§ 2.45 p.m.
Lord JANNERMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper and, in doing so, I wish to indicate that I live in a flat of the type referred to in the Question and therefore have a personal interest.
§ The Question was as follows:
§ To ask Her Majesty's Government what steps they are taking to deal with the situation created by property speculators who refuse to let at a reasonable rent, thus creating a scarcity of flats and causing homelessness to tenants, even to those with over 30 years' occupation.
447§ Baroness DAVIDMy Lords, one purpose of the Rent Acts, to which the Government are strongly committed, is, by the system of fair rents, to protect private tenants against extortionate rent increases. The Government took a further step to help private tenants in 1975 when they introduced the phasing of rent increases over three years. All our evidence suggests that fair rents are substantially lower than market rents, particularly in Inner London. It is this system of fair rents that protects tenants against landlords who want to charge market rents. Where tenants have difficulty in paying a particular rent, there is a generous system of rent allowances to help them, with higher maximum levels in certain boroughs.
Lord JANNERMy Lords, may I compliment my noble friend on the new position she holds and on the very interesting reply she gave to my Question? May I also express my hope of forgiveness if I have to pursue the matter on rather different lines'? Is she aware that in the very flats that we occupy the landlords, who are Arabs, bought the property but have no registered office in this country? Is she aware that the property, which was offered at £13/4 million one and a half years ago, was sold to these people for £3 million, that they paid £500,000 to extend the lease, that they are now demanding an estimated £10 million for the property (apart from some of the flats which are not occupied) and that owners are charging as much as £500,000 for one flat? Is my noble friend further aware that the result is that people like, for example, one woman aged 93, who has lived there for 30 years, and who, having become a member of what are now known as the new poor—
§ Several noble Lords: Question!
§ Lord PEARTDo better.
Lord JANNERI am doing the best I can, my Lords. Is my noble friend aware that this situation prevails and that the result will be exactly the same for the so-called new poor as it was when we were fighting for years to get the Leasehold Reform Act through Parliament? What 448 do the Government intend to do to meet the situation?
§ Baroness DAVIDMy Lords, I wish at the outset to thank my noble friend for the kind things he said. So far as foreign buyers are concerned, I think it would be quite unreasonable to discriminate between landlords or anyone else on the grounds of race or nationality. Foreign landlords are subject to British law, including the rent and housing Acts, just like anybody else, and they are also subject to capital gains tax. The tenants of foreign landlords have the same protection as those of British landlords. Existing tenants have security of tenure and, as I have said, are protected against extortionate rent increases. Nevertheless, the Government do not approve of this form of speculation and that is one reason why we are studying ways of helping tenants to buy the freehold of their block collectively in certain circumstances. We are also looking at ways of giving tenants and leaseholders in mansion blocks more control over management, including the standard and cost of services.
§ Lord HAILSHAM of SAINT MARY-LEBONEMy Lords, has the noble Baroness thought of reporting the Arab landlord of the noble Lord, Lord Janner, to the Arab Boycott Committee for having too much to do with Israel?
§ Baroness DAVIDActually, I have not, my Lords.
§ Lord SANDYSMy Lords, first may I congratulate the noble Baroness upon her masterly debut at the Dispatch Box? Are the Government aware that the remedy for the situation, described at some length by the noble Lord, Lord Janner, is quite simple; namely, to increase the supply of accommodation? Are the Government further aware that the reason that accommodation has dried up is very largely due to their own legislation, the Rent Act 1974?
§ Baroness DAVIDNo, my Lords, I would not agree with the noble Lord.
Lord JANNERMy Lords, is the noble Baroness aware that the provision which was referred to in the latest Rent Acts—that scarcity value has to be taken into 449 consideration when fixing rents—is not being carried out? Is she also aware that the position is that scarcity values no longer maintain anything like an ascertainable amount, and that the whole position, according to the manner in which the matter is proceeding at present, creates a scarcity value which is almost practically 100 per cent. of the rent?
§ Baroness DAVIDMy Lords, the rent officer is specifically told in the Rent Act that he may not take scarcity value into account and that he has to assume that the demand and supply for such accommodation are roughly in balance. It seems to me a little far-fetched to argue that the way to persuade more landlords to let accommodation, thus relieving scarcity, is to reduce their rent income. All our evidence suggests that market rents—that is, the rents which do exploit scarcity—would be significantly higher than current fair rent levels.
§ The Earl of KINNOULLMy Lords, does the noble Baroness agree that the Rent Acts are a particularly unkind subject for her to have to deal with on her first appearance at the Dispatch Box? Does she also agree that the fair rent system under the Acts at present is working satisfactorily, and that the fair rent officers interpret the law as it is intended? Furthermore, does the noble Baroness agree that the problem with Lord Janner's Question is that he is confusing those tenants outside the Rent Act, who do not have the protection of the Rent Act, with those who do? However, if the noble Lord is not, may I ask the noble Baroness how it is that a speculator can apparently charge an unreasonable rent, when in fact all the tenant has to do is refer the matter to the rent officer?
§ Baroness DAVIDMy Lords, of course there are some tenants who do not have protection because the rateable value of the property they occupy is too high. This is a matter which is being looked at at the moment. There is a Rent Act review going on, and this is one of the matters that is being studied.
§ Lord PARGITERMy Lords, can my noble friend say to what extent rent officers ignore inflated capital values in fixing rents?
§ Baroness DAVIDI am sorry to say that that is something I do not know, my Lords. I will try to write to my noble friend with an answer.
§ Several noble Lords: Oh, oh!
Lord JANNERThis is a terribly serious matter, my Lords. We are dealing with a problem in which thousands of people are to be put out of their homes—
§ Lord BOOTHBYYou are having a debate.
§ Several noble Lords: Order, order!
§ Lord PEARTMy Lords, I feel that my noble friend, whom I admire so much, is taking liberties. I think that it is the wish of the House that we proceed to my noble friend's next Question.