps he would do so, if he could. But to be an owner occupier of a flat in a building which is otherwise tenanted might, I suggest, be rather unattractive to a person with the money to buy rather than to rent. So it may be unlikely that the landlord will succeed in selling off piecemeal part of a building which is in multi-occupation. I think he would prefer to continue enjoying the benefit of the income he receives from that letting, rather than leaving it vacant altogether.
There is the provision, which we will come to discuss later on, for excluding landlords who live on the premises from the provisions of this Bill. There is quite a high proportion of those in London and in other stress areas, in particular. I am not saying that I agree with the provisions in the Bill which exclude those people from the scope of its application. But the landlord about whom the noble Lord, Lord Garnsworthy, spoke on Second Reading, whose family grows up and leaves home, thus releasing a certain amount of accommodation, and who therefore performs a public service in letting off a few rooms to somebody who wants them on a short basis, will not be affected by the Bill, whether or not my Amendment or that of the noble Lord, Lord Gifford, is accepted. Those properties will remain within the furnished rented sector, whatever happens this 1171 afternoon or during the rest of the proceedings on this Bill.
I hope that we shall not exaggerate, as I feel the noble Baroness has done, the effect on the income of landlords or the anxieties which being a landlord may cause them, because if we adopt this tone during the proceedings on this Bill we shall indirectly produce the sort of result which the noble Baroness deplores and which the noble Lord, Lord Robbins, fears. By talking so much about the difficulties of private landlords in the furnished sector, we shall cause the decline—which is happening anyway—to accelerate.
§ LORD CLITHEROE
I shall not keep your Lordships more than a minute. I think I agree with everything the noble Baroness and the noble Lord, Lord Robbins said. With regard to the noble Lord, Lord Leatherland, I am not quite sure whether he interprets the Bill as I interpret it, and it strikes me that the Amendment to be moved by the noble Baroness, Lady Young—I think it is the next one—will probably correct that. I am interested in universities, as he is, and I am thinking of the university landlady who does not seem to me to have the protection that she should have under the Bill as drafted, but might have appropriate protection under the Amendment to be moved by the noble Baroness.
§ LORD LEATHERLAND
As I interpret the noble Baroness's Amendment which is to come on very shortly, that is to extend the implication of the protection granted by the Bill from university students to nursing students and people undergoing other courses of training. But the noble Lord will remember, I am quite sure, that the university landlady usually lives in part of her house and lets off the other part to students and is therefore not affected by the Bill.
§ LORD SHEPHERD
I suggest that if we wait until we reach that Amendment we can deal with that matter correctly.
§ LORD HYLTON
Several speakers have asked what will be the net effect if this Bill is passed, and it may be of interest to mention that Shelter produced 1172 a report for Greater London only, suggesting that there would be 5,000 units less per year becoming available for letting if the Bill went through. That represents something like 2 per cent. of the total furnished market in Greater London, so if they are right it is not a very big fraction. Against that loss, one has to set the immense gain to those who are now accommodated and who will not be evicted but will be gaining protection.
Several noble Lords have mentioned students. I think we should be quite clear that if two, three or four students club together they can always afford a higher rent than one family and therefore they win. At the present time, by using their greater economic resources they can get the accommodation they want, at the expense of families. Several of my noble friends, quite rightly, have pointed out the decline which has been going on now for many years in the private rented sector, regarding both furnished and unfurnished accommodation. I would say only this to them: a great deal of thought has been given to this problem and mention has been made of it, for example, in the Cullingworth Report on council housing and in subsequent papers from the Institute of Housing Managers. All those who have looked at the matter very carefully are saying that local authorities, helped by the Housing Corporation and housing associations, must in future cater for the whole population in their areas, and not just for families; that they must make provision for young people, for old people, for single people and mobile people, as well as for families with children. This will require a revolution in contemporary thinking.
As regards the Amendment put forward by my noble friend Lord Kinnoull, I think there may be something to be said for having a greater security of tenure for furnished tenants than they now enjoy. There may also be something to say for "term tenancies" which specify a period of time, so that both landlord and tenant know where they stand and arrangements may therefore be made in advance, one hopes, before a tenancy terminates.
§ 4.43 p.m.
§ LORD SHEPHERD
Much of the debate we have just had is perhaps more 1173 relevant to a Second or Third Reading of a Bill, when general principles are discussed as regards the proposals before your Lordships. If I may say so to the noble Lord, Lord Robbins, my understanding is that in the short term the passing of this Bill is likely to reduce the number of furnished tenancies. This may be only in a short term, because it is not a Bill which is in any way "anti-landlord". There are quite a number of new provisions in the Bill which in many ways make the position of the landlord perhaps more secure, or at least more identifiable. Therefore one would hope that with the knowledge and experience of the working of this legislation landlords, who do provide a very substantial proportion of homes and places for people to live, particularly for short periods, may feel themselves able to available accommodation to the general public.
I think we should all agree that the real problem here is not the Bill or its provisions, but the fact that over many years we have not built enough houses either for the private or the public sector. That is the central issue for this Government, as it was for the previous Administration. I wonder whether the noble Baroness—and since I do not wish to be provocative I should like to ask her to give this to the Committee rather than myself—would agree that at the end of three or three and a half years of Conservative Government we were in fact building fewer houses both for private and municipal occupation than was the case a decade ago. That is the basic problem which confronts any Government and also, of course, the country.
Certainly there can be no solution to the problem which the noble Baroness is putting forward until we have revitalised the building industry and provided the finance to enable the local authorities to build even greater stocks of their own and perhaps to do something which may be even more difficult—and this is something of which the noble Lord, Lord Robbins, will have greater knowledge than most of us—in other words, to bring down the lending rates of building societies and banks. This has an international implication, of course, and it would make it possible for more people to purchase their own accommodation. I think I will 1174 be frank with the Committee and say that in the short term I believe this Bill will make for a reduction in this field but not—and here I would agree with my noble friend Lord Leatherland—as regards students. Certainly the students who, singly or with friends, occupy institutional accommodation or are with a landlady are not really governed by a tenancy at all but by what is called a "licence" and thus are not affected by the Bill. I personally do not think that we shall see any diminution of the accommodation available to students.
I agree, if I may say so, with the noble Lord, Lord Hylton, that we should make known the real characteristics of this Bill to landlords and to all those other companies who are involved in the letting of furnished accommodation. I do not believe that they will find in it anything which, as a good landlord or as a good property owner, would he difficult or inhibiting to accept. It seems to me that the question is whether we accept in the short term a small diminution—and the noble Lord, Lord Hylton, mentioned the figure of 2 per cent., though I myself am not able to confirm or deny that—in order to give security and a sense of stability to many thousands of people who to-day live in rented accommodation and who feel that the roof above them does not represent a home in the true sense but that it could disappear from above them without any great difficulty. I believe it is a political judgment (with a small p) as to whether this Bill should pass. I can only say to the noble Lord, Lord Robbins, that my political judgment (again with a small p) is that I would accept a small diminution of availability in accommodation in order to provide a really increased sense of security and stability for all those hundreds of thousands of young men and women who to-day live in rented accommodation.
§ BARONESS YOUNG
I should like to thank the noble Lord, Lord Shepherd, for his reply. It has been worth putting down this Amendment, if only to get the noble Lord to say that the Bill is not meant to be "anti-landlord". I say that because I have had a shoal of letters which I am still attempting to answer, and I have seen two deputations of upset people who let, not on a large scale, but perhaps one or two houses, who 1175 are certain that this Bill is simply aimed at driving all private landlords out of the market. It is important in public life to try to hold a balance and to be fair to all sections of the community. Of course there are bad landlords, but there are also good ones. There are bad tenants as well as good ones, too. When one is considering all these matters, one must make quite sure that one is trying to be fair to all sections of the community so that one will not be accused of being prejudiced against one group of people.
I should like to thank the noble Earl, Lord Kinnoull, for speaking to his Amendment at the same time because its purpose is the same as mine; that is, to draw from the Government how they propose to meet the difficulties that this Bill will create. I can only say to some of the other noble Lords who have spoken and, in particular, to the noble Lord, Lord Slater, that I understand the point that has been made. I, too, had fifteen years in local government. I know how housing committees work and I know that there are different points schemes; but I cannot see that the Local Government Act 1972 will help the situation. It created larger authorities, but the districts remain the housing authorities. The real point of argument was the triumph of hope over experience. Local authorities can do an enormous amount to meet specific needs. In my opinion, in the foreseeable future they are not going to meet the needs of any of these three groups of people that I have identified. I am sure the noble Lord will agree with me, if he thinks about it, that they will certainly not meet these needs in areas of housing stress. I do not know the situation in the North-East; it may well be that you can put your name down on a council house list and get a flat within six months. But that must be one of the few areas of the country where that is possible. I am talking about groups of people for whom I do not believe local authorities will cater.
I listened with great care to what the noble Lord, Lord Avebury, said. It seemed to me that what he was saying was that my point was probably true, and that there would be less accommodation to let. But although landords 1176 have been asked by the Francis Committee whether they will continue to let and they have said that they will not, we need not necessarily go by that because it is hoped in the future, as a result of all this, that they will continue to let. That, again, is a triumph of hope over experience. I do not think he has produced any evidence that any of the groups of people that I have indicated will be helped.
§ LORD AVEBURY
What I said was that 16 out of the 63 landlords questioned— and it is important to remember that it was a rather special group of landlords who were questioned—said that they would not continue to rent. I said that it was likely that a smaller number would take up the decision if faced with the need to decide on the spot and not in response to a hypothetical question.
§ BARONESS YOUNG
I do not think that that invalidates my argument at all. The noble Lord, Lord Avebury, said the landlords were asked a hypothetical question and gave an answer. He is now saying—and this is another hypothetical point—that if they were confronted they would give a different answer. We do not know; we do not have the evidence. We only have the evidence of what is happening— that there is less private, unfurnished accommodation to let. Now everybody is agreed that there is going to he far less furnished accommodation available.
§ LORD ROBBINS
May I interrupt the noble Baroness to add a grain of evidence to her argument? This is not hypothesis. In one educational institution in London the officer responsible for accommodation of students has recieved telephone messages from landlords in this particular position saying that they propose to sell.
§ BARONESS YOUNG
I am grateful to the noble Lord, Lord Robbins, for that intervention. I hope he will be able to produce these figures when we debate my next Amendment which is specifically to deal with this point. It adds to the general point I am making, and I am grateful for it.
I should like to try to answer the point raised by the noble Lord, Lord Hylton. He has rightly summed up this Bill. I 1177 accept that there will be people who will he helped. There are obviously those at present in furnished accommodation. I do not think he is being fair when be says that few people will suffer. I have read carefully the memorandum circulated to me by Shelter. I do not know whether we are working from the same set of figures, but in the last paragraph on the first page of the document it says:It must be remembered that of 80,000 furnished tenants in London, 27 per cent. of all tenants rent from resident landlords.They are the people who will not have protection under this Bill. Therefore I should have thought that slightly over 70 per cent. will. If the landlord, as a result of this Bill, decides to sell the property, this will cause a diminution in the supply of furnished accommodation. This is a matter which perhaps I could discuss with the noble Lord at some other time. We do not have any other figures on which to work, except those that have been circulated in this particular memorandum.
I indicated to the noble Lord, Lord Shepherd, that I would not press this Amendment; but I hope that I have said enough so that those who continue to take part in the rest of this stage and the other stages of the Bill will realise that this is a serious matter, and that a considerable number of people will find it much more difficult to find accommodation in the future than they do now. We think that there will be considerable suffering as a result of this Bill.
§ LORD LEATHERLAND
Before the noble Baroness sits down, may I ask her to elucidate a little more her last reference, which was to the 70 per cent. or so of tenants who might find the house or block of flats sold over their heads? Will they not be protected tenants? Will not the landlord therefore have difficulty in selling with vacant possession? Will not the protection continue after the landlord has sold to the new owner?
§ BARONESS YOUNG
What the noble Lord, Lord Leatherland, is saying is that this group of people will be protected, and that I accept; that is what the Bill says. I have indicated that a great many people will benefit. What we were trying to elucidate—and it is difficult to get figures on this—was the number of people 1178 who would not be helped. I have quoted three groups. They are either in furnished accommodation at present, or are about to look for it. There will be less furnished accommodation to let because the group of people who will probably give up letting furnished accommodation as soon as it becomes possible to do so will be the approximate 70 per cent. whose tenants would be given security under this Bill. That was the group of people that I was talking about.
§ Clause 1 agreed to.
§ THE EARL OF KINNOULL
I thought we were still on my Amendment. I have one brief question on Clause 1. It concerns the words of the clause—
§ LORD SHEPHERD
Just to be sure that we are correct, the Question, "Whether Clause 1 shall be agreed to?" has been put. If the noble Earl has a particular point concerning the clause, if he would like to see me afterwards, I should be happy to deal with it. The Question has been put and it would be difficult, within our procedure, to go back, although I want to be helpful. If the noble Earl would like to see me afterwards, I should be happy to help him.
§ 5 p.m.
§ THE EARL OF KINNOULL: Moved Amendment No. 3:
After Clause 1 insert the following new clause:
. A protected tenancy in this Act shall refer to a protected furnished tenancy, and any such tenant under a protected tenancy shall deem to have been granted up to 12 months security of tenure beyond the term of a written agreement.
The noble Earl said: I have already stated the gist of my case regarding this Amendment to the noble Lord, Lord Shepherd, and I do not intend to repeat that. When the noble Lord replies I wonder whether he would answer a small question which concerns Clause 1. It says that rental should include payments in respect of the use of furniture. For many years it has been the basis of assessing furnished rentals that part of the rental is for the accommodation and part for the furniture. As the noble Lord will know, in the courts there has been some disparity as to what percentage of the rent should represent furniture. Indeed,
according to Sir Robert Megarry's textbook, the Francis Report stated:
The Court of Appeal has expressed the view that in the absence of special circumstances 20 per cent. or more of the whole rent is a substantial portion for this purpose. Less than 15 per cent. is not. Anything between it is a borderline case. However, the House of Lords has said that it is for Parliament and not for the courts to lay down any percentages that may he required.
In a recent case the courts took the view that 8 per cent. was a substantial part and was sufficient to represent the furniture. I should like to ask the noble Lord whether he can comment as to why no percentage has been written into the Bill.
§ LORD SHEPHERD
We have not put in a percentage because it would be undesirable to do so. It is far better in our view, as in previous legislation, to leave this as a matter for the courts on which to exercise their judgment. In regard to the noble Earl's Amendment, this is very much in line with the debate we had on Clause 1. I can only say to him that we could not accept it in one sense. To grant twelve months, as the Amendment suggests, already duplicates what is for many an existing right, since they enjoy indefinitely their contractual tenancy. If the noble Earl's intention is—I am not sure whether it is—to limit this to twelve months, this would go quite contrary to the whole spirit of this piece of legislation. I hope the noble Earl will not press this Amendment to a Division.
§ THE EARL OF KINNOULL
I am glad to report that I do not intend to press this Amendment to a Division, but perhaps on the next occasion we can discuss this matter yet again. What I would say to the noble Lord, Lord Shepherd, is that I think I am correct in saying that under the present legislation a tenant does not have twelve months; in fact, he has up to six.
§ LORD SHEPHERD
If the noble Earl will look further on in the Bill he will find that we have provided that the rent tribunals can now extend the period after a notice to quite from six months to twelve months. We have also given the rent tribunals the power to extend this even further on application.
§ Amendment, by leave, withdrawn.1180
§ Clause 2 [Certain tenancies not to be protected]:
§ 5.3 p.m.
BARONESS YOUNG moved Amendment No. 4:
Page 2, line 29, leave out from ("pursue") to second ("or") in line 32 and insert—
§ The noble Baroness said: I beg to move this Amendment, which I regard as a very important one. I believe it will remove the three anomalies which now appear in Clause 2(1)(bb). I should like to begin by giving apologies from my noble friend Lord Balerno, who much regrets he is unable to be here this afternoon. At Second Reading he explained the great difficulties that students in universities and polytechnics will find themselves in if this Bill becomes law as it stands. The first anomaly in Clause 2 is that only those students living in accommodation provided by specified educational institutions will be exempted from the provisions of Clause 1; namely, security of tenure for all furnished tenancies. If, as everyone agrees, there will be less furnished accommodation to let as a result of the Bill, then thousands of students, who at present arc not living in 1181 specified educational institutions but in flats let privately, will be in great difficulties as this supply of accommodation begins to dry up, and they could well find themselves with nowhere at all to live.
§ My noble friend Lord Balerno has given me the estimated figures for Scotland. Although in the shortness of time since the publication of the Bill it has been very difficult to get very accurate figures, it is thought there are 5,000 such students in Edinburgh. This includes Heriot Watt university and colleges of art and of education
§ BARONESS YOUNG
I am referring in all these cases to students who are private tenants of private landlords; that is to say, students who are not living in hostels or in accommodation provided by the university. In Glasgow there are about 2,000; this includes Strathclyde university. At St. Andrew's the figure is 500 which includes Stirling university. In Aberdeen it is 15,000, and that includes the colleges of art and education and technology. So, altogether there are about 9,000 in Scotland. I made inquiries in Oxford, and it is thought that between the university and the Oxford polytechnic there are probably about 5,000 students living in this kind of accommodation. I believe that the noble Lord, Lord Robbins, can supply us with some information about the numbers of students in London, and I hope that the noble Lord, Lord Annan, if he speaks to this Amendment, will do the same. I hope therefore that I have said enough to indicate that this is a very real problem of considerable magnitude.
I noticed an article in the Daily Telegraph of June 17 headed: "Digs crisis faces students", which said:Universities will face their worst ever accommodation crisis when term starts in October, Vice-Chancellors said yesterday. Only 4,000 extra hall of residence places have been built this year instead of the 10,000 originally planned. This is because of the Government's spending restrictions".The article continues:One Vice-Chancellor said, 'If students realise the potential seriousness of the situation and take steps to find accommodation early, we may get through without a major crisis, but it will be touch and go'.1182 The second paragraph is relevant to this debate because it assumes that a great many students, an even greater proportion than do now, will have to find private accommodation.
It may well be thought that one answer to this is that there should be more purpose-built accommodation. I have no doubt at all that that is true. But it ignores three important factors. The first factor is the cost of providing purpose-built accommodation for every student in every university and polytechnic. Secondly, there is the problem of the acquisition of land in suitable places. There must be (although, here again, I have not had time to check on every university) a good many universities which would find it impossible to acquire land close to their university buildings or suitably sited for students. Last of all, but just as important, that answer ignores the wishes of students themselves. Whatever we may think of the modern trend, students do not want to be in what they regard as a paternalistic setting. They regard themselves as adult at 18, and like to live on their own. They do not like the feeling that senior members of the university may be, as it were, looking over their shoulders—even though I am sure few of them have enough time to do that. So there is this great trend towards students having flats on their own.
It may be said, as the noble Lord. Lord Avebury, and the noble Lord, Lord Robbins, said, that landlords and landladies may well prefer. as a consequence of the Bill, to let to students. This may well be true, but what we do not know is how many students, most of whom by definition will be temporary tenants, will choose to move out at the end of their university course. Many may in any event want to stay on through the long summer vacation. Then, the good landlord who tries to put the flat or house in order and decorate it will find as soon as one group of tenants has left that there is no gap in which to do the necessary repairs because another group has come in. I have tried, but have been quite unsuccessful in getting the numbers of under-graduates who are now married. But I should be surprised if the numbers are decreasing. These are students who might well like to stay put, provided they 1183 find themselves in accommodation which is suitable.
Furthermore, postgraduate students in my experience are nearly all married. Quite a number of them have children and, naturally enough, if they find somewhere suitable they will be quite likely to stay on for a considerable time. Some under-graduates, notably science undergraduates if they go on to do a postgraduate degree, could be in a university for six or seven years and therefore would be tenants for a considerable time. I hope, therefore, that I have said enough to indicate that this is a problem of numbers of students up and down the country who will be seriously affected if the Bill becomes law. Therefore, I believe that an extension to Clause 2 is essential and that my Amendment does this by removing any limitation on the landlord who grants a tenancy under Clause 2(1)(b).
The second anomaly of this clause in the Bill is that few young people will be helped by this subsection. It refers only toa person who is pursuing or intends to pursue a course of study …provided by a specified educational institution. The second anomaly is, of course, that there are many young people pursuing all kinds of courses of study which are not defined. I accept that Clause 2(4) says that the Secretary of State will make regulations to define those institutions to be covered, but it seems to me that this is not good enough, because many people will want to know now whether they are to be covered or not by this. Therefore the second anomaly of Clause 2 is removed by my Amendment because it indicates the very large number of other courses that young people could be following. While they are taking these courses they will be looking for furnished accommodation to live in because the probability is that they will be following these courses away from home.
The first paragraph covers university students. As it indicates the second paragraph is taken from the Industrial Training Act 1964. It covers a great many people. Section 2 of the Industrial Training Act allows industrial training boards to provide courses, to approve courses, to assist persons in finding facilities for 1184 being trained for employment in industry. Therefore it covers a large category of people who will be doing various forms of industrial training leading to quite particular technical qualifications in industry.
The third paragraph applies to the various medical professions. On Second Reading I quoted nurses as an example of young people who frequently live in furnished accommodation in the course of their training and who will, therefore, find it very difficult to find any similar accommodation if this Bill becomes law.
Finally, there is a provision that any other group of students who may not be covered by all these specific recommendations can be so covered by regulations made by the Secretary of State. I feel that this is a much stronger and more widely drawn Amendment to this clause and strengthens the clause by making it possible for young people to find furnished accommodation. It brings into this group far more young people than those very narrowly defined in the first part of the clause. I think that it should be of enormous benefit to a group of people who, as I have already indicated, will find themselves in great difficulties as a consequence of this Bill.
In conclusion I should like to make it clear, as I am sure the Committee realise, that this Amendment was not drafted by myself but by my noble friend Lord Colville. Therefore I have considerably more confidence in it than I would have in the drafting of the Amendment by myself. I say this because I hope that the noble Lord, Lord Shepherd, will look at this very seriously. I think that he would agree with me that this clause is an anomaly in the Bill; that it will be very difficult for many people to interpret it; that it is going to have very serious consequences for a great many young people, students in particular. Therefore I hope that he can say that he will accept it. I beg to move.
§ 5.15 p.m.
§ LORD SHEPHERD
If I were to intervene here I might be able to help the noble Baroness. I may not be able to help her too far, but at least I can make a gesture towards here. May I also congratulate her or her noble friend on the manner in which they have carried out their research. It must have been a formidable undertaking. As introduced, 1185 the Bill excludes from full protection tenancies granted to students by educational institutions specified by regulations made by the Secretary of State.
I think that we should be quite clear about the limitations of this part of the clause. The effect of this Amendment would be to widen this limited exemption so as to embrace almost anybody engaged on a course of study or vocational training. It would specify the exemption classes in the Bill rather than in regulations and, as drafted, it would exclude from any protection any tenancy granted to a student rather than merely a tenancy granted by a specified institution. Quite apart, however, from the problems of definition and interpretation to which the Amendment gives rise, there are a number of serious objections to what the noble Lord and the noble Baroness are proposing.
Paragraph (bb) in Clause 2 of the Bill was drafted to take account of a situation which I think I should point out is believed to be comparatively rare—where universities and colleges have granted furnished tenancies to students for whom your Lordships will readily agree full Rent Act protection would scarcely be appropriate. This Amendment goes far beyond the strictly limited exemption that we are proposing. It would exclude from protection virtually anybody pursuing a course of study or training for a trade or profession, whether he was renting accommodation from an institution at which he was studying or from a private landlord. It would appear to mean that anybody studying for any professional qualification could not be a protected tenant, no matter where he was living. If we were to accept this proposal, we should be accused, I think quite rightly, of discriminating against a class of person simply because they were furthering their education, and I am quite sure that nobody on any side of the Committee would wish to be open to this charge.
This part of the Bill does not in any way deal with private accommodation. I sought earlier to explain the position, as I see it, of students seeking outside accommodation. This part of the Bill deals merely with accommodation that is provided by institutions. It would appear from the Bill that what was originally in mind was that the institutions would 1186 be those within what one might call the public field—the universities, the colleges, the polytechnics. But it has been put to me that there may be a number of private institutions which either provide both education and accommodation on the site or arrange accommodation themselves but within the private field. I want to say to the Committee that it is not our intention that these institutions should be included or that there is any question of treating the public accommodation in a different way from the private. We have sought in the Bill to do this by specification of tenancies and to have this in a Regulation in order to have flexibility. I can assure the Committee that my right honourable friend the Secretary of State for Education and Science will be open to discussion with any institution which may feel that they may be affected, in order that if there is a real case to be met those private institutions could be included in the Regulations.
I thought the noble Baroness went a good deal further than the particular subsection in the clause, and I think on reflection she will agree that we are dealing here with the question of the institutions and not that of the provision of flats. I know that many students like living in flats. My younger son is already embarking on that next term in his second year at university, and I must say that when I see some of those whom he has around him who will be tenants I really wonder whether I should be willing to be the landlord! But there it is. They are embarked upon this venture and so is the landlord. The difficulty here is that local authorities have their major demands placed upon them by those who are on their waiting lists, and the noble Baroness herself referred to that earlier. I suspect that one of the consequences of this Bill—and I will be frank about it—is that the furnished flat accommodation for students is likely to be shorter and therefore there will be a need for students to move into furnished accommodation with a landlady. Here my understanding is that we are not then in the field of tenancy but of licence, which is not dealt with in this part of the Bill.
I have sought to deal with the Amendment and—I will not say its shortcomings. because it is too early at this stage of the Committee and I do not want to cross 1187 the noble Baroness too soon. It is on account of some of the difficulties that would confront us if we were to accept the Amendment that I have sought to be forthcoming in regard to the private institutions which may feel that they have not been included. I hope that with that explanation the noble Baroness will feel that the work put into this Amendment by her noble friend Lord Colville of Culross was not entirely wasted (because we have had a debate), and that she will now be willing to withdraw the Amendment.
§ 5.23 p.m.
§ LORD ANNAN
I wonder whether it would be helpful if I were to speak on this Amendment and not on Amendment No. 10 which is tabled in my name and that of the noble Lord, Lord Lloyd of Hampstead. It is really on the same subject. Like the noble Baroness, I must at once admit that my Amendment was drafted by me. She has said that her amendment was drafted by the noble Viscount, Lord Colville of Culross, and mine was drafted by the noble Lord, Lord Lloyd, and that may he the reason for the seemingly tortuous, incomprehensible form of the Amendment I hasten to say that the mind of the noble Lord cannot be described by those adjectives; it is pellucid. The reason of course, is that the very nature of rent legislation makes any Amendment, even on a comparatively simple point, appear impenetrable.
May I try to explain my point in very simple language. As the noble Lord, Lord Shepherd, said a moment ago, for the first time Her Majesty's Government are applying rent protection to furnished tenancies and have, if I may say so, very sensibly exempted from this control a number of special cases. The only one with which I am concerned, of course, is that of tenancies granted to students by educational institutions. The reason for this exemption is the obvious one that has been mentioned already: the very essence of student accommodation so provided is its ephemeral character and therefore it would be positively undesirable if tenancies of this character were subjected to statutory control. That is why, as the noble Lord, Lord Shepherd, said, the exemption has been provided for under Clause 2(1)(bb) of the Bill.
1188 Naturally, the universities are extremely grateful for this understanding, but unfortunately if the Bill is enacted in its present form the very point that Her Majesty's Government wanted to achieve may well be defeated. The reason for this is simple. The present exemption applies only in the case of a tenancy in the legal understanding of that term. In practice, universities and similar institutions invariably and quite naturally grant to their student occupants not a tenancy but a licence to occupy the relevant premises. Licences to occupy do not in any event fall under the ordinary Rent Act control, either in the case of unfurnished or furnished lettings, and therefore the exemption as at present provided for may well be irrelevant to some of the problems which universities and other institutions face.
As those of your Lordships who are familiar with rent legislation will be aware, furnished lettings have always been treated separately, and while they are not subject to normal Rent Act control they come under the limited and rather special form of control that was first introduced, so I understand, by the Furnished Houses Act 1946, which will now be found to be re-enacted as Part VI of the consolidating Rent Act 1968. Since some of your Lordships—and I certainly was one of them—may not be too clear on this point, I must explain that control under the 1946 Act enables the tenant to apply to a rent tribunal to have his rent adjusted and registered, and there are also provisions for giving him a very limited discretionary security of tenure. I should also explain that control under the 1946 Act applied not just to tenancies in the strict sense but to any contract conferring the right to occupy a dwelling. Therefore such controls apply in the case both of the tenancy and of the more tractable licence.
As the student occupier is in fact almost invariably a licensee it follows that if the exemption introduced in Clause 2 of the present Bill is not also extended to confer a similar exemption in the case of contracts for the letting of a furnished dwelling, the commendable aim of Her Majesty's Government to give effect to the special situation of universities in this matter may well prove ineffective. So the simple purpose of 1189 the Amendment which we are now discussing and of Amendment No. 10 is precisely to provide the same exemption in the same terms as conceded in regard to Rent Act control in the case of furnished licensees, to which the 1946 Act system of control would otherwise apply.
I should perhaps explain that the reason why it is undesirable that even the limited control under the 1946 Act should not be applied in the case of university students is that so far as security of tenure is concerned there is clearly no case at all for giving ephemeral occupants in this category some form of statutory security. Parliament certainly could not have contemplated such cases when the 1946 Act was introduced. So far as rents are concerned, the universities, who are required to break even on their special charges, therefore find themselves in a ludicrous situation. If the rents charged are subject to a separate system of registration, the universities cannot fulfil the obligations which the University Grants Committee has laid upon them. That is the obligation to break even and not subsidise students' residences from their block grant. So we are in a corner and we do not know how best to proceed.
So may I submit that the Amendment which I have in mind, and also that tabled by the noble Baroness, is completely sensible and justified in the circumstances. It does no more than give effect to what must, one should have thought, be the underlying purpose of Clause 2 of the present Bill. Lest any noble Lord might think that I am urging the point from the biased standpoint of the Vice-Chancellor's Committee, this question was fully explored by the Francis Committee. Their massive Report on the Rent Act was presented in March, 1971, and is referred to as Cmnd. 4609 of that year. In chapter 28 of that Report, on page 164, the Committee discussed various exemptions from Part VI of the Rent Act 1968, and in particular referred to student lettings. In the case to which I am now referring, namely, lettings of accommodation owned by universities and institutions of higher education, the Committee stated categorically, and I quote their actual words:Our view is that such lettings, if unfurnished, ought not to be protected, and, if furnished, ought to be exempted from Part VI.1190 It follows therefore that this whole question has already been subjected to very full study by a highly qualified Committee which reached this unqualified conclusion, which, so far as I am aware, has not since been contested. This is the purpose of the Amendment in my name and that of the noble Lord, Lord Lloyd of Hampstead, and if the noble Lord, Lord Shepherd, could give an assurance that this particular point would be considered I should be very happy to let the matter rest there.
§ LORD CLITHEROE
May I ask the noble Lord, Lord Shepherd, to explain to me what exactly is meant by Clause 2(1)(bb)? There are in the county in which I live a number cf educational establishments. Until April 1 there were four universities, but now only one, but each depends on lodgings for the accommodation of students. When I was an undergraduate I was myself a tenant. Can the noble Lord, Lord Shepherd, say what is the position now of a student in a university who is a tenant? Is the person who is his landlord protected or not protected? That is the simple question I put.
§ LORD LEATHERLAND
As I spoke about university students earlier in the debate I do not wish to repeat what I said on that occasion. I want to ask an innocent little question in order to seek knowledge. I know a young lady who is thinking of training as a nurse. At the present time she will probably be put into the nurses' home at the hospital where presumably she will enjoy security of tenure, so long as she behaves herself, of course. If we accept the Amendment of the noble Baroness, Lady Young, that protection will be removed from her. Could my noble friend clarify the position? He will probably be able to tell me that residence in the nurses' home is a kind of licensed residence and therefore she will be protected to that extent. The position of this young lady must be typical of thousands.
I support my noble friend Lord Clitheroe in asking for elucidation. I am absolutely bemused by torrents of words on this matter and I must plead complete ignorance of the existing state of undergraduates, the state under the Bill and that under my noble friend's Amendment.
§ 5.34 p.m.
§ LORD SHEPHERD
I will do my best to answer the questions. If the young lady whom my noble friend Lord Leatherland has in mind becomes a student nurse in one of our teaching hospitals and occupies accommodation belonging to that institution—or to any other institution, because we should like to see an exchange and interchange of accommodation—she would, in 99.999 per cent. of cases, be under a licence. When she has completed her studies the institution would be able to require her to leave the premises. That is the object of Clause 2(1)(bb). Thus, when a student goes into a university there should be no question about his leaving the premises when he has completed his course. My understanding is that a student who lives in such premises as the young lady training in hospital would be under a licence; but we have included paragraph (bb) because there is just a small chance that some university or other educational institution may have granted tenancies. By excluding this part of the Bill we do not wish to make it possible for a student, who may be there on a tenancy and not under a licence, to have permanent occupation of accommodation in an educational institution. That is the purpose of paragraph (bb). So far as I know, it has nothing whatever to do with private accommodation outside the institution.
I must congratulate my noble friend Lord Annan for—I will not say, jumping the queue, but certainly on having taken the opportunity of putting his Amendment forward in the hope that I would accept it. No doubt he will enjoy a quieter supper than he would perhaps have enjoyed in your Lordships' House if he had remained in order to move the Amendment. I very much regret that I cannot accept his Amendment. Clause 2(1) of the Bill excludes from full Rent Act protection tenancies granted to students by educational institutions. Part VI of the 1968 Rent Act applies only when persons are granted a right to occupy a dwelling as a residence. These words show some intention to restrict Part VI to cases where furnished premises are occupied as a home. It is arguable that in the normal case a student's residence is at his own home. 1192 It is understood, however, that some rent tribunals have been prepared to accept the jurisdiction over lettings by educational institutions and to fix rents paid by students. Their right to do this has not, so far as is known, been tested in the courts which are the final arbiters on whether a rent tribunal has jurisdiction in any individual case.
It seems to us rather strange to include in a Bill, the main purpose of which is to protect the rights of tenants, a provision that would expressly remove a right which students already have. Such a provision would be considered inequitable and might be widely regarded as an act of discrimination against students by the Government. We believe it is right that students should not be given security of tenure, but we thing it not inappropriate that they should have the rent fixing procedures available to them. We are not giving it them; they have already acquired it by the decisions of a rent tribunal, and the Government do not feel that they would be justified in removing what is an apparent right to-day.
§ LORD CLITHEROE
The noble Lord has not answered my question. What is the position of a student who is in a lodging in a unversity? This applies to a very large number of students in many universities. Is the landlord of the student protected, or is he not?
§ LORD SHEPHERD
If I may say so, I thought I had answered the noble Lord. The noble Lord asked: "What is the position of a sudent in lodgings in a university?" My understanding of that was lodgings in the university. Is that what the noble Lord had in mind?
§ LORD CLITHEROE
No. One can have either lodgings in college, which means one has rooms in college, or one can lodge with a private landlord, be the tenant of a private landlord somewhere. If one is the tenant of a private landlord, is the private landlord to be protected? He should be, otherwise other students will not be able to come there.
§ LORD SHEPHERD
If the noble Lord will refer to Schedule 2 to the Bill, he will see that here we are dealing with furnished tenancies where the landlord is an occupier. I think that is what the noble Lord had in mind. The noble Lord will see there that under Part VI 1193 of the Rent Act the landlord has a special position. I speak now with some confidence, but I do not think there is any difficulty in the landlord being able to bring the licence to an end as and when he so wishes, by having given the proper notice.
§ LORD SHEPHERD
I think it may be one and the same thing. My understanding of the word "licence" is the agreement between a tenant and a landlord on the basis of lodger or boarder, where there is not a complete right to a particular individual dwelling place. But I will look at the point the noble Lord has put, because I agree with him that one wants to be quite clear. I think I can give the noble Lord a very clear assurance that the student—I have been passed a piece of paper, and perhaps this may help. It says: "Licences to occupy. It has been held by the High Court that Part VI of the Act can apply to a licence which meets the conditions of Part VI"—I am sorry, I had better come back to this at a later stage. I cannot read it.
§ LORD CLITHEROE
May I thank the noble Lord. I just wanted to give some assurance to the landladies in Morecambe.
§ LORD SHEPHERD
The assurances I have given will stand up to examination. There is no difficulty here, but the part of the Bill we are dealing with is that in regard to institutions.
§ LORD LEATHERLAND
While thanking my noble friend for the satisfying reply which he gave to my question about the young lady who wants to train to be a nurse, I ought to add, in order that suspicions may be removed, that the young lady is my granddaughter.
§ LORD WYNNE-JONES
I have been slowly and painfully struggling towards what may be an understanding of this clause. I do not know whether I have reached the point, but I should like to raise one matter which may merely show that I have completely misunderstood it. If one looks at Clause 2(1)(bb), one findsthe tenancy is granted to a person who is pursuing or intends to pursue a course of study …".1194 My noble friend the Leader of the House has been pointing out that most of the students will not require the protection of this clause at all, or the institution will not require it, but that there are a few, very few, which I think my noble friend put at 0.0001 per cent.—
§ LORD SHEPHERD
May I say that we do not even know who they are, but are merely putting it in as protection.
§ LORD WYNNE-JONES
That is precisely why I raised this matter, because there are some habitations which have been built by universities. I happen to know of one where a number of flats were built by the university out of private funds, not out of University Grants Committee funds because the University Grants Committee will not give money for this purpose. In the university of which I am thinking, these amount to about 20, and were built for married postgraduate students. I imagine these come exactly under this particular clause.
What slightly worries me is the phraseology, "to pursue a course of study". These flats are meant for research students. I know that sometimes research is referred to as a course of study, but when one is thinking in particular of research students in the fields of science, medicine and technology, there is no study in the ordinary sense, in the undergraduate sense. These people are actively pursuing research work. I should like to be satisfied that the word "study" will not be used in a restrictive way, because it seems to me perfectly clear that the intention here is that any student occupying a university flat, while he is an undergraduate or a post-graduate student, is really in this kind of contractual position with the university. Can the noble Lord tell me whether or not I am right in my interpretation?
§ LORD SHEPHERD
I can give the noble Lord, Lord Wynne-Jones, that assurance. My understanding is that the word "study" would cover those who were doing research. So I can give that assurance to my noble friend.
I thank the noble Lord for that reply. He has certainly cleared up one point; that in the Year 1922/23 at No. 2 Kings Parade, Cambridge, I was the licensee. But I understand that the modern generation is not content with that. As the noble Lord 1195 said earlier, students go in for renting flats. Presumably, the landlords or the owners of these flats are people who keep the flats specially for letting to undergraduates. If they are going to have undergraduates with full rent protection staying in those flats for their three years, or whatever it is, staying on for a postgraduate course, then for further study, and then possibly taking up a job in the town, these places will be occupied for ever by people who are not undergraduates. Under existing circumstances, do those tenants have protection? Under the Bill do they have protection? Under the Amendment do they have protection?
§ LORD SHEPHERD
So far as the Amendment is concerned, it does not apply to them. My understanding is that students who are in flats under the normal circumstances of a tenancy will have the same rights, and the landlord will have the same obligations and the same limitations, as anyone else with a tenancy of that sort. But I believe that tenants, students of this type, who are entering into a new agreement might be able to enter on what I think is called a fixed term tenancy. If there were a clear statement at the beginning of the agreement, I think it is possible that the students would have an obligation to leave at the end of the tenancy. This will certainly be applicable to a landlord who may have the premises and who has gone overseas, perhaps on an overseas tour to an embassy or a university, for a period of perhaps a year or two. He would be able to let his premises on a fixed term tenancy, making it quite clear, however, that at the end of that fixed term the person would have to leave. Then the tenant would have to leave. I understand that the general principle, however, is that students who occupied furnished premises would be in the same position as any other tenant.
§ LORD ROBBINS
Will the noble Lord tell us how far the possibility of fixed term tenancies extend? Listening to what he has just said, it seems to me that all landlords who have been in the habit of letting flats of this sort to students will at once switch over to fixed term tenancies, because that would solve a great deal of their problems.
§ LORD SHEPHERD
I said that there is a limitation which is open to a certain 1196 type of landlord, and I specifically referred to those who were proceeding overseas and clearly had it in mind to let their premises for a fixed period. Perhaps I have mislead the Committee into thinking that there is a loop hole here; that one could enter into a fixed tenancy and therefore immediately be excluded from the general provisions. Clearly this Bill, like other legislation, provides for a person who has a tenancy, whether it is fixed term or periodic, the right security of tenure in the premises. I was trying to meet the point of the noble Lord, Lord Hawke. I think the point I was making would be very much limited to those landlords who wished to make premises available while they proceeded overseas.
§ LORD ROBBINS
So that it would not be open to, let us say, an elderly professor, having inherited from his economist colleagues a solid lack of confidence in gilt-edged securities, to erect a block of flats and let them on fixed term tenancies to married graduate students?
§ LORD SHEPHERD
If I may say so to the noble Lord, Lord Robbins, I have not yet lost confidence in gilt-edged securities.
§ BARONESS YOUNG
I am most grateful for the great interest to which the Amendment has given rise, because it meets a very real anomaly in this Bill. I was not really satisfied by the reply of the noble Lord, Lord Shepherd, though I am grateful, of course, for the crumb of comfort he has given: that in making regulations the Secretary of State for Education and Science will consider any representations made to him about independent institutions that would not otherwise be covered. On that point, I really do not think that is good enough, because I do not see why these establishments which I have in mind—something like a secretarial college which is, after all, performing an extremely useful service to the community at large—should not simply be covered in the first regulations.
But what is much more important is that the noble Lord has not answered the very real fear that I expressed on Second Reading which now has the support of the noble Lord, Lord Robbins, who, of course, speaks with such authority on these matters, and the noble Lords. Lord Annan and Lord Clitheroe. I am not sure whether the noble Lord, Lord 1197 Wynne-Jones, has had all his questions answered. The fact is that this Bill as drafted leaves a great gap in the provision of accommodation for students, and it seems to me, although the noble Lord, Lord Shepherd, seems to think that it is perfectly all right, that he has in fact exactly made my point in explaining the clause as it stands. He said that the reason for this clause is that although most students in specified educational institutions are there on licence, there may be some who are tenants and there should be no question about a student leaving his premises when he has completed his course; that is to say, the university must be sure that when he has finished his course he will leave the accommodation. That is, of course, completely reasonable and nobody objects to that.
What we are saying is: what about all the other thousands of students not in licensed premises, not in premises where there is a resident landlord, who are private tenants, who will now enjoy full security under Clause 1? On the explanation of the noble Lord. Lord Shepherd, they could be there indefinitely. I accept that a lot will not be there indefinitely, but enough will be there for quite a considerable length of time for landlords not to wish to let their premises in the future. Because they do not wish to let their premises, students will have nowhere to go. For all the arguments that have been put, the universities do not have the money to erect these buildings. We do not know when all these spendid benefactors will turn up to provide the money, and in the intervening period of time there will be an acute shortage of accommodation.
The noble Lord, Lord Shepherd, has not provided any answer at all. I do not know whether he has had discussions with his right honourable friend the Secretary of State for Education and Science. But I should have thought that if the Government had consulted at all with vice-chancellors or anybody in the university world, they would have realised that this Bill would cause very great difficulties indeed. I feel that to leave the position as it is with simply an assurance that the noble Lord will say that private students can get their names put on the list of those who will be exempted, is really not good enough. Not only do we need this assur 1198 ance so far as university students are concerned, but we need it over the whole range of other young people.
May I refer to the case of the nurses? My home is in Oxford, and not only does it have a university and a polytechnic, but it has an enormous medical centre. I think I am right in saying that there are seven major hospitals, including a teaching hospital. There are, therefore, an enormous number of young people coming as medical students and nurses, and all the ancillary medical workers. I can think of two houses which are let furnished exclusively to nurses. I should not like to say exactly at what stage they are in their training, but houses of that sort are going off the market.
Where are these people to find accommodation? Not all nurses wish to live in purpose-built nurses' accommodation—there are all sorts of disadvantages as well as advantages to that—and given that people should have a certain degree of choice as to where they live it seems to me that they will be put into an impossible position under Clause 2(a). That is why my Amendment has extended the provision to include other people seeking professional qualifications. What I am saying also applies equally strongly to those who are working for some kind of technical qualifications. That is why I have included paragraph (ii) of my Amendment. I do not think that the noble Lord has given any answer to these points.
§ LORD AVEBURY
I am sorry to interrupt the noble Baroness's most eloquent argument. She said categorically that she knew of two houses that were wholly let to nurses which are now being taken off the market. Is the landlord trying to sell them for owner-occupation? If so, I should have thought he had chosen a rather odd time to do it, with the market in such a state. I am surprised at that information. I should have thought that if landlords of furnished properties did that on a large scale they might find they had lost a great deal of money on the sale.
§ BARONESS YOUNG
I hope I have not misled the Committee in any way. What I thought I said was that I know of two houses let to nurses. My argument is that at an appropriate time the landlord will make a decision. I am sorry if I said 1199 that the landlord would give up immediately. Clearly, nobody expects the landlords of every bit of furnished accommodation to decide to sell it as a result of this Committee stage. I do not think my argument was quite so absurd. What I am saying, and what we have all agreed, is that as a result of this Bill there will be less furnished accommodation to let. I am saying that those young people who require furnished accommodation for a given period of time, and which the noble Lord, Lord Shepherd, has agreed in the case of university accommodation, must really be on a sequence of short tenancies. This should be available to more than just university students in university premises. That is my argument. I have not heard anything that refutes it or meets this point. I hope that the noble Lord will say that he will take my Amendment back and look at it. If it is deficient in drafting I am prepared to accept that, but I cannot accept his argument as it stands.
§ 6.1 p.m.
§ LORD SHEPHERD
I have a suspicion (I have smelt this atmosphere before), that the noble Baroness is working round to a Division. Looking at the rather over-full Benches opposite at this time of the evening. I suspect that that is very much in her mind. What do I do, as a gentleman? Do I give her the privilege and joy of having a Division, or respond to the invitation she put to me that I should consider this matter again? I ought to put it frankly to the noble Baroness that she is saying that in order that students should have the existing supply of rented accommodation they have not to be protected, because this is what the Amendment will do. Under the Amendment students will not be protected either at rent tribunals, or by the rent officer, or the like. This is more than many of my noble friends would wish to swallow.
If, however, there is some way in which we could meet the heart of the case put by the noble Baroness—I do not know if there is one—I am quite willing, I have always been willing, and nobody would be more willing, to talk with the noble Baroness about this matter. If I can save the noble Baroness from going through the Division Lobby I am very willing to do so. I cannot give any firm commit 1200 ment, but I shall certainly see what can be done. I recognise that there is a difficulty, but this part of the Bill was not designed to deal with the students who live in private accommodation. I will look at this matter. If the noble Baroness will be satisfied with that, I shall undertake to do it in a most serious manner, not in a trivial or lighthearted fashion in which I am perhaps now approaching the Committee. I shall do it seriously, but I cannot give the noble Baroness any firm undertaking that we shall be able to find a solution. We are dealing here (are we not?) with the problem of providing accommodation for ordinary people other than simply students, and this is a pressure that is on us all the time.
§ LORD ROBBINS
I was simply going to suggest terms of reference for the noble Lord's meditation. He has agreed, in recommending the clause under discussion, that he thinks it right and proper that university institutions should have the right to turn out the students who have finished their course of studies. He has also pointed out to us again and again in the course of this debate that if the students who do not live in college take apartments in a house where there resides an aged landlady, or perhaps the wicked landlord himself, then they are not protected. So there are people, in the intermediate region, who, like his relative, if I understood him rightly, are proposing to take flats not immediately under the supervision of a landlord who lives in the basement. This is now popular among students. Many of the students are browned off with hostel accommodation. I think that they are wrong, although in some respects it saves a university much trouble if they do not have to act in a paternalistic way.
Certainly this would be more popular among students. It is that group of students, their rights and the rights of their landlords, which really are the subject of discussion in this debate. Whether in fact all that we have said on the noble Baroness's Amendment has been strictly relevant to the particular clause under discussion is an open question, but it has afforded us a splendid opportunity for ventilating the case of this important body of students. We have all agreed (have we not?) that there is likely to be less accommodation for them if this goes through in its present form.
§ LORD WYNNE-JONES
May I put this point to my noble friend the Lord Privy Seal: what the noble Lord, Lord Robbins, has just said, and what the noble Baroness has said previously, amounts to an important matter dealing with a problem of growing urgency. This is something where the Government could well say, "We should like to look at it carefully, and see what we can do about it." I still do not feel clear about the situation at all, but I know that there is a problem. I have been convinced, in listening to the arguments this afternoon, that the problem is one which ought to be tackled. If the Government are prepared to do it, I am sure that that would win the approval of the Committee.
§ LORD SOMERS
I think that the noble Lord the Leader of the House said that this Amendment seeks to provide protection not only for students but for ordinary people. If you look at the Amendment, paragraph (iii) says:a course of study leading to any of the following …They are students. If you are studying to be an optician or veterinary surgeon, you are a student. You may not be a university student, but you are a student.
§ LORD HYLTON
If the noble Lord, Lord Shepherd, is to reconsider this, would he consider legislation somehow in the context of the Bill so that students, and other people doing bona fide courses, can have a fixed-term tenancy, so that they are secure for the normal period of their course or post-graduate studies. He mentioned the case of the owner-occupier who goes abroad for a fixed period of time. That is all right, and we know about that, but it does not cover the professional landlord, or landlady, who is not a university body in his or her right.
§ LORD SHEPHERD
Everybody likes to be popular, and since the noble Lord, Lord Robbins, suggests that one might be popular if one undertakes to look at this matter, clearly I will. However, there are great difficulties here. It will be necessary not only to discuss this matter within the Departments, but certainly we shall need to discuss it with the local authorities, and also with the various institutions. Clearly, this will take time. I will undertake to look at this matter. However, I think I ought 1202 to be fair and frank with the Committee; even if they were to pass this Amendment, they would not really be doing anything for the people that we have been discussing, because the Amendment, at heart, deals with institutions. I shall be in immediate consultation with the noble Baroness, and I hope that she will feel so disposed towards me that she will not pursue me on the next stage of the Bill.
§ BARONESS YOUNG
As the noble Lord, Lord Shepherd, knows, I am always a reasonable person. I have listened carefully to him and I will accept his offer to discuss this clause. In doing so, I must be equally frank with him; I cannot accept it as it stands because I do not think that it answers the real points that have been made. I should have said earlier on that I do not believe that it would be impossible to identify who is doing a bona fide course of the kind described in my Amendment, because it is perfectly possible to produce some kind of document from the institution giving the course to that effect. I think that this rather minor technicality could be covered. I hope that, when he discusses it with me, he will tell me in what way he feels my Amendment could be improved to meet these points. I do not regard it as necessarily perfect, but I do not think, and nor do I believe that the Committee as a whole believes, that the clause is correctly drafted. On these terms, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 6.11 p.m.
§ LORD GIFFORD moved Amendment No. 5:
Page 2, leave out lines 33 and 34 and insert—
(bbb) the intention of the parties to the tenancy at its inception was that the tenancy should be for the purposes of a holiday;
§ The noble Lord said: This is in a sense another lawyers' Amendment. It is a very important one and attaches to a very important point, but I hope that it is not a controversial one. It deals with the definition given in the Bill of "holiday lettings". We have reached Clause 2(1)(bbb) and the noble Baroness will later be going into the fourth degree of "b's", which only goes to show how 1203 difficult the Bill is. I recognise at once that the landlords and landladies of genuine holiday accommodation should be outside the control of the Rent Act. Equally clearly, I would hope that my noble friend will accept that landlords in the inner cities should not be able to evade the Rent Act by describing as holiday accommodation what is a perfectly ordinary letting to a family which does not need a holiday at all. I have experience of an agent in Notting Hill who quite regularly puts on the rent books which he gives to prospective tenants the words "Holiday Letting", knowing quite well that the tenant does not want a holiday in bracing Notting Hill but is in fact in need of a home. I have been able to show my noble friend a copy of one of these bogus holiday agreements. The tenant is made to sign a form headed "Holiday flats—temporary accommodation available for a maximum of 26 weeks". The wording continues, "I agree to take the flat as holiday accommodation for a period of four weeks", and that is then renewed month by month at an exhorbitant rental.
§ If, as a result of a wrong definition of "holiday accommodation" in the Bill, landlords were able to evade the intention of the Bill by describing something as a holiday letting when it is not so, a major gap would have been blown in the Bill. I am very doubtful whether the definition of a holiday letting proposed in the Bill serves to protect the tenant of what I have described as bogus holiday accommodation, for what the Bill requires a court to look to is the right conferred upon the tenant. The purpose of the tenancy is to confer upon the tenant the right to occupy the dwelling house for a holiday. My fear is—and I have discussed this with colleagues at the Bar—that when a test case comes before it the court will say, as it certainly will, that, though the tenant may well not have wanted to have a holiday, that was the only right which the landlord conferred upon him. The courts will look to the form of agreement and, seeing that, as in the case I have mentioned, it states that the accommodation is only holiday accommodation, will say that they cannot say that the purpose of the tenancy was to confer on the tenant the right to occupy the premises permanently, because that 1204 was manifestly not what was stated in the agreement itself.
§ I think that the intention of the parties as to the purpose of the tenancy should be the decisive factor. If it is quite apparent that both landlord and tenant knew that no question of a holiday was required by the tenant, the courts should be able to investigate and to get behind the form of the letting, and to say that the intention of the parties had nothing at all to do with holiday accommodation.
§ It is essential to get this right because the kind of gap which a wrong decision on this matter would expose is considerable. It is, in a sense, one for the lawyers, for I recognise that there would be arguments in a court for saying that the Government's present proposal requires the courts to look at the true purpose of the tenancy; but there is this disturbing reference to the right conferred, and I believe that it is by no means clear to the courts that the intention of Parliament will be to prevent these kinds of bogus holiday lettings obtaining exemption. I would therefore urge my formula as making it quite plain that it is the intention of the parties rather than the form of the agreement which is to be looked at.
§ 6.17 p.m.
§ LORD SHEPHERD
My noble friend is quite right in saying that this is a lawyers' Amendment. I am therefore advised that it would not materially improve the effect of the existing exemptions of holiday lettings. The intention of the Amendment is quite clear; that is, it is designed to prevent landlords from evading the provisions of the Act by claiming that residential lettings are for the purpose of holidays. But this is already achieved in the present exemption by the use of the words, "the purpose of the tenancy". This does not mean the purpose or intention of the landlord or tenant individually, but the facts behind the tenancy agreement entered into by both parties. The fact that a landlord calls a letting a "holiday letting" or persuades his tenant to agree that it is one will not prevent a court, which is the arbiter in such cases, from determining on the basis of the surrounding facts that a residential tenancy exists. The purpose of a letting is a question of fact to be decided by the court on evidence. It is not a question 1205 which can be determined simply by the label given to the tenancy by the landlord or the tenant.
I gather that my noble friend referred to the rent book as being evidence; but I understand that a rent book is not given or required to be given for a holiday letting, so I do not think that this could be used in evidence. I hope that my noble friend will consider what I have said. As lie has said, it is a lawyers' point. My advice is that the position is clear within the present legislation, that it is for the courts themselves to decide the general character of the tenancy and that this does not depend upon what may allegedly have been said either by the landlord or the tenant as to the intention of the tenancy.
§ LORD HALE
I am sorry to return like a dog to my earlier vomit, but this is precisely the same point once again. What is the test? If there is a rent book, an agreement or a scrap of paper showing that the letting is for a holiday, is that decisive evidence? Does the court decide on that? My noble friend nods his head. I attribute great importance to his nods, though less since he made his unexpected pronouncement about investments. I am quite willing to sell him all mine at the price which I gave for them ten years ago if he would like to have some experience as an investor in Government securities.
What is a holiday? If I may quote an exotic extra-territorial example, is Mr. Ronald Biggs on holiday? He is certainly on vacation; no one can deny that. Indeed, if I may venture to use a quotation from a learned friend of mine, taken from the Latin, the position is not without a certain degree of what he called Fragrant delectation. Biggs has been having a good time. Many people who go on holiday with these wretched travel agencies have a very tough time indeed now.
In the Second Reading debate, a noble Lord made a point which I thought was valid. To put it without arrogance, I think he made one point and might have made two. There is no test of a holiday by the season of the year. Discriminating people go to Cornwall in the winter and not in the high summer.
§ LORD SOMERS
May I interrupt the noble Lord, Lord Hale, for a second? He realises, of course, that there are such things as "busmen's holidays"? How does he describe those?
§ LORD HALE
I do not know. I should have to leave that to Miss Dorothy Sayers who dealt with the subject in about 400 pages, and did so ably and very well. If I wanted to extend the discussion, I could talk about people who enjoy the lights of Northern Scotland. I have not seen them for many years. I used to love the country North of the Caledonian Canal, with a little trading in oil, or employment, and so on but not too much, possibly a little stag shooting. But I do not want to let a perfectly serious argument be touched by my frivolity. The noble Lord, Lord Gifford, has put the case very fairly and well.
I was saying that another noble Lord had mentioned the fact that with a genuine letting holiday there is not very much to fear. People from Oldham who go to Torquay do not decide to shack up there, stay a few months and then face the courts. They go back home at the end of the month or fortnight or at the end of the Oldham Wake's Week, or whatever they have. There is a danger and a serious hardship for landlords who let, for temporary residential purposes throughout the winter, cottages which they normally like to occupy themselves while on vacation for part of the summer and let for a fair rent during the rest of the summer. There is a problem there. I can remember being the tenant of a small bungalow in West Road Bridport, a charming and lovely situation, which I got for a very modest sum. It was furnished and I was the tenant, with power to sub-let for holidays. A friend of mine who went down as my guest in September met a charming gentleman in the local pub and let the bungalow for the winter. He said he was sure that I would be glad to have the extra money for the winter, but I was not at all glad, because I know what sometimes happens to furniture when you let to strangers.
Some months later I was playing golf—as I observe that there are no right reverend Prelates here, I might add that it was on a Sunday morning—when a police inspector walked across the course looking hard at me. Being of a frivolous 1207 turn of mind, I said that he had come to inquire about the Brighton trunk murder. That invasion of my privacy was ended when the police officer said: "I must talk to you, Mr. Hale. I want to talk to you about the Brighton trunk murder. Did you know about that woman to whom you let the bungalow, and did you make any inquiries about her character? Did you know that she has disappeared and we are checking up on all the women who have disappeared from the South Coast?" Perhaps that is not an example which I could quote as one of general application, but it shows some of the problems that may arise.
All the noble Lord, Lord Gifford, has said is, "Shove in a few extra words and make it clear." He has not said, "Detract from your intention." The noble Lord the Lord Privy Seal says that we are in complete agreement as to our objectives. "We want to do that. We think it is unnecessary." I would not like to say how many times I have heard a Minister say that something was unnecessary, and how many times I have seen a Minister go to the Box and say, "On the highest possible advice I am now able to say that this clause is as clear as mud." A few months later the matter goes before the courts, possibly even before the noble and learned Lord, Lord Denning, as Master of the Rolls, who has a great gift for explaining what he thinks of the drafting of both English and foreign law. Many of us always appreciate his comments. But what reason is there why we should not add a few words that help to clarify? Why should we leave it to the judges to say to what extent they are able to define a "holiday", to ask why Parliament did not define a "holiday", and to ask "If Parliament had meant to say this, why did they not say it?"
I apologise for a longer interruption than I had intended, but the noble Lord will have observed that at the moment the courts are moving a little more on the road to deciding that they arc entitled to try to assess what was Parliament's intention. They have always said that they are bound only to assume that Parliament must have had some intention, however indefinable, however incredible, and however inexplicable front the point of view of discernability. They 1208 have always said, "We cannot look at what was said and we cannot look at what questions were asked, because that would be infringing the privileges of Parliament and would affect a principle of great constitutional importance." Now they are trying to find out whether we mean anything, and if we mean anything why not help them and accept the noble Lord's Amendment, which the Lord Privy Seal has said will make no difference to his intentions?
§ LORD GIFFORD
If indeed the courts were able to look at the Hansard for this debate, and were able to see in plain terms what my noble friend has said on behalf of the Government, and were then to see that this House plainly intended that the courts were meant to go behind the facts, I would be much more confident in accepting my noble friend's reply and assurance about the advice he received on the likely interpretation of the clause. As it is, of course, the courts cannot look at Hansard by a rule which must soon, I think, be challenged and made redundant. They are not allowed to read the report of this debate. Even so, I hope that my noble friend is right. I appreciate that the matter has been looked at carefully. If my noble friend is wrong, he will find a Private Members' Bill on his hands very quickly, because this matter will certainly come to be tested in the appellate courts in the near future. I am sure we shall see many so-called "holiday lettings" coming up for investigation. But I hope that he is right, and in that hope I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 6.28 p.m.
§ BARONESS YOUNG moved Amendment No. 6:
Page 2, line 35, at end insert—
("(bbbb) the tenancy is for a fixed term certain; or").
§ The noble Baroness said: In moving this Amendment I should like to thank the noble Lord, Lord Shepherd, for the discussion we had on this point and for the long letter which he sent in explanation of it. I do not want to take up the time of the Committee about something on which I know we are all agreed and which, as I understand the noble Lord, Lord Shepherd, is a point which is met 1209 in the Bill. But it is important to get this matter on the Record, because the question of letting your house for a given period of time, when you may be away, either serving overseas in the Foreign Office or on sabbatical' leave, or whatever it is, on a fixed-term tenancy and being absolutely sure that you can get it back at the end of the tenancy, is a matter of importance. I raised it originally because, although I am not a lawyer myself, it was put to me by a lawyer that this point was not covered in the Bill. I understand that it is covered by Schedule 3. I have looked at this matter again, and of course I have looked at it in the light of the explanatory letter that the noble Lord, Lord Shepherd, has sent me.
There is one point that I should like to raise, and I think it is of some importance. If I have understood the position correctly, when an owner-occupier lets his house in this way he must give notice under Section 79; and he may not realise, in the course of the passage of the Bill, that he ought to have given notice in this way. Indeed, I think the last paragraph of the noble Lord's letter indicates that there could be room for someone not being able to repossess his home because he has not served this notice. If I may, I will quote from the letter because I think it will be helpful to everybody to know what the point is:
I can understand your fears that some people may not be aware of the need in future to serve a notice in order to retain the right to repossess their home, but I think this problem can be overcome. We have already had several inquiries, not only from individuals but also from building societies, Government Departments and an organisation representing many of the large firms which post staff overseas, about these provisions, and in general they seem perfectly satisfied with them".
§ I am of course very glad to hear that, but I am concerned about the individual who does not really fall into any one of those categories; and I should like the noble Lord to say how he intends to inform those people who wish to let their house about this provision. There are people who, perhaps unwisely, will not have taken legal advice before doing so and who could really find themselves in considerable difficulty when they return, if, by some misfortune, the tenant decides that he wishes to stay on. I am sure that 1210 the larger organisations will look after their employees, but there could be individuals who might not know about this, and it is for this reason that I should like to have it on the Record. I beg to move.
§ LORD SHEPHERD
I think that the noble Lord, Lord Bethell, who I see opposite, also raised with me some of the points that the noble Baroness has just mentioned in moving this Amendment. I undertook to seek to reply to the noble Lord, Lord Bethell, on the Question. Whether the clause shall stand part?, and if he is agreeable I shall seek to cover the ground of the noble Baroness, and also, perhaps too, go a little further and deal with a similar point that the noble Lord had in mind.
The Bill already has safeguards for the position of the landlord in two situations—situations in which, I think, everybody would agree that some safeguard is necessary; first, where the owner-occupier lets his own home during a temporary absence and, secondly, where the landlord is resident on the same premises with the tenant. In the first case, the Rent Acts have in the past recognised the right of the temporarily absent owner-occupier to recover possession of his home when he wishes to live there himself.
The Rent Act 1968 provides in Case 10 of Schedule 3 an absolute ground for possession of unfurnished accommodation where the owner-occupier has given written notice at or before the time of the tenancy being granted that possession may be recovered under this Case. Similarly, if the owner-occupier lets his home furnished on a periodic contract and gives written notice under Section 79 of the 1968 Act that he is an owner-occupier within the meaning of that section, and if he then wishes to return to live in his home, the rent tribunal have no power to suspend the operation of the notice to quit which he serves on his tenant. Absentee owner-occupiers who let their homes furnished on fixed-term contracts have of course the right to possession at the end of that term, subject to the requirement to obtain an order for possession from the court before evicting a tenant who has refused to leave at the end of his contract.
The Rent Bill preserves this concession in favour of owner-occupiers who let their homes in their own absence. If the letting is made after commencement date of the 1211 Bill (one month after Royal Assent), then the owner-occupier who lets furnished will be able to guarantee that he can regain possession by serving a Case 10 notice. The Bill also makes provisions preserving the rights of absent owner-occupiers who have let furnished before the Bill comes into force, either under the Section 79 procedure or on a fixed-term contract.
There will be nothing in future to prevent an owner-occupier from using letting on fixed-term contract so long as he also satisfies the notice procedure. Indeed, this method would best suit those people who know for certain how long it will be before they require their homes again, in particular those such as members of the Armed Forces or the Diplomatic Service who are posted away for a fixed tour of duty. Their position will then in practice be the same as it is now. The tenant will be aware that the owner-occupier has an absolute right to repossession, as he has now, and that he therefore has no right to continued occupation of the dwelling-house when the contract ends. There should therefore be no question of a tenant of an absent owner-occupier remaining in occupation in an attempt to claim statutory protection. Where the tenant does not move out in time, the owner will of course have to go to the court for a possession order, but this is true in the existing situation, and it will, as of now, be open to the owner-occupier to apply to the court for an expedited hearing if he requires his home urgently.
The noble Baroness asked how this position can he made known to those who wish to let property. I hope that a landlord letting property on this basis would consult either with a lawyer or with any of the bodies that provide information to the general public. But I think that the Bill as drafted is just about right in this respect. The noble Lord, Lord Bethell, intended to ask me what the position was about visiting diplomats, Ambassadors or High Commissioners, who may occupy furnished accommodation in London. My understanding is that if they occupy the premises and the tenancy is in the name of the Embassy or of the country, then they have no rights at all. Nor, of course, do the country or the Embassy have rights, because they are a body; they are not an individual who will have a place 1212 of occupation. The position is the same in the case of companies: companies cannot be occupiers of residential accommodation. I do not think that the noble Lord need be concerned about these people or about the landlord who may be letting accommodation to that class of person.
§ LORD BETHELL
I am grateful to the noble Lord, Lord Shepherd, for what he has said, which certainly goes some way towards answering the doubt which is in many people's minds on this matter of tenants who come from abroad as representatives of foreign countries, and from foreign companies. I must immediately declare an interest in that I am the owner of a number of furnished flats which I let. In the case of none of these flats, I may say, do I think that I am providing a home for anyone. In Central London there are very large numbers of flats (a high proportion in Central London) which are not homes but which are provided for people such as those I have just mentioned, and for transients of various other categories. It would be a very serious problem if this Bill were in any way to restrict the supply of these flats which are made available to transients whether they come from abroad or, for that matter, from this country.
The noble Lord has said that provided agreements are drawn up in the name of a company or in the name of an embassy, the occupier will not have the protection under the proposed Bill. But I wonder whether he can say what would be the situation if, as is sometimes the case, the existing agreement happens to be in the name of the individual concerned? Suppose a counsellor at a certain embassy has taken a furnished flat in his own name. As I understand it, he will have security of tenure under the Bill. He will probably be paying an extremely high rent for his flat because such representatives demand large flats where they have to do entertaining; they have furniture of an extremely high standard—not the few sticks of furniture which the noble Lord, Lord Avebury, has referred to several times, but furniture costing several thousands of pounds. He is paying a high rent, very often in excess of £100 a week. Will he, if he has signed an agreement in his name, be able to go to the rent officer in order to have his 1213 rent reduced? If, for one reason or another—and anything can happen in any country, as we know from recent experience—he decides to remain in London and not to return to his country, will he have security of tenure at a reduced rent? Will he be able to turn his company- or embassy-acquired flat into his home under this Bill? If that is the case, does not the noble Lord, Lord Shepherd, feel that some amendment is called for in the Bill which will prevent such a state of affairs from happening?
§ LORD AVEBURY
I am sorry to have come in during the middle of the noble Lord's speech, but would not such accommodation as he has mentioned be outside the rateable value limits for protection?
§ LORD BETHELL
It would not. I remember speaking on the debate a year or so ago when rateable value limits for unfurnished accommodation were raised to their present levels. I think I am right in saying that the Government spokesman at that time said that there were only 7,000 residential units in the whole country which would not be protected under the proposed legislation. I can give the noble Lord a concrete example from my own experience, and that is that there are flats being let now at rents of over £100 a week—and this is by no means extortionate or exorbitant according to the market value—which have a rateable value under the new scale of less than £1,000 There are very few in central London that have a rateable value of more than £1,500.
§ LORD SHEPHERD
I can give only a short answer to the noble Lord. If it is within the rateable value as defined in the Bill, and if the tenancy is in the name of the individual—not the company or the country—then the answer is "yes" he does come within the ambit of the Bill with all the rights and privileges that go with it. It may sound slightly iniquitous, particularly to the embassy or the company concerned, but that may be a consequence of their own failing for having allowed an employee to enter into a tenancy on their behalf and putting it in that individual's name. But the noble Lord asked me a question and the answer is the one that I have given, yes he will.
§ LORD BETHELL
I asked the noble Lord another question, which was: did 1214 he not think that it was wrong that such an employee should be able to take advantage of the proposed Bill and remain in his accommodation at a reduced rent which he might have negotiated with the rent officer when in fact he took the flat for an entirely different purpose?
§ LORD SHEPHERD
Fair or not, I do not see how we can get over the difficulty. I do not see how one can draft legislation to deal with these odd, and I should think very rare, cases. If there is any mistake, I suppose it must lie with the company or the country concerned which may have lost valuable property which they will probably need to replace for some new employee coming in. And clearly, too, for the landlords, in taking a very high rent probably knowing that it is a rent well beyond an individual and a rent that could be paid only by a Government or by a company, they took the risk. I must admit it may be that they did not know that a Bill of this nature was likely, but I am sorry I cannot be more helpful to the noble Lord. I do not see a way round this particular difficulty.
§ LORD BETHELL
May I very briefly suggest a way in which the noble Lord might find a way round this difficulty: that is, by accepting my Amendments Nos. 10A, B, C and D.
§ LORD MELCHETT
I am not entirely clear why we should try to see a way round this. If a landlord has a tenant who is paying a rent, albeit perhaps a lower rent than the landlord would like—but that applies to most tenants—if the rent officer has been asked to fix a rent he will fix a fair rent. He will not fix too low a rent or one that is unfair to the landlord. I do not see any reason why the noble Lord's fiats, just because they happen to be let to people who he does not expect to stay there, should be unprotected rather than any other tenancies.
§ BARONESS YOUNG
If I may say so, as I think that originally we were speaking to my Amendment. I understand the fears of my noble friend Lord Bethell. Of course this is another group of people, and no doubt a group of people with whom I am not as familiar as he is, who visit London for diplomatic or business purposes and who need, while they are 1215 here, somewhere to stay. I talked about people who are, as it were, transients at the other end of the scale, students who come and go. But there are large groups of people, and I think my noble friend Lord Bethell has raised a real point. I do not know whether the Government have discussed this matter with the Foreign Office and what effect they think this could have. But I can well see that this could create great difficulties.
That leads me to my second point. I am grateful for the explanation given by the noble Lord, Lord Shepherd, about fixed-term tenancies. I am referring now to where an owner-occupier lets his own house for a period of time. It is helpful to have this on the Record. But as both these cases have illustrated, this is a difficult Bill to understand. It will apply to a great many individuals and I wonder whether the noble Lord, Lord Shepherd, will give an assurance that a simplified version setting out these main points will be available immediately the Bill becomes law, and available very widely because there will be an enormous number of people affected by it. We are working, as I said originally, to a very tight timetable and it is difficult enough for anybody who has spent, as I have no doubt all of us taking part in this debate have spent, days trying to understand it, let alone someone who is suddenly confronted with this situation and has only the Act to work on.
§ LORD SHEPHERD
I will certainly respond to the noble Baroness and will see what I can say at a later stage of the Bill in regard to information and publicity. I agree with her that a simplified explanation of the new provisions would not only be justified for the landlords concerned, but also for the tenants. I shall certainly look at this point.
§ Amendment, by leave, withdrawn.
§ Clause 2 agreed to.
§ Clause 3 [Recovery of possession of holiday accommodation let on out-of-season tenancies]:
§ 6.48 p.m.
§ BARONESS YOUNG moved Amendment No. 7:1216
Page 3, leave out from beginning of line 15 to ("the") in line 17 and insert—
( ) In Part 11 of Schedule 3 to the Rent Act 1968 (Cases in which court must order possession of dwelling-house subject to regulated tenancy)—
§ The noble Baroness said: On behalf of my noble friend Lord Kinnoull I should like to move this Amendment. I must apologise to the Committee as he has only just asked me to do so. He says that it raises a technical point to which he would like an answer. I have not had an opportunity to look at it myself, having seen the Amendment only today, but if the noble Lord, Lord Shepherd, has the answer I hope that he will be able to give it.
§ LORD SHEPHERD
I am only seeking clarification, Which Amendment is it? Like the noble Baroness I have just received a piece of paper. Is it "Page 3, leave out from beginning of line 15"?
§ LORD SHEPHERD
The effect of this Amendment would be to amend Case 10 of Schedule 3 to the Rent Act 1968 so as to allow a person who has not occupied a dwelling-house as his residence but who intends to do so, to claim an absolute right to repossession if he has let that dwelling-house on a protected tenancy and he wishes to Occupy it himself. At present of course, the absolute right to possession under Case 10 only applies if the landlord had previously lived in the dwelling-house himself.
I have some sympathy with the situation which I assume the noble Lord and the noble Baroness are concerned about: that is the position of the person who buys a house for his use, but before he occupies it, lets it for a time. Such a person might himself be living in tied accommodation—if, for example, he is a schoolmaster or a minister of religion—or he might have bought the house in advance of his retirement from a job in another part of the country. But I do not think we can make any concession in favour of such genuine cases without running the grave risk of presenting 1217 opportunities for abuse by the unscrupulous. It would be all too easy for a landlord to claim that he intends to occupy a house as his residence at some undefined time in the future, when what lie is really doing is trying to avoid the Act. I do not think that the addition of the word "principal" before the word "residence" would add much force to the case in these circumstances.
There is of course a ground for possession already in the Rent Act in Case 8 on which a landlord can apply to the court if he reasonably requires the dwelling-house occupied by the tenant for his own occupation or that of a member of his family. It is not an absolute ground for possession; that means that the court must be satisfied that it is reasonable to make the order and that, having regard to the circumstances, no more hardship would be caused to the tenant by granting the order than to the landlord by refusing it.
These provisions seem to me to offer would-be owner-occupiers the opportunity to gain possession of previously let accommodation for their own use without exposing tenants to the insecurity which would result from the introduction of an Amendment on the lines suggested. I hope the noble Baroness will feel, having had that explanation, that she might now leave it to her noble friend Lord Kinnoull to read what I have said and to decide whether it is satisfactory.
§ LORD AVEBURY
I do not know whether the noble Lord has any information regarding cases of the kind he mentioned, where a schoolmaster or a minister of religion, for example, has acquired a property with a view to his retirement in two or three years' time and has let it to a tenant, having given clear notice to that tenant that he will require the property when he reaches the age of 65. Has there been any case where landlords of this kind have had difficulty in obtaining possession in the courts? If the noble Lord could reassure us on that, I am sure it would help to reassure everybody.
§ LORD SHEPHERD
I do not think there has been any difficulty under the previous legislation, but of course we are now moving into the more difficult area of furnished accommodation. I will look to see whether serious cases of this kind 1218 are on record. I am not aware of them myself, but I will certainly see whether I can give the noble Baroness and the noble Lord any information on this matter. I think I can give an assurance to the noble Lord that there have been no notable difficulties in this matter.
§ BARONESS YOUNG
I should like to thank the noble Lord, Lord Shepherd, for that reply. This is a quite specific point which concerns a number of people. Here, of course, we are all concerned only with bona fide cases of people who decide to buy a house for their retirement a few years early and would expect to occupy it when they retire. I think it would be very helpful to us all to read what the noble Lord has said; and if he could write to me when he writes to the noble Lord, Lord Avebury, on this point I am sure this would clarify the situation. Then, if any points arise we can raise them on Report. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 6.57 p.m.
§ LORD GIFFORD moved Amendment No. 8:
§ Page 3, line 27, at beginning insert ("bona fide"3.
The noble Lord said: I beg leave to move Amendment No. 8 and to speak at the same time to Amendment No. 9. which has the same effect. This deals with the clause with the rubric:
Recovery of possession of holiday accommodation let on out-of-season tenancies".
From that rubric I see at once what is envisaged; namely, that landlords of holiday accommodation should be able, without fear of granting a protected tenancy, to grant tenancies in the off season. The trouble is that the terms of the clause do not talk about "out-of-season" tenancies at all but, I suggest, go dangerously wide. If a landlord gives a notice under the proposed Case 10A before granting an 8-month tenancy, all he has to prove if he wishes to get automatic possession at the end of it is that at some time in the previous 12 months before he granted the tenancy somebody occupied the dwelling-house under a right to occupy it for a holiday, no matter for how short a time it may have been. A friend of the landlord may testify, quite truthfully, that he occupied this dwelling-house for a weekend, having come to London from
the North. The real purpose of that weekend holiday may have been to enable the landlord to raise the circumstances which he could later utilise under Case 10A.
§ There is no reference here to the purpose of the tenancy, as there was (a fact which was relied upon by my noble friend) in Clause 2. Provided it can be shown that somebody occupied it for some time under a holiday letting in order to have a holiday, the tenant who would not know about these matters loses his protection. Indeed, if an unscrupulous landlord—and the noble Lord referred to these a moment ago—were to bring forward a friend to bear false witness that he had spent a holiday for a week or a fortnight in the dwelling-house, the tenant would not be able to dispute it or disprove it in any way since he would have no means of verifying the situation. I have sought to introduce an element of good faith ("bona fide") into this case. It may not be the best way to do what I suggest is needed, to distinguish between the kind of accommodation referred to in the rubric to the clause and the unscrupulous letting of "normal" accommodation—that is to say, not seaside or holiday accommodation—by a landlord who wants at a later stage to be able to turn out a tenant who asks for a decrease in rent or perhaps complains about the state of repair of the property. I beg to move.
§ LORD SHEPHERD
I have looked at this Amendment with care. I would assure my noble friend that it will be necessary for the dwelling-house to have been occupied within the previous year under a right to occupy for a holiday. This method of preventing abuse of the position was chosen in preference to a method which required the landlord to produce proof that he had entered into future books for holiday use of the accommodation, as it would be difficult to devise an adequate test on which the court could make a judgment which would not be a disincentive to landlords to continue the practice of out-of-season letting.
My advice is that the insertion of the words "bona fide" would in the context add nothing to paragraph (b) of Case 1220 10A. The paragraph refers to the dwelling-house having beenoccupied under a right to occupy it for a holiday".This can only mean a genuine right, and if in any case there is any dispute, it would be for the courts to decide whether such a right was granted, or the transaction was merely tolerable. The words "bona fide" do not appear in Section 75(5) of the Rent Act 1968, which provides that no right to occupy a dwelling for a holiday shall be treated for the purpose of Part VI of that Act as a right to occupy it as a resident. The abolition of these words were not considered necessary. They are no more necessary in Case 10A, and indeed to insert them here, when they do not appear in Section 70(5), would only be likely to give rise to questions in the court, as the noble Lord, Lord Gifford, as a barrister, will appreciate. I have looked into the matter and I do not believe the inclusion of the words would materially affect the Bill as drafted.
§ LORD GIFFORD
I accept what my noble friend has said, but there is a difference between Case 10A and Clause 2, and, indeed, Section 70(5) of the Rent Act 1968, to which my noble friend referred. In Clause 2 and Section 70(5) we are dealing with the purpose of the tenancy granted to a tenant—that is to say, was the tenant intending to have a holiday? He can give evidence as to what his real intentions were. In Case 10A one is dealing with a right conferred upon somebody else some 12 months or so before the tenancy begins. Even if the main purpose of allowing the person who occupied it 12 months before was to avoid the Rent Acts, if that person had a week's holiday in the dwelling-house it does not matter whether or not the real intention was to set up the case and thereby avoid the Rent Acts. I am rather distressed that there is not any element of either good faith or even reference to purpose. I do not want to spend any more time on this, but I hope my noble friend will look at it again before the Bill finally leaves your Lordships' House. It seems to me that this is a different case from the cases envisaged in Clause 2 which we have discussed.
§ LORD SHEPHERD
I am happy to respond to my noble friend. I will look 1221 at this again, and if an Amendment is necessary I will see what steps can be taken to introduce it at a later stage.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 3 shall stand part of the Bill?
§ LORD SHEPHERD
If noble Lords wish to raise matters on Clause 3, I suggest we leave them until after dinner, if that would he convenient to Members of the Committee.
§ On Question, Motion agreed to and House resumed accordingly.