Housing Bill

HL Deb 21 July 1988 vol 499 cc1493-552

3.45 p.m.

The Minister of State, Department of the Environment (The Earl of Caithness)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Assured tenancies]:

Lord McIntosh of Haringey moved Amendment No. 1:

Page 1, line 18, at end insert (''and any tenancy falling within this subsection, or subsection (3) below, shall be a tenancy to which the provisions on protection from eviction contained in section 27 below apply").

The noble Lord said: In moving Amendment No. 1 I should like to speak also to Amendments Nos. 57, 60, 61, 62 and 63. I do not know how many Members of the Committee were able to watch some few weeks ago a programme in the "World in Action" series about harassment of tenants by landlords. In that programme, which I was able to see again only yesterday, there were numerous interviews with a landlord by the name of Nicholas Hoogstraten.

The programme described how he and his associates were in the game—they described it as a game—of thieving property. They called it thieving property. They bought properties at below their true market value. They were available at below their true market value because there were sitting tenants in those properties. Their next step was what Mr. Hoogstraten described as winkling. The purpose of that was to get those sitting tenants out of the properties so that the properties could be sold again at the different market value of a property with vacant possession.

Mr. Hoogstraten described how in many cases he was dealing with properties with controlled tenants paying £10, £12 or £20 a week who were frustrating the sale of a property. With today's prices in London, a single property with a piece of land with development value could be sold for £1 million. He described these tenants as scumbags. He described their rights as rubbish. He described them as being the proper victims of the landlords who were being denied the right to use their own properties for profitable speculation. The fact that they had been living there for 10, 20 or 30 years meant nothing to him. He was proud of this. He laughed when he said it.

The proposals in Part I of the Bill which are intended to extend the private rented sector are so serious in the way that they extend the possibility of this kind of harassment that the Government have introduced a whole chapter of Part I with the intention of restricting harassment. I pay tribute to their motives in doing so.

They recognise that the whole system of assured tenancies and assured shorthold tenancies and the whole way by which controlled tenancies and security of tenure are to be eroded by the many provisions of the Bill will increase the risk of harassment by landlords like Mr. Hoogstraten. They have attempted in Chapter IV of Part I of the Bill to do something about it. But I want to suggest to the Committee that what they have done and what they are proposing go no way at all towards reassuring tenants or frightening landlords that anything better will be achieved.

Indeed, Mr. Hoogstraten in the programme which was recorded some four weeks ago, when at least the provisions of the Bill in Committee in another place were available, if perhaps not the changes on Report—and I recognise that there are differences here—said, "The Housing Bill is going to help us a great deal. It will make our lives, we the landlords"—that kind of landlord—"very much easier".

Should anyone think that I am talking about four weeks ago as being past history, yesterday afternoon in a committee room in this place we had one of Mr. Hoogstraten's victims. Since the programme was made her flat has been set on fire. She does not know who set it on fire and she cannot prove that it was the landlord or any of his associates. She is the victim who had already been spat upon several times by Mr. Hoogstraten in her own garden. She is the victim who when she called in the housing tenancy adviser of the local council found that one of Mr. Hoogstraten's associates was about to throw a lump of concrete at him He only escaped because she shouted at him to duck.

All this is happening now. This lady left her flat only last Sunday because her life was no longer tolerable in the circumstances in which she found herself. I must ask Members of the Committee to consider very seriously the provisions of the Bill which make the risk and potential profits—because that is what Mr. Hoogstraten is talking about—of harassment much greater. We must consider whether the provisions to deal with harassment are good enough. Our amendments deal with four particular aspects of harassment where we believe that they are not good enough and where we believe that something more must be done to deal with the problem.

The first aspect is to be found in Amendment No. 57. The major point here is that the Bill refers to acts which are calculated to help the landlord eject the tenant—I am paraphrasing the less important words. All the experience of the tenants' rights groups, the local councils who are concerned with such matters and the experience which was made most clear in the "World in Action" programme is that it is very difficult in law, and in practice, to identify an individual act which can be said clearly to be calculated to be harassment. But a whole series of acts which in themselves may not be serious can cumulatively add up to harassment. Therefore in Amendment No. 57 we are seeking to change the wording. Instead of the words "calculated to", we propose that the Bill should say "or omits to do acts", because the failure to provide services may not be an act but it is an omission to do acts which individually or cumulatively add up to harassment.

That is perhaps the most important of all the amendments which we wish to put forward. We suggest to the Committee that the existing protection for tenants is not good enough. Everyone who is dealing with tenant protection knows that it is not good enough. Moreover, the courts know that it is not good enough because there is inadequate conviction in connection with those who find themselves in such circumstances.

The second and especially important point, to which I have already referred in a sense in passing, is the issue of "calculated to". That involves the law in saying what the landlord's intentions are as a test of whether it is a case of harassment. The Government are proposing to move away from reliance on the landlord's intention as such. Again, I recognise that there are attempts at improvement in Chapter IV of Part I, but the test of "calculated to"—that is, causing the tenant to leave—is in our view still not good enough. There should be an objective test of whether the landlord's actions have the effect of making it more likely that the tenant will have to leave, rather than that there should be any judgment on the landlord's intentions.

The third point, which again comes from the experience shown in the "World in Action" programme, is that it is not enough to say that actions which come under the scope of the law are the actions of the landlord or the landlord's agents. Mr. Hoogstraten operates under something like 20 names and I have a list of those names with me. He has something like 50 associates; he has 30 or 40 associated companies and managing agents and he has 20 or so main business addresses. In addition to all those, there are people who are not even his formal associates.

Let us think of a house in multiple occupation. One of the most common ways of winkling out an undesirable tenant is not to do anything overtly violent; is not to make any threats and is not even to do anything like dismantling the roof—although that is common enough. It is simply to move in an objectionable tenant on the floor below. That tenant on the floor below will not be the landlord or the landlord's agent and he will therefore not be covered by the scope of the harassment provisions. Yet that tenant on the floor below could play music all night, could hammer holes in his ceiling and into the floor of the tenant who is to be removed and could make his life an absolute misery. Indeed, he could be a very effective informal agent for harassment. So our amendments go that much further to provide that any person who is associated with attempts to persuade a tenant to leave the premises should come within the scope of harassment legislation.

Such an approach—namely, "the any person approach"—was included in the Protection from Eviction Act 1977. But although the Government claim that they are providing a further safeguard from harassment, in fact they are proposing a weaker provision concerning the identity of the person who commits the act of harassment.

I sincerely believe that all Members of the Committee will have the same objective. We all want to see the major harassment which I have described in very brief terms—indeed, I could have gone on for much longer and described very much worse things—outlawed. We all want that. The question is: does the Bill now achieve it?

Lord Coleraine

I am most grateful to the noble Lord for giving way. He has spoken at considerable length on amendments to Clauses 27 and 29 of the Bill, but is he going to say anything about the effect of the first amendment tabled in his name and what it means? Further, does the first amendment add anything to the provisions protecting tenancies in Clause 27 which is not already there?

Lord McIntosh of Haringey

I am indeed happy to speak to any amendments tabled in my name. However, it was my intention to speak principally to the amendments relating to Clause 27, to which Amendment No. 1 is really a paving amendment. I do not claim that it adds anything to the scope of the amendments to Clause 27.

Lord Coleraine

The noble Lord says that Amendment No. 1 is a paving amendment. So far as I can see, it adds nothing to the Bill and is quite superfluous to it. Moreover, the other amendments tabled in the name of the noble Lord stand completely independent to the first amendment. Therefore I do not see how it can be said to be a paving amendment to anything.

I should have thought that any decision which was taken in relation to Amendment No. 1 was entirely free-standing and had no bearing on any decision which the Committee may make on any of the other amendments to which the noble Lord has spoken.

4 p.m.

Lord McIntosh of Haringey

It has been agreed through the usual channels, with the agreement of the Government and the department, that the amendments should be taken together. It is a longstanding tradition of this place that we should seek to save time by grouping amendments into meaningful groups. I hope that the committee will agree that this is a useful tradition which should be continued.

Lord Coleraine

What the noble Lord says may be correct. However, if that is so, why should not the amendments to Clauses 27 and 29 be taken at their proper place in the Bill, when those clauses are reached?

Lord McIntosh of Haringey

I am happy to take any amendment individually if the Committee thinks that that will further the Committee business. As it is, we have an agreed grouping which we hope is helpful. Morever, I hope that we will not abandon the useful convention that we can have an opportunity to consider amendments together and to consider matters at a time which is usually thought to be for the convenience of this place.

There are, although the noble Lord was kind enough not to refer to them, a number of other amendments which could be taken in this group. We have tabled amendments which refer to harassment by a so-called resident landlord. We have tabled a whole series of amendments about possession of properties under assured tenancies. We have amendments about possession on, for example, forced disposal. They are all related to this matter, because the whole of Part I is related to the major changes the Government are making in the nature of the private rented sector. We consider that that is perhaps the most important single social effect which will arise from the Government's changes. We consider that those changes are recognised, by the Government's amendments and intention, to be of great social significance. We believe that it is right for the Committee to take a view on harassment and on the adequacy of the Government's measures to combat it. I beg to move.

Lord Broxbourne

I have listened with some sympathy to the expos½ of the noble Lord, Lord McIntosh, delivered with his characteristic lucidity and skill. I want just to query whether the drafting of Amendment No. 57 is correct. If I read it aright, it would leave Clause 27 as reading, "does acts"—the amendment leaves out -calculated to"— interfere with the peace or comfort". I do not believe that that is a grammatical construction which would be appropriate in a statute. Some other word, if only "which", is required to give the effect intended to the noble Lord's amendment. If I am wrong, he will say so straightaway, and I am fully ready to believe him.

Lord McIntosh of Haringey

My Lords, I admit that this is one of those cases where to a considerable extent I have drafted the amendment myself. Not being a lawyer, I am capable of being seriously wrong; but as I read it, the sentence will now read; if the landlord or any person acting on behalf of the landlord . does acts or omits to do acts which individually or cumulatively interfere with the peace or comfort of the residential occupier or members of his household". I believe that that is grammatically correct. It was my intention in framing the amendment.

Lord Broxbourne

I believe that the Committee will be disposed to give the noble Lord the benefit of the doubt. He need not plead, as a serious matter of mitigation, that he is not a lawyer. Indeed, there are some who would think that that is a matter of congratulation rather than commiseration. No doubt the ingenious parliamentary draftsmen will scrutinise the matter with the care that it deserves and the expertise that they possess.

Perhaps I may make my second point to my noble friend the Minister. I wonder whether the words "calculated to", which the noble Lord's amendment proposes to omit, are well chosen in a statute. It is difficult to give juridical interpretation to the term "calculated to". What degree of motivation it implies is a matter of doubt. I respectfully ask my noble friend to consider whether that is an appropriate phrase to include in an Act of Parliament. If it is to be included, should it not figure in the interpretation clause to Chapter IV. There is an interpretation clause (Clause 33: "Interpretation of Chapter IV") which contains a variety of provisions, but no interpretation of that rather idiosyncratic and esoteric term "calculated to". Can it be either changed or defined?

Lord McIntosh of Haringey

Perhaps I may suggest that the point made by the noble Lord, Lord Broxbourne, would be dealt with if he accepted my amendment, which removes the words "calculated to"

Lord Broxbourne

I was hoping that there were better, simpler and more acceptable ways of meeting the point.

Lord Renton

In making his impassioned speech against harassment—I have an open mind about the pronunciation—the noble Lord, Lord McIntosh of Haringey, was preaching to the converted, bearing in mind the fact that the Bill contains greatly improved provisions in Chapter IV—especially Clauses 27 to 30—for preventing harassment. The noble Lord has done a service by inviting us to ensure that the terms especially in Clause 27 are as they should be.

The word "calculated" has been interpreted by the courts on a number of occasions and has generally, in the context in which it has appeared, been held to mean the same as "intended". There have been other connections, more rare, in which it has been held that the word means "likely". In this context either of those interpretations would do.

I did not think that the noble Lord's speech was necessary to convince us all about the dangers of harassment and the need to get rid of it; nor did I think that the implied criticism of the Bill with regard to that was fair, because, as I say, those clauses are strongly worded and should go a long way towards stopping it.

I come to the individual amendments. I agree with my noble friend, Lord Coleraine, that the first amendment seems to be unnecessary, because Clause 1, to which it relates, deals with assured tenancies and they are residential tenancies to which Clause 27 refers. The residential occupier is defined in Clause 27(8)(a). I do not believe that Amendment No. 1 (the paving amendment) is necessary.

Perhaps I may briefly deal further with the other amendments. I have dealt with what appears to be important about the word "calculated". I believe that the noble Lord has a point when he invites the Government to consider whether it is enough merely for the court to bear in mind acts committed where there could perhaps be circumstances, more rare, when there was a failure to commit acts. I hope therefore that my noble friend will consider that point. It is a narrow point but valid and it is the only point of substance which arises on this group of amendments.

Lord Stewart of Fulham

I am not a lawyer nor a parliamentary draftsman although, as suggested, one may regard that as a matter either for disappointment or congratulation. A very witty Member of this House, the late Lord Hale, had also been a Member of the other place. Once in a speech there he remarked, "My honourable friends spend half their time making ill-natured remarks about lawyers, and the other half asking me for unpaid advice".

Although I am not a lawyer, I have a memory. I seem to remember this same debate pushed back about 25 years to when another place was discussing the evil then known as "Rachmanism". Now it apparently is known as "Hoogstratenism". I do not believe it is true that people with foreign-sounding names are more likely to behave in this manner than people with ordinary names. However, it is true that when they do, they attract the press more obviously. The great evils of harassment 25 years ago went on for a considerable time until somebody with the foreign-sounding name of Rachman was connected with it. Then matters flared up and it made a great press story. History seems to be repeating itself, and I think it does so for this reason: whenever a situation is created where a house has a definite rent attached to it but, if the tenant can be got out, the rent which can be charged immediately leaps up, a motive is created for harassment.

I accept that these amendments do not alter that fact about the Bill. That seems to me one of the general evils of the situation. I think we ought to try to avoid a situation in which getting the tenant out will make the house a more valuable asset. If that is done then a motive is created for committing a crime and it is not much use, or it is only a limited amount of use, to chase round afterwards trying to prevent the crime, if we have already allowed the law to create a situation in which it pays to commit the crime. Nor need one fall into the error of supposing that all landlords are wicked and all tenants virtuous.

The trouble is that if a situation is created in which it pays to harass a tenant out, the landlord who wants to be virtuous and public-spirited knows that he is behaving like a mug in comparison with the landlord who is prepared to practise harassment. That is the evil with which we are faced. In those circumstances, if the situation exists where it pays to commit harassment, we cannot be too careful or vigilant in trying to prevent it. I am especially interested to see that, if I understood it correctly, one of the loopholes which the amendments of my noble friend aim to stop is that connected with the fact that the act of harassment may be committed by somebody who is not the landlord but who is in effect working for him. This was remarkably true in the days of Rachmanism. When one tried to find out who was responsible for it, the owner of the property always seemed to be changing into somebody else.

I was reminded of that section of Dante's Inferno which was reserved for the thief and the extortioner, part of whose nature and penalty it was that when one looked closely at them, they turned into somebody else. This seems to be that situation all over again. Therefore, I urge that if we are in any doubt as to whether the precautions we have taken for hunting down and punishing harassment are strong enough, we should err on the side of making them as strong as possible. If we have allowed the law to create the situation in which it pays to commit harassment we cannot be too careful in trying to nail it down and penalise it.

4.15 p.m.

Lord Stallard

I am neither a lawyer nor a barrister, and I hesitate to enter a field which seems to be being taken over by lawyers. However, I have been a tenant of a private landlord and I know literally thousands of other tenants of private landlords. I have dealt with them for many years in the whole of my public life, and I was active throughout the whole length of the Rachmanite era. I was responsible for at least trying to do something in the other place about the legislation which was being used by the gangsters. I must confess that I did not find it too difficult. When I listened to the noble Lords, Lord Coleraine and Lord Renton, I did not find it too difficult to align Amendment No. 1 with Clause I. I thought it improved matters. As I see it, Clause 1 deals with the transference to the assured tenancy situation as opposed to the tenancies which might have applied previously, like security of tenure, and so on.

Therefore it is essential that if we are to change those to assured tenancies, then they ought to be given the same protection or given the protection which they would be allowed under Clauses 27 and 29. I thought that was what we were doing. As my noble friend rightly says, Clause 1 paved the way for discussion on those protections included in Clauses 27 and 29.

Lord Coleraine

The noble Lord possibly misunderstands the point that I was making. It is as follows. All the tenancies which the first amendment would bring within the scope of the protection from eviction clause are already in that clause. Therefore the amendment is quite unnecessary.

Lord Stallard

I must stick to the point. Our amendment adds to Clause 1 the point that tenants will be given the same protection. When we amend Clauses 27 and 29, we shall have improved the protection they get. Therefore it is important that Clause 1 should contain the facility or the measures for giving that kind of protection to the new assured tenancies. That is causing a great deal of concern. I certainly do not know many private tenants with the simplified view held by the two noble Lords. It does not add anything if they get the added protection or if this protection is added to what is already becoming in most people's minds a bit of a trick. The assured tenancy will very shortly, as soon as possible, become an assured short-hold letting.

Then there are problems and difficulties. Tenants are at the mercy of the people mentioned by my noble friend on the Front Bench. Not Rachman—he has gone. He has been overtaken by a new breed of the same people who are now operating in inner London. So I felt that it was necessary to allay some of the fears of people who will be on the sticky end of the Bill. We should say that even if it does turn into this other assured tenancy or assured short-hold, tenants will still have the protection of Clauses 27 and 29 as amended by this House. I may be entirely wrong; but I shall stick to that point of view because I do not think that I am far out.

The whole series of amendments gives us the opportunity to mention or discuss harassment and eviction, and all that that implies. When we say that Clause 27 gives all the protection that is necessary, that is where we immediately differ. Clause 27 was based on—or the wording is virtually the same as—the Protection from Eviction Act 1977. There will be many of us who never accepted that as being adequate. The provisions of that measure on protection from eviction were never adequate to deal with the kinds of situations that exist in real life.

When we talk about the situation, it is not just a few isolated cases. I should tell Members of the Committee that in a survey of the London boroughs carried out in 1985, 4,500 cases of harassment were reported, but only 76 prosecutions took place. That shows the inadequacy of the legislation: that the 4,500, and the many more that would have been reported if people had known how to go about protesting, only gave rise to 76 prosecutions.

Lord Renton

When he says that the noble Lord is pointing to the inadequacies of the present law rather than to any inadequacies in the Bill.

Lord Stallard

The Bill simply repeats the words of that existing Act. Consequently it repeats the same inadequacies. We shall probably never agree on that, but that is how I read the Bill. If it repeats the words of the Protection from Eviction Act 1977, it has not improved anything. The Bill has left that Act as it was. I thought that Act was inadequate at the time and I still think it is inadequate now. That is why I support this provision to amend Clause 1 of the Bill. If that is perverted thinking, then I plead guilty to it.

The Royal Borough of Kensington and Chelsea has the highest proportion of private tenants in the country. That borough recorded 66 illegal evictions and 352 cases of harassment in 1986, yet very few of those cases proceeded to court. In my own borough of Camden—I think everybody must know where I live by now—for the last six-month period for which we have statistics, the number of harassment cases investigated was 121. But, because of the inadequacies of the present legislation—which are carried on into the Bill—the people who investigate the cases must consider whether they have a chance of succeeding if the case goes to court. If they do not think a case stands a chance in court, they have to try all kinds of other means of solving the problem rather than go to court where they know they will lose the case because of the wording of the Act. Of those 121 cases only six went to court. That is nowhere near adequate.

I give an example of one of the cases that went to court. All six cases were successful, incidentally. That shows the persistence of the officers involved. I give an example of one of those successful cases. In that case a tenant was given alternative accommodation while her own accommodation was being repaired. However, she returned within a couple of hours of vacating her accommodation because she had left some papers behind. When she returned, she caught some builders red-handed. They were in the process of demolishing the ceiling and taking down a wall. They did so despite the fact that they knew that all her private possessions were in the flat. I am not talking about the situation that operated 20 years ago under Rachman. I am talking about something that happened a few months ago despite the existing legislation which appears to be carried on into this Bill.

The lady concerned caught the builders red-handed. That case was successfully prosecuted. The landlord was fined £250. If the Government consider that that is adequate and that tenants have nothing to worry about, they are on the wrong track. Tenants have plenty to worry about when that kind of thing occurs, because the present legislation allows it to happen. Therefore, the Government must allow me to say that the legislation needs strengthening. We intend to strengthen it by the amendments we have put down to Sections 27 and 29. which will then be applied to the assured tenancies as laid out in Clause 1. That seems to me to be reasonable.

I shall give another couple of examples of cases of harassment. The 1986 adjusted figures for unlawful eviction cases brought under the terms of Section 1(2) of the Protection from Eviction Act 1977 show that in England 49 cases resulted in a guilty verdict being returned. In Wales in that year 10 prosecutions were brought and five guilty verdicts were returned. In the same year 26 cases of unlawful harassment were brought under the terms of Section 1(3) in England, 10 of which resulted in guilty verdicts. No cases were brought to court in Wales under that subsection of the 1977 Act. The whole thing tends to confirm the opinion of local authorities and people responsible for bringing convictions that the Act has not been successful so far. This Bill will be similarly unsuccessful unless it is strengthened in the way that we have suggested.

I wish to give another couple of examples. These examples occurred only two or three weeks ago. Therefore we are not talking in terms of events of long ago. The first incident occurred on an estate in a house which was in a bad state of repair. Repair work was started but not finished. The house was left in an unfinished state with no bath or shower. During that period the landlord offered cash to the tenants to move. Developers are already going round council estates in Camden offering cash to tenants to tempt them to leave in advance of the legislation being passed. Nothing has happened yet, but property developers have moved into council estates, are knocking on doors and saying to tenants, "When the legislation is passed, you will have to pick a new landlord. Will you consider me? Here are my details."

Why should tenants not be worried in the face of such advances? In the example I mentioned, a landlord offered cash to tenants to tempt them to move. He went into their rooms without any kind of permission, written or otherwise, and looked around. The tenants in the basement moved out as they became frightened. At that point the landlord's builders went in and removed the spine walls and the chimney breasts. The other tenants protested and called in a district surveyor. The surveyor said that if he had not been called in and the building had not been made safe, it would probably have collapsed within 24 to 48 hours. How can we ask why tenants are worried about the effects of this Bill when such things are happening? Unscrupulous landlords are going round offering tenants money or threatening them because the landlords can earn a lot of money from empty rooms and empty property at the moment.

The villain who was shown on a recent film is not going to be worried about what happens to his tenants. When asked about his tenants he replied that he did not care about them and said that if they were evicted it was their problem. He said that all he wanted was the room and that he could make £150 a week on it. He said that he was the landlord of the property, that he wanted the rooms empty and that the fate of the tenants was somebody else's problem.

One would not think that such things occurred in Hampstead, but there was another bad case of harassment there. A tenant died a few weeks ago and at the weekend the landlord changed the locks in order to keep the tenant's cohabitee out of the flat. The landlord was called Bokhari. I do not discount the fact that all these landlords have foreign sounding names. At the weekend in question the landlord threw out the belongings of the deceased tenant and those of the tenant's cohabitee into the street. The tenant's cohabitee was arrested as the police believed that he was picking up things which did not belong to him and they were suspicious because he had no address and nowhere to go. There was an awful kerfuffie. The landlord in question has umpteen properties in the same area and is already harassing other tenants.

Anyone who says that the Bill has prevented any harassment is not telling the truth. Nevertheless it has improved the situation that has pertained up until now. These two clauses are certainly an improvement on the existing situation. But I am saying that they do not go far enough. I am asking Members of the Committee to support the amendments. That way we can at least try to alleviate some of the problems that we have outlined and many others that we could mention if we had the time.

Lord Trafford

I feel that the noble Lord has spoken to some extent about penalties rather than the cover of the clause. In some ways I agree with him on that point. As I am probably the Member of the Committee who lives nearest to Mr. van Hoogstraten, I must say that I have absolutely no sympathy or any defence to offer for such activities. I should like to see such activities curtailed in every possible way. Nevertheless, if one refers to page 19, line five, of the Bill, one will see that it provides part of an answer to the points made by the noble Lord, Lord McIntosh.

I also agree that it is right that these measures should be strengthened. I should hate to think that Members on the other side of the Committee, or anyone else come to that, believed that we on this side of the Committee did not wish to see these practices cease altogether. None of the previous five speakers have been lawyers. Yet they would be the first to agree that there is some difficulty in introducing legislation which would curtail these problems but would at the same time free the market. There is a difficulty in framing the legislation in such a way.

I personally welcome the strengthening of measures to fight harassment, for which I have no sympathy whatsoever. I have no interest to declare in this matter. I was a landlord at one time, although I am one no longer. Nonetheless, I have no sympathy at all for any harassment on the part of landlords.

I suggest that page 19, lines five and six of the Bill might cover some of the examples that the noble Lord, Lord McIntosh, postulated could take place. I remember the campaigns of the noble Lord, Lord Stallard, in another place on this matter. But I think he is referring more to penalties than the cover of the legislation. The great difficulty for tenants in these circumstances is that it is expensive, difficult and often very inconvenient to them in terms both of their existence at the time and the expense of bringing actions against landlords.

Lord Graham of Edmonton: They are terrified.

Lord Trafford

Precisely. The noble Lord has intervened from a sitting position. I agree that they are frightened. That is an unacceptable situation. However, I am not sure that the amendments which are proposed will help the situation very much. Much of what has been said in relation to the amendments is covered by the lines which I have mentioned.

I hope I speak for all Members of the Committee on this side of the Chamber when I say that we have no sympathy with the landlords in the examples given by the noble Lords, Lord Stewart, Lord McIntosh and Lord Stallard.

4.30 p.m.

Lord Stallard

I hope that I have not given the impression that I am concerned only with penalties. I hope that the noble Lord will read the amendments and will see what I am attempting to say about them. The amendments would shift the burden of proof from the tenant, where it lies at the moment, and on to the landlord. The landlord should be made to prove more than he has to at the moment and tenants should have more safeguards. I hope I did not give the impression that I was concerned only with penalties.

Lord Trafford

I understand the point which the noble Lord has made. However, he gave an example of a landlord who was fined £250. That amount, relative to the cost of property, was trivial. I therefore believed that he was emphasising penalties rather than stopping harassment. I am sure that all of us would like to achieve that. I re-emphasise the point that there is difficulty in framing legislation to achieve what we all wish to achieve at the same time that we help the housing market in general terms.

Lord Ross of Newport

I referred to the activities of Mr. Hoogstraten in my Second Reading speech. I expressed the hope that the Committee would take the opportunity to strengthen the Bill to make sure that actions taken against such persons would be successful.

I received a telephone call from a gentleman acting on behalf of the Association of Tenancy Relations Officers. I did not know that such officers existed. I am told that the members of the association are employed by a very few local authorities to explain and, in the last resort, enforce the legal rights that successive parliaments have seen fit to give to residential occupiers. The association has been in being for some 25 years. It acts as a sort of quasi police force so far as the Protection from Eviction Act is concerned. The association suspects that there are many landlords like Mr. Hoogstraten who are waiting to exploit some parts of the Bill. Mr. Hoogstraten actually stated that that was the case in a television programme. He said that it was a step in the right direction. He was pictured at one of the London property acutions. I believe that half the time people who buy such properties do not know what they are buying.

I believe that we are opening a Pandora's Box. I have always supported the Government's attempt to bring more private sector rented housing on to the market. However, I am sure that that will lead to grave difficulties in London, Brighton and one or two other places. I implore the Committee to listen to the pleas which have been made from this side of the Chamber. I am sure that no one will disagree that landlords must be dealt with properly. However, anything that we can do to strengthen the Bill must be done. The Bill will obviously be passed. It is up to us to strengthen it.

The association has had to implement the provisions of the Protection from Eviction Act for the last 25 years. It states: anything that can be done to restrict their activities and bring the worst offenders into court must be written into the Bill before it leaves the House of Lords". In 1986 the borough of Kensington and Chelsea took criminal proceedings against Mr. Hoogstraten for harassment. In January 1988 he was found not guilty on all nine counts at Inner London Crown Court. In March 1988, the borough of Kensington and Chelsea made representations to the Minister for Housing and Planning suggesting how improvements could be made to harassment legislation in order to give greater protection to tenants against unscrupulous landlords. The present Bill had been published at that time. I hope that the Minister will assure us that he has listened to representations from a borough which has been in the midst of the problem and knows a great deal about it. Is he satisfied that the Bill as it is drafted is adequate? I doubt it; that is why I support the amendments.

Lord Campbell of Alloway

Abhorrence of harassment has been expressed from all sides of the Chamber. That is common ground. It is common ground that the existing situation needs strengthening. It is common ground that the Bill strengthens it. However, we are discussing Amendment No. 1. Does that amendment add anything to the Bill or strengthen it?

Amendment No. 57 is referred to in Amendment No. 1. Amendment No. 57—I have considerable sympathy for it—is irrelevant to the acceptance of Amendment No. 1. To describe Amendment No. 1 as a paving amendment is, with great respect, a misnomer. It does not strengthen anything. It is an otiose provision. Having listened to what has been said, I believe that we should concentrate on Amendment No. 57. Amendment No. 1 takes the matter no further.

Lord McIntosh of Haringey

I hesitate to return to the question of grouping, which was raised originally by the noble Lord, Lord Coleraine. However, I must point out that the grouping of amendments was accepted by the Government. In addition, I was asked by the Government Whip's Office just before lunch today to add Amendments Nos. 60 and 62 to the list. Clearly there is some agreement between the Front Benches as to the relevance and interconnection of the amendments.

Lord Campbell of Alloway

I am not saying that there is no interconnection. However, one is defeated every time in the ball game of grouping. At the end of the day, each amendment must be considered and moved on its own merits. Amendment No. 1 has no merits whatever; in my humble opinion, Amendment No. 57 has.

Baroness Fisher of Rednal

The clause attempts to create assured tenancies and assured shorthold tenancies. In the long run, that will be done at the expense of tenants with either protected tenancies in the private sector or secure tenancies in the local authority sector. The Government wish to see that change in tenancy. Therefore, the change will also mean a change in security. It is obvious that the Government hope that new rent levels will be brought in. Market rents are mentioned frequently in the Bill.

If we change protection for tenants, we shall find that evictions will take place not through harassment, but rather through rent arrears. We shall find in the long run that rents will rise. I believe that the Bill also provides mandatory grounds for possession if tenants are three months in arrears, rather than as at present a discretionary power. Therefore, I believe that we have to think very seriously about why the amendment has been put down. It provides protection against eviction—perhaps in order to allow higher rents—which tenants will face if they are not given the protection they have at the moment.

Lord McIntosh of Haringey

I think that it may be helpful if, after further reflection, I respond to the points made by the noble Lords, Lord Coleraine and Lord Campbell of Alloway. I defended our grouping of amendments on the grounds that we were free to group as we wished. However, I accept the points that both noble Lords have made. It might he for the convenience of the Committee if I said now, without in any way denying the Government the opportunity to reply to this or any other amendments which have been discussed, that I propose to withdraw Amendment No. 1 and return to the matter on Amendment No. 57.

Lord Coleraine

I should like to make it clear that I understand entirely the predicament in which the noble Lord, Lord McIntosh, finds himself. This is a matter of the practice of the Committee. I understand that he will withdraw the amendment. I think that that is quite correct. The difficulty which faces the Committee with a grouping of this kind is that while the debate is held now many members who have participated in the debates may not be present when the amendments are moved. In an hour or two's time when the amendments come up Members in the Committee or voting may have no idea of what arguments were put forward when the amendments were debated.

Baroness Blatch

The noble Lord, Lord McIntosh and other noble Lords are absolutely right to take any opportunity in this Committee to expose the worst landlords in the system. Certainly Mr. van Hoogstraten is one of them and, I believe, deserves wholesale condemnation from all of us in this Committee.

However, are not Mr. van Hoogstraten and others of his ilk a creation of the way in which the present Act works? That point has not been made by noble Lords who have spoken so far. Rent controls, for example, under which landlords receive no reasonable return on their investment, have acted as an inhibitor and given rise to some of the abuses that have been catalogued by many who have spoken already in this debate.

Let us consider the package of proposals in the Bill—a loosening of rent controls allowing landlords a reasonable return on their investment; a system of assured tenancies with all the protection from eviction which is contained in Clause 27; another mechanism for helping the poorest to meet a more reasonable rent for the landlord. Is that not a healthier and more constructive way forward than to argue for more of the same, which would merely make the system more restrictive, would give no return on investment and would not open up the private rented sector?

I agree with the noble Lord, Lord Ross, that we have to find ways of opening up the private sector if we are to go some way towards resolving some of our housing problems. It is a question of balance and how one opens up the housing sector. I think that loosening rent controls and finding another mechanism for helping the poorest to meet the rents is the way forward.

Lord Bellwin

I should like to support m0y noble friend.

Noble Lords: The amendment has been withdrawn!

Lord McIntosh of Haringey

I do not want to inhibit debate. I have indicated that I shall withdraw the amendment but I think that it is proper that noble Lords should have freedom to intervene.

Lord Bellwin

I should like to make the same point as my noble friend Lady Blatch. The noble Lord, Lord Stallard, said that there was a lot of money to be made from empty rooms. I wonder therefore why we are not concerned that there are over 200,000 empty dwellings in the private sector and some 100,000 empty dwellings in the public sector. Those are empty rooms. If we look at the reasons for the empty rooms we come back to the underlying theology of the Bill.

I speak not without some knowledge of the subject. I served on the Francis Committee, which in the early 1970s studied the workings of the Rent Acts of 1965 and 1968. Although harassment was a great worry then as it is now—and as all speakers have said it is something that everybody deplores—the committee concluded that altering security of tenure from furnished to unfurnished accommodation would open the door still further to the closing down of private rented dwellings. We expressed our great concern at that time. In the event, the Government of the day took no notice, went ahead and increased security of tenure. What did we have but the inevitable further drying up at a dramatic rate of the amount of accommodation available?

This is relevant to the amendment of the noble Lord, Lord McIntosh. He, like everyone, has to look at the causes of harassment. If there was an increase in the available accommodation the prizes would not be so great for the dreadful people who do such things. It would not be worth the candle to the same extent as it is today. For that reason I believe that we cannot look at the amendment pertaining to harassment in isolation without taking into account also the other factors in the Bill regarding different forms of tenancies. In my opinion, if it is as successful as we all hope, the Bill will make a major contribution to reducing the rewards which harassment produces today.

4.45 p.m.

The Earl of Caithness

I am not quite sure how to respond to this debate, because it was not quite in the form that I thought this morning—or at 11 o'clock, at lunchtime, at 3 o'clock or now even—that it would be. I started off this morning believing that we would debate Amendment No. 1. Of course the noble Lord, Lord McIntosh, is absolutely entitled to bring forward any other amendments in his name to be discussed together with Amendment No. 1. That is what he has done and he has a right to do so. Those are the rules under which the Committee operates.

I think that it is right to say that we on this side of the Committee are very concerned about the lack of a private rented sector. In that we are supported by the noble Lord, Lord Ross of Newport and his party. Both the noble Lord, Lord Ross, and we believe that the private sector has an important part to play within the rented market. As my noble friend Lord Bellwin has just reminded the Committee, it has decreased at an alarming rate. That we believe is to a very great extent due to the existing legislation. That is why we have produced new legislation which we believe will enable landlords to let and at the same time give very necessary security to tenants. As the noble Lord, Lord Goodman, said at Second Reading, tenants' security is very important. We have taken full cognisance of that point. When noble Lords study the Bill they will see the security provisions which we have included.

We have also taken the opportunity to tighten the law to prevent harassment. Harassment and illegal eviction of private tenants are not a recent problem. Bad landlord behaviour is in large part a product of the Rent Acts, which have held down rents and deprived landlords of a reasonable rate of return. However, no one in this Committee could condone illegal attempts to gain control of property. As my noble friend Lord Renton and all my noble friends have said, Members opposite are preaching to the converted.

Under the Protection from Eviction Act of 1977, which has its origins in legislation passed in 1964, harassment and illegal eviction are criminal offences attracting in extreme cases very severe penalties—up to two years' imprisonment and/or a fine of up to £2,000.

The Bill includes extensive measures to strengthen this area of the law. They are aimed not only at the immediate landlord but at any superior landlord. These measures include a new offence of harassing an occupier knowing or having reasonable cause to believe that this was likely to cause him to leave his home.

There is also a new civil right to damages provision for tenants who are evicted illegally, which we hope will be effective from 9th June of this year. The amount of damages available under the new right could be equivalent to the whole of the landlord's financial gain from evicting the tenant. We see this as a powerful deterrent to misbehaviour by a minority of bad landlords. Even Peter Rachman might have thought twice about evicting his tenants had there been legislation of this kind in the 1950s. If I may encapsulate the provisions, this is what we have brought into the Bill already in order to take care of an existing situation. It is not a situation that will be created as a result of this Bill. We believe in fact that the provisions in the Bill will make the situation a great deal better.

The noble Lord, Lord McIntosh, referred to a Mr. van Hoogstraten, who is a landlord with properties in London and the South-East and who has recently been the subject of well merited criticism by the media. Perhaps I may just say to the noble Lord, Lord Ross of Newport, that of course officials in my department have spoken to officials of the Royal Borough of Kensington and Chelsea and to the tenants who were involved in the court case against Mr. van Hoogstraten brought by the borough, so we have views about why the case failed and what kind of improvements in the legislation may be necessary. I am sure that the Committee will agree that Mr. van Hoogstraten is exceptional among landlords in his attitude to his tenants and the law. He is not typical of landlords generally. He has been in prison in the past and has been fined.

I put to the Committee that he might not have made the profits from property that he did had the new right to civil damages been available earlier. The noble Lord, Lord McIntosh, spoke for about 10 minutes about this one landlord but it is worth stressing that bad behaviour by landlords is a product of the Rent Acts, which have made renting private property an uneconomic activity. The noble Lord, Lord Stewart of Fulham, was right when he said that present legislation has encouraged a very small minority of landlords to take some extreme actions. I repeat that the provisions of the new tenancy arrangements under this Bill with market rents will reduce that element of encouragement to had landlords.

Lord Stallard

The noble Earl said that one can blame the new breed of bad landlords on the Rent Acts. How does he explain Rachman, who was a product of the 1957 Rent Act?

The Earl of Caithness

With respect, I think that the noble Lord may have misheard me. I was indeed referring to Rachman and landlords who, under the existing Rent Acts and other Acts that affect housing did some things which, I suggest, they would not have done had there been available then the present penalties that are included in the Bill and the new right to civil damages.

Lord Coleraine

Surely the noble Earl accepts that Rachman is in no sense a product of the 1957 Act.

The Earl of Caithness

Mr. Rachman was buying property at market value. It was property that was subject to tenancy and therefore had a low market value, and he was harassing tenants and evicting them from that property in order to sell it. Had the provisions of the present Bill been in existence and if civil damages could have been taken against him, I put to the Committee that he might not have done some of the things he did. Quite apart from the anti-harassment measures that I have mentioned, I think it highly unlikely that the deregulation provisions of this Bill will increase harassment and illegal eviction. Landlords who try to get rid of their tenants illegally usually do so because they want to have vacant possession in order to sell the property and not because they want to re-let it. As my noble friend Lord Coleraine has just reminded the Committee, the incentive to harassment is already there. This Bill will not increase it.

The point which my noble friend Lord Trafford and I take from the example, given by the noble Lord, Lord Stallard, of the tenant whose ceiling was taken down is not that the 1977 Act is inadequate but that the court imposed a fine which he thinks was inadequate. The fine could have been a lot higher, but that was a matter for the court. We shall be discussing with the Magistrates' Association whether there is any advice that can be given to its members about the appropriate penalties to be imposed upon landlords who are found guilty of harassment and illegal eviction. We shall be issuing a circular to local authorities which will remind them of their powers under the Protection from Eviction Act, and which will contain general advice on the use of control orders and CPO's in cases of harassment.

Lord Stallard

I apologise for again interrupting, but on this point the noble Earl quite rightly says that Rachman was interested in having empty properties for sale. I accept that it would have been better if these measures had been available at the time and better still if they had been strengthened in the way that we suggested. However, he failed to mention that the prices which can be obtained for property are now far higher than even Rachman could have dreamed of obtaining by emptying his properties. So the incentive still applies to emptying the property for sale.

If one considers the selling prices of properties in the inner cities and London and the rents that could be obtained by letting those properties, calculating how long it would take to obtain by those rents the huge fortune that one can make by selling, there is simply no comparison. The interest is still in selling. Ordinary family houses in boroughs such as Islington, Hackney and Camden at the moment sell for £300,000 to £320,000. How much rent will a landlord have to receive to make that kind of money? What landlord will say. "I shall buy that property because I want to get back into the rented market"? He will not want to rent those rooms for £50, £60 or £70. That would not make economic sense from the landlord's point of view. He still wants property for sale and there is therefore still the incentive for the kind of oppression about which we have heard.

The Earl of Caithness

The noble Lord, Lord Stallard, merely confirms the potential for harassment and eviction of tenants that exists under the present legislation because of the wide discrepancy between artificially low rents and the resulting capital value of the dwelling against vacant possession value of the dwelling. I put it to the Committee that, if a landlord under the new assurred tenancy provision can let for a market rent which gives him a rate of return, at least some properties which are at the moment empty may come back into the rented sector. Surely that is something to be welcomed.

I turn to Amendment No. 1. I shall deal only with Amendment No. 1, because I sense that we shall be having another substantial debate on Amendments Nos. 57, 60, 61, 62 and 63, on which I shall have more to say to the Committee. Rather than repeat myself then, having made some general remarks I shall confine myself now to Amendment No. 1.

The effect of this amendment is to apply the new civil right to damages for unlawful eviction set out in Clause 27 to tenancies which fall within Clause 1 of the Bill and are therefore assured. I assume that this is a probing amendment, and in fact that has now been confirmed by the noble Lord, Lord McIntosh of Haringey.

Of course, the amount of damages under Clause 28 will vary according to the nature of the occupier's agreement: this is because the damages are to be assessed as the difference in the value of the landlord's interest in the building containing the premises with and without the residential occupier. So the landlord who evicts unlawfully a Rent Act tenant with a registered rent can expect to have to pay higher damages, all other things being equal, than one who evicts an assured tenant paying a market rent. But the incentive to evict the assured tenant may of course also be much less.

I hope that that explanation goes some way toward reassuring the noble Lord, Lord McIntosh, but I look forward to resuming discussion of this matter, which is a very important matter for the Committee to decide, when we come to Amendments Nos. 57 and 60 to 63.

Lord McIntosh of Haringey

I am grateful for the recognition by the Minister that this is a matter of very great importance. To return to the procedural matters that we have just been discussing, it was for that reason that we thought that it should be the first item on the Committee's agenda. We put it into Clause 1 because that clause which deals with the creation of assured tenancies, is something that the outside world will see as being the potential cause of an increase in harassment. That was the thinking behind it. We thought that tenants who saw Clause 1 going through unchallenged or unamended would feel that in a sense we had let them down. However, under pressure from Members opposite, I have agreed that the matter should be discussed separately. I think that there are procedural problems with this which are not merely concerned with the length of debate. Certainly when we come to discuss Amendment No. 57 I shall not deal with it at very great length although I must repeat the more important arguments for the benefit of those Members of the Committee who were not present at the earlier debates.

However, the procedure whereby we attempt to group amendments together—and we sometimes create amendments which make that possible even if they do not add a great deal except in psychological terms to the force of the Bill—is a system which is worth supporting. It ought not to be abandoned. I hope that Members of the Opposition or the Government Benches will not feel inhibited in doing so in the future. It is in accordance with the Committee's somewhat informal, but usually helpful, conduct at Committee stages that we should continue this procedure. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5 p.m.

Lord McIntosh of Haringey moved amendment No. 2:

Page 2, line 22, at end insert— ("( ) The provisions of this Part relating to termination of an assured tenancy before the expiry of the term shall not apply to any such tenancy which falls within the meaning of section 20 below, except in pursuance of a provision for re-entry or forfeiture for non-payment of rent or breach of any other obligation of the tenancy.").

The noble Lord said: In moving Amendment No. 2 I wish to speak also to my Amendment No. 43 and, at the request of the Government Whips' Office, to Amendments Nos. 41, 42 and 46. In case any noble Lord should think that a debate on Amendment No. 2 will result in my withdrawing the amendment I give notice now that I shall not do so. I do not think that I would have the right to do so because the grouping that has been agreed includes government amendments.

The same argument applies. If we allow Clause 1 to go through without drawing attention to the huge risks which are involved in the proposals for assured shorthold tenancies, we would be causing misunderstanding outside this Chamber and causing fear to those tenants who are likely to become assured tenants and are afraid of the risks of the provisions for shorthold tenancy.

In considering the later amendments I shall welcome the government Amendment No. 42 which we believe goes some way to achieving the objectives of our Amendment No. 43. The problem with shorthold tenancies can be expressed very simply. If it is in the interests of landlords to have the assured tenancy provisions, and if, as the Government argue, there is likely to be an increase in private rented property as the result of the assured tenancy provisions, it must be for one or both of these reasons. Either they will obtain more rent out of the properties than they have done in the past over many years under the more restrictive rent control procedures; or they feel that the provisions for repossession are stronger. To put it another way, the security of the tenants under the assured tenancy scheme is weaker.

I suggest to Members of the Committee that both are the case, and that the provisions of an assured tenancy will be substantially weaker than the provisions under existing rent Acts. We shall argue those points in detail as we come to the different clauses which deal with repossession and so on. I do not wish to pre-empt those arguments.

The provisions for a shorthold tenancy drive a coach and horses through the remaining restrictions which exist to prevent landlords treating tenants' houses simply as a speculation rather than as a real economic and social service.

Perhaps I may again emphasise the degree to which I hope we are all agreed. I do not think that anybody in this Committee wishes to encourage private rented accommodation simply for the benefit of money making for landlords. They wish to do so because they see that private rented accommodation is a useful part of the total housing picture in our country.

The Minister referred to the support of the noble Lord, Lord Ross, for that point of view. It is a view that I share. I believe that there should be a plurality of types of tenure in this country. Anything which adds to the varied and efficient provision of decent housing for people at a decent affordable rent should be encouraged. If it can be achieved through the private rental sector, we have no ideological objection to it. We are saying that the Government's provisions in respect of the assured tenancies are shot to ribbons by the provision for shorthold tenancies.

The shorthold tenancy is the same as an assured tenancy in every respect except that it may have a finite term from six months to five years. At the end of the finite term the landlord's opportunities for repossession are very much greater than they are for ordinary non-finite assured tenancies.

This is in no sense a wrecking amendment. It is one which seeks to go in the same direction as the government Amendment No. 42. However, it goes a little further than that. We are saying that such a tenancy cannot be brought to an end by the landlord before the expiry of the term, except in pursuance of a provision for re-entry or forfeiture for nonpayment of rent or breach of any other obligation of the tenancy. We are reinstating in the Bill the safeguard against the use of the break clause which was contained in the 1980 Housing Act which created the protected shorthold tenancy, which was the predecessor of the current form of tenancy. Under our amendments, it is still possible for the landlord to terminate a shorthold fixed term if the tenant fails to pay the rent or if he breaches the terms of the tenant's agreement. If our amendments are accepted, he cannot use the provisions of the Bill in order to transfer his tenancies, as they become available, to shorthold tenancies and then kick people out at the end of a fixed term, or indeed in advance of a fixed term.

Those are the purposes of our amendments. We believe that they are helpful to the Bill rather than unhelpful. We think that they are in accordance with a long line of housing and tenancy provisions embodied in the law. We hope that they will find favour with the Committee. I beg to move.

The Earl of Caithness

Where a landlord has granted a fixed term assured tenancy, whether or not it is an assured shorthold tenancy within the meaning of Clause 20, the circumstances in which he can recover possession of the dwelling before the end of the fixed term are limited by Clause 7(6) of the Bill. This allows the court to grant possession only on certain of the grounds in Schedule 2 and then only if the terms of the tenancy make provision for it to be brought to an end on the ground in question.

One effect of Amendment No. 2 in the name of the noble Lord, Lord McIntosh, is further to reduce the grounds which the landlord can use in such a case. Grounds 2 and 9 would not be available to the landlord. We agree that a landlord ought not to be able to use Ground 9, which involves the provision of suitable alternative accommodation, to get possession during the fixed term of any assured tenancy, not just a shorthold, and I undertake to bring forward an amendment to achieve this at a later stage of the Bill. We do not agree that a landlord's mortgagee should be denied the use of Ground 2, however, where the landlord has defaulted on his mortgage and to that extent the amendment is not acceptable.

The other effect of the amendment is to prevent a landlord bringing a shorthold to an end during the fixed term where the tenancy includes a right for him to determine it. We agree that it should not be possible to determine a shorthold within its first six months, and we have tabled government Amendments Nos. 41, 42 and 46 to that effect. We shall discuss them in a moment. But if, for longer shortholds, the landlord wishes to include a right to determine and to use it, we do not see why he should not be able to do so.

Let me turn to the government Amendments Nos. 41, 42 and 46, and the opposition Amendment No. 43. There is, as I am sure Members of the Committee are aware, nothing between the Government and the noble Lord, Lord McIntosh of Haringey, on those amendments. Both our amendments and those tabled by the Opposition have the same purpose, though the wording is slightly different.

Clause 20 provides that in order for a tenancy to be an assured shorthold tenancy it must be for a term of at least six months. We do not want landlords to be able to circumvent this requirement by granting six month tenancies with a power to determine the tenancy at some point before the minimum six month term is up. Our amendments provide that any tenancy with this sort of provision will not be shorthold. Provided the qualifying conditions are met it will be a full assured tenancy. These amendments block a possible loophole.

The opposition amendment takes a slightly different route but reaches the same goal. With respect to the noble Lord, Lord McIntosh, we prefer our route because it avoids the need to mention reentry or forfeiture. It achieves this because determination is defined in Clause 45(4) as excluding those things. I am delighted the noble Lord will accept government amendments, and that he now agrees that they achieve what he wants.

Lord Monson

I wonder whether the noble Lord, Lord McIntosh, would accept that landlords would be less keen on the idea of shorthold tenancies if the Labour Party were to enter into a long-term compact with the Conservative Party and the other opposition parties on the future of private rented accommodation and on the question of security for landlords as well as tenants, and showed themselves to be as interested in the rights of landlords as they are, justifiably, in the rights of tenants? It is fear of what a future Labour Government might do that makes landlords so reluctant to enter into long-term commitments.

Lord McIntosh of Haringey

Perhaps I may first respond to the noble Lord, Lord Monson. When I was saying that we accepted that private rented accommodation could be a valuable part of the housing market, it certainly was not because we were concerned for the interests of landlords. Our concern is that there should be decent accommodation on a wide variety of bases for a wide variety of people at affordable rents. If some of that can be achieved by giving landlords a reasonable return on investment, there can be no ideological objection to that.

However, as I pointed out at Second Reading, the rate of return on investment for private landlords does not depend on the quality of the property but on the time when the property was bought in a situation where house prices—residential accommodation prices—have been going up dramatically faster than inflation over a number of years. I fear that the noble Lord, Lord Monson, is not going to tempt me into committing my party to becoming supporters of landlords under those very dubious economic circumstances.

We have, as the Minister said, a measure of agreement on what is necessary to restrict a particular kind of misuse of the shorthold tenancy provision, and the noble Earl has given an undertaking that he is going to bring forward amendments—I think at Report—to deal with one particular problem that is referred to in Amendment No. 2. Under those circumstances, I can only say that I have heard with interest what he has said, and I look forward to having an opportunity to discuss it with him. I hope that the result will go a long way to meeting our objectives in these amendments. It is, under those circumstances, proper that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord McIntosh of Haringey moved Amendment No. 3:

Page 2, line 22, at end insert— ("( ) The provisions of this Part relating to rents in respect of assured tenancies shall not apply where a Rent Assessment Committee has not registered a rent under section 14 below for an assured shorthold tenancy falling within the meaning of section 20 below.").

The noble Lord said: Amendment No. 3 is to he taken together with Amendments 33, 44 and 50. It may be for the convenience of the Committee if I explain what is intended by those amendments. The reason why we have Amendment No. 3—and I say this in the absence of the noble Lords, Lord Campbell of Alloway and Lord Renton, but in the presence of the noble Lord, Lord Coleraine—is that we are referring to a number of different clauses in Part I of the Bill and it is necessary in our view for Clause I of the Bill to bring those elements together and to provide a coherent view of what is intended in the remainder of the Bill, otherwise there is a serious risk that the whole provision for shorthold tenancies will be misunderstood.

The first amendment we are concerned with after Amendment No. 3 is Amendment No. 33. This amendment has the effect of ensuring that the setting of rent for an assured shorthold tenancy is only subject to Clause 22, which is the clause that deals with the assured shorthold tenancy procedure, and not to Clause 13, which is the more general assured tenancy procedure.

The important point here is that if, as we assert, landlords have substantially more powers to remove tenants under the assured shorthold tenancy procedure than they do under the assured tenancy procedure—and we are by no means satisfied with the assured tenancy procedure itself—that ought to be reflected in the rent, because security of tenure is one of the things that deeply concerns people and affects the judgment that they are going to make about whether they take, or accept, a tenancy as between one form of tenure and another. We would look to the Government for an assurance that they understand that an assured shorthold tenancy does not merit the same level of rent as an assured tenancy. I hope that this is a relatively uncontroversial provision, and therefore an uncontroversial amendment.

The next amendment refers to the determination of the rent under an assured shorthold tenancy. What we say here is that it is extremely important that there should be a determined rent set by a rent assessment committee. At the moment the provisions for rent assessment committees—and we shall come back to some specific aspects of the rent assessment committees in later amendments—are in our view quite inadequate. Rent assessment committees are not as accessible to tenants as they should be—in effect, on demand.

Noble Lords spoke at Second Reading about the valuable work of rent officers. I believe that the noble Lord, Lord Ross, made particular reference to this, and certainly other noble Lords did. The whole point about rent officers is that in effect they are available to tenants on demand, whereas the rent assessment committee is hedged about with restrictions. In particular, there is a restriction which says that the rent assessment committee is absolved of the responsibility for determining a rent if they think that there is no comparable rent in (I think the phrase is) that part of the country. I do not really know what "that part of the country" means, but it could be interpreted by a rent assessment committee which wanted to avoid unnecessary or unwelcome work in such a way as to make it quite difficult for a tenant to get a determined rent that would provide him with the kind of protection about rent that he wants.

The final amendment in this group is Amendment No. 50, which refers to the reference of rents to a rent assessment committee. The point about this amendment is that once a rent has been determined by a rent assessment commitee under the conditions we are proposing, that rent shall continue in effect even if there is a change of tenant. That is an important provision, and one that the Government ought to find some way of meeting.

That amendment is rather long and complicated, and I have no doubt is therefore subject to textual criticism. But, even if that amendment is not totally adequate, I hope that the Government will recognise that it is important that there should be built up by the rent assessment committees over a period of time a body of not case law but case regulation, case understanding, and case pricing that will help rent assessment committees to determine more effectively than they can under the provisions of the Bill what a reasonable rent should be for this type of tenancy.

The amendments hang together and properly demand the attention of the Committee in its consideration of Clause 1 of the Bill. I hope that they will commend themselves to the Committee.

The Earl of Caithness

Amendment No. 3 reflects the view of the noble Lord, Lord McIntosh of Haringey, that there should be a powerful incentive if not an outright compulsion to obtain a determination of rent for a shorthold tenancy. This brings us once again to an issue on which there is a clear divergence across the Chamber; namely, the merits of statutory regulation of private lettings as against the right of landlord and tenant to negotiate terms between themselves.

As I have already indicated, our position is that the existing rent Act regime places an undue emphasis on statutory regulation and the balance ought now to shift in the opposite direction towards greater freedom for the parties to sort out their affairs by negotiation and contractual agreement. We are by no means ignoring the need for statutory procedures in cases where the parties cannot agree between themselves, but we are quite adamant that there should be no compulsion to use them. Amendment No. 3 would in effect provide such compulsion since it would apparently require that, if a shorthold tenancy did not have a rent determined by the rent assessment committee, it would he excluded from the new market rent regime altogether. That is not an approach that we could countenance.

I turn to Amendment No. 33. Clause 13 as it stands relates only to periodic tenancies. A shorthold letting will, by virtue of the definition in Clause 20(1), be granted for a fixed term. For as long as that fixed term runs, the tenancy will therefore be outside the scope of Clause 13. Generally our position is that, where a fixed term tenancy is granted, landlord and tenant ought to be bound by the terms of that agreement and have no right of access to any statutory rent-fixing mechanism.

We recognise that some statutory rent provision is desirable in respect of shorthold lettings, but that is provided for under Clause 22. Clause 13 will thus be of no relevance in the initial fixed term of a shorthold letting. To this extent the amendment is unnecessary. However, once the initial fixed term has come to an end, the landlord may not wish to seek immediate repossession; he may be prepared to let the tenancy run on as a periodic tenancy. It seems perfectly reasonable that he should be encouraged to do this. Where he does, a mechanism will be needed under which the rent can be increased. It seems right that at that stage, and at that stage only, the tenancy should be brought within the scope of the Clause 13 procedure just like any other assured periodic tenancy. Accordingly, the landlord will be able to propose an increase in the rent, and the tenant will be free to refer that to the rent assessment committee if he wishes. The effect of the amendment would be to deprive the landlord, who let a shorthold continue beyond the fixed term, of any means of increasing the rent. This in our view would be quite unreasonable from the landlord's point of view and would merely serve to encourage landlords to seek immediate repossession of their property even when they might not otherwise have chosen to do so.

I deal next with Amendments Nos. 44 and 50. These again are at odds with the basic thrust of government policy towards the private rented sector. We accept that the shorthold market needs to be underpinned by a statutory rent-fixing procedure. That is the purpose served by Clause 22. The intention is to provide a safety net for the shorthold tenant who has struck a particularly bad bargain with his landlord and committed himself to paying a rent that is clearly well above market level. In such circumstances, the rent assessment committee is available to bring the rent into line with the generally prevailing level. However, it is one thing to provide a statutory mechanism for occasions when it is genuinely needed; it is quite another to require that the mechanism must be used in all cases. In no circumstances do we wish the statutory machinery to cut across the freedom of the landlord and tenant to negotiate matters amicably between themselves. On that basis we cannot accept the proposed amendment.

Nor can we accept the approach in Amendment No. 50, which would require the rent assessment committee to determine the rent for a shorthold at a level below that applying to full assured tenancies. It is central to our strategy that rents for private lettings, full assured tenancies and shortholds, should be established according to free market principles. One would expect that the rents for shorthold tenancies ought in general to emerge somewhat lower than those for full assured tenancies, having regard to the limited security of tenure. However, it would not be right to enshrine this expectation in legislation. A market, the operation of which is determined by statute, by definition is not the free market that we wish it to be.

As regards housing benefit, this will of course come into play in respect to the market rental. I can set the Committee's mind at rest by making clear that where a rent has been determined by the rent assessment committee, whether for a full assured tenancy or a shorthold, that rent will normally be accepted as reasonable for housing benefit subsidy purposes. The necessary provision for this can be made under existing legislation. There is therefore no need for an amendment to the social security legislation of the kind suggested in Amendment No. 50

Lord Ross of Newport

I am very disappointed, as I said on Second Reading, about the demise of the role of the rent officer. I gave my name to these amendments because, in respect of shorthold tenancy, I thought that an alternative might be to go to a rent assessment committee. I believe the Government are wrong in their belief that rents fixed amicably between landlord and tenant will not be sky high. In effect this could swamp the advice of people like rent officers, who have abundant experience and knowledge of what sensible rents should apply. This should be done in stages. I do not think that it will help anybody in the borough of Kensington or anywhere else if the rents are something like £300 or £400 a week, as I suspect that they probably will be. Such tenancies will be taken up by short-term visitors to these shores—holiday lets to people coming from overseas wanting temporary accommodation.

I rather regret that the Goverment have turned their back on this. I wonder whether the originator of shorthold, the late Sir Brandon Rhys-Williams for whom I had great respect, would agree that the Government should not allow people occupying shorthold to have the advice of rent officers or, if that is not to be, rent assessment committees. I think that we should have made use of that facility.

Baroness Gardner of Parkes

I take a different view on the matter from the noble Lord, Lord Ross of Newport. He says that rents in Kensington are £300 a week or thereabouts. Of course they are, but what is the noble Lord saying? I could point to rents in the area ranging from £100 up to £1,500 a week. Rents range over all prices. What I think is not understood by the Opposition in particular is that people are not willing to let a place if they have to undergo the hassle of involvement with a rent assessment officer. They are prepared to agree a price with the tenant, strike a bargain and everybody is perfectly happy about it. The alternative is to have the threat hanging over one's head that one will be taken to a rent assessment officer.

Many years ago I was taken to what was then a rent tribunal. I had a surgery with a flat above it and a flat below it. The time came when I needed to move the surgery. In those days, furnished tenants did not have security of tenure. I gave notice that I wanted to leave. The girls in the flat above, who had been there for years, found other accommodation and moved. The girls below, who had been there two or three weeks, immediately applied to the rent officer for security of tenure.

The only way to act in those days was to apply for a reduction in rent. I appeared on my own behalf and was asked what I thought about the rent. I said that I thought it was rather low, but I was happy to accept it. The girls were asked what they thought, and they said they were perfectly happy with it. Despite that, the tribunal cut the rent by £1.50 a week although both landlord and tenant had been happy with it. The tribunal also said that it could see that we needed possession in order to sell the house and it gave the girls only three months security of tenure. I lost the only buyer that I had at that time. The girls found alternative accommodation and left after about two weeks.

Having been through the harrowing experience of a rent tribunal, I am aware how hard it is for landlords to face it. I believe that we are entirely overlooking the fact that if many people will be willing to let their properties, there will be a surplus of property available. Therefore landlords will be unable to charge the sky-high rents about which we have been talking. Landlords are charging sky-high rents because they are so restricted in the type of tenant that they can now accept, and they are conscious of the bad deal that they are getting. There are plenty of people who, as tenants, would be willing to agree a rent with the landlord, strike a fair bargain and carry on.

Until recently all the rents in London had to be subject to assessment and no one was letting property within London. Outside London there were no restrictions, and that had an adverse effect on the situation in London. If that situation were to be returned in the Bill, we should be back exactly where we were. I certainly oppose the amendment.

Lord McIntosh of Haringey

Having known the noble Baroness for a long time, I can say that I have total respect for her probity and sympathise with the difficulty that she experienced with the rent tribunal. I am afraid that she is not typical of landlords who will he using the shorthold tenancy procedure.

As the Minister made admirably clear in his response to the amendments, the shorthold tenancy procedure is a fundamental difference between us. In our view it will amount virtually to complete deregulation. There are those who want complete deregulation; and although I hesitate to say that I respect them for that, I understand their reasons. No one has yet answered the question why, under the two-tier system of assured tenancy and assured shorthold tenancy, any landlord in his right mind should opt for an assured tenancy instead of an assured shorthold tenancy. He has an extra ability to kick out tenants at the end of a fixed period. It costs him nothing; there is no assurance that there will be a lower rent. Indeed, it has been specifically denied that there will be any recognition of the lack of security in the rent paid. The Minister made no comment on that assertion which I made in introducing the amendment. Will it be 10 per cent. or 20 per cent. below? There is no indication that there will be any recognition of the lack of security in the rent paid for a shorthold tenancy.

Under such conditions, why should there be anything other than shorthold tenancies? The shorthold tenant will always be afraid to exercise even the rights which are given to him under the Bill because of the fear that, at the end of his shorthold tenancy, he will be kicked out under the shorthold provisions. What incentive or protection will there he for a shorthold tenant to apply for his rent to be registered? The answer is that, unless the amendments are accepted, there will be none. The provisions for a rent assessment committee under those circumstances are meaningless. The whole elaborate structure which the Government appear to have set up to protect tenants under the assured tenancy procedure will be as naught.

I fear that this is a matter on which we cannot allow the Government to get away with what is, in effect, a switch-sell. They are selling complete freedom for landlords as though there was a degree of assurance in the assured tenancy procedure. That is not the case and we must show that it is not the case. It is necessary for me to ask the Committee to take a decision on Amendment No. 3.

5.34 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 76; Not-Contents, 117.

DIVISION NO.1
CONTENTS
Addington, L.	Kilbracken, L.
Airedale, L.	Leatherland, L.
Ardwick, L.	Listowel, E.
Aylestone, L.	Longford, E.
Birk, B.	Lovell-Davis, L.
Blackstone, B.	McIntosh of Haringey, L.
Boston of Faversham, L.	McNair, L. [Teller.]
Briginshaw, L.	Mais, L.
Bruce of Donington, L.	Mayhew, L.
Buckmaster, V.	Molloy, L.
Carmichael of Kelvingrove, L.	Morton of Shuna, L.
Carter, L.	Mountevans, L.
Cledwyn of Penrhos, L.	Nicol, B.
Cocks of Hartcliffe, L.	Ogmore, L.
Dean of Beswick, L.	Oram, L.
Dormand of Easington, L.	Peston, L.
Elwyn-Jones, L.	Ponsonby of Shulbrede, L. [Teller.]
Ennals, L.
Ewart-Biggs, B.	Prys-Davies, L.
Falkender, B.	Rea, L.
Falkland, V.	Reilly, L.
Fisher of Rednal, B.	Rochester, L.
Gallacher, L.	Ross of Newport, L.
Galpern, L.	Seear, B.
Graham of Edmonton, L.	Sefton of Garston, L.
Grey, E.	Serota, B.
Grimond, L.	Shackleton, L.
Hampton, L.	Stallard, L.
Harris of Greenwich, L.	Stewart of Fulham, L.
Hatch of Lusby, L.	Stoddart of Swindon, L.
Henniker, L.	Turner of Camden, B.
Hooson, L.	Underhill, L.
Houghton of Sowerby, L.	Wallace of Coslany, L.
Howie of Troon, L.	Wells-Pestell, L.
Hughes, L.	White, B.
Jacques, L.	Willis, L.
Jay, L.	Winchilsea and Nottingham, E.
Jeger, B.
John-Mackie, L.	Worcester, Bp.

NON-CONTENTS
Ampthill, L.	Balfour, E.
Arran, E.	Bauer, L.
Auckland, L.	Beaverbrook, L.

Belhaven and Stenton, L.	Johnston of Rockport, L.
Beloff, L.	Killearn, L.
Belstead, L.	Kinloss, Ly.
Bessborough, E.	Lauderdale, E.
Blatch, B.	Lawrence, L.
Borthwick, L.	Long, V.
Boyd-Carpenter, L.	Lucas of Chilworth, L.
Brabazon of Tara, L.	Luke, L.
Brookeborough, V.	Lyell, L.
Brougham and Vaux, L.	Lytton, E.
Broxbourne, L.	Mackay of Clashfern, L.
Butterworth, L.	Macleod of Borve, B.
Caithness, E.	Marley, L.
Cameron of Lochbroom, L.	Merrivale, L.
Campbell of Alloway, L.	Mersey, V.
Campbell of Croy, L.	Milverton, L.
Carnegy of Lour, B.	Monson, L.
Carnock, L.	Mowbray and Stourton, L.
Clitheroe, L.	Munster, E.
Coleraine, L.	Norrie, L.
Colnbrook, L.	Onslow, E.
Cork and Orrery, E.	Orr-Ewing, L.
Cox, B.	Peel, E.
Craigavon, V.	Pender, L.
Davidson, V. [Teller.]	Peyton of Yeovil, L.
Denham, L. [Teller.]	Plummer of St. Marylebone, L.
Derwent, L.
Digby, L.	Prior, L.
Dilhorne, V.	Quinton, L.
Dundee, E.	Rankeillour, L.
Eccles, V.	Reigate, L.
Eden of Winton, L.	Renton, L.
Elibank, L.	Renwick, L.
Elles, B.	Rippon of Hexham, L.
Elliot of Harwood, B.	Rochdale, V.
Faithfull, B.	Rodney, L.
Ferrers, E.	Rugby, L.
Ferrers, L.	St. Aldwyn, E.
Fortescue, E.	St. Davids, V.
Fraser of Kilmorack, L.	St. John of Fawsley, L.
Gainford, L.	Saint Oswald, L.
Gardner of Parkes, B.	Sanderson of Bowden, L.
Gisborough, L.	Stanley of Alderley, L.
Glenarthur, L.	Strathspey, L.
Greenway, L.	Swinfen, L.
Gridley, L.	Terrington, L.
Hailsham of Saint Marylebone, L.	Thomas of Gwydir, L.
	Thomas of Swynnerton, L.
Harmar-Nicholls, L.	Thorneycroft, L.
Havers, L.	Trafford, L.
Hesketh, L.	Trumpington, B.
Hives, L.	Ullswater, V.
Holderness, L.	Wise, L.
Hood, V.	Wolfson, L.
Hooper, B.	Young of Grafham, L.
Hylton-Foster. B.	Zouche of Haryngworth, L.
Jenkin of Roding, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.43 p.m.

Clause 1 agreed to.

Lord Dean of Beswick moved Amendment No. 4:

After Clause 1, insert the following new clause:

("Application for registeration of rent.

.—(1) Notwithstanding any provision in the terms of the tenancy, an application for the registration of a rent for a dwelling-house may at any time be made to the Rent Assessment Committee by the landlord or the tenant, o0r jointly by the landlord and the tenant, under an assured shorthold tenancy of the dwelling-house.

(2) Any such application must be in the prescribed form and contain the prescribed particulars in addition to the rent which, it is sought to register.

(3) Subject to subsection (4) below, where a rent for a dwelling-house has been registered under this Part of this Act no application by the tenant alone or by the landlord alone for the registration of a different rent for that dwelling-house shall be entertained before the expiry of two years from the relevant date (as defined in subsection (5) below) except on the ground that, since that date, there has been such a change in—

1. (a) the condition of the dwelling-house (including the making of any improvement therein)
2. (b) the terms of the tenancy
3. (c) the quantity, quality or condition of any furniture provided for use under the tenancy (deterioration by fair wear and tear excluded), or
4. (d) any other circumstances taken into consideration when the rent was registered or confirmed, as to make the registered rent no longer the market rent.

(4) Notwithstanding anything in subsection (3) above, an application such as is mentioned in the subsection which is made by the landlord alone and is so made within the last 3 months of the period of 2 years referred to in that subsection may be entertained notwithstanding that period has not expired.

(5) In this section "the relevant date", in relation to rent which has been registered under this Part of this Act, means where on an application for the registration of different rent the registered rent has been confirmed, the date of that application or, if there was more than one such application, the date of the last of them.").

The noble Lord said: Perhaps I may also speak to Amendments Nos. 34 and 37. On this side of the Committee we are concerned with giving tenants and prospective tenants the maximum protection which we believe Members of the Committee will accept. In a recent speech delivered at a conference on housing, the Housing Minister, Mr. Waldegrave, assured those attending that the Government are keen to ensure that: rents remain within the reach of those in lower-paid employment". Similarly, in the latest consultation document issued by the Department of the Environment entitled Tenants' Choice, that is one of the criteria which will be developed by the Housing Corporation in consultation with the Secretary of State. It says: to ensure that only stable and responsible landlords with a long-term commitment to the provision of rented housing for those who need it are approved". In order to ensure that that objective is fulfilled, the Government have given repeated assurances that housing benefit will cover market rents set by the rent assessment committee. I quote: The real market rent must be met by housing benefit for those eligible for it … Where the rent assessment committee has determined the rent for a tenancy the regulations will provide that the rent will automatically be accepted as a reasonable market rent".—[Official Report, House of Commons, 27/6/88; col. 119.]

However, the problem is that we consider that there are many circumstances in which tenants will not have the right to refer the rent to the rent assessment committee. I give the following examples relating to assured tenants: during a fixed tenancy (Clause 14 only applies to periodic tenancies); during the first term of a contractual periodic tenancy; at the end of the periods in the two examples given above unless a notice of increase is served; and during any period in a periodic tenancy where there is a provision for an increase in rent.

Examples where similar circumstances prevail for assured shorthold tenants are as follows. During any fixed term tenancy granted after the first fixed term; during a periodic tenancy arising at the end of the first fixed term when no notice of increase has been served; if the rent assessment committee considers that there is not a sufficient number of similar comparable tenancies in the locality and that the rent payable is not significantly higher than the rent which the landlord may reasonably be expected to obtain, then it is under no obligation to make an assessment of the rent. Moreover, at the end of a fixed term contractual shorthold tenancy, any determination by the rent assessment committee will cease to be the maximum recoverable rent—the rent can be increased by agreement between the landlord and the tenant—and there will be a period in which the tenant will have no access to the rent assessment committee. This period could be up to one year. For example, it would be one year if the rent assessment committee determines the rent on the last day of the fixed term tenancy.

In addition, even if the rent assessment committee registers a market rent, the landlord and tenant can agree a higher rent and that will almost certainly not he covered by housing benefit. Therefore, during those periods, if the contractual rent charged by a landlord is higher than the reasonable rent assessed by the rent officer for the purposes of housing benefit subsidy for the local authority, there will be no subsidy payable on the difference. In such cases tenants are likely to be faced with the choice of paying the difference themselves or, if they cannot afford to, of falling into arrears and facing eviction and homelessness.

Thus, the effects of the Bill and the consultation paper on housing benefit are that rents are likely to double or treble especially in areas of chronic housing shortage such as in inner London. Housing benefit will not always cover the full rent. Those on low incomes will not be able to afford the rents under the new assured tenancies if not covered in full by housing benefit. Tenants wanting to take up the tenancy will not know whether housing benefit will cover the rent and will have no means of finding out.

The choices are that if the Government genuinely wish to ensure that those on low incomes are not excluded from this sector, then safeguards must be added to the Bill. That must be done either by limiting the rent that can be charged by landlords under the new assured tenancies to market rents fixed by the rent assessment committee and providing access at all times to that committee or by making all rents under the assured tenancy scheme, whether fixed by the rent assessment committee or not, eligible for full benefit subsidy.

The first option is preferable because it would prevent landlords charging excessively high rents at the taxpayers' expense while landlords will nevertheless be able to charge reasonable market level rents. That is consistent with the Government's wish: to ensure against the possibility … of rents being led by a racket, so that housing benefits lead the rents ahead of the real market rent".—[Official Report, House of Commons, 27/6/88; col. 119.1 That option would ensure that those on low incomes who are not entitled to housing benefit would also benefit.

Obviously in our opinion the Bill as it stands leaves a lot to be desired and that is hy I propose these amendments. I await the Minister's reply with interest. I beg to move.

The Earl of Caithness

As drafted, Amendment No. 4 would give the landlord or tenant, or both acting jointly under a shorthold tenancy, the right to apply at any time to the rent assessment committee for the registration of a rent. There is no specific provision as to the basis on which the rent assessment committee would determine the rent, but we can infer from the reference at the end of subsection (3) that it would be a market rent. The Bill as it stands provides a mechanism under which the rent assessment committee can determine the rent payable under a shorthold tenancy but it is considerably more restricted in scope than that envisaged in this amendment, and quite deliberately so.

Generally speaking, our view is that landlord and tenant should be free to negotiate the tenancy agreement and having once done so should be bound by its terms. That is why we have provided no access to the rent assessment committee for full assured tenancies granted for a fixed term or for short periodic tenancies which have been in existence for less than 12 months.

However, we recognise the need for an adequate safeguard against exploitation in the shorthold market. Such a safeguard is set out in Cluase 22. It is designed to deal with the situation where a shorthold tenant has struck a particularly had bargain which involves him paying a rent which is clearly above the level generally prevailing in the market. Where this is the case the rent assessment committee will be able to set a lower rent which overrides the terms of a tenancy agreement. However, the wording of this provision makes it clear that the committee can determine a rent only where there is a sufficient number of other tenancies against which the tenancy in question can be compared and only where the evidence of those other tenancies confirms that the rent under consideration is indeed above market level.

We are firmly of the view that it would be wrong to go any further than we have done in Clause 22 given the basic principles on which the legislation is constructed. A safety net is provided for the shorthold tenant but only for use in limited circumstances and without cutting across the vital concept of a free market. The approach reflected in this amendment represents a considerable divergence from the strategy we have chosen to adopt in so far as it involves a greater reliance on statutory procedure to determine rent levels and correspondingly less emphasis on freely negotiated terms and the market principle. It is for that reason that I cannot commend the amendment to your Lordships.

Amendments Nos. 34 and 37 strike once again at the principle of the freedom of landlord and tenant to negotiate changes in the rent and other terms of a tenancy independently of statutory procedures. We entirely accept the need for statutory procedures to be available in respect of private lettings and the Bill therefore provides them, but only in those circumstances where the landlord and tenant are genuinely unable to settle matters amicably between themselves. It is our firm belief that, contrary to what is often suggested, the landlord-tenant relationship is not an inevitably hostile one. All the indications are that the majority of landlords are perfectly satisfied with their tenants, and vice versa. There are many occasions on which the two parties are happy to resolve their affairs on an amicable yet business-like basis with no need to resort to statutory procedures. That is what my noble friend Lady Gardner of Parkes reminded the Committee of and I know that, unlike the comment of the noble Lord, Lord McIntosh of Haringey, she is typical of many landlords. It is one of our key objectives to ensure that it is possible for such landlords to continue to do business by agreement rather than on a statutory basis.

Each of the amendments thus represents a divergence from what we are seeking to achieve. Amendment No. 34 would delete the provision which enshrines the freedom of landlord and tenant to vary, by agreement, any term of a tenancy, including a term related to rent. Amendment No. 37 would remove the provision which ensures that the rent determined by the rent assessment committee becomes the rent under the tenancy unless the parties otherwise agree.

Leaving aside the objection of principle to which I have referred, the second amendment would have the effect of depriving the rent assessment committee's determination of any statutory force, which I am sure is the opposite of what the noble Lord, Lord Dean of Beswick, intends in his amendment. I hope that in the light of what I have said the noble Lord will understand the Government's arguments on these amendments.

Lord Renton

I agree with the explanation given by my noble friend but I should be grateful for clarification. He pointed out, rightly, that Amendment No. 4 does not give an indication of the nature of the rent that would be registered but assummes that it would be a market rent. Under Clause 14, to which he referred, which deals with the determination of rent by a rent assessment committee, various factors are mentioned which have to be borne in mind and applied by the rent assessment committee.

Am I right in thinking that what it will come to is that instead of the rent assessment committee having to fix a notional market rent, it will hear from both sides—landlord and tenant or their representatives—and will simply use its judgment as to what, in the circumstances, the rent ought to be in the light of the representations made to it?

The Earl of Caithness

As I understand it, that will be a consideration which will be taken into account. However, the committees will also take into account the level of the rents because, as I have explained, there has to be evidence of rents at a different level from that agreed. I am sure that the rent assessment committees will be looking at the level of those rents as well.

Lord Renton: I thank my noble friend.

Baroness Fisher of Rednal

Can the Minister give me an interpretation? I am thinking of when a marriage breaks down and under the Matrimonial Causes Act and the Family Reform Act the wife is left to stay as the tenant. I may be wrong but it looks as if the Bill does not recognise what are called the family law rights of many of these ladies who are left and whom we call separated wives.

We use the term "non-tenant spouse"—because the tenancy is left in the man's name—and allow the wife to stay with the children. I understand that the non-tenant spouse has no right to apply to a rent assessment committee to have a rent registered or to be a party to any proceedings. In other words, the person left in the matrimonial home will not be able to appeal to a rent assessment committee and might even find the rent substantially increased beyond her means and without coming under the housing benefit maximum.

Lord Trafford

Is it not true, referring to rents in the private sector, that it would depend on to whom the tenancy was let? The circumstances described by the noble Baroness, unfortunate though they may be, would apply to the original letting of the tenancy. If this were to both, then it would apply to the deserted wife. If it is not in both names it would not, and could not, be so; certainly not in the present circumstances. If that is to what the noble Baroness refers, surely that is how it applies. Is that not correct?

Baroness Gardner of Parkes

I take the opportunity of raising this point because we have reached this subject although it is more related to Amendment No. 9. There is a real issue to be considered on where a marriage breaks up. It is important that the tenancy right should remain with the spouse who has the children. Another point concerns the need to change the tenancy from husband to wife, or from wife to husband, depending on who has the children and who remains in the property. If it is necessary to change the tenancy from, say, husband to wife it is important that it should not count as a new letting. That would make a considerable difference. The existing and protected tenancy would be changed completely in character.

I put forward these points now in the hope that, perhaps at a later stage in the Bill, the Minister can consider them. It is therefore important that a spouse left with the children should have a greater tenancy right.

6.00 p.m.

The Earl of Caithness

The noble Baroness, Lady Fisher of Rednal and my noble friend raised a very important point as regards the question of separated and non-tenant spouses. We shall be dealing more extensively with that, as my noble friend has reminded the Committee, when considering Amendment No. 9. I should hate to steal the thunder of what my noble friend Lord Hesketh will tell the Committee when he comes to speak about that amendment. At this stage I say to the noble Baroness that the non-tenant spouse might be unaware of a rent increase affecting her; but if there was a divorce and subsequently a maintenance order made, the increase would be reflected in the maintenance payment. The question of who should have the tenancy in the event of a divorce is, as my noble friend knows, settled by the court, and at that time it takes the position of the children very much into account. I remind the Committee that we shall be coming to Amendment No. 9 when we shall deal with the whole of the Matrimonial Causes Act and the Family Law Reform Act in much more detail.

Baroness Fisher of Rednal

I accept what the noble Earl said regarding divorce; but there are many couples where the marriage breaks up and no divorce takes place. I believe the noble Earl said that the non-tenant spouse has no right to appeal to the rent assessment committee. If she can find a husband to pay the extra rent, she will be all right. We know that a great number of marriages break down and the husbands disappear altogether. It is the fact that a rent might be increased and the non-tenant spouse cannot apply to the rent assessment committee.

The Earl of Caithness

I shall look at the point raised by the noble Baroness if it is not covered in due course by my noble friend Lord Hesketh.

Lord Dean of Beswick

Obviously, I am not going to move forward and begin speaking about Amendment No. 9 because no doubt that will be given a proper airing in its rightful place. On the Minister's reply to this amendment one matter strikes me. He keeps referring to market rents; but never once has anyone representing the Government used the term "a fair rent". If some of the protection contained within this amendment is not given serious consideration and is dismissed out of hand, it will result in a fair rent but only to the landlord. It will not be fair to the tenant. If one were in a situation where supply almost equates with demand, one could achieve some kind of negotiation on a rational and reasonable basis. However, in an area such as inner London (which will probably be the biggest minefield of the lot) there will be no basis for setting reasonable and fair negotiations.

It is all very well to say that tenants will negotiate with landlords and that a deal will be acceptable to both; but the fact is that most landlords will be aware of their rights and familiar with the rent law. Most of them will be articulate and know all about the subject. We are talking about a large percentage of people who will probably have no such attributes so that the negotiations themselves will be conducted between unequal parties. I can visualise the landlords going for short-term tenancies as that is the best way for them to terminate tenancies because they cannot continue to let properties on the basis that they desire.

The Minister said that normally landlords and tenants are happy together. I suspect that if we are unable to persuade the Government to insert more complete and profound protection for potential tenants into the Bill, then when this Bill becomes an Act there will be all the happiness of being together like the proverbial shotgun wedding. One partner will he there on the basis that he or she has nowhere else to go and the partner has to negotiate from that situation. The landlord, on the other hand, may well have a battery of people who have to reside in a particular area and who may have far better means to finance a tenancy.

Baroness Gardner of Parkes

I ask the noble Lord to give way. The noble Lord is saying that if this Bill becomes law people will have nowhere to go. People have nowhere to go now and that is the whole purpose of this Bill. It is to make available housing that does not exist at the present moment. I believe this to be a point that the noble Lord is overlooking. We also have failed to remind ourselves that this Bill applies only to property that is not already occupied or let. We are talking about new lettings and places that are not available now. I believe that this Bill must increase the supply of accommodation and that an amendment of the kind that the noble Lord is supporting will only prevent that happening.

Lord Dean of Beswick

I should like to believe the noble Baroness that these will be completely new lettings and that they are not already on the market. Each year there is a considerable changeover of lettings of any kind whether in the private or public sector. Once a tenancy ceases, it becomes a new one. I take a completely opposite view to that of the noble Baroness when she speaks about negotiations and the protection that they will give to tenants. I believe that tenants will get about as much protection from these measures as giving someone who has just been to the guillotine an aspirin to cure the headache. These provisions are loaded mainly in favour of landlords otherwise the Bill would not be before us.

I predict that at the end of the day, if the Bill becomes law and it is enacted as it stands, I shall be amazed if within two or three years from now a Minister (if it is the same Government) can come to the Dispatch Box and say that these measures have helped to solve the housing problem in London. They will have no effect on it whatever other than to allow landlords to charge more rent. Someone mentioned the question of housing benefit, and I understand that we shall be dealing with that provision later on in Part V of the Bill. I should like to read more closely what the Minister said. I do not know whether he fully understands the lack of protection that a great number of tenants will receive if this Bill goes through. I ask the Minister to look at the subject more closely. To constantly use the term "market rents" is an invitation for an explosion upwards of rents which even the Minister will regret when it occurs.

The Earl of Caithness

Before the noble Lord decides what he intends with this amendment, I ask him how he can say that, on the one hand, there will be no more properties let in London in the next three years as the result of this Bill yet, on the other hand, he says that all this Bill will do is enable landlords to charge more rent. We are not affecting existing tenancies.

Lord Renton

Before the noble Lord answers that question, I wonder whether he can explain this point. Why is it that in subsection (4) of his amendment the landlord is given the opportunity of making an application when a period of nearly two years has expired but the tenant is given no such opportunity?

Lord Dean of Beswick

Perhaps I may reply first to the Minister. While I do not see it happening, if as the Government say the Bill releases houses for rent I can see it being on the basis of rents far higher than even the Government imagine. Nobody has spoken about it today but there are predictions that mortgage rates will rise by another 2 per cent. That will have an effect on what landlords will be able to charge for housing in the stress areas. In that respect the Minister is playing with an argument. I do not believe that there is a vast pool of houses available for rent.

Lord Trafford

I am a little puzzled by what the noble Lord is saying and seek clarification of some of his points. First, he accepts, I take it, that the Bill does not apply to existing tenancies. I believe that that is common ground. Secondly, the noble Lord said quite rightly that when demand is much higher than supply, prices tend to rise. In general economic terms, he is absolutely correct about that. However, if the purpose of the provision is to increase supply—although the noble Lord is obsessed with inner London to which he referred five times in his speech I can assure him that many other parts of the country have housing problems—the increase in supply must be encouraged to level off demand. I accept his argument that new tenancy rates may rise. I accept his argument that where long-term tenancies fall in, the landlord may prefer to use shorthold tenancies. However, I do not take the main argument in his speech; first, because the increase in supply is one of the main objects of the Bill; secondly, because once that increase in supply is achieved it affects the level of demand; and thirdly, because this does not apply to the whole of London and does not apply to existing tenancies.

Lord Dean of Beswick

Perhaps I appear to be concentrating on London. I was a Member of Parliament and at one time the leader of Manchester Council with housing as my special responsibility. I am quite aware that not only London, Manchester and Leeds have housing problems. I understand that. The Government have been asked about homelessness on a number of occasions. It was raised during the Second Reading debate and in a series of Questions. The Government keep telling us that they are convinced that the Bill will help to solve the problem.

I walk here every morning from my flat and pass through parts of London on the way. I see flats for sale but none for rent. If those flats were let, there is no question that people could afford the rents. The Government are saying that the Bill will help homeless people. That will not be the case unless the Government fund in full the tremendous increases in rent that these people have to pay.

If the noble Lord, Lord Renton, is convinced that there is an omission that might benefit the tenant, perhaps he would care to correct that at a later stage of the Bill.

6.15 p.m.

The Lord Bishop of Worcester

I am in difficulty here because I would greatly welcome anything that would make available more rented property to those in need. However, I greatly fear that the Government will give with one hand and take away with the other.

If it is new rented property about which we speak, does the Minister agree that there will be a temptation for present tenancies to be brought to an end as quickly as possible so that they may be renegotiated at a higher rate? Is there not a danger of giving with one hand and taking away with the other?

When we talk about negotiated rents for tenancies we must remember that we are talking very often about people at the bottom of the social pile, people who are not capable of negotiating, people who, as the noble Lord, Lord Dean of Beswick, said, are not articulate and do not have knowledge of property and renting. They will always be at a disadvantage. Are the Government seeking to give with one hand and take away with the other?

The Earl of Caithness

As the right reverend Prelate knows, under the present Acts it is extremely difficult to hasten the end of existing tenancies. One of the results of this has been harassment. As the right reverend Prelate will recall from our earlier discussions, we are strengthening protection in that respect under Clause 29. That is a significant improvement. As to taking away with one hand, I should say that the Government are giving with one hand and giving with the other. The Government are seeking to increase the availability of rented property. We have said that we want this to be at market rent. We have said that housing benefit for those who require it will need to meet that market rent.

Lord Stallard

The right to establish assured tenancies has existed since 1980. Has the Minister any statistics of how many assured tenancies have been taken up in London? Half of those in the private sector are in bed-and-breakfast and are outside rent control. Can he tell us how many assured tenancies have been set up since 1980? If we had that information we could decide for ourselves how the Bill will set up some more. The noble Baroness, Lady Gardner, believes that it will produce many more assured tenancies. From where will they come, if they have not come since 1980 in the London area?

Baroness Gardner of Parkes

Perhaps I may answer that question. In London all the rents were determined over this period. It is only recently that London rents have been derestricted. Outside London we did not have those restrictions and lettings were more successful.

Lord Jay

The Minister said that the Government are trying to increase the availability of rented properties; but the Government are not trying to do that at all. The great majority of rented properties are council-owned properties. The whole of the Government's policy is tending to reduce the number of rented council properties available in the community.

They are reducing that number by making it easier for such properties to be sold, which reduces the amount of rented accommodation. They are doing it by refusing local authorities the right even to spend more than 25 per cent. of their capital receipts on building new council houses. It is this reduction in supply of rented council properties, deliberately created by the Government, that is causing the shortage of rented properties in the country. It is that shortage which is forcing up rents. Therefore my noble friend is absolutely right to say that it is a complete fallacy that the availability of relatively few private rented properties, as compared with the loss of council properties, may lead to a fall in demand for rented property. I wonder how the Government can claim to be increasing the amount of rented property when in fact they are doing exactly the reverse.

Lord Dean of Beswick

I think my noble friend and colleague Lord Stallard put a most pertinent question on the issue of assured tenancies. He asked how many assured tenancies there are now. I do not have the latest figure but I do know that when the question was last answered from the Dispatch Box by the noble Lord, Lord Skelmersdale, the number given at that time—which was not so long ago—was appallingly low. In fact I think it was in the region of just over 300. Unless there has been a dramatic acceleration since then, are we to assume that the assured tenancies scheme has been a failure?

Baroness Gardner of Parkes

I am sorry to speak again on this amendment, but I feel that I must take up the issue raised by the noble Lord, Lord Jay. That issue was debated so many times during the years when I was a member of the Greater London Council; namely, the magic that because you have more council rented accommodation you have more vacancies. That is not necessarily so. People who are occupying a council flat are occupying that flat whether they are renting it or whether they own it. I still hold the belief that they are entitled to own it. Therefore I do not accept his argument that if we turn them all into rented properties tomorrow there would be many more of them available.

Lord Trafford

Perhaps I may just say something about two points which have been made. I cannot believe the figures that have just been quoted by the noble Lord, Lord Dean of Beswick. I know he quoted from an Answer but he did not specify the Question which was tabled. If the figure was nationwide, I find it impossible to believe that that was the actual figure. Secondly, if he is referring to any new assured shorthold tenancies, that cannot be true. I must have signed nearly that many in the past eight years.

Before the noble Lord rises, perhaps I may make just one further point. We heard a comment—from a "communist" I would say—from the noble Lord, Lord Jay. He must know that as regards local authority tenancies one of the drawbacks—and it has nothing to do with the rent—is that labour is immobile. The percentage of changes that take place is approximately—I shall have to do a quick mathematical figure here—60 per cent. of what can occur in a privately-owned sector; that is, the owner-occupier group of people. Therefore that suggests that what happens in that group is that they are stuck there because they cannot exchange. It is not a question of whether they are renting or owning, as my noble friend Lady Gardner of Parkes said. It is the system which fixes them.

The aim of the Bill is to increase the privately rented sector. However, to a very large extent we have been talking in this debate about existing tenancies being affected—which they are not—about shorthold tenancies which may or may not apply, and very much, as I said to the noble Lord earlier, about inner London. There are other vast areas in which that applies and with due respect to the noble Lord, Lord Jay, his other remarks, which were no doubt true economically, were actually irrelevant to this amendment.

Lord Jay

All that the noble Lord has just said makes no difference whatever to the fact that if you reduce the total of council-owned rented properties on the present scale you will reduce the total of rented properties available in the country as a whole.

The Earl of Caithness

I think that my noble friend Lord Trafford is right. We have wandered far and wide from the amendment before us. Indeed, we have almost gone through the Second Reading again. Therefore I think that as there are one or two other amendments which we should like to discuss this evening, perhaps we ought to concentrate on the amendment moved by the noble Lord, Lord Dean of Beswick, and let him decide what he wishes to do with it.

However, before the noble Lord does so, he asked me to reply to the point raised by the noble Lord, Lord Stallard. The latest figure that I have for assured tenancies set under the Housing Act 1980 was compiled on 1st April 1987. That figure is 3,000—that is, 3,000 more than there would have been had we not had the Housing Act 1980. But, as the noble Lord, Lord Stallard, will be aware, that Housing Act was strictly confined. The reason that there is what we consider to be a relatively low figure is that only new or newly-refurbished houses could he let under that scheme and only approved landlords could use it. However, that has encouraged us to believe that there is a big market ahead of us.

Lord Dean of Beswick

The Minister's theories are not justified by the figures, because the figures I have are that since 1980 3,000 assured tenancies have appeared, 2,600 of which are sheltered accommodation. Therefore in fact there have been 400 assured tenancies since 1980. If that is success: show me a failure. However, bearing in mind what the Minister said—I should like to look at the implications of what he said—and because we have had a good debate on the matter, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Tenancies which cannot be assured tenancies]:

Lord Dean of Beswick moved Amendment No. 5: Page 91, line 16, at beginning insert ("Subject to sub-paragraph (3) below").

The noble Lord said: In moving Amendment No. 5 I wish to speak also to Amendment No. 6. As the Bill is presently drafted a landlord could remove the rights of an assured tenant occupying part of a house.

If the landlord moves into the house and is able to persuade the sitting assured tenant to accept a new tenancy of his accommodation, or to move to accommodation in another part of the house, the landlord would then be able to claim that since the new tenancy was granted he has been living in the house as his home and is therefore a resident landlord.

The tenant would become a tenant unprotected by the Bill. The landlord would he able to evict him without having to give any reason for so doing. Further, if the landlord shares any accommodation with the tenant, the latter could be evicted without a court order pursuant to Clause 31 of the Bill.

The proposed amendment reinstates a safeguard contained in the Rent Act 1977 to prevent such an abuse of the law by providing that the sitting tenant will remain an assured tenant, even if he accepts a new tenancy following the landlord taking up residence in the house. Where there are multiple tenancies within a large building I think that the situation would be wide open to that particular abuse and it would be a pipe dream to suppose otherwise. I beg to move.

The Earl of Caithness

Under this Bill landlords letting accommodation in their own homes are treated differently from non-resident landlords. Provided that the conditions in paragraph 10 of Schedule I are met, a letting will not be an assured tenancy under Part I. Future lettings by resident landlords will not be subject to any special statutory regime. These landlords will be able to agree rents with their tenants without statutory intervention and the security which tenants have will be a matter of contract. We all, I think, would want to encourage people to let spare accommodation in their homes and it is simply not appropriate that they should be subject to the sort of legal controls necessary for nonresident landlords.

The purpose of the noble Lord's amendments is, if I understand them correctly, to protect a tenant who has an assured tenancy but who accepts a new tenancy of the same dwelling house or of another dwelling house in the same building. The noble Lord fears that if the landlord who grants the new tenancy has become a resident landlord and satisfies the test in paragraph 10 of the schedule, the new tenancy would not be assured.

Of course, no one can force an existing tenant to accept a new tenancy. However, I agree that there is a risk that an assured tenant could lose his rights in those circumstances if he accepted a new tenancy without understanding the significance of doing so. Therefore if the noble Lord will withdraw his amendments, I undertake that we shall consider the point with a view to tabling an amendment of our own at a later stage. I hope that the noble Lord, Lord McIntosh of Haringey, is counting!

Lord Dean of Beswick

I am obviously grateful for the fact that the Minister has undertaken to take the matter away and consider it. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

6.30 p.m.

The Earl of Caithness moved Amendment No. 7: Page 92, leave out lines 21 to 24.

The noble Earl said: The Committee will know that shared ownership has been a popular form of low-cost home ownership provided by housing associations under which people can get a foot on the housing ladder by part-buying and part-renting their homes. In legal terms of course the occupier does not own a share in his home as such, rather, he has a lease for which he has paid a premium set at a proportion of the capital value of the dwelling, the rent being reduced on account of that premium.

Shared owners have been able to buy extra shares as they could afford them and eventually acquire the whole of the equity in their homes if they wanted to. I am sure that the Committee will agree that this is an imaginative and welcome scheme.

In the Housing and Planning Act 1986 we excluded certain shared ownership leases from the rent control provisions of the Rent Act because they were restricting the availability of shared ownership schemes. Our first thought was that those leases, defined in Schedule 4 of the 1986 Act, needed to be excluded from the assured tenancy scheme too, and that is what paragraph 13 of Schedule 1 achieves. We have concluded however that that is an unnecessary complication and that there is no reason why shared ownership leases should not fit within the main assured tenancy regime. That regime will enable a landlord to grant a long tenancy at whatever combination of rent and premium he can obtain in the market, with contractual rent reviews. That is exactly what is required for shared ownership to work. Paragraph 13 of Schedule 1 is therefore in our view redundant, and the amendment removes it. I beg to move.

Lord McIntosh of Haringey

I do not think that we shall oppose the amendment. However I should be grateful if the Minister would clear up one or two possible effects of the amendment and perhaps correct any misunderstandings that I may have on the matter. It is obvious that if people are contemplating shared ownership, they will need to be made aware, as clearly as possible, about the new regime that will apply to shared ownership. Does it mean that the rental part of shared ownership could be on the basis, for example, of assured shorthold tenancies or is it only on the basis of assured tenancies? It would be helpful if the Minister will indicate in what way the Government propose to let people on shared ownership leases know what their new legal status is.

The Earl of Caithness

The noble Lord has asked me some questions. Perhaps I could write to him between now and another stage with the details.

On Question, amendment agreed to.

On Question, Whether Schedule 1, as amended, shall be agreed to?

Lord Monson

Before we leave Schedule 1, will the Minister tell us whether the assured tenancy provisions introduced by this Part of the Bill will continue to be governed by the repairing obligation provisions contained in earlier Housing Acts? In other words, will it still be necessary for a landlord to grant a lease of seven years or more before full repairing obligations can be imposed—with his agreement of course—upon the tenant?

Finally, what about apportionment of the responsibility for paying insurance on the fabric of the building against normal perils, such as storm, fire, aircraft damage and so on, which has always been something of a grey area?

The Earl of Caithness

I should like to draw the attention of the noble Lord, Lord Monson, to one of the Government publications which I am sure he has read. It is Government proposals for housing—private renting which my department and the Welsh Office have produced. In it he will find an elegant little paragraph on what the position on repairs will be. It answers him clearly. Of course he will know from reading the Bill that under the 1985 Act at present for most tenancies of fewer than seven years, the landlord will be required to keep the exterior structure of the dwelling in good repair. We shall of course be extending that obligation to flats.

Baroness Gardner of Parkes

I too should like to ask a question about Schedule 1. I wish to refer to paragraph 2: "Tenancies of dwellinghouses with high rateable values". The paragraph refers to a dwellinghouse having a rateable value -for the time being". What will happen after the community charge becomes operative and the rateable value vanishes? What will the basis then be? Not every property that comes up for rent will necessarily have a rateable value assessed. If people alter or add to the building under the present system the rateable value would have varied. I wonder how that matter will be dealt with. I do not necessarily require a reply now. I believe that it is a matter that should be considered in the Bill.

The Earl of Caithness

Thank you.

Schedule 1, as amended, agreed to.

Clause 2 [Letting of a dwelling-house together with other land]:

Lord Monson moved Amendment No. 8: Page 32, line 24, after ("land") insert ("contiguous to the dwelling-house").

The noble Lord said: The purpose of the amendment is to restrict the security of tenure provisions imposed by the Government to the dwellinghouse and the garden or land immediately surrounding the dwellinghouse. There is no call for the state to extend its protective embrace to paddocks where horses, ponies and donkeys may graze, or to vegetable gardens or allotments which may be situated on the opposite side of the public highway to where the house is situated, as is often the case to my certain knowledge.

It is no good the landlord letting paddocks or allotments on a separate tenancy agreement or even giving a tenant a licence to occupy, because more often than not the courts construe such arrangements as artificial and deem the land concerned to be included in the main tenancy agreement.

So far as non-essential land, such as paddocks and allotments, is concerned, it is up to the tenant to negotiate such security of tenure as the rent level warrants and as the tenant requires. He may not require the same security of tenure that he will wish for the house and garden. It is no business of government to interfere in the law of contract where non-essential land is concerned. I beg to move.

Lord Renton

At first sight I was attracted by the amendment, but on further thought I am not sure that we should acccept it, with great respect to the noble Lord. Admittedly it is now unusual, but in the last century there were, especially in the North of England and the Midlands, rows of terraced houses built with practically no garden attached. There is sometimes a path or tiny yard at the back of a house, and the local authorities, or the private landlord as the case may be, managed to arrange that there were strips of land to go with each house.

If the amendment were accepted in such circumstances, although it is essentially part of the enjoyment and occupation of the dwellinghouse, the land would not be covered. It could be made the subject of other contractual arrangements, as the noble Lord said. I shall be interested to hear what my my noble friend the Minister has to say about this matter. Although the circumstances are unusual, we should be prepared to deal with them. They must be considered. I prefer the flexibility of the clause as it stands, without the amendment.

The Earl of Lytton

I support the amendment. I know what has been said about the possibility that the term "contiguous" may give rise to a legal severance of the entitlement of the tenant. I do not believe that that was intended. If the wording is perhaps at fault, the concept behind the amendment is not. In particular, in the Bill we are trying to protect the dwellinghouse and to provide someone with a roof over his head. That being the case, the surplus land, as it were, over and above the necessary garden area should not rank for protection pari passu—to use what I believe is the correct legal term—with the remainder of the property. Therefore I commend the amendment to the Committee in terms of its spirit even though the wording may not be ideal.

Baroness Gardner of Parkes

The Act says: If, under a tenancy, a dwelling-house is let together with other land". Surely we are only discussing a case where the land is included in the letting. If, instead of that, the land were separately dealt with or not included in the letting, there would be no concern, or it could be dealt with as a separate letting if one wanted to let the garden separately. Like my noble friend Lord Renton, I prefer the present wording because I found this word "contiguous" very deceptive and confusing in terms of people's garages attached to houses. The rates can be changed if they are contiguous and not if they are not. I like the original wording in the Act.

Lord Monson

Perhaps I may take the opportunity of replying to the noble Baroness. I explained that it is no good the landlord putting the paddock or whatever on a separate tenancy. That may be no good because more often than not the courts construe such arrangements as artificial, an artificial way of getting round the restrictions under the rent Acts. Therefore that nullifies the whole purpose of letting the paddock, allotment or whatever it is on a separate tenancy.

Lord Renton

There is a further point which was just touched upon by my noble friend Lady Gardner of Parkes—that is garages. Sometimes with quite modern houses a group of houses is built with garages placed quite separately. There is an example of that just across the river and it is a situation which we should also envisage.

Baroness Fisher of Rednal

Will the noble Lord go a little further? I am thinking now of council houses which might be sold. I could describe many houses in the city of Birmingham, there might be 40 or 50 houses in little closes with very nice grass and trees provided by the local authority. Some have quite big areas of green. I know many local authorities have done this so that especially where there are blocks of flats there is green open space. How would that be affected under the noble Lord's amendment? I should not like to feel that there was no protection for those areas. Even if the blocks of flats or the surrounding houses were sold to a private landlord, I should like to feel that the open space development would be retained.

Lord Monson

Perhaps I may quickly say that it is up to the noble Lord to answer that but, so far as I am aware, my amendment would not affect that at all. Houses such as the noble Baroness mentions have been sold, therefore no question of tenancy arises.

The Earl of Caithness

It is clear from our discussion that the amendment of the noble Lord, Lord Monson, does not achieve the purpose which he stated at the outset of protecting the tenants' occupancy of the house and garden. The noble Lord's amendment removes protection not only from the contiguous land but also from the dwelling.

Clause 2 deals with the case where accommodation is let with other land. This is important because of the need to decide whether the accommodation is let as a separate dwelling, which is one of the factors which will determine whether the letting is an assured tenancy under Part I. The test used is whether the main purpose of the letting is to provide a home for the tenant. It seems to us that the question of contiguity ought not to be relevant because the key point is in Clause 2(1)(a), to which I draw the Committee's attention.

The noble Lord, Lord Monson, mentioned the case law that has arisen since the Rent Act 1977. I can assure him that Clause 2 is based on case law. While I would not always regard that as a very promising provenance, in view of the presence of my noble friend Lord Renton I am happy to accept it in this instance and I rather agree with him.

Lord Monson

I think this has been a useful discussion. The noble Lord, Lord Renton, pointed out the most obvious objection to the amendment as it stands: I was not aware of the sort of terraced properties he described. I still think it is wrong, and whereas it may well be right to protect gardens of one-quarter of an acre, when we are talking about fields of two, three or four acres, very different considerations apply.

Perhaps we ought to come back at the next stage and look at it again. It may well be legitimate for the Government to interfere in the normal interplay of supply and demand as regards shelter—dwelling-houses with four walls and a roof, with a garden surrounding them. However, the same does not apply to what one might call optional extras. It is the optional extras, the luxuries, if you like, that I am trying to exclude from the protection of the Act. We have time to think about it in the next few months, and therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clauses 3 and 4 agreed to.

Clause 5 (Security of tenure):

6.45 p.m.

On Question,Whether Clause 5 shall stand part of the Bill?

The Earl of Lytton

Before we leave Clause 5, I should like to mention just one thing which I feel cannot go unchallenged. My criticism of Clause 5 is allied to my criticisms of the Bill as a whole—namely, that it goes out of its way to avoid the reality of security of tenure and the importance of that principle in the context of residential landlord/tenant relationships. At this point I have to declare an interest both as a chartered surveyor and as a landlord of private rented accommodation. I hasten to add that this is in a very small way.

The Government in their White Paper and the Minister in his introduction to the Bill have laid emphasis on bringing rents up to an economic level. I believe that this is an illusion and one perpetuated by my own professional body, with which I do not agree in this instance. We have heard much from the noble Lords, Lord McIntosh of Haringey and Lord Dean of Beswick, about rent control, but, with respect, we cannot have both low rents and security of tenure in the private sector. If we want it in the public sector that is a different matter. We have heard also about marginal cases, wives who have been deserted, people unable to afford levels of economic rent. With respect, marginal cases and concentration on them make bad law.

The Bill assumes that a landlord can and will be willing to offer a property at a rent that will be attractive to a tenant as against the alternative of that tenant purchasing a property on the open market, assisted by a mortgage. It assumes that the tax advantages of home ownership will be put into a proper equilibrium as compared with renting. It also assumes that there will be freedom of movement within that sector. This freedom of movement is, I believe, the single greatest advantage of renting over purchasing.

I believe that none of these things will come to pass under this Bill, particularly because there is no political consensus. Landlords will not be willing lessors lest at some future date the equivalent of the Protection from Eviction Act 1964 rears its head and is slapped upon them with very little notice. As long as nothing is done to free up the existing security of tenure provisions on existing tenancies—I say "existing"—small landlords will continue to wait in vain for justice—the same landlords who have looked to the Government to do something about freeing the entire sector. We know that the residential rental sector is shrinking and needs revitalising. It has been shrinking for a long time, on everybody's admission, and with respect to the noble Lord, Lord Jay, I do not think that is related to the provision or otherwise of council housing for rent. The private sector as it stands has been shrinking quite separately from the public sector. I have to ask what landlord would willingly let residential property now where a hint of security of tenure exists at present or will do in the future. I suspect, very few. The promise of the immortality of the present Government might be welcome but not necessarily believed.

If it is accepted that present rents represent too low a return to attract landlords into the marketplace, then it follows that fair rents on existing rented accommodation are too low. I am obliged to ask why new landlords will be able freely to negotiate rents at open market levels but old landlords will not. Is it perhaps that tenants cannot afford those increases? If so, why is it the private landlord who provides social security in this instance? How much longer will he have to wait to get more than a 1 to 2.5 per cent. return on capital?

This Bill will create a two-tier system—one for lettings before it comes into force and another one thereafter. I can imagine nothing more divisive. I can imagine also that this will give a great incentive to the sharks, who have already been mentioned, who already show a high profile but who are, I believe, a very small element in the private rented sector. Nonetheless they bring it into disrepute.

As I have been approached in the past for advice by tenants suffering from harassment, I know very well how difficult it is to prove that a large, anonymous and perhaps threatening man came banging on a tenant's door in the small hours of the morning. Yet the ingredients of a compromise are present and within our grasp. For a landlord, knowing that he could ultimately gain possession of a property (and thus sell on the open market if he wished, having given an appropriate period of notice) might well be content with a modest income in the interim period.

As I see security of tenure as the biggest disincentive to private residential lettings, it follows that I would personally encourage the freeing up of the entire system by the partial removal of security of tenure. But in the same breath I have to say that rent control of some kind or another would almost certainly have to remain a large part of the rental system. That would be a quid pro quo for the relaxation on security. Shortholds could still be excluded if necessary, as could the situation regarding resident landlords, and indeed furnished lettings. I believe that there is a point where a willing landlord can do business with a willing tenant, but I cannot see that happening under the terms of this Bill, and in particular under the provisions of this clause.

I wish to distinguish the residential letting situation from its commercial counterpart, which, I believe, may be behind some of the Government's thinking. Most commercial tenants do not wish to buy their freeholds and the absence of rent controls has meant a free rental market. We have gone too far down the road of rent control in the private rented sector ever to recover that kind of free market situation in rents. Therefore, I feel that there are too many political and practical uncertainties remaining for the residential sector to recover in the way envisaged by this Bill.

The Earl of Caithness

I understand the views of the noble Earl, Lord Lytton, who has advocated the removal of all statutory controls over private lettings, leaving both the rent and the tenant's security as matters of contract.

The Earl of Lytton

I thank the noble Earl for giving way, but, with respect, I did not advocate the total removal of all statutory controls. I advocated the rolling back of some of them.

The Earl of Caithness

I retract that statement and I apologise to the noble Earl. The point is that the noble Earl wished to go very much further than the Government have gone, and we have gone very much further than the noble Lord, Lord McIntosh, has gone, or would like us to go. So perhaps we have struck the middle road, which can only be to the benefit of the landlord and the tenant.

Clause 5 agreed to.

Clause 6 [Fixing of terms of statutory periodic tenancy:

Baroness Ewart-Biggs moved Amendment No. 9: Page 5, line 14, at end insert—

("(3) Where the landlord serves a notice under subsection (2) above—

1. (a) he shall make reasonable enquiries to establish whether there is a person in occupation of the dwelling-house who is entitled to apply to a court to have the tenancy transferred into his name under the provisions of section 24 of the Matrimonial Causes Act 1973, Schedule 1 of the Matrimonial Homes Act 1983, or section 12 of the Family Law Reform Act 1987; and
2. (b) if, subsequent to making such enquiries, the landlord finds that there is a person in occupation who is entitled to apply to a court to have the tenancy transferred into his name under the provisions of either of these Acts,

he shall serve a notice in the prescribed form on that person.").

The noble Baroness said: I rise to move Amendment No. 9 and speak to Amendments Nos. 10, 31, 35, 36, 38 and 39, which have been grouped together. In saying that I point out with very many apologies that Amendments Nos. 35 and 36 should be amendments to Clause 13 and refer to page 10, line seven of the Bill. However, on the Marshalled List they come under Clause 14 and refer to page 11, line 20, of the Bill. I apologise for that error. I do not know how it arose.

The purpose of these amendments is to protect the spouse or partner who remains in a family home after the breakdown of a relationship. We seek by these amendments to ensure that both members of a couple know what is going on during a tenancy, and that that will enable the person who remains in the home after the breakdown of the relationship to take steps to protect his or her rights.

Amendments Nos. 9 and 10 deal with Clause 6, under which the landlord has the right to propose a variation in the terms of a tenancy. Amendment No. 31 deals with the situation where a landlord intends to seek possession against a tenant and, in effect, terminate that tenancy. Amendments Nos. 35 and 36 deal with Clause 13, which concerns the right of landlords to apply to increase the rent.

The general purpose of these amendments is, first, to ensure that bodies which make decisions about assured tenancies, such as the rent assessment committee or the court, make the decision in the light of all the facts. Secondly, the amendments provide that the person who is going to have to abide by the proposed changes—the spouse who remains in the tenancy—should have a chance to put his or her case to an independent body for a fair hearing.

It is quite common for a tenancy to be in the sole name of one spouse. It is most commonly, of course, in the name of the man. This Bill only recognises the rights of tenants, despite the fact that non-tenant spouses have a long-term interest in the property under the Matrimonial Homes Act 1983. Those rights include the right to remain in occupation, the right to pay rent and the right to apply to the court to have the tenancy transferred into a sole name.

But these rights are in very great danger of being completely eradicated if these amendments are not accepted. It is of the greatest importance that at a time of a very high rate of marital breakdown, it is the parent with the care of the children, which is generally the mother, who should have her accommodation protected and who should not be made homeless. As the Bill stands at present, the landlord could change the terms of the tenancy, increase the rent and evict a tenant without the spouse being made aware of the facts. Therefore, his or her right to remain in occupation is made absolutely meaningless.

At this point it is important to note that the rights of the spouse of an owner occupier are much greater than those of the spouse of a tenant. The purchaser of a property or a building society seeking repossession is under an obligation to investigate whether there is a spouse who has an interest in the home.

It could be said that it is far more difficult for a building society or a purchaser to find out about the existence of a spouse in the house than it is for the landlord, who has probably had a great deal of contact with a house. A landlord may often have called at the house to see if it needed repair, for instance. Under Clause 9 a spouse with a right of occupation under the Matrimonial Homes Act has a right to apply for an adjournment of proceedings or to apply for a suspension or postponement of any order made by the court. But, as I have already said, what use are such rights if the spouse has no knowledge of the proceedings in the first place? Those principles apply equally to cohabitees. The Family Law Reform Act 1987 provides that the court can order a transfer of property from one partner to another if it is in the interests of the children.

But, again, of what benefit is this if the rent is too high or a possession order is made without the previous knowledge of the cohabitee? Surely the way out of the predicament is to put the onus on the landlord to investigate the case and to serve a notice on that spouse who remains in the habitation so that she or he can apply to the rent assessment committee or to the court if possession proceedings are brought. Amendment No. 35 would require the landlord to find out whether there was a wife in the house, and, if there were, to serve a notice on that wife. Amendment No. 36 would allow a wife to refer the level of rent to the rent assessment committee herself and attend any hearing the committee might hold in order to make representations.

When we debated Amendment No. 4, it was pointed out that non-tenant spouses would be able to apply to the RAC. The Minister said that on divorce a husband would pay the increased rent demanded by the RAC through a rise in maintenance. However, it should be remembered that maintenance is rarely paid regularly. In many cases, it cannot be relied on. Maintenance is fixed not only according to what the wife needs but perhaps even more according to what the husband can afford. To ask the husband to pay the amount of the increased rent by way of maintenance is not a practical proposition.

Amendments Nos. 38 and 39 apply to Clause 15, which allows a landlord to charge premiums. That does not necessarily present a problem if there is a court order transferring the tenancy under the Matrimonial Homes Act. However, it will be a problem if one spouse wishes to assign the tenancy voluntarily to the other because the couple do not want to divorce. Our concern is to prevent a landlord from charging a premium in those circumstances.

Clause 15 also enables a landlord to refuse to allow a tenant to assign a tenancy. It is important that the provision does not apply in the case of assignments between spouses and partners in those situations. It must be right to encourage spouses to enter into agreements about property as soon as possible and without the need for court proceedings. Our amendments would achieve that.

We must remember that a large number of single parent families end up homeless. Every precaution should be taken to avoid that. It is true that 19 per cent. of applications to local authorities are made by those who are homeless as a result of a breakdown in a relationship. That is the second most common cause of homelessness. It is also true that 33 per cent. of homeless households are one parent families. The purpose of our amendments is to ensure that after a breakdown, the spouse—who in many cases is a mother with children—will not encounter barriers in remaining in the tenancy. I hope that the Minister will look kindly on the amendments. We set great store by them. I beg to move.

7 p.m.

Lord Trafford

I do not wish to be unsympathetic either to single parent families or spouses of broken marriages. However, there is considerable difficulty in the practical application of the amendments. What is being advocated is a form of social letting whereby a private landlord who makes a private let agreement with a tenant also enters into obligations which are unwritten and unthought of with regard to a spouse, a family, a broken marriage and so on. All of that would not normally enter into a landlord's consideration of a straightforward economic or financial transaction.

I do not think that it will be easy to put into this type of Bill something which is provided, for example, in the Matrimonial Causes Act in terms of owner occupation where there is a significant contribution—or an implied contribution—by a spouse to a marriage. However, the matter becomes more difficult in the circumstances which the noble Baroness has outlined. She has pointed out that many of the people who apply to local authorities are people who would otherwise be rendered homeless. Whatever the figure she gave—I believe that she said 19 per cent. —I am sure that she is correct. The circumstances are tragic.

We must not confuse a straightforward private letting with what can occur in the public sector or elsewhere as regards social letting. That is what the noble Baroness is talking about. She is shaking her head. However, once one moves away from the economic and financial circumstances on which such lets are negotiated, one is allowing other factors to enter, whatever one likes to call them.

That is what is being advocated. It seems to me to be impractical. The object of the Bill is quite different. It would be better to take other steps or measures rather than try to amend the Bill to include such an implication, involvement or duty on a landlord who, in those circumstances, will believe that he is signing a straightforward financial obligation to let a piece of property at a certain price for a certain time. It does not seem to me to be a free and reasonable negotiation—

Lord Morton of Shuna

The noble Lord must be aware that if one buys a house, one must be sure that there is no deserted spouse who has rights to it. I fail to see any basic difference between that situation and a letting situation.

Lord Trafford

There is a significant difference. I believe that as regards house purchases one of the reasons for employing a lawyer—and this will appeal to the noble Lord—is to ascertain what hazards or difficulties may lie in the way. For example, there may be a right of way across the property or a right of access by a number of authorities. That is why searches are undertaken. Those are entirely different matters.

We are talking about what should happen if we wish to revive the private sector. If noble Lords opposite do not wish to revive the private sector and take a totally contrary view in the matter, they can put as many difficulties in the way as they like. We have a straightforward situation which we either wish to encourage or do not wish to encourage. One of the ways of discouraging it is to put hurdles and tripwires in the way. When a landlord signs a straightforward undertaking in good faith with a tenant and the situation then changes dramatically, the landlord should not be landed with those problems.

I have not referred to the other amendments which deal with raising rents. That is a slightly different issue. However, I believe that the main amendment is a discouragement and a trip-wire which will upset what we are trying to achieve in the Bill. I also believe that the amendments are impractical.

Lord McIntosh of Haringey

I had not intended to intervene. However, the noble Lord, Lord Trafford, is seeking to persuade us as a matter of policy that we are not in favour of private rented property. In fact he seems to be trying to put us off private rented property with his examples. He is saying that a landlord should be guaranteed against any change in family circumstances which might work to his disadvantage later on and that a tenancy which was arranged with a single person would not continue on the same terms if that person married, if his marriage broke up or if there were obligations to other members of his family. Unless he is saying that, it is difficult to understand the meaning of his intervention.

Lord Trafford

I said nothing of the sort. If the noble Lord took a tenancy with me and then decided to marry one wife, divorce her and marry two more, it would be nothing to do with me. He is my tenant and I am his landlord—or vice versa. However, if I sign a contract with the noble Lord which creates a tenant and landlord situation, and the noble Lord then marries two or three other people—even one will do—and decides of his own volition to leave the lady, he may then say, "The tenancy that I signed with you should now be transferred to her". In those circumstances it would be perfectly reasonable if the agreement had been signed in their joint names. However, he is asking landlords to undertake duties which they would not normally expect to undertake when they sign an agreement with a single tenant.

With due respect to the noble Lord I have been, although I am not now, a private landlord. I used to sign different forms of tenancy agreement. On one occasion it would be in a single name, on another it would be a joint undertaking—and incidentally, the tenants were often not married. Nevertheless, that tenancy was then transferable. It was nothing to do with the landlord because the landlord—who in that case was myself—would know that he had undertaken that obligation. But to place upon him an unknown obligation is a disadvantage and a drawback to an activity which the Bill apparently wishes the landlord to undertake.

It is for that reason that I think that these proposed measures are trip-wires in the way of the privately rented sector. They ask people to undertake not just financial but also social obligations. One might say that if one wishes landlords to undertake that obligation they should double the rent and be quite certain that the situation is taken care of. If one wishes to encourage the recovery of the private sector it does not make sense to put obligations in its way.

Lord McIntosh of Haringey

The noble Lord has certainly succeeded in diminishing my enthusiasm for the private rented sector. If tenants in the private rented sector cannot change their family circumstances after the original lease was signed without losing their security of tenure, the value of the private rented sector as a viable part of our housing market is clearly drastically limited.

Lord Trafford

That equally is rubbish, if I may say so. The noble Lord is trying to put words into my mouth. I did not say, and he knows perfectly well that I did not say, that a person who has signed a tenancy agreement cannot change his social circumstances. I am saying that if a person contracts for one particular obligation he should not automatically be expected to have contracted for two, three or four other circumstances. That is all—neither more or less.

It is pejorative, and if I may say so somewhat hypocritical, to put forward all kinds of other explanations and rubbish to suggest that I said something else. That is all I have said about the question—neither more nor less.

Lord Meston

I hesitate to intervene. However, I believe that the noble Lord, Lord Trafford, is under a misconception if he thinks that the landlord will automatically be taking on not just the tenant himself but the wife or the mistress or the lover of the tenant, or whoever he or she may bring into occupation. He speaks as though when the relationship breaks down and the tenant leaves, the landlord has no right to be heard at all in the following proceedings which would enable the tenancy to be transferred under the Matrimonial Homes Act, the Matrimonial Causes Act or the new Family Law Reform Act. That is a misconception. The established rules of the court provide that in such circumstances the landlord is notified of the application and has the right to be heard as a fully competent party before the court.

I speak from fairly recent experience of just such a case. A lady client of mine was left in the lurch in a rented property. Her husband went off. She inevitably got into difficulty with the rent. She desperately tried to take over the tenancy. The landlords, who I think were the Church Commissioners, not unreasonably said that they would like to help her but did not think that she could keep up the rent. She tried very hard to get someone to guarantee the rent or to raise a bank loan to buy a long lease from the landlord. Ultimately she failed and the landlords, as they were entitled to notwithstanding their evident sympathy for the lady, prevailed and she had to go. That is just the kind of situation we are considering.

I think therefore that the noble Lord is under a misconception if he thinks that there will be some automatic procedure enabling the property to be transferred to the spouse or whoever it may be.

I should very much like to support both the logic—

Lord Trafford

Will the noble Lord permit me to intervene? In the amendment it is proposed that there should be a written obligation on the landlord to take action which he would not presently have to take under an ordinary lease.

7.15 p.m.

Lord Meston

As I understand the obligation in the amendment, it is simply to give notice to the other possible occupier. However, if I am wrong perhaps I shall be corrected.

Having heard the argument in support of the amendment, I should like very much to support both the sentiment and the logic of the proposal. In practice it quite frequently happens that a tenant's spouse or partner is left when the relationship breaks down. The sole tenant—usually the man but not always—surrenders the tenancy or accepts a notice to quit without reference to the estranged partner and disappears before the party in occupation has any opportunity to retrieve the position. The result is that that party is evicted and has to go to the local authority to be rehoused or has to look to the DHSS for the rent.

It is quite correct to say that people in that position are in a much weaker position than equivalent parties who are married to freeholders. In those circumstances there is a right under the Matrimonial Homes Act to register a charge or a caution. As the noble Baroness said, the partners or spouses of freeholders also have a further advantage. If the lender, which is usually a bank or a building society, seeks to enforce security there is a specific duty on it under the rules of court to make inquiry to see who is in occupation.

As I read the amendment it is an attempt to bring tenants' partners into line with the partners of freeholders. To that extent it is a valuable amendment. It is not to be forgotten that these people already have existing rights. For a number of years under the Matrimonial Causes Act the tenancy has been regarded as property. There are existing rights for the transfer of tenancies under the Matrimonial Homes Act going back to 1967 which were reinforced in 1981. It is my understanding that the amendment is not intended to enhance those rights but rather to ensure that those rights are not lost by the unilateral act or omission of the disappearing tenant.

Lord Renton

Would it not be a good thing if we were now to hear what my noble friend Lord Caithness has to say about this rather conflicting argument?

The Earl of Lytton

Perhaps I may intervene very briefly. It seems to me that the situation here is in the essence of a contract between landlord and tenant. The landlord is entitled to know to whom he is letting and the tenant is entitled to know who is letting the property to him. It therefore follows that if some change occurs, such as the tenant marrying and wishing his spouse to be included as a tenant, he ought to give due notice to his landlord that that is what he would like. The landlord can then be asked to make sure that he has served a notice on both parties or that he is dealing with both parties and makes due representation to them jointly and severally as the case may be. It seems to me that anything short of that represents an imbalance in the whole concept of landlord and tenant law.

Baroness Gardner of Parkes

I must respond to the comment of the noble Earl, Lord Lytton. In an ideal world where all husbands and wives got along marvellously, and men really thought about what might happen to their wives, they might give due notice that they were now married and they would like their wife to have equal rights. They might have a joint tenancy, which is something that I should like to see more couples have. However, there are many situations in which that does not happen.

The noble Baroness, Lady Platt, has asked me to say that she too feels strongly on this issue. I do not support the amendment as such because I am not sure that the wording is right. However, I support the principle. It should refer to whichever spouse has the children, because it is the welfare of the children and their future which is most important. If the landlord is receiving the rent from the man, or from the wife who is continuing to live there with the children although the man has gone, what difference does it make to the landlord? On the other hand, if the woman finds that, although the husband's tenancy rights were protected because he had been there for some years, hers is considered a new tenancy and she loses all the rights that existed with the earlier tenancy, I think that that may be a very serious position.

Without doubt local authorities are overburdened with homeless families, and homelessness is a terrible thing in terms of the children. This type of Act does not suggest any reduction in rent for the landlord. The point made by the noble Baroness is that it would usually be the woman who is left. It could be a man whose wife has deserted him but it is usually the man who goes off. Whichever parent is left with the children, if the tenancy is not in joint names then that parent should have the opportunity to acquire the tenancy. I support that in principle.

Lord Hesketh

I fully appreciate the reasons why the noble Baroness moved these amendments. The arguments behind them were set out for my honourable friend the Parliamentary Under-Secretary of State by representatives of women's organisations at meetings at the department. I have considerable sympathy for the partner to a marriage which is breaking up who is kept in ignorance by the other partner of developments which could be of vital significance for her future. However, I do not think that these amendments are a practical way of helping such people.

The amendments would require a landlord to serve a notice in prescribed form of changes in the terms of the tenancy, notice of increase in rent, and, most important, notice of proceedings for possession on a person living in his property who is not the tenant.

The tenant of course gets such notices automatically. The amendments would require the landlord to make inquiries to establish that the person has a right to apply to the court under matrimonial legislation for the tenancy to be transferred to her—I say her, though of course it would apply to a spouse of either sex, because it is most often the woman who is left in the position of being a non-tenant spouse.

I contend that that is an unreasonable burden to place on landlords. A landlord makes a contract with his tenant. He should not be obliged to make inquiries into the personal affairs of that tenant. If the tenant marries, he may apply for a joint tenancy to be granted to himself and his wife. That is the best course, and one that we shall advocate in the advice literature that we shall be issuing to prospective tenants after this Bill becomes law. Of course it is open to a wife to apply to the court in good time to get a property adjustment order made. But it would be burdensome and possibly objectionable for a landlord to have to investigate the marital status of his tenant every time he serves one of these three notices.

I would point out that it is not normally in the tenant's interests to allow a notice of rent increase to go uncontested, on the assumption that his wife will simply be saddled with the cost of the higher rent. He might well be expected to pay maintenance as part of the divorce settlement, and his maintenance payments are likely to be higher if the rent is increased significantly. So in practical terms. he—if it is he—has nothing to gain by letting a notice of rent increase go uncontested.

I believe that the notice of proceedings of possession is the most important of these notices. I understand that, where possession proceedings are started, notice is served at the address of the property that the landlord wishes to repossess. If the spouse is still living at the property, it is open to her to find out what is going on and seek to intervene in the proceedings. I understand that the courts will treat such intervention sympathetically, and if it is an arrears case, the wife may be given the opportunity to pay off her husband's arrears.

I make the practical observation that people do have to take some responsibility for safeguarding their rights. I strongly urge spouses to take out joint tenancies, and our advice literature will do so too. I do not think that we should expect the landlord to go through complicated and intrusive procedures to protect the spouse's rights.

I am afraid that I also see problems with Amendments Nos. 10 and 36. Again, I have sympathy with the partner to a broken marriage who is living in a property in the case where changes to the terms of the tenancy or rent are agreed without her knowledge. However, we are up against the fact that the landlord's contract is with his tenant. He must serve the notice on the tenant, and if the tenant agrees to it, even if he is not living in the property, the case will not get referred to the RAC. We do not want every spouse to apply to the RAC in every case. We want to get at the case of the deserted spouse. The point I made earlier about maintenance still applies—if the tenant does not challenge the rent increase, he will pay for it through maintenance.

As regards Amendment No. 38, the prohibition on assignment without the landlord's consent applies to the tenant. It does not apply where the court makes an order to transfer the tenancy. So the first part of this amendment is unnecessary. As regards the second part, the landlord makes a contract with his tenant. He does not necessarily want the tenant to be able to assign the tenancy to his spouse or to someone with whom the tenant is living as husband or wife. It would be wrong to override his contractual agreement.

With regard to Amendment No. 39, when the court transfers a tenancy to a spouse as part of divorce proceedings the premium becomes irrelevant and the spouse is not charged it. If we prevent a tenant from charging his spouse a premium when there is a question of assigning it to her—and I have to say that I find it a most unusual course of behaviour to want to do so—then the tenant who is determined to recover his premium will simply not assign the tenancy to his spouse. So I do not think that this amendment is very practical nor, in respect of divorcing couples and matrimonial legislation, is it necessary.

Earlier in the day my noble friend Lord Caithness referred the noble Baroness, Lady Fisher, to my own arrival at this Dispatch Box later in the evening. With regard to her question, it is indeed the case that if a husband vanishes, leaves his wife and does not institute divorce proceedings, he could leave his wife facing a rent increase that he has unilaterally agreed with the landlord. But it is the case under the current Rent Act that a tenant could agree to a rent increase about which his wife did not know and would not have accepted.

The problems that arise with broken marriages in rent-fixing legislation cannot be dealt with here; but of course where there is a divorce, judicial separation or decree of nullity, the Members opposite have tabled amendments which I can say now we shall accept.

I am afraid that I cannot accept these amendments, because they impose undue burdens on landlords or interfere with the contract entered into between landlord and tenant, and I ask the Committee to reject them.

Baroness Fisher of Rednal

I should like to ask the noble Lord one question. It is very interesting to hear that the man continues to make maintenance payments. However, I sit in the matrimonial courts in Birmingham and in fact that does not happen at all. The husband leaves and the woman is left high and dry, and more often than not the first thing that she has to do is to go straight down to the social security offices to make quite sure that she receives some payment. It normally takes that office between three and four weeks to make quite sure that the husband has not returned or is not coming into the house and giving her some money and so on.

That is the difficulty that arises—not if there is maintenance money being paid and divorce proceedings are being instituted. But when a woman is left with only payments from social security with which to pay the bills, if the landlord is then able to increase the rent without the tenant's spouse knowing, that simply means to say that she has to receive a greater amount of money from the social security to pay it. In those circumstances, one would have thought that the noble Lord might have been more sympathetic to the amendment moved by my noble friend.

Lord Hesketh

I think I am right in saying that in the circumstances that have just been mentioned by the noble Baroness, Lady Fisher, the unfortunate lady that she uses in her example will be covered by housing benefit.

Baroness Ewart-Biggs

Obviously, I am extremely disappointed because we were trying to protect mothers and their children from becoming homeless. That was the whole object of these amendments. It had nothing to do with social tenancies, as the noble Lord, Lord Trafford, said. We do sometimes refer to social tenancies, but in fact not in this case. It was to prevent the situation in which the mother—the spouse who remains in the tenancy—is totally unaware of the notices, the increases in rent, or the eviction order that has been served upon the husband who has left her and is rendered homeless by the time she finds out. It is then too late to do anything about it. We were asking for a very minor change. The noble Lord, who is in a very good position to know about such situations, gave it his support.

However, the Minister made one small concession. I think it was peripheral to the point that I was making. It concerned divorce, and I was talking about people who did not necessarily wish to get divorced but who wished for the mother and the children to be protected in the tenancy.

We shall obviously consider what the Minister said more carefully and take advice. We may well come back with some amendments which will try again to bring before the Committee the point that we have been trying to make in these amendments. In the meantime, with very great disappointment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh

Perhaps I may suggest that this would be a suitable moment to break for dinner until 8.30 p.m. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.