§ 5.20 p.m.
§ Debate resumed.
§ Lord ROBBINS
My Lords, I believe that we now resume the debate which was so ably initiated by the noble Baroness, Lady Young, regarding the effects of the Rent Act. It is always a pleasure to take part in debates in which the noble Baroness participates. Her exhaustive knowledge of the subject and the felicity of her exposition always make me feel that further comment is otiose. On this occasion she certainly gave us a masterly survey of the problems and of the way in which they might be eliminated. I almost feel that, had there not been that intermission of questions and instructions regarding the unemployment statistics, the most graceful thing for me to do would be not to rise. But perhaps it may be worth while underlining certain principles involved, pointing out one or two morals and giving one example.
The general background of the doubts which were expressed regarding the effects of the Rent Act of the summer—and I was one of those who expressed doubts; this is not a case of hindsight—was the principle, almost universal in its application, that if the conditions of supply of goods or services are in some way or other made more onerous, either by direct operation on prices or profitability or by way of indirect operation on the conditions of the contract, then there will be a tendency for a diminution of the supply of the goods or services in question. As we all know, the rate at which this tendency manifests itself depends, of course, upon technical considerations. If the price of a foodstuff is fixed far below the profitable level, it is a very short time indeed before that foodstuff disappears from the shops. If the higher price of something very durable, like a house, is fixed below the equilibrium level or if the conditions of renting are made more onerous, it takes some time for the deleterious consequences to manifest themselves.
Rent restriction in general began in this country round about the outbreak of the First World War and successive Governments, of whatever degree of ingenuity, have not yet succeeded in clearing them up; in some cases what they have done 264 has made matters worse. This generalisation certainly applies to the renting of private dwellings in general, to the renting of unfurnished dwellings, and—what was the subject of the debate last time—to the renting of furnished accommodation. I think that noble Lords should agree that the platitudinous remarks which I have been making so far are in accordance both with our knowledge of human nature and of history.
So far as human nature is concerned, it is scarcely logical to base whole political programmes on the assumption that landlords are apt from time to time to be influenced by pecuniary motives, to depict them as being from time to time rapacious in this respect, and then not expect them to take measures to adjust their position if restrictions of one kind or another are placed upon profitable operation in that area. So much for our knowledge of human nature. As regards history, reading around this topic I hit upon some really quite surprising statistics. I beseech your Lordships not to think that in quoting them I want to draw any moral for immediate legislation, or indeed to make any pronouncement upon the more general aspects of policy in regard to housing.
Looking around the House, I fail to see anyone who will have a very vivid recollection of the San Francisco earthquake of 1906. I was 8 in that year, and I am bound to say it was not a circumstance that was drawn to my urgent attention. But we all know that there was an earthquake then. I discovered, by reading an American paper on the subject, that half the housing was rendered uninhabitable within the space of three days. The highly ingenious and technically, at least, unassailable Professor Milton Friedman, and his almost equally distinguished colleague, Professor George Stigler, had the really rather splendid idea of examining, as far as they could, the influence of this in comparison with the state of affairs which occurred after the Second World War, by looking at the small classified advertisements in the San Francisco Press.
The results were as follows: After the earthquake of 1906, the classified advertisements in that area showed, broadly speaking, one advertisement of accommodation desired for every ten advertisements of accommodation offered. Those were the 265 days when there was no rent restriction and the market was allowed to redistribute the accommodation. In 1946 in San Francisco, where rent control had been imposed but where there had been no earthquake, there were 375 advertisements of accommodation wanted for every 10 advertisements of accommodation offered. I draw no moral from that. I merely suggest that it is an interesting illustration of the principle which I have been trying to elucidate.
Although the Act of June has consequences, as I think the noble Baroness has demonstrated, which give rise to some anxiety, it was of course chicken feed compared with the mass of restrictions which have been imposed on the owners of real property, generally in regard to the contracts of renting, from 1914 to the present day. There is no reason to suppose—and I am quite sure that the noble Baroness would agree with me—that the Act of last summer has created a major social problem. But there is reason to suppose, as the noble Baroness has argued, that it has created a problem for some people. The order of magnitude of this small problem is frightfully difficult at this stage to quantify. My tentative inquiries, which have not been nearly as extensive as those of the noble Baroness, suggest that there is a perceptible diminution of accommodation, especially for students. There is certainly a suggestion that some landlords in the London area who were in the habit of providing this kind of accommodation have been trying, not always effectively so far as their expectations were concerned, to put their property on the market.
I can give a very concrete example. One of my friends, a foreign academic of great distinction, is working here more or less half-time on a job which makes it convenient for him to reside in this capital city with his family. The other day I went to have a drink with him. He was quite comfortably accommodated. I looked around his flat and congratulated him. He said, "Yes, it is an excellent flat. But, you know, I had to do a great deal of looking around, and I could not obtain access to this until I had found a company which was prepared to guarantee my evacuation of the premises at the time when the landlords wished me to go".
266 I ask myself why do we, just because of reports from time to time of hard cases which could be dealt with in other ways, inflict these disabilities on ourselves and on our guests from abroad; and why, in particular, when the accommodation of the student body is so anxious a matter for those of us who, directly or indirectly, are concerned with the universities and the higher education policy, do we tolerate a situation which not only results in a diminution of this accommodation, but makes this absolutely indefensible differentiation between the position of people living in college and people trying to get accommodation in furnished flats, and so on, outside. I would urge the noble Baroness, Lady Birk, who is to reply, to give especial consideration to the second suggestion of the noble Baroness, Lady Young, that, at any rate, that part of the Act should be modified. I feel that if the Government were to make that gesture it would certainly not be a controversial matter in this House.
§ 5.35 p.m.
§ Lord AVEBURY
My Lords, I hope that I shall be forgiven if I do not follow the noble Lord, Lord Robbins, in detail in his arguments, except to remark, first, that the number of small advertisements in a newspaper does not seem to me a very scientific way of assessing the relative supply and demand for any commodity, whether it be rented accommodation or any of the other products or services which are offered in newspapers. I do not think that all your Lordships would agree with his description of Professor Milton Friedman as an impeccable authority on these matters. I should have thought that one could not necessarily draw any conclusions from the information that he gave, and that another possibility might be that in more recent years people have found other ways of getting in touch with the potential suppliers of accommodation, rather than by putting advertisements in newspapers, and that the phenomenon that he quoted had nothing to do with the restrictions which have been imposed by the authorities in San Francisco since 1908.
I think that it would be absurd to expect any useful conclusions to be drawn about the working of this Act, when it is less than six months since the Royal Assent was given. My first reaction when 267 I saw this Unstarred Question on the Order Paper was that it would not be at all useful for us to make any contribution, having made our views absolutely clear at the time of the proceedings on the Bill. I was anticipating—accurately, as it turned out—that we should be treated this afternoon to a rehash of the arguments already deployed at some length both on Second Reading and at the Committee stage of the Bill, together with what one might describe as a ratatouille of landladies' gossip, estate agents' commentaries, and a sample of remarks made by prominent journalists such as Mr. Benny Grey, who, I may say, has not had all the arguments his way. If the noble Baroness had read the subsequent correspondence in The Observer she would have seen that not all the readers agreed with every word of his conclusions.
I think that all the noble Baroness succeeded in doing before the Bill was given the Royal Assent was to frighten a good many landlords so badly that her prophecies stood a very good chance of being self-fulfilling. She is now, if I may say so, repeating that act of disservice to those who are seeking privately rented accommodation by driving a few more landlords out of the market.
§ Baroness YOUNG
My Lords, the noble Lord, Lord Avebury, is spending his entire time making accusations that I repeated the speeches that I made at Second Reading and Committee stage, when in fact I have done quite differently. I have made three constructive suggestions to increase the supply of furnished accommodation for those who want it, and I wonder whether the noble Lord would recognise that fact
§ Lord AVEBURY
My Lords, I have only just begun. I have been on my feet for only a few minutes. I am going to deal with the suggestions made by the nobe Baroness, if she will allow me to do so. Before I do that, may I say that she led on to them by remarking that there are now more empty flats and houses than at any time in the past, and that this is in spite of the fact that we have a static population. That is a complete non sequitur, because babies are not in the market for dwellings. The rate of increase of the population today has no 268 effect whatever on the demand for acommodation, rented or otherwise. It is the rate of formation of households that the noble Baroness should have been thinking of, and there is no reason why that should have varied because there have been recent declines in the fertility of women of childbearing age.
As regards the suggestions she made, I must agree wholeheartedly with the first one; that there should have been a simplified description of the Act published immediately so that both landlords and tenants could know the implications so far as they were concerned. I am surprised that this has not been done. Until the noble Baroness said so, I did not realise that the undertakings, as I thought, which were given by the Government on Committee stage had not yet been fulfilled. I recall that after the passage of the Rent Act 1965 a useful little booklet was issued entitled, The Rent Act and You, which many of us used at our Advice Bureaux, and I daresay the CAB and others concerned with the problems of landlords and tenants found that document most useful as a rough guide to the workings of the Act, although it did not go into the legal details. I hope that the noble Baroness who is to reply will be able to give us some assurances on that point.
The noble Baroness, Lady Young, then made the suggestion that students should be excluded in any amendment of the Act and said, to use her own words, that there was a crisis in the university world this autumn. I simply do not believe that. I do not think that the noble Baroness purported to give the House any figures, and I believe that she is merely repeating what has been said to her by some academics and others in the City of Oxford and elsewhere, who are concerned with the provision of this type of accommodation and who have repeated to her either their own experience, or what they have heard from others in the same field. I do not consider this to be a very scientific way of approaching the problem.
If the universities have information from their own records about the volume of accommodation available this year and in previous years, then let it be produced and we can all examine it. But simply to take information at random from one or two university towns and 269 to inflate it by describing it as a "crisis" is, in my opinion, really irresponsible. It is calculated only to drive even more landlords and others concerned with the provision of student accommodation out of business, if they believe that the risks of letting their property to students are as serious as the noble Baroness has described. I do not believe that that is the situation. Obviously, one cannot produce any evidence, because it is too soon after the passage of the Act. But, on the grounds of common sense, a person with accommodation available for letting is far more likely to look towards the student population, because at least he knows that once a person has obtained his degree he is likely to go elsewhere.
The noble Baroness will remember that we discussed this in Committee and I said that few students these days went to a university that was within daily travelling distance of their homes. For example, my eldest son has gone to the University of Birmingham, and I do not imagine that he is likely to settle in Birmingham for the rest of his life. Presumably, once he qualifies, he will look for a job wherever employment is available. It might as well be any other city in the United Kingdom than Birmingham. Just because he happened to have some rather substandard accommodation which is all that is available to students, and obtained security of tenure of it would not be sufficient inducement to persuade him to remain in Birmingham for the rest of his life. The argument of the noble Baroness on this point does not stand up to examination.
She then made two minor suggestions about the second fixed-term tenancies with residential landlords and the position of executors who have to make a decision in 12 months. If we are talking about hundreds of thousands of houses, I do not think that small modifications of the Act along the lines the noble Baroness has suggested will make any difference. But, certainly, let us consider them if it is shown that there is a problem. However, does the noble Baroness not think that six months after the passage of an Act is rather too soon to be considering detailed technical modifications of that kind?
Her last suggestion of short leases to encourage owners to rent empty properties requires a reply. If this could be done 270 without creating an enormous loophole through which the whole of the privately rented sector of 750,000 furnished properties would pass, then I am perfectly prepared to consider it. When the noble Baroness has thought out this plan in more detail—which she will obviously have to do if the Department invites her to go and discuss it as she proposes—then I will be glad to take a completely unbiased and impartial look at it. But I think it rather premature to come to the House with a half-baked scheme which, as I understand her, is not ready to put in front of the Department.
May I now get some facts straight. In every year since the 1957 Rent Act the number of privately-rented dwellings in England and Wales has declined. I do not think I shall be contradicted on that statement. The rate of decline was rather steeper in the years prior to 1965 when the main Rent Act was passed, than between the passing of that Act and the 1971 Census. Therefore, if the additional security of tenure which was conferred on the tenants of unfurnished properties by the 1965 Act had any influence at all on the market, that influence was certainly outweighed by the other factors in the situation. In my opinion, the main influence has always been financial, as the noble Lord, Lord Robbins, said. Even when unfurnished rents were outside control, the owner of a dwelling was generally better off if he could sell with vacant possession and then invest the proceeds elsewhere than if he continued to let that property. In addition, of course, the more profitable investments would seldom have involved him in anything like the same responsibility as he incurred by being a landlord. The extension of regulation, and what I call "proper security of tenure" to the people who are living in furnished properties, by the 1974 Act did little to change the fundamental economics of landlordism.
One may say that there is a marginally higher incentive to sell if vacant possession can be obtained, but that, I should have thought, is counterbalanced by the greater difficulty which landlords now have in obtaining possession in the first place. So one might expect that the next effect would be a continuing decline in the privately rented sector at very much the same rates as before. That is what I 271 imagine the figures will show once they can be produced. But of course we are still arguing in the absence of any hard and fast data to show whether or not the noble Baroness's case is right.
I think that instead of continuing this dispute about the precise effects of the Act, in isolation from all the other factors which affect the supply of privately rented accommodation, this House would do much better to address itself to the question of how to boost the amount of rented accommodation provided by local authorities and housing associations. Let us accept that private landlordism is no longer in business to cater for the needs of the broad mass of the people, and that in future the role of landlords will be largely confined to satisfying demand for luxury accommodation in the larger cities. In saying that I want to emphasise that I am not making any ideological point. I happen to be a landlord myself and perhaps I should have declared an interest, although I do not own any furnished property. I am merely talking about the practicalities of the situation. Why do we go on deluding ourselves into thinking that private landlords have an important role to play, when since 1957 all the evidence proves the opposite?
Therefore, I present six suggestions of my own to which I hope the noble Baroness will similarly give her consideration as I will to hers. First, we have 56,000 unsold new houses. What has happened to the Government's proposals that these should be taken over by the local authorities and used to shorten the waiting list? As the noble Baroness said, if we have these longer and longer waiting lists at the same time as these 56,000 houses remain empty, then that is indeed Alice in Wonderland. I agree with her. Let the local authorities be empowered to take over these houses and reduce the length of their waiting lists.
Secondly, let us consider the position of involuntary landlords, the people who own one or two houses, and the "classical widow", who always appears in our debates on private landlords, who does not want to continue in the position of being a landlord but finds the local authority unwilling to buy her property. Why not say that local authorities should be compelled to buy out unwilling private 272 landlords at prices agreed by the district valuer, not based on the investment value of the property but on some reasonable figure with a discount by reason of the fact that the purchaser is not getting vacant possession, and with sufficient inducement to persuade an old lady that she should give up her property to the local authority, which in most cases she will be only too willing to do?
Thirdly, let us abolish the housing cost yardstick, which has inhibited local authorities from building more dwellings of their own. Fourthly, let us see whether the Government cannot persuade local authorities to add to their building programmes, particularly in 1975 when every newspaper one opens contains words of doom about the building industry and the building materials industry and speaks of vast stocks of unsold bricks and so on. The resources being wasted could easily be brought into productive use, provided the Government would encourage and finance local authorities to increase their building programmes.
Fifthly, I should like to sec greater emphasis on the modernisation of older properties. An enormous amount remains to be done here and, if I may, I will interpolate a little story. I was talking to somebody from the firm of architects of Ove Arup, which assisted voluntarily in helping the inhabitants of Chorlton-cum-Hardy, a suburb of Manchester, to resist a compulsory purchase scheme under which the local authority was intending to knock down 111 houses. When architects from Ove Arup went to look at those properties, they said that 108 of the houses could be made fit with the minimum of expenditure in such a manner that they would last at least 25 years. After a great deal of work, they proved this to the local authority and 108 of the dwellings were saved. As I told my informant, this is happening all over the country and even in Greater London—for instance, in Deptford. Hundreds of acres of houses have been compulsorily acquired by local authorities and then left vacant to rot for years. This is a scandal and one that should be eliminated. I believe that the Secretary of State has expressed himself fairly strongly on this point, but I am afraid that his words of wisdom have not yet percolated through to some local authorities, including some of our London boroughs, which have all this vacant 273 property which they acquired with a view to grandiose schemes of redevelopment with multi-storey blocks which have now gone out of fashion. Let those properties be brought back into productive use.
Sixthly and finally, my Lords, local authorities, particularly in Greater London, should come together and agree among themselves on a comprehensive tenancy exchange system. Some London boroughs have rudimentary provision in their own areas for tenants to exchange and for lists to be provided for tenants if they want to move, with a view to minimising under-occupation as well as giving the tenants the kind of accommodation they want in the places where they need it. Why not extend the scheme to the whole of London, so that if, for instance, somebody wants to move from Bromley to Redbridge or Haringey, proper lists of the accommodation offered by tenants in each area would be available and tenants could be put in touch with each other and thus enabled to make much better use of the accommodation which the local authorities already possess? I believe that this idea could be very simply implemented on a computer system which would give virtually immediate information to the tenants wishing to exchange, at minimum cost. It might even be possible to use the computer system which is used for a rather similar application—that of job banks, where one has to compare the qualifications of an application for a job with the needs of the employer who is asking for staff. I believe that the London job bank system has some spare capacity and that might be used by local authorities for this purpose.
My Lords, those are six practical suggestions which I believe would go some way towards solving the problems which the noble Baroness, Lady Young, and I, and, indeed, the noble Lord, Lord Robbins, believe demand the attention of the House. I conclude by agreeing most heartily with the final sentiment which the noble Baroness expressed: let us consider the individual not the doctrine and let us finally end these sterile disputes across the Floor of the House and consider what is best for the tenants.
§ 5.57 p.m.
§ Lord BALERNO
My Lords, with one exception, with which I shall deal later, I do not propose to follow the arguments 274 of the noble Lord, Lord Avebury. Indeed, I found them somewhat involved and very much to be contrasted with the excellent clarity of the disquisition on the law of supply and demand given by the noble Lord, Lord Robbins. I was particularly struck by the San Francisco illustration.
My Lords, my intention is to deal with the student problems arising from the workings of this Act as they have come into effect and as they can be seen at the present time. This Act got off to a very bad start. It was literally rushed through Parliament, the greater part of it during a period when Parliamentary Papers were not being printed; and, as my noble friend Baroness Young has said, while it came into effect in the second week of August, it was a matter of months before printed copies were available for the lawyers or the public. Furthermore, it came into effect at the start of the holidays. Very little publicity was given to the Act in the Press. Confusion was confounded by your Lordships. I expect that your Lordships will recollect that we passed an Amendment excluding students from the scope of the main purpose of the Act. I suppose that we can take it as flattering to ourselves that this Amendment received a significant amount of publicity from the Press, whereas the Amendment subsequently passed in another place restoring the inclusion of students did not receive the same publicity. This led a number of owners of furnished accommodation to let their flat as usual, so that, although our Amendment was not successful, it did enable some students to rent furnished accommodation which would not otherwise have been available to them.
The student accommodation problem will also in some degree have been mitigated by the fact that there has been a decline in the market value of the type of flats and houses in question. This was largely due to many owners being so fearful of the terms of the Act that they put their property on the market. This I have checked and it is true. Even though the advertisements were small, they were there in the papers and they were counted. This is not landladies' gossip, as the noble Lord, Lord Avebury, has hinted. Most universities have a director of student accommodation or some such office as that. These people are qualified graduates whose job it is to make a close study of 275 the problems of accommodating students, and their information is available for those who ask for it. I am only speaking from knowledge of the eight Scottish universities.
My Lords, although the Act does not alter the fixing of a rent, the publicity given to the rent officer has frightened many landlords out of the market. When the rent is registered for three years, at the current rate of inflation, it makes a most difficult proposition for any landlord. The remaining owners who have to rent out their furnished flats are now looking very closely at their prospective tenants. Such owners seek final year students, especially those from overseas, for they are really only willing to rent until such time as they can get a proper value for their property, which in a year or two will most certainly sell at a much higher figure than they could get at present. In this connection, landlords are naturally wary of letting to students since, as a class of people, they know far more than most other tenants about their rights and the law. It is no exaggeration to say that, come next autumn, the vast majority of flats available for letting will be those owned by persons intending to retire to them at the termination of their present employment. By then it will be almost impossible for first or second year undergraduates to become tenants of furnished flats.
There is one point on which I should particularly like elucidation by the Government. The new rent allowance system in Sections 11 and 12 of the Act seems to me to be of no help at all to students, as it has worked on an assumed rent derived by the local authority. If the assumed rent is a lot less than the actual rent the students will soon realise that if they go to the rent officer then they will have to pay only a rent similar to the assumed rent. These two sections have exactly the same effect as in the case of people being led up the garden path—in this respect one that goes round in a circle.
Returning to the problem of the acute shortage of accommodation for students, there is, I think, one rather narrow way round, and perhaps the noble Baroness when she replies may care to make a comment on its legality. The trick is for the universities themselves to rent 276 furnished flats and then to sub-let them to individual students by name. A vary tentative start has been made on this—no names, no pack drill—and it is too soon to predict the extent to which this may ease the problem, which is certainly not helped by those students who, rightly or wrongly, refuse to pay the economic rent occasioned by such a procedure.
I can speak only for the Scottish universities. The public seem to think that the universities have a duty to provide residential accommodation for students, just as they are now expected to provide day nurseries for the children of staff and students. Yet support for this idea by the State is exiguous in the extreme, and the only way that the universities can provide accommodation is by borrowing money and by refunding from the charge made to students. When money was cheap this could just about be made to work, especially where it was eked out by some private donations— where the pump was primed by some such means as that. Now this is not possible. The new universities are especially hard hit. Recently, Heriot-Watt University has had to turn down an offer of nearly half a million pounds given for the construction of a hall of residence for 150 students—that was the condition of the gift. The cost of such a building is now about £1 million, and on the half a million pounds that the university would have to borrow there would be an interest charge of something of the order of £70,000 to £80,000 a year, requiring a rent from each student occupier of around £10 per place per week. That would be for the accommodation only. The costs of heating, servicing and lighting the building would also have to be paid for. In those circumstances, and despite taking in this gift, the economic charge to students would have to be something of the order of £17 or £18 per week per student, and that without—to use the English word—amortisation of the capital.
The prime functions of a university are to provide education and to conduct research, and so to advance learning. Inflation is eroding the academic work. For lack of cash posts, when they become vacant, are not being filled. Money directed to student accommodation can only be at the expense of sound learning. I entirely agree with the word my noble 277 friend Lady Young has used in this connection—there is a crisis here, and it is a crisis of the first magnitude. "Crisis" is not too strong a word. With the rise in the general standard of living, with the fantastic rise in the wages of certain classes of our society, it surely is the duty of this or of any Government to make provision for the adequate housing of students at our universities. This Act does just the opposite—it makes the position more difficult. The noble Lord, Lord Robbins, asked why we tolerate the situation. I re-echo that question. I have one last Parthian shot for the noble Baroness to deal with when she replies. It is a question which interests me greatly. I wish to know whether the Government have received any representations, officially or otherwise, about the workings of this Act from the National Union of Students.
§ 6.6 p.m.
My Lords, I have listened with particular interest to the debate today because it has assumed a rather different aspect from the kind of debates I have heard since the 1915 Act was passed, with the constant attack on the whole principle of attempts to protect tenants. I am glad that that has happened. I could not quite understand what the noble Baroness was driving at when she put down the Unstarred Question. Now, of course, I realise that what she is saying is that the Act is very good, because she has not criticised the Act itself, but that there are some features of it which might be reconsidered, and on that nobody with any reasonable approach—I am not saying that her arguments are right—would object to a reconsideration of some of the points involved.
I do not disagree to a reconsideration of the student question, which I am quite certain the Government would do in the light both of what has been said and of their own knowledge. But I am interested that the noble Lord, Lord Balerno, was the only one in the course of the debate who criticised the action of the Government in introducing this measure. He was wrong, if I may say so with the greatest respect. A Party which goes into an Election saying it is going to do something is expected to do it. The Opposition may grouse about what is not done, but only when the Government's Election Manifesto has said that they are going to do it. The Opposition cannot be 278 heard to grumble about the fact that a Government acted as speedily as possible, particularly in view of the peculiar circumstances which existed at that time, by introducing legislation which they adumbrated in their Election programme. I do not see that there is any answer to that. The Government were placed in a position where they had promised to do this very thing—which they did.
Obviously, there may be slight errors. These occur in every Act that has ever been passed. I have found it so in the course of my legal experience. If any noble Lord can show me an Act where slight errors have not occurred, I shall be happy to see it. It will be a new experience for me to read an Act of that description. The Government certainly did what the public knew they were going to do. Was that right or wrong? The public voted in favour of it; the public wanted furnished tenancies to be protected and they said so by returning the Government. The Government said, "Thank you. You have accepted our policy. We will proceed with it." The noble Lord cannot complain about that, or at least ought not to do so.
It is all very well for us to talk about these exceptional cases. Of course, there are exceptional cases. The truth is that millions of people in this country have benefited—not in an unfair way at all— in consequence of the Rents Acts that have been put into force. I can remember the debates in the other place, which I heard time after time. A spirit of gloom was brought into the whole proceedings —not so, I am glad to see, by the noble Baroness today; though she was a little gloomy about certain aspects. The things the opponents used to say in the course of those debates were enough to shatter the nerves of the most strongnerved person: "Ruin stares us in the face! The landlords will be ruined; they will be going round cap in hand begging for some kind of help!" It is all nonsense. We know that the result of the Acts has been that millions of people have been protected in their tenancies, people who would otherwise have been thrown on to the streets. For what purpose? For the purpose of speculative actions by—well, not all landlords, but perhaps a minority of them. Certainly we see this kind of thing happening today with certain landlords.
279 My Lords, what is wrong with the Act itself? Let us put aside for the moment consideration of these exceptional cases. The noble Lord, Lord Avebury, is a very experienced debater. I hope that he will not mind my saying so, but I think that he showed his skill when he introduced other methods of dealing with the situation which (I think he will agree with me) are not entirely relevant. They are somewhat relevant; but not entirely so to the point that we are discussing today. We are discussing this Act. Some noble Lords may not know what he has in mind. I know; and in many respects I agree with him. But having said what I have just said, it would not do for me to comment on the subjects that he has introduced.
In effect, this Act states: If you are a landlord of furnished apartments do not charge an unfair rent. What is wrong with that? You are entitled to go to an independent person, the rent officer. He is not a vampire waiting for the blood of landlords; he has much to put up with; but certainly the rent officer is not a vindictive man, a fellow who is determined that one side or the other will be pushed out of existence. He is asked to assess a fair rent. If the parties are not satisfied they may go to a rent tribunal. I feel sure that some of the rent tribunals have Conservatives among their members. I believe so, I have never asked; but I think it probable. Therefore, a person who has a property will get a fair rent from the letting of that property. If he does not want a fair rent, what does he want? He wants to deprive the people of this country of accommodation in order that he may make some kind of speculative deal which will serve to increase the terrible inflation that is already going on.
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I am sorry to interrupt. I cannot follow the logic of this argument. What does the noble Lord think is going to happen to the houses from which these people get "kicked out"? Are they to stay empty? Surely that will not suit the landlord.
My Lords, the noble Lord had better not goad me. I did not want to enter into discussion on this particular topic; but if the House really 280 wants to know, I think that some landlords will be happy when tenants are "kicked out" because the landlords will then try to sell in the highest market. They will wait for someone to purchase the house or parts of the house. People in a position to purchase—and only such people—will be able to live in the house and use as much space as they can; whereas the people in need will be sitting on the streets. We do not want that to happen; and that is why we introduced this Act. We do not want the affluent oil people coming here and taking over elaborate apartments. What we want is that the people of this country should have somewhere to live. So far as the landlord is concerned, if he gets a fail rent, it means that he gets a fair return on his money.
§ Lord BURNHAM
My Lords, can the noble Lord explain what he means by "fair rent"? It is not contained in the Act. I have never been able to discover what it was.
My Lords, I am not an assessor. The rent officers are supposed to be people who have knowledge of what is a fair or reasonable rent in a particular area. I do not know the exact scientific way or the mathematical way by which they come to their conclusions. But I am sure of this: if the tenant or the landlord is not satisfied, the rent officers have to satisfy the tribunal that it is a fair rent. What more can a person want than a fair rent for his property? I can never understand the argument that is put against that. If a rent of a certain amount were specified, it would be a different matter. I was not in the House at the time that the 1915 Rent Act was considered, but I remember that my first case before a county court judge over fifty years ago was on that particular Rent Act. At that time there were other problems to consider. People used to buy the house at a cheaper rate; it would go up in value and they wanted increased values for renting. It is not quite the same kind of thing today. Today properties are in the hands of individuals who should be entitled only to a fair rent for the property that they own.
The consumer has to be protected by not putting upon him the additional amount which the speculator wants. We 281 have this problem in the international sense at present. Just think of the oil situation. It is the same kind of problem, but it is local, it is social error. The blackmailers who try to drive us into a situation where we cannot get the oil commodity are setting an example to people here in respect of letting houses. I would not say that people here could possibly be quite as bad, although they like to charge as much rent as they can get even though it would be an unfair rent. How could this noble House agree to anything of that nature? We have now reached a situation where a furnished tenant must also be protected, not because anyone takes a vicious line against the landlord, but because we think that unless that is done people will have no homes.
Then we come to statistics. I am sure that many among your Lordships know how far statistics are reliable—sometimes they are, sometimes they are not. We have had only six months since the passing of the Act and the eggheads have decided in that six months that they can tell us why there is a great shortage—for example, that people are not advertising as much. That is a silly kind of argument. A distinguished newspaper in this country published an article which said that people are not advertising as much. Of course they would like more advertisements, but if people have accommodation and have not been forced to change because their rent is going up or an exorbitant rent is being asked, they will not advertise for new accommodation. I can understand why the Evening Standard complains, but there is no logic in it so far as the tenants are concerned. That does not show that accommodation is not being made available; on the contrary, in my view it shows that accommodation has been made available and consequently people are not advertising for other accommodation.
§ Lord BROUGHAM and VAUX
My Lords, will the noble Lord forgive me if I contradict him completely? A cousin of my wife's has just come down from Oxford. He queued for hours trying to get a flat but without success. There are just not enough flats for undergraduates who have come down from Oxford.
I agree, my Lords, but the removal of protection will not help him. Once he gets somewhere to live he will be protected, whereas otherwise he might be called upon to pay twice or three times the amount of the fair rent. Remember what I said a moment ago—there are other methods of dealing with it. I should have liked to pursue the course which the noble Lord, Lord Avebury, followed—but I do not want to go into that. Of course, there are other ways, and the Government want as much rented property throughout the country as they possibly can. I would advise the noble Lord to talk to some of the housing authorities, some of the local authorities; ask them what is being done and force them to do more.
§ Baroness YOUNG
My Lords, I am sorry to interrupt the noble Lord, but he says that local authorities ought to do more. Has he any evidence of any housing authority in the country which is prepared to let a house or a flat to a young couple on getting married or to a single young person? I have none.
My Lords, the noble Baroness has no evidence. She has made inquiries, I have not, so consequently I cannot give a definite answer to the point she has made. But what does the noble Baroness want? I want the local authorities to make more accommodation available. I want them to take over houses which are empty. I did not go more fully into that, because as a Member of another place I should not have been allowed to do so.
§ Baroness YOUNG
My Lords, may I pursue this point, because I believe it to be a very important matter of principle? If there are no more private landlords left and fewer local authorities are prepared to provide accommodation for newly married couples and young people, there will be nowhere for them to go, and like the friend of my noble friend they will be on the streets indefinitely until they find a place in a council house. This is a very serious matter.
My Lords, the noble Baroness is doing so. She is saying that as long as this Act or similar Acts exist, the private landlords are going to stick with their places empty. You cannot have them both empty and full. That being the case, the noble Baroness is now arguing that they must charge an unfair rent in order to be able to let their places. That is not the kind of argument we can accept. Let us do whatever we can for the local councils and the housing organisations.
Today there has been an endorsement, because there has been no argument against the action taken by the Government in introducing this measure. There are difficulties which it might be necessary to consider. Of course there are difficulties and exceptions arise. Let me me say on behalf of my colleagues in the legal profession, who are always attacked from both sides of the House, that what I am saying now is not in our best interests in a professional sense, as many noble Lords on the other side and many on this side will understand. But speaking quite openly, it is not a question of supporting landlords or supporting tenants. The point now is to give publicity to the Act. This is what I would ask in exchange for what the noble Baroness wants from the Government. Let her give an undertaking that her Party will join the Government in giving as much publicity as possible so that tenants and landlords will know where they are. It is a good Act and I am sure that my noble friend will, in her customary way, reply in a reasonable manner, perhaps not entirely to the satisfaction of the other side but coming some way towards it. Let us do what was proposed here by one or two people. It is true that there has not been enough publicity. I know this because time after time I have advocated the production of pamphlets so that the man in the street will know where he is. Let the Opposition help but do not let them go out and attack, because in doing this they are ruining the possibilities created by what is a first class measure.
§ 6.29 p.m.
§ The Earl of KINNOULL
My Lords, along with every other speaker I should like to add my thanks to my noble friend Lady Young, not only for raising this important subject of the 1974 Rent Act, 284 and indeed illustrating the very disturbing effect it is having on the supply of furnished accommodation, but also for the clarity and the manner in which she has done so. My noble friend is always very conscientious and thorough whenever she introduces a debate in this House. I am sad that other speakers who followed her were not quite so thorough. Surely the basis of this debate is whether or not the supply of furnished accommodation available to young couples, to old people and to people in transient jobs is declining fast. I believe that this is the basis of this debate.
I was very sad that the noble Lord, Lord Avebury, seemed totally to disregard my noble friend's remarks without a trace of evidence. I hope that the noble Baroness, Lady Birk, will give some reward to my noble friend for raising this Question and for the fact that she has a well-prepared brief, and will be able to reassure the House and others who are interested that her Department are watching the position carefully, have available facts and figures which are so essential in this matter and indeed are contemplating action upon it.
Before coming to the House today, I tried to obtain evidence to support my noble friend's arguments. Individually, without exception, if one talks to owners of property and indeed to their professional advisers, the firm answer is that the ambit of the Rent Act 1974 rules out most cases of future letting. If one talks to would-be tenants—and there is a growing list of them—the answer, also quite firmly, is that there is a severe and growing shortage of rented accommodation throughout the country, particularly in London and other large cities. If one looks to local authorities, one finds they are not able to offer adequate alternative solutions. Therefore, in some ways the availability of furnished accommodation today compared with, say, six months ago when this Act was passed, is now a mere trickle. That is the case for our discussion tonight.
My Lords, will the noble Earl permit me to ask him this? Might that not be because the people who are already in accommodation have not been turned out?
§ The Earl of KINNOULL
My Lords, that is one possibility, but I am looking 285 at the case of new tenants or would-be tenants who are without accommodation today.
§ The Earl of KINNOULL
No, my Lords, that is not so. If I may continue—the noble Lord has had his say and, if I might say so, he always argues with great persuasiveness even though he sometimes goes beyond the point—I believe that a great deal of hardship is being suffered today not only by students but by young and old couples, as has been mentioned, and by many of those in transient jobs. If one reads reports in the Press, as I am sure all those who have taken part in our debate today will have done, these occur almost every day and I cannot believe that all of them are wrong, no matter what other noble Lords have said.
When the noble Baroness, Lady Birk, replies, I hope she will not be tempted to say that her Department do not yet have sufficient evidence to show how the Act is working and what effects it is having. If that were her answer it would be very distressing and disappointing to many people, both inside and outside your Lordships' House. It would lead one to ask how the Department gathers evidence: is it from annual returns or half-yearly returns? From whom do the Department draw their evidence? Do they go out to see what is available in the market and what areas are worst hit? The noble Lord opposite shakes his head, but I believe we are now facing a new housing crisis, perhaps the worst for many decades.
The signs are there. The number of new private housing starts represents a mere trickle of the former number, and local authority housing is suffering from a cut-back in support from the Government. Indeed, I understand that the other day a circular was sent to local authorities by the Government, requesting cutbacks on management and on repairs to existing stock. One sees the freezing up of rented accommodation in the private sector; one sees the increase in the numbers of squatters, and this is a very disturbing sign. One also sees the local authority housing lists getting longer and longer. To meet this crisis I believe it to 286 be essential that the Department represented by the noble Baroness should have accessible and up-to-date information. My suspicion is that the present system of information gathering is not geared to the problems we face. I would hope that a standing committee might be set up which could monitor all the information required, such as has been mentioned in this debate tonight. It is essential to know the numbers of those who are waiting to get into furnished accommodation. I hope that the noble Baroness will be able to give us some figures on this aspect.
Like my noble friend Lady Young, I should like to offer three thoughts on how amendments to the Act might be made. The first is possibly a major one and the other two are comparatively minor. The first, which could attract a pool of some 100,000 new houses and some 200,000 houses which are waiting for perhaps a period of one or two years for refurbishing, is that this great pool of houses should be let on a fixed term basis either to the Housing Corporation or to local authorities. This would offer an immediate supply of accommodation of a temporary kind which is so urgently needed. A variation of this—and perhaps the noble Baroness will comment on it when she replies—is the possibility that the landlord and the tenant could contract out of the provisions of the Act, with the consent of the court, as is done with business rents at present.
The second point I should like to put to the noble Baroness—and I appreciate that it is a minor one which I mentioned to her some time ago—concerns the owners of houses which are the subject of mortgages. When the owner goes abroad and wants to rent the house, the mortgagee is faced with twin problems. First, in the event of the death of the owner or of the mortgagee being forced to foreclose, the mortgagee would not automatically get vacant possession of the property. This is important and I should be grateful if the noble Baroness could tell us what is happening. This particularly affects building societies.
The final point which I should like to raise, which again is perhaps a minor one in some respects but is very important in others, concerns the case of those who have houses which go with jobs. Schoolmasters are among those affected by this situation. I believe that the Act partly 287 covers this situation, but there is a great deal of doubt as to whether a schoolmaster who buys a house and rents it during term-time, and then wishes to come back and get possession of his house during the holidays is able to do so. Those are some suggestions which, if accepted, might help to alleviate the difficulty which at present hangs over the furnished accommodation market.
In conclusion, I believe that my noble friend was right to ask this Question today. I am sure that in the years to come the 1974 Rent Act, as it stands at present, will go down in history—perhaps like many others—as a piece of housing legislation which caused more harm and hardship to the very people Parliament thought it was protecting. The market has reacted swiftly and the result is a disaster for those who, for one reason or another, have no opportunity to purchase; and it is a disaster not only because the market has dried up, but because those who need housing to rent now have no alternative. The solution lies with the Government, as does the responsibility, and I hope that the noble Baroness, Lady Birk, will not duck that responsibility tonight.
§ 6.40 p.m
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I shall try and resist the temptation to turn this into a general housing debate, although a number of the points that have already been raised have very much tended in that direction. I hope that if it had been a general housing debate there would have been a few more noble Lords in the Chamber to show interest in what to me is a very important subject. Let us start from the proposition—and I believe I will carry even the noble Lord, Lord Janner, with me on this—that we all genuinely want to see people housed. What we have to accept is that there is a good deal of genuine disagreement about the best way to do it. This is unfortunate. It is a pity housing has to be the subject of political argument and becomes a political football. I totally accept, however, the genuineness of those whose ideas differ from my own.
I will make one provocative remark right at the beginning and then try not to 288 be provocative again. I go along with my noble friend Lord Kinnoull, and I believe that this Act is proving to be a sledge hammer to crack a nut. But it is not only cracking the nut, it is showing signs of destroying the workbench on which we are trying to operate. Despite what was said by the noble Lord, Lord Avebury, it is relevant and it is true— and I believe Mr. Crosland said it—that there is, broadly speaking, the same balance between housing and people now as there was before the war when there were plenty of houses available at prices people could afford. This is an important general background.
I need not do more than thank my noble friend Lord Kinnoull who, much more eloquently than I could, emphasised again that there is a case to answer; and, of course, I agree with my noble friend Lady Young that there is a problem. Everybody who has worked and talked to people in this field has the same impression. It is difficult to get figures, but I cannot believe the people working in the university towns are completely wrong in the feelings that they have. I was in touch today with the Society for Co-operative Dwellings. They wrote to me and said that they accepted that this Act would inevitably lead to a shrinking of the stock of privately-rented furnished housing. They did not say it had happened, but they accepted it would happen. It is a little unfair of the noble Lord, Lord Avebury, to say that one cannot suggest this is the case unless one can produce figures to prove it. I suggest the right course for me to take is to throw this back on the noble Baroness, and ask whether she can produce figures to prove our feelings are wrong. I am sure she cannot.
§ Lord AVEBURY
My Lords, may I interrupt? What I said in fact was that the supplies of privately-rented accommodation have been declining since 1957. The legislation enacted by Parliament had very little effect on the rate of that decline; in particular, after the 1965 Rent Act was passed in relation to unfurnished properties the decrease slowed up for a period up to the 1971 Census. The evidence from the past was that legislation granting security of tenure to tenants had little effect on the supply of accommodation.
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I shall not get into a long statistical argument with the noble Lord, Lord Avebury, partly because I have a feeling he might win in any case. The impression I have—an impression noble Lords have confirmed this evening —is that they are talking about the period since the beginning of last autumn. That is a short time scale. All agree that rented accommodation has quickly become much more difficult to find over the past few months.
Noble Lords will have seen articles in the Observer and The Times newspapers. These articles have suggested that there are large numbers of houses unoccupied. They further make the rather frightening assertion that a great number of these houses belong to the local authorities. This is a bad reason for suggesting that the local authorities should be given more houses to manage; all the evidence is that they are making an exceedingly poor job of managing the houses they already have. Incidentally, there is no security of tenure issue involved at all with local authority housing. I hope that the noble Baroness, Lady Birk, will be able to tell us that serious consideration is being given to the various proposals which have been put forward for making it possible for these empty houses to be occupied on a short-term basis. This is the only point I want to put to her. I do not think there is any point in elaborating on the way in which this can be done. It is difficult for an outside person to suggest it, but I believe the noble Lord, Lord Goodman, when he gave his address on housing on television, simply said that it is ridiculous that here we are in a country with many people unhoused and a great many empty houses. I can see the fear: if one puts people into these houses then those occupants become the responsibility of a local authority or a landlord for rehousing them when the houses are renovated or redeveloped.
I say this with the greatest temerity in the presence of the noble Lord, Lord Robbins, but is there not an analogy here with the building society movement? There must have been a great deal of shaking of heads in the old days when the building societies started. The economists must have thought that it was unsound to borrow short and lend long. The fact remains that it would 290 appear, if one has a large enough area in which one is operating, that this works itself out on a continuous turnover basis. Is not this the way that we should look at these sub-standard houses? Is it not better for people to be living in houses with leaking windows or roofs rather than be scattered around with broken families and some people living in the streets? This is the scale of the destitution that we are trying to deal with here.
I hope that we shall not get into a Party political argument about this. It does not seem to me that any of the recent Governments have had much to be proud about in their housing record for a great many years. I hope very much indeed that the noble Baroness will be able to say that she will take note of what my noble friend has said and, in particular, I hope she will be able to demonstrate that this Government really care about the housing of the many homeless people, particularly in London. I hope that she will tell us that the most careful consideration will be given to some of the proposals which have recently been put forward which might manage to marry the number of homeless people to the number of available houses.
§ 6.48 p.m.
§ The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
My Lords, I must first apologise in advance if I sound as though I am speaking through my nose, as I have a heavy cold. I will try to speak as clearly as I possibly can. Although there have not been many speakers to this Unstarred Question of the noble Baroness, Lady Young, nevertheless they have all made so many points that if they had been spread over 20 speakers there would still have been just as much to which to reply. I will reply to as many points as I can manage to deal with but if, at the end of the debate, I have omitted to refer to any points I can promise noble Lords that I will be in touch with them.
I think the noble Baroness, Lady Young, put her case in an extremely reasonable and, in many respects, a very constructive manner. The fact that I think it was put prematurely and is perhaps inopportune at this moment is a different point. I was also extremely glad 291 to hear her assert that she was not asking for the repeal of the Act because she appreciated that, once people had security, it would be so wrong to take it away from them. This fact is extremely important because, when it is reported, it means that people will not feel that there will be any change pressured in this way by either political Party. Some of the noble Baroness's criticisms of the Act were technical and where this is so I will deal with them in writing.
I entirely agree with the noble Baroness about an explanatory booklet or leaflet. As we all know, there were difficult printing problems when the Bill was being discussed and when the Act came into being. Some emergency leaflets were got out immediately, and the Department is now in the process of bringing out some further explanatory leaflets in question-and-answer form. But I still must say—although I am certain there must be reasons for the delay, which I shall no doubt be told later today or tomorrow—I find it difficult to explain or even defend it, because in this instance I agree with what has been said. The noble Lord, Lord Avebury, and the noble Lord, Lord Janner, among others, referred to the point that it is absolutely essential that when we have complicated pieces of legislation, and legislation which affects so strongly the ordinary person and is not just a sort of field for lawyers, the relevant information should be available as quickly and as clearly as possible. For what it is worth, I will undertake to ensure that this matter is certainly expedited. I hope noble Lords will forgive me if I say that the roaming around the subject was so great that at some point in the debate I wondered whether I had taken a jump in time and was dealing with the Housing Rents and Subsidies Bill which we shall in fact have before us on Monday next. Never mind: I felt I learned a lot myself from the debate.
The main objective of the Act, if I may return to that, was quite simple. It was to extend to those living in privately rented furnished accommodation the indefinite security of tenure and the right to have a fair rent registered which were already enjoyed by unfurnished tenants. It was not a sudden revolution in housing; it was to include an area which had previously been omitted. The Act also 292 contains special exemptions for accommodation let by resident landlords and by specified eductional institutions. This point was touched on by the noble Lord, Lord Balerno, but as I shall be talking about students particularly I will return to that point later. It also gives certainty to absent owner-occupiers, and people who own homes which they intend to use upon their retirement, that possession can be recovered for their own use. The interests of the holiday landlord who lets in the winter are likewise protected. The important point is that over 80 per cent. of the 764,000 furnished tenants in the country have acquired security of tenure under this Act.
The lack of security in this sector of the housing market was a major and increasing cause of homelessness, particularly in housing stress areas. The one point I must resist is the attitude which has been stated or implied by several noble Lords that a tremendous increase in homelessness has been brought about by what is in fact a small piece of legislation which has not made much of a dent either way. But the basis of it is that, because of the lack of security, occupiers of furnished lettings too often had to pay high rents for poor accommodation; and tenants applying to the rent tribunal for a reasonable rent ran the risk that the landlord would serve a notice to quit. Therefore, they were caught in a sort of Catch-22. Before the Act, tenants of furnished accommodation could be served with a notice to quit at any moment and they lived under the appalling threat of being literally thrown out on to the street. I am sorry to spell this out in this way because I am aware that all noble Lords who have spoken are extremely well informed on the Act. It is one thing to go through it and to look at it, even in a conscientious and detailed way; I still think we ought to come back to looking at what was happening before and at the social consequences of the Act and what it was intended to do.
Nor do I think it should be assumed, as some noble Lords appear to do, that furnished lettings are occupied mainly by transient groups who require only temporary accommodation and do not need security of tenure. On the contrary, most furnished lettings are occupied by people who need permanent homes. Until 293 now, although they needed permanent homes they have never had permanency of tenure. The Act has removed the threat of eviction which constantly hung over the heads of young couples, families with children, and pensioners—not just the migrant population. In fact, they are migrant but not by choice. My noble friend Lord Janner pointed out this fact and emphasised it extremely well. They now have indefinite security of tenure and are able to apply to the rent officer for the registration of a fair rent, with a right of appeal to the rent assessment committee if they consider the officer's assessment to be too high. This I should have thought is surely something to celebrate, not decry, for the Act has achieved its main purpose and remedied an obvious and long overdue social injustice.
The sharp fall in evictions from furnished accommodation—I hope this will be one answer to the question that the noble Earl, Lord Kinnoull, asked me concerning evidence about the effect of the Act; this is one of the effects of which we have evidence—which has taken place since the Act was passed is evidence of its success. On this point—
§ The Earl of KINNOULL
My Lords, with respect to the noble Baroness, there would hardly be an increase in evictions when this Act was passed.
§ Baroness BIRK
My Lords, there has been a very sharp fall in evictions if we compare figures for the months before this Act came into being with the latest figures we have. We are now working on figures for the current period and will be able to produce them. As my noble friend Lord Janner pointed out, one of the reasons why there is now not so much mobility in tenure is that people have far greater security and are now able to stay where they are in furnished rooms, whereas before they were not able to do so. I thought that from a different angle the noble Lord, Lord Robbins, illustrated this point when he referred to his friend who had acquired accommodation in this country. I think the noble Lord said 294 that his friend had to give evidence, or get a company to say, that he would (as the noble Lord put it) "evacuate" the flat when he was required to do so. This point perhaps concerns a higher income or more comfortable group. Eviction is exactly the same for people who do not have companies to speak up for them. Indeed, if they are forced to leave their accommodation they have nowhere else to go, whereas I hope that the friend of the noble Lord, Lord Robbins, has.
However, the Act must also be seen as part of the wider approach to housing which the Government propose. The housing problems of this country are not caused by one piece of legislation, nor by this Act, nor by almost any other Act. It is a far deeper and wider subject than that, but I promise noble Lords that I will not lecture them about it tonight. To lay the blame for homelessness at the door of the 1974 Rent Act is prejudiced, unrealistic and, frankly, quite ridiculous. There are many facets to this problem. It is an economic, social and human problem.
§ Baroness YOUNG
My Lords, I apologise for interrupting the noble Baroness, but in such a serious matter it would be a mistake if we were to misunderstand each other. I never said that the 1974 Rent Act was the sole cause of homelessness. I made it quite clear several times in my speech that it has been a contributory cause.
§ Baroness BIRK
My Lords, I accept that the noble Baroness did not say that the 1974 Rent Act was the sole cause of homelessness, and I did not say that it was the sole cause, either. I said that it was a blame for homelessness. I was replying not only to the noble Baroness but also to many of her friends who have spoken. I think that anybody listening to this debate who did not know what it was about would have thought that what we were discussing was the cause of homelessness in this country, and it was to that that I was referring. Unfortunately, one of the problems is that we have lived with a severe housing shortage for a very long time. Indeed, one of the problems is that because of it thousands of people have existed rather than lived. With so many people in need of accommodation we cannot allow homes to be treated merely as items of monetary value.
295 Although I quite appreciate the difference of attitude and philosophy which divides us over this question, that is why the Government believe that landlords cannot be permitted to let their property at one moment and, at the next, to sell it with the sole aim of maximising profit, if this means disregarding the misery caused to tenants who can never be sure when they might be homeless. That is why the Rent Act is so important. Quite frankly, I must say that underlying most of the arguments—and many of them are reasonable and have been very reasonably put—lies this very strong difference of opinion and approach. This is a political and social chasm, and it goes further and deeper than this particular Act. By giving security of tenure to furnished tenants the Act has ensured continuity in the supply of accommodation for those tenants. I am not pretending that it is increasing the amount of accommodation, since landlords will no longer be able to evict their tenants and sell their property when house prices rise again.
The noble Baroness suggested in one of the points she made that the Act should be amended, and, as I understand it, the way she suggested is that in certain conditions landlords could grant fixed term tenancies. That is not acceptable to the Government because once again it is contrary to the purpose of the Act, namely, to give security of tenure to tenants of furnished accommodation and to relieve them of the fear of eviction. To turn back on that would undermine one of the main purposes of the Act. What we are sure that the Rent Act has achieved the main purposes of the Act. While we about security, frankly it will not be possible for some time to reach conclusions about its detailed operation—or to estimate its effects in any reliable way—as I hope the noble Earl, Lord Kinnoull, will appreciate, upon the supply of furnished accommodation.
Comparisons between the supply situation before and after the Act are difficult to make, because of the dearth of recent detailed information on the stock of rented accommodation. We have hardly ever had good enough statistics on this point. The principal source of statistics on changes in the housing field must always be the Census. However—and I hope the noble Earl will feel cheered by this— 296 my Department is monitoring the situation closely and is also reviewing possible interim means of securing information upon the effects of the Act. Also, it is intended to repeat the survey of Press advertisements for rented accommodation which was carried out for the Francis Committee. Furthermore, my Department has begun to assemble data on people becoming homeless in England and Wales, which again may throw some light on the effects of the Act. There have, as noble Lords have not omitted to bring to my attention—
§ Lord AVEBURY
My Lords, I apologise for interrupting, but it is a very interesting point which the noble Baroness has made that the Department is to assemble data on people becoming homeless. Does this mean that the noble Baroness is asking local authorities to provide her with that information? I cannot imagine how the Department would be able to do it centrally.
§ Baroness BIRK
No, my Lords, the Department would not be able to do it centrally. The Department would have to do it through local authorities, various housing organisations and welfare organisations. It means a comprehensive assembly of material which can be made only by the Department. However, as I was saying, as noble Lords have not omitted to bring to my attention, there have been many allegations that the Rent Act has caused a serious reduction in the number of private furnished lettings which are available, because landlords who were apprehensive of the provisions of the Act have withdrawn accommodation from the market. There is some indication that the number of vacancies for furnished lettings advertised in the Press has fallen since the Act came into operation. However, as was indicated in the to-ing and fro-ing which went on with my noble friend Lord Janner, and as he pointed out several times, the much greater stability in the furnished sector which has resulted from the extension of security of tenure will itself have led to a reduction in the number of vacancies occurring.
Also, it is true, as I think several noble Lords have pointed out—although not quite in this way since they talked about the effects of the Act and I do not think many of them will agree with what I shall say—the inaccurate and alarmist accounts 297 of the effects of the Act may have caused some landlords, particularly resident landlords, to withhold accommodation. It is quite true that the unfortunate delay in the publication of the Act, which caused tremendous confusion, must have exacerbated this situation. However, we believe that any such effects will prove to be temporary and will disappear as the true nature of the Act becomes understood, and as people begin to understand what their rights are and, especially in the case of owner-occupiers and resident landlords, that many of them have nothing to fear, which at the moment they are still concerned about.
§ Baroness YOUNG
My Lords, I am sorry to interrupt the noble Baroness once again, but she has just made a very important point. She has said that in many circumstances the resident landlord has nothing to fear. The point about one of the amendments to this Act which I have proposed is that the resident landlord has a great deal to fear, because if he or she gives a second fixed-term letting to a tenant that tenant has security of tenure. My proposal was simply to meet what I think is the point she is making—to eliminate that fear by not giving security, where the landlord is resident, to the second fixed-term letting. I wonder whether the noble Baroness would look at this point again?
§ Baroness BIRK
No, my Lords. What I said was that, as I understand it, many landlords have been worried about letting and have withdrawn accommodation for letting because they have not realised that, as owner-occupiers, they have rights to get back their accommodation, if they were letting their property during holidays or were wishing to come back to their house when they retired. Therefore they took fright, which is understandable because they did not know what the Act was about. They had not seen it and they did not understand it. Once they realise this, they will feel more relaxed about it and if they want to let their accommodation they will be able to do so.
On the point of fixed-term letting which I have covered already, it is true that it is unacceptable to the Government, because before the Act was introduced fixed-term tenancies were being used in order to evade security of tenure even 298 so far as unfurnished lettings were concerned. So long as the contract is made, and so long as notice is given in writing—the noble Baroness knows as well as I do, and she probably knows this even better than I do, because she is such an expert on these matters—the resident landlord is himself well protected.
But if she is asking us to do something which again puts the tenant at greater risk then I am sorry; the answer is, "No". This is what I mean when I speak about the difference in approach and in attitude, as well as in discussing the legal niceties of the Act. But as has been pointed out, when we are talking about the loss of rented dwellings—and I think the noble Lord, Lord Avebury, also made this point—the average loss has been running at about 125,000 a year during the past six or seven years. There is general agreement on the part of most housing experts that this trend is irreversible and has largely been caused by the great increase in owner-occupation, starting after the First World War, which has resulted in a much higher level of demand for houses and higher house prices, and thus considerable incentives to landlords to withdraw rented accommodation from the market and sell it.
There are also of course other contributing factors. There is the increase in the level of family incomes, particularly as a result of the growing number of working wives. I am personally convinced that in many cases, where people used to let rooms in their homes or part of their homes, wives who now go out to work find that they can earn money outside and do not have to let rooms in their own homes, so people do not want to continue to be landlords. I think this has had some effect, among other things, in areas where there are universities, on the supply of accommodation for students.
On this point, the noble Lord, Lord Avebury, put forward six interesting points, many of which were desirable objects but most of which were quite outside the scope of what we are discussing tonight, as I know he appreciates. Five of them would involve such massive expenditure that we could not possibly consider them, except as an exercise in futurology, at the present time. However, his suggestion of tenant exchange 299 is a very good one and should be encouraged. In fact, several local authorities have taken powers in local Acts to run exchange agencies at a minimal registration fee of 50p. I would certainly agree that this was a very good thing, and would do anything I could to encourage it and to see that my Department did so as well.
The regulation and control of the rented housing market has not caused the most drastic loss of rented accommodation—which was, I think, some 200,000 houses a year—between the years 1958 and 1968. This was during the period of the greatest decontrol and when, indeed— and I feel I really must mention this— a Conservative Government was in Office. The present Government certainly do not accept the contention that the Rent Act is causing the private rented sector to shrink as a valid argument for depriving the occupants of furnished lettings of full security of tenure.
Turning to the speech of the noble Lord, Lord Robbins, who many years ago rather unsuccessfuly tried to teach me economics—the failure was on my part and was not due to his teaching—I was once again entranced to hear him start by discussing the natural laws of supply and demand. With the greatest respect, I would put it to him that the objective was to give security of tenure. We are aware that there may be a certain temporary decline but we believe that this is outweighed by the advantages. Our service and the only acceptable landlords, view is that housing is essentially a social apart from where we get to a very much higher income group or to the resident landlord who lets off spare rooms in his own house, are the local authorities and housing associations.
I think we must look at the whole housing problem and the question of rented housing in a new light when we are concerned with different groups of people and their different needs, and with what can be done. The failure of the present system of private rented accommodation, so far as private landlords are concerned, is what is being discussed today, because for various reasons there is this decline, and it is quite clear that the people who are at the bottom end of the financial scale need different con- 300 cepts. This is what I think we are all trying to work out.
Even the Conservatives reached the conclusion that the private landlord can no longer be relied upon to meet this demand for rented accommodation, because the Tory Government's White Paper Widening the Choice: the Next Steps in Housing, which was issued in April 1973, said:The Government will continue to support improvement of the quality of private rented dwellings. But the decline in their number is unlikely to be reversed. The Government therefore proposes to widen the range and choice of rented accommodation by the expansion of the voluntary housing movement.This was the trend. Also, there was a second White Paper, Better Houses: the Next Priorities, of June 1973, which said:The Government hopes that existing landlords will co-operate in programmes of comprehensive improvement but some may prefer to dispose of their tenanted property; in other cases it may be desirable for the management or ownership of tenanted property to pass into new hands.That again is a realistic appraisal of the situation.
So in our view the long-term decline in the supply of privately rented accommodation—and I emphasise the words "long-term"—makes it especially important that we should continue with and increase our programme of social ownership. The Government have already taken steps to increase the supply of dwellings made available by local authorities and housing associations, and to encourage the transfer of privately rented dwellings into social ownership. In the current financial year we have allocated £125 million to the purchase of private rented property by local authorities, and the Housing Act 1974 includes measures designed to stimulate the provision of dwellings by the voluntary housing movement.
Most of the speakers today, including the noble Lord, Lord Strathcona and Mount Royal, and the noble Lord, Lord Avebury, mentioned the need for making the fullest use in the short term of any valuable housing. I am pleased to say that my honourable friend the Minister for Housing and Construction attaches great importance to this, and the ways in which this might be achieved are at present under consideration in my Department. However, this does not 301 mean any relaxation of the security which is embodied in the Rent Act.
We are also examining the part that the co-operative housing schemes can play in providing homes for occupational groups such as students, and the Society for Co-operative Dwellings recently completed a project at Lewisham—which I am sure will interest the noble Lord, Lord Balerno—for students and young single people, which shows the scope for further similar developments, and these we are anxious to encourage. We believe that not only the existing loss of accommodation in the private sector, but any additional loss which might result from the Rent Act, can more than be made up by the expansion of the sector in social ownership. But, of course, social ownership will have to take account of the needs of groups which find it specially difficult to obtain accommodation at present. This is the most tremendous problem at the present time. People with young children find it almost impossible to remain in furnished accommodation if they have no security of tenure.
Finally, I should like to mention the effects of the Act on the supply of private rented accommodation to students, which I think has been referred to by everybody but particularly by the noble Baroness, Lady Young, the noble Lord, Lord Robbins, and the noble Lord, Lord Balerno. This debate is taking place after only the first term of the academic year, and I am sure anyone who knows anything about universities will agree that the beginning of the academic year is a time when there is a great deal of sorting out. There is usually a bottleneck at that time. Students constantly have problems in finding somewhere to live. It is difficult at this stage to say whether this year has been any worse in this respect than previous years, or whether there has been any decline in student accommodation which can be quite strictly and accurately attributable to the 1974 Act. But it is true that some universities claim that that Act has had an adverse effect.
My Lords, while the Rent Bill was before Parliament, my honourable friend the Minister for Housing and Construction said in another place that he was much aware of the difficulties, and that he was examining the possibility of making special provision for student lettings. A scheme for the registration of 302 student lettings and for the exclusion from full Rent Act protection is currently under consideration. My Department is at this moment consulting interested bodies, which include the National Union of Students. The noble Lord, Lord Balerno, particularly asked me about this. The National Union of Students wrote to the Department before Christmas. They did not want a registration scheme, and they will be given a chance to join in consultations which will take place before any legislation is put forward. This is under active consideration at this moment.
My Lords, in conclusion I must repeat that we believe that the 1974 Rent Act was a necessary and just measure of social reform. It is too early to judge whether the Act has had a detrimental effect on the supply of furnished accommodation, but we are not complacent about its side effects. I can assure noble Lords that everything that has been said in this debate will be kept under close scrutiny by my Department. There are enormous advantages which I have outlined. In my view, there is no evidence to suggest that even if there is a slight loss in terms of new lettings it is on a scale that outweighs the enormous advantages of the Act. People living in furnished accommodation are often the poorest, the most illiterate and the most socially disadvantaged. These are the people least able to cope with the difficulties of living, let alone finding and keeping accommodation on the open market. They are most in need of the protection given to them by the Act. The more helpless one is in this respect, the more difficult it is, as we know. These are the people who find it most difficult to stand up for themselves and help themselves through the sphere of social welfare. Proper security, lower rents and effective allowances tilt the scales heavily in favour of the 1974 Rent Act.