§ 3.7 p.m.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they are aware that considerable hardship is caused, particularly to the aged whose pensions are not now linked with the rate of inflation, by the failure of rent tribunals to ignore scarcity values in making assessments of the rent to be paid; and what steps they are prepared to take to stop the exploitation of this by speculators many of whom operate from abroad.
§ Lord BELLWINMy Lords, it is in fact incorrect to say that pensions are not now linked to the rate of inflation. As far as the question of rents is concerned, the statutory basis for the assessment of fair rent requires rent officers and rent assessment committees to fix a rent which does not reflect the effects of market scarcity, as has been said in your 14 Lordships' House, on more than one occasion. All the evidence suggests that market rents would be significantly higher than current fair rent levels. Furthermore, tenants are additionally protected by the system of phasing rent increases and there is a generous system of rent allowances to help those who have difficulty paying their rents.
Lord JANNERMy Lords, while thanking the noble Lord for his reply, with which, unfortunately, so far as he is concerned, I do not agree, would he be good enough to investigate the matter properly? Is he aware that it is a sheer farce to suggest that protection is being given to people, the rateable value of whose flats or apartments is £1,500 or much less when, in fact, the machinations that are going on at present make it impossible to rent places, the result being that the speculators are making vast profits by driving out the people who come within that range? The fact is that there is no protection whatever at present. Will he please remember that similar matters arose as regards the necessity of enacting the leasehold reform Act? Moreover, similar matters have arisen with regard to the Rent Acts. Is it not time that the Government realised that scarcity value is being created by those who are increasing the rents to such an extent that there are no places to rent in these areas?
§ Lord BELLWINMy Lords, it is difficult to know quite which question, of the many that the noble Lord has asked, to answer first. Of course, he is going right across the whole spectrum of the problem of rented accommodation. With great respect, as regards scarcity it seems a little far-fetched to argue that the way to persuade more landlords to let accommodation, thus relieving scarcity, is to reduce their rental income. It is a matter of finding a balance between ensuring that there is not only the security of tenure, but the rights to pay a fair rent on the one hand, and ensuring that landlords can in fact receive at least sufficient to encourage them to rent. That is the dilemma that exists. However, I think that one can only say that the Rent Acts as they have been, and as they are now, continue to give and the Government are anxious to ensure that they continue to give—a fair return, by way of the fair 15 rent system, to the landlord, while they protect the tenant from what might become, as the noble Lords says and fears, extortionate rents.
Lord JANNERMy Lords, with the greatest respect, is the noble Lord aware of the fact that the manipulations of those who are speculating in property are of such a nature that there are no places to rent? Is he aware that that is creating a scarcity value of an enormous proportion, and that failure to observe the provisions which at present exist, relating to securing values by tribunals when assessing the rentals payable, creates a situation which dispossesses decent, reasonable people, and particularly those whose pensions are not inflation-linked? In those circumstances, I ask the noble Lord to reconsider the whole matter.
§ Lord BELLWINMy Lords, the noble Lord suggests yet another review of the Rent Acts. That may well be a course to take, but it is a matter which has frequently been reviewed over the last few years and each time the conclusions on scarcity reached by both major political parties have been exactly the same. As I said before, it is a dilemma. How do we achieve an exact balance between the fact that landlords must have a return, otherwise the property disappears, and give proper rights to tenants to pay a fair rent? At the moment we have this system and that is how things will be unless there is a review. So far as I am aware, my right honourable friend the Secretary of State has no intention to suggest that such a review be undertaken at present.
§ Lord DOUGLAS of BARLOCHMy Lords, may I ask the noble Lord whether scarcity is not a factor in the valuation of everything?
§ Lord BELLWINMy Lords, the answer to that must be, yes; but by itself it does not get away from the other point I made, which is that it must be in the context of a total situation.
§ Lord HANKEYMy Lords, is not the real problem of scarcity in this area due to the fact that landlords, many of whom would like to let a room or two, cannot be sure of getting rid of the tenant when they want the room back? If that 16 situation was altered, would there not be plenty of flats or rooms to let, and would that not decrease the scarcity values and many of our problems?
§ Lord BELLWINThat, my Lords, is quite a contributory factor, and that is why, in the Bill now in another place, there is the intention to introduce short-hold lettings. Hopefully, that will help the situation.