HL Deb 12 February 1987 vol 484 cc795-807

7.9 p.m.

The Under-Secretary of State for the Environment (Lord Skelmersdale) rose to move, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]

The noble Lord said: My Lords, I beg to move the first Motion standing in my name on the Order Paper. I trust that it will be convenient to the House if I introduce both orders together. This is the second time in a week that I have been privileged to announce extensions to the right to rent. These orders, which I hope will be widely welcomed, will restore some of the incentives for private landlords to let properties left empty because of restrictions of the Rent Acts. They will encourage landlords to make accommodation available in London where housing need is particularly high. This will benefit many people—job movers, single people and the homeless—for whom private renting is the logical or sometimes the only choice.

I shall deal first with the Rent (Relief from Phasing) Order, which abolished the phasing of rent increases for regulated tenancies. Notwithstanding the history lesson which the noble Lord, Lord Dean, gave me last week, the House will need no reminder that it was the Labour Party's Rent Act of 1965 that introduced the current fair rent machinery. That Act made no provision for the phasing of rent increases. Landlords were allowed to charge the full fair rent immediately. Phasing of increases in regulated rents is not fundamental to the fair rents system. It was introduced at a time of high inflation to protect tenants from paying large increases all at once. In particular, the Conservative Government in 1973 froze rent increases, and this was subsequently converted into statutory phasing in the Housing Rents and Subsidies Act 1975 which provided for an increase in the fair rent to be payable in three equal instalments. In 1980, as inflation started to go down, we altered the phasing provisions and the effective period of registrations. We reduced the period before a fair rent could be reviewed from three years to two years and made a similar change to the phasing period. The effect of this is that only half any increase in rent can be charged immediately; the full rent one year later.

Under phasing the landlord never gets a fair rent. He does not get the fair rent assessed in 1985 until 1986—when it has already fallen behind. When in 1987 a new fair rent, appropriate for 1987, is set, he cannot get that until 1988. "Unfair rent" would be a better description; less fair than it was in 1965 when Labour introduced the system.

For many years private landlords have lost out because rent increases fell behind the rate of inflation. Since 1970 private rents have lost a fifth of their value against the retail price index, and two-fifths against average earnings or indeed against local authority rents. During the 1970s this falling behind was particularly marked. Inevitably there has been a catching up process, and this is still continuing. Nonetheless, the annual rate of increase in registered rents has fallen from 12.5 per cent. in 1983 to 8.5 per cent. in 1986. Inflation is now at its lowest for many years. The abolition of phasing will make a marginal difference to rents payable but it will help landlords to obtain a better yield from rentals and in turn help them to carry out repairs to their property. Ending phasing will not of course affect the ability of tenants to claim housing benefit on any higher rent.

The second order with which we are concerned today is the Protected Shorthold Tenancies (Rent Registration) Order which deals with shorthold tenancies in Greater London. Initially, it was a precondition of a shorthold tenancy that a fair rent had to be registered for that tenancy. This condition does not apply and never has applied for any other private letting. The law gives the Secretary of State power to review the position and modify the conditions. This he did in 1981. It was clear that the requirement for uneconomic fair rents to be registered was enough to deter many landlords from using shorthold. So, this requirement was waived for shorthold tenancies outside Greater London.

While precise statistics are not available, it is increasingly apparent that shorthold is being used successfully elsewhere in England and Wales. This is not the case in London, however. That is why with this order we now propose to lift compulsory rent registration for shorthold tenancies inside London to bring them into line with shortholds elsewhere. Noble Lords tell me practically every day how important it is to make available more rented accommodation, while others press me on the need to protect the tenant. Shorthold tenancies achieve both these objectives.

The order does not affect the position of existing shorthold tenants in London. Their existing fair rents will continue to have effect. I emphasise that it is still open to either landlord or tenant of a shorthold tenancy outside London to apply for a fair rent to be registered although it is not now compulsory.

Both these orders help to further the joint causes of increasing choice in housing and helping those in housing need. I commend them to the House.

Moved, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]—(Lord Skelmersdale.)

7.15 p.m.

Lord Dean of Beswick

My Lords, we seem to be having a surfeit of debates on this type of rent legislation in your Lordships' House. I am sorry that there is no representative present on the Alliance Benches to speak on such an important issue. I should have thought that it is important enough to attract them to this Chamber even at this time of the evening.

Your Lordships will recall that a fairly broad debate was initiated only two weeks ago by the noble Lord, Lord Harris of High Cross. Noble Lords who took part covered almost the whole field of rented accommodation in the private sector as affected by the orders. During that debate noble Lords on all sides of the House gave various statistics. It depends on one's political point of view what one thinks will happen when this type of order is brought forward and the alterations take place. I have no desire to hold back your Lordships or to restate what I said on that day. What I said and what my party believes in is on the record.

For instance, I do not believe for one moment the Minister's claim that London will be better off. All the indications from people involved in private sector housing in London are that London will be worse off. I made the point that when last there was a total release on renting in the private sector and a full market policy was introduced in the late 1950s by the then government, housing was not freed for letting. However, property in the private sector was freed to be sold at attractive prices compared with what rents could have brought in. I see no reason to alter my view on that issue.

In his speech, which was as long as was necessary for the occasion, the Minister spoke about the rate of inflation and the rates of increase in rents. But is it not a fact that over the past two years rents in the private sector have increased by 17 per cent? If noble Lords take the trouble to do the calculation they will see that the increase is more than double the rate of inflation. On that score one could not say that the landlord is losing out on the basis that rents are below the rate of inflation.

The Minister also made the point that the order will allow the landlord to carry out necessary repairs. This has never been proved. There is no evidence to suggest that as soon as the clarion call goes out from here tonight and landlords become a great deal freer than they were before they will immediately start—if they have not done so already—to survey the properties, bring in the property repairers and start a repair programme. That is not the case and never will be. I believe that more houses will be brought on to the market but for sale in the private sector.

In the debate two weeks ago I produced evidence from a report commissioned by a section at Cambridge University. As your Lordships will be aware, the report concluded that rented housing is a diminishing commodity which would continue to do so. Nobody could see a future for the present private rented housing stock. Whether one could introduce a building programme for the private rented sector is a much wider issue. This would require massive investment from the Government and from the private sector in order to make it attractive for the private sector to become involved. There is no question but that government money would have to be involved.

As a consequence of these two orders the balance will be tilted against the tenant. Many tenants who have been in their houses for quite a number of years are now in the twilight of their lives. There is no question but that they will be disturbed and frightened by the consequences of these two orders. I have had letters from various organisations and individuals mentioning these fears. Time will prove whether or not they are groundless but history will show that these people are probably right and there is room for concern.

The Minister mentioned that three-year phasing was introduced because of the higher rate of inflation in those days. He now says that because the rate of inflation is low they believe they should take a further step and, when the rent is set, reduce the period from two years to one year. No one can guarantee what will happen in the future, but let us suppose that for reasons outside the control of this Government inflation takes off. That has happened in the past because of the oil crisis. It was a Conservative Government at the time but it could equally have occurred under a Labour or an Alliance Government.

No government could have protected this country from the consequences of the tremendous increase in the cost of living that took place at that time because of changes in oil policies. Is the Minister prepared to say that should the denominator move the other way the Government will be prepared to come back to this House for a review of the situation in the light of their policy having been mistaken? I do not think that one can ask for anything less than that.

Normally, in another place, when such orders are considered, these statutory instruments are dealt with pretty expeditiously upstairs in Committee, and eventually they become consigned to history. However, on the occasion that these two orders were moved in the other place they were discussed in the full Chamber at the request of the Opposition because at that point in time the Opposition had neither the desire nor the power to interfere with what was taking place. It was made clear by the spokesman of my party that we were against what was happening.

I have to say that although the orders will be accepted tonight without a Division, as is the custom in this House, we are categorically opposed to them. We do not believe that they will achieve the Government's objective. That view was expressed by some noble Lords during the debate that took place in your Lordships' House a few days ago. I know that the orders will be accepted but I want to put on record that, when a Labour Government are elected to office, one of their first priorities will be to review the private rented sector to see whether the tenants in that sector are getting a square deal. Having said that, I shall end my observations on that score.

My noble friend and colleague from Camden, Lord Stallard, has had a long career in local government. He was Member of Parliament for an inner London borough and must be better versed or at least as well versed as any Member of your Lordships' House in the effects of these two orders on private sector tenants in London. I have no doubt that he will explain them in his usual very lucid and forceful manner.

Lord Monson

My Lords, I should like briefly to extend a warm welcome to these two orders. I should also declare a modest interest so far as the first one is concerned.

I cannot agree with the noble Lord, Lord Dean, that these orders tilt the balance against the tenant or that they will strike fear into tenants' hearts: I think that that is going a little over the top. I cannot agree that the abolition of phasing will cause any genuine hardship. After all, wages and salaries rise every single year without fail. Food, petrol, gas, electricty and clothing rise at least once a year. Why should rents alone be singled out to be held down artificially, and held down not only below the market value but below the so-called fair rent, which itself is below the market value, in the South of England at any rate if not necessarily in the North and the Midlands?

As the noble Lord, Lord Skelmersdale, has pointed out, these orders will encourage owners of houses to let property which at the moment they feel they cannot let economically because of the restrictions that have been imposed hitherto. As such, these orders will positively prevent hardship rather than cause it and for that reason I welcome them once again.

Lord Stallard

My Lords, as my noble friend has said, quite recently we had a long debate on rent control and deregulation, and it is not my intention to cover ground that we have already covered. Certainly we have no time this evening, and as custom stands at the moment, at the end of our short debate on these orders there is not much that can be done about them in this House.

There has been mention of a number of points that I should like to pick up. In his opening remarks the Minister did his best to put forward these orders as two innocuous little measures which did not mean a lot and would not do much damage. No harm would be done, he said, and in any case it was a previous Labour Government who had introduced the 1965 Rent Act. As my noble friend pointed out, the fact that in another place we insisted that these orders be debated in the full Chamber is a measure of the interest and anxiety that have been aroused outside this House by these orders and their interpretation, as we who live among the victims know.

The noble Lord, Lord Monson, mentioned phasing and asked why rents should not rise just as food and everything else have risen in cost. The simple answer, which was given also during the debate on the Motion tabled by the noble Lord, Lord Harris, the other week, is that in recent years the retail price index has hovered around the 5 per cent. to 7 per cent. mark but that certainly in London housing costs have been increasing at the rate of 17 per cent. and more. It is self-evident that if housing costs and rents are rising at 17 per cent. and the RPI is rising at only 5 per cent., that is an adequate reason for not increasing rents every year.

The figure of 17 per cent. that I have mentioned relates only to the first six months of 1986. In London there are instances of increases in the year of over 100 per cent. I do not know whether the noble Lord, Lord Monson, could justify a rent increase of 100 per cent. when the cost of living is rising by 5 per cent., 7 per cent., 9 per cent. or 10 per cent. There is no justification for that kind of rent increase. There is therefore something wrong with the basis of his argument.

Lord Monson

My Lords, does the noble Lord not agree that the reason for the high increases is the restriction of supply? If more rented accommodation comes onto the market because of the abolition of restrictions, rents will not rise to such a great extent.

7.30 p.m.

Lord Stallard

My Lords, that is a much longer argument which I should love to debate with the noble Lord, Lord Monson. That is a myth that has built up since 1965. There is ample evidence to prove that there are more reasons than the one he gave for the diminution of rented stock which has taken place not just because of the simple facts that the noble Lord has pointed out. There is a long list of reasons why rented accommodation is not as widely available as it was. Building and development have taken away huge chunks of it. We know that the lodgings or digs in which many people used to live when they first came to London have disappeared. A huge chunk of such rented accommodation has been taken away.

We know that it is more acceptable to the new breed of tenants, as it were, to buy rather than rent. Whole heaps of what was originally rent-controlled accommodation have been converted into self-contained units of accommodation and sold off in that fashion. It is just too glib to say that the 1965 Act caused the disappearance of rented accommodation. There are a number of complicated reasons. They are easily understood by those who live and work in inner city areas, particularly London. It is not as simple as the noble Lord made out. I have dealt with the phasing argument.

Phasing and the tenants' ability to pay are crucial. The justification for phasing is simple. Tenants in the private rented sector in London are often the people with the lowest incomes. They are the poorest people. That is evidenced by reports and surveys which have been carried out ad infinitum. They are just unable to pay high increases all at once. Recent government statistics prove that incomes are not rising anywhere near as high as registered rents. That is another reason why tenants cannot pay the increases.

The Minister said (I believe his honourable friend in the other place said the same) that those people can obtain housing benefit. We have had a number of debates on that subject in this place. We are all aware that while the Minister says that tenants can obtain housing benefit, one of his noble colleagues in another department is doing his best to ensure that fewer tenants qualify for housing benefit. Ministers are under pressure to take people off housing benefit and to reduce the number who qualify.

The Government cannot have it both ways. They cannot say that those people can obtain housing benefit, because many of the people who will be affected by the proposals contained in the first order are not eligible for housing benefit. Many are students, and many others are pensioners with a small occupational pension which takes them outside the scope of housing benefit. There are low paid workers and single women who are often outside the scope of housing benefit. They suffer hardship due to the rents and because they receive no assistance with them. That is an answer to the point put forward by the noble Lord when he introduced the order.

We know that in 1984 the average weekly rent was £212 for furnished accommodation and £76 for unfurnished accommodation. I can only talk about London, but much of this applies only to London. Shortholds apply only to London, so why should we not talk only about London? We are talking about £212 a week for a furnished flat and there are advertisements for unfurnished accommodation in London at upwards of £76, £100 and £150. It is suggested that those rents could go higher in the next few months. It therefore becomes evident that the argument against phasing does not hold water.

The points put forward about phasing by the Minister and the noble Lord, Lord Monson, can be dealt with adequately with regard to London. Fabulously high rents cannot be afforded by people who need accommodation. That is one reason why we were concerned and insisted that the order be taken on the Floor of the House.

My noble friend said that the Minister thinks that when the clarion call goes out from this House tonight that these orders have gone through, everyone will jump in and free all their houses for rent, loads of rented accommodation will be available and all repairs will be done overnight. That is another myth. It is another story. The clarion call that will go out from this side of the Chamber tonight is that there will be a review of the matter. In the debate initiated by the noble Lord, Lord Harris, I spelt out what our party's housing policy would be. There is no ambivalence about it. There is no question of the Minister asking us what we would do. We have said what we will do. One of the things we will do is to abolish shortholds. That should be the clarion call that goes out from here. There will be no such thing as shortholds in the life of the government who will take over in the next few months.

The argument is that the order on shortholds merely brings London into line with the rest of the country. London was excluded. It is said that it is about time that it was brought into line with the rest of the country. In 1981 when shorthold tenancies were introduced, it was the noble Lord's predecessors and his honourable friends' predecessors in the other place who argued that London should be treated differently. They would never have got the legislation through had they not argued that point and pressed it on the Government because of the sheer size of the privately rented sector in London.

London is not like other places. I do not know whether the noble Lord is aware that I have lived all my adult life in London. London is different in every respect, whether it be transport, health, education or housing. Whatever aspect one looks at, London is not the same as other parts of the country. Members on both sides in the other place recognised that and made provision for it when they introduced these tenancies and the phasing that we are discussing tonight.

The size of the rented sector in London forced that attitude on Members of the other place. There is a much higher rent-income ratios. I mentioned that when I discussed a previous order. They are much higher. The rent-income ratios in London are almost grotesque. I know Hackney, Lambeth, Brent, Camden and Islington.

Lord Graham of Edmonton

And Edmonton, my Lords.

Lord Stallard

I know Edmonton and Tottenham as well. I know many parts of London where those things are true. Rent-income ratios are different in London. Such things do not happen elsewhere in the United Kingdom. Of course the Government responded to Members of Parliament (mainly their own Members) representing London, and they introduced this legislation.

The Shorthold tenancy was already a diminution of tenants' rights. Given London's long tradition of the exploitation of tenants by landlords, more protection was needed in the capital. I could go on talking for another hour and a half talking about exploitation and Rachman. I took the liberty of sending one or two press cuttings to the noble Lord, Lord Harris, after he had used his cuttings. I have not yet had a reply. I hope that he had had a chance to study the press cuttings that I sent him.

Outside London market rents and registered rents are much closer than they are in London. In London market rents can be as much as four times the amount of registered rents. There is no incentive for London landlords to apply for rent registration with such a ratio. Tenants rarely apply because they fear harassment. That is a real factor in London. If I had time, I should be happy to read reports by the Select Committee on the Environment which contain long lists of cases of harassment which still go on in London. Tenants are still being terrorised by landlords and high rents.

Not all tenants are aware of their rights. Whatever the Minister may say, tenants of shorthold properties do not know their rights or how to enforce them. I have heard it said that they should know their rights because they receive enough material and everything is written down. It is written down but it is no doubt written in Whitehall jargon. It is said that they have all these leaflets and documents and therefore they should understand their rights. They do not all understand their rights or how to enforce them.

As I said before, the Government's shorthold proposals amount to effective decontrol. That is the nub of the matter. The Government fully intend to decontrol rents altogether. If noble Lords, on whatever side (including the government side) were honest they would say that that is their ambition. The noble Lord, Lord Harris, made no bones about it. He is in favour of complete decontrol. That is the objective.

Although these two orders may appear innocuous, they are the thin end of the wedge. They are a step towards the total decontrol of rents. That is the Government's ambition, although not in the lifetime of this Parliament, as has been said by the Secretary of State and the Minister in the other place. However, they both said that they did not know about the next Parliament. In other words, it is not very far from their minds that this policy is a runner.

As shortholds already carry less security, it will lead to a boom in shorthold lettings in London. Tenants will be intimidated into signing shorthold agreements in deperation. Large numbers of new lettings will be on shorthold, all at market rents, and the tenants' rights will be almost totally ignored. There is no doubt about that. Tenants will end up paying more rent. In many cases that is rent they cannot afford. That means more arrears and more harrassment. It certainly means more evictions. Or they will leave the privately rented sector and go elsewhere—perhaps the Embankment—or to local authority bed and breakfast if they can make themselves homeless.

The empty private homes will not be let, in spite of what the noble Lord, Lord Monson, thinks. Those properties that become empty as a result of this process of winkling out, or harrassment and emptying, will not be let. There is much more profit to be made in London by selling, and they will be converted and sold. There is no doubt about that. In 1977, of 550,000 empty properties in private ownership only between 8,000 and 30,000 could be said to be empty for any reason connected with the rent Acts. The bulk were sold.

I shall not weary your Lordships with any more statistics although I should love to. On shortholds, the measure that the Minister has introduced means, so far as I am concerned, a stepping up of the Rachman-type landlord that we knew immediately after the 1957 Act. This is another invitation for that kind of activity in London, where there is such scarcity and where there is so much money to be made from a free-for-all with no controls or legislation. One does not have to be very bright to work out what will happen and who will come in and grab the pickings.

As I have said, the tenants will be made homeless. Local authorities which are already in real difficulties with bed and breakfast accommodation will be hard pressed to do much about the problem. We shall have more serious problems in London than we have at the moment. We have had a debate recently on the difficulties in the inner cities. We have had the debate on a Motion relating to the International Year of the Homeless moved by the noble Lord, Lord Scarman, which, again, points out the problems of the homeless in London. The situation arises mainly in London and in the big inner city conurbations.

To introduce this measure, which is a licence to double and treble those problems, is absolutely crazy and almost criminal. If it were possible to do something about this tonight I should be going through the Lobby to vote against the thin edge of the wedge of total decontrol. That is what these two orders represent to me. There is no way that I can agree to them. I understand, as my noble friend says, that they will be agreed to because of the customs of the House, I think that is a great pity.

Lord Monson

My Lords, before the noble Lord sits down, may I put one short question to him as he has made several criticisms of my intervention? I agree with him that to some extent London is a special case. For example, the ripple effect of the City Big Bang is sending up values all over London. This inevitably affects tenants as well as potential owner occupiers. Does the noble Lord agree that a solution to the problem of the hard-pressed private tenant might be found if private tenants—who at the moment are unique in receiving no tax relief or subsidy of any kind—were brought into line with council tenants on the one hand and owner occupiers on the other by being given some kind of tax relief or subsidy? Would he agree that that might ease the problem?

Lord Stallard

My Lords, I would not rule that out of any review. These orders are not the way to review rent controls. I think that the noble Lord, Lord Harris, would have agreed with that. The matter needs review. Those aspects that the noble Lord, Lord Monson, mentioned must come into that review. We have to look at the possibility of attracting institutional capital—from building societies and so on—into that area, where they will provide the funds and accredited housing associations will do the building or the renting. These are all constructive and practical possibilities but they cannot happen in the atmosphere created by these two orders.

I would therefore say that the policy I outlined in the previous debate will be the Labour Party's approach to the matter. We understand all the problems that have arisen since previous legislation. We shall not say, "Because you did this, we shall do that." We shall do it because the whole matter needs rejigging and reshaping. That is what will happen immediately after the next election when the Labour Government looks at the new housing policy. I would certainly not rule out those matters for consideration.

7.45 p.m.

Lord Skelmersdale

My Lords, I am grateful to the three noble Lords who have spoken in this very short debate, which certainly hotted up in the last 19-odd minutes.

The noble Lord, Lord Stallard, was a little mischievous, to say the least, because shorthold tenancies were introduced as an initiative to encourage private landlords to let property. Almost overnight 5,000 came into existence. The key element of shorthold is that it is a fixed term tenancy of between one and five years at the end of which the landlord may if he wishes take possession of his property. I am fully aware that the noble Lord, Lord Stallard, does not approve of this. He says that the constrictions are so unintelligible that tenants will not know what they are letting themselves in for. It is a fixed period of years. That is a very simple concept to grasp. However, much more importantly the whole edifice comes crashing to the ground if the landlord does not go through the prescribed routine. As the landlord of a shorthold tenancy in Somerset I know this perfectly well. I should declare another interest, incidentally, as a tenant in London.

Lord Stallard

My Lords, before the Minister leaves that point I also mentioned that tenants in London are desperate. I do not think the Minister has grasped the situation of people looking for accommodation in London. Desperation will make them sign all kinds of bits of paper, and accept all kinds of conditions. They might understand some, but sheer desperation will make them accept.

Lord Skelmersdale

My Lords, I am answering points in the best way that I am able in the limited time available. If the noble Lord, Lord Stallard, will let me continue with my speech he may find that he has rather more answers than he expected.

Under shorthold the tenant does not have a right to stay on beyond the fixed term. He or she will be aware of this when taking the tenancy. This is the most important aspect of shorthold from the landlord's point of view and is crucial in cases where a landlord envisages only a short-term let. It will be for the landlord and tenant to agree on the length of the fixed term and the level of rent. If a tenant chooses to seek a registered rent the landlord will have nothing to gain by not continuing the shorthold because, once registered, the fair rent will apply to any subsequent lettings.

The department has received very few complaints about the use of shorthold outside London following the removal of compulsory rent registration in 1981. On the other hand, there have been several complaints that compulsory registration acts as a deterrent to landlords who want to make accommodation available on shorthold in London.

The noble Lords, Lord Dean and Lord Stallard, covered some of the same ground and talked about the increases in fair rents being much higher than the rate of inflation. I accept the figures given by both noble Lords showing that for the first half of 1986 the mean increase in rent on re-registration was 17 per cent. This works out, as I said, to an annual rate of about 8 per cent. However, these figures—as I also sought to show in my opening speech—must be put into perspective. Rent increases in the 1970s—a time of high inflation—lag well behind the retail price index and other cost indicators. Comparing rent levels and prices in 1970 with 1986 gives a surer indication of the erosion of the value of fair rents. It is small wonder that the private sector has been substantially reduced over the long term. I accept that these orders will not have the dramatic overnight recovery potential that the noble Lord, Lord Stallard, suggested that I put forward in my speech just now. Nonetheless, I think that they are valuable.

Rents for that period between 1970 and 1986 rose by about 340 per cent. Over the same period the all-item retail price index rose by 417 per cent. Local authority rents—and this is an interesting point—rose 581 per cent.; average earnings rose 579 per cent. I think that these figures all speak for themselves. All that this change will do is to allow landlords the full registered rent; the amount that the rent officer deems to be a fair rent at the time of registration. It does not alter the way in which registered rents are assessed.

The noble Lord, Lord Monson, very nearly answered the second point of the noble Lord, Lord Dean, and the first point of the noble Lord, Lord Stallard, concerning inflation and what the future would bring. I have no better crystal ball than any other noble Lord in your Lordships' House. However, phasing was never the right way to deal with rent rises even in a time of high inflation, and we now recognise that. Why should the landlord, who, by definition, is equally affected by inflation, be made to subsidise his tenant, whose income may well be rising in line with inflation? Help for tenants is largely a matter for housing benefit.

Turning to housing benefit, we estimate that some 626,000 private sector tenants received housing benefit in 1984. That is about one third of all private sector tenants, and I cannot say what proportion of the 550,000 Rent Act tenants received housing benefit.

I did not come armed with figures for students and single people, but I can tell the House that a family of two adults and two children, paying some £25 per week in combined rent and rates, would not cease to be eligible for housing benefit until their income reached around £152 per week, or £7,900 per year. Therefore, I do not think that one can argue in that case that housing benefit thresholds are set at too low a level to help the least well off.

I dispute that the Department of Health and Social Security is in conflict with the policies of the Department of the Environment. It is common ground among all concerned that the public purse should not be asked to meet rents which are set unreasonably high purely to cheat the benefit system. The Department of Health and Social Security is discussing with the local authority associations ways of building into the machinery of DHSS grants to local authorities incentives to encourage local authorities to ensure that this abuse is prevented. Of course local authorities already have the power to withhold benefit on unreasonable rents, and the great majority exercise that power sensibly. That will not change. The changes that we are making today do not disturb the basic system of fair rents. However, even if they did, there would be no conflict between raising rents and taking measures to discourage benefit abuse.

It is true that in 1981 the Government were against removing compulsory rent registration for shortholds in Greater London. At that time we had no experience of how a shorthold would operate without compulsory rent registration. The experience of the last six years has shown that outside London shorthold operates very well without it and provides much-needed accommodation. The demand for short term rented accommodation is at its greatest in London and we see no justification for continuing the requirement that fair rents must be registered on shortholds here.

The noble Lord, Lord Stallard, made great play with the review which is due to take place within the next few months, when he anticipated that a Labour Government would come into power. That review has been taking place continuously for the last two years under a Conservative Government. Nonetheless, the noble Lord, I suspect slightly unintentionally, gave us a very good advertisement for our introduction of private capital into the rented housing market through the Building Societies Act, of which we are extremely proud and which he clearly thinks is a step in the right direction and would like to see continued. I agree with the noble Lord, but we shall know the effect of that when it gets off the ground, in the same way as we shall know the effect of these orders when they get off the ground. I do not expect them to have the damaging effect which the noble Lord Lord Stallard, and in a rather softer and more muted tone, the noble Lord, Lord Dean, clearly expected.

The Government's housing policy is about choice. The right to buy is well established. The pent-up demand from a million households has been released. The right to rent is our next goal. We shall continue to open up variety in tenure and to stimulate private investment in housing. Whether we shall go along the route suggested by the noble Lord, Lord Monson, as regards tax advantages I cannot yet say. That is something which has been suggested to me in this House before and I believe it was last mentioned at Question Time by the noble Lord, Lord Hams of High Cross. It is certainly one of the many things which we are considering in the area of the private rented sector. However, the extension of assured tenancies, the changes to encourage privately financed shared ownership and the new specific power for local authorities to support private rental development, are all important steps along the road.

The two orders which we are considering tonight are small but significant steps in the same direction. On that basis I commend them to the House.

On Question, Motion agreed to.