HL Deb 28 February 1990 vol 516 cc736-9

2.58 p.m.

Lord Molloy asked Her Majesty's Government:

Whether they will state, in respect of the tenants of privately rented housing accomodation for which they are now paying landlords a gross rental including local authority rates, what enforceable rights they have on becoming individually liable for the community charge to secure a reduction of their rents commensurate with the rates for which their landlords will no longer be responsible.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)

My Lords tenants' rights will depend on the type and terms of their agreements but most tenants paying rate-inclusive rents can secure a rent reduction following abolition of domestic rates. A substantial majority are still covered by the Rent Act and can have a fair rent registered which will be exclusive of rates.

Lord Molloy

My Lords, with great respect, that does not answer the kernel of my Question. Will all tenants be free from being cheated by landlords to whom they now pay rates in with their rent and will they have to continue to pay rates to the landlord as well as the poll tax to the local authority? Will that be regarded as criminal behaviour on the part of those landlords? Can we have a straight answer and not one about publications? Can we have a yes or no on behalf of the millions of people who are so threatened?

Lord Hesketh

My Lords, I think that the noble Lord refers to the position of licensees. That is a figure which we approximate at some 100,000 people. I should point out that in the current and existing circumstances, if there were legislation which did what he asks the Government to do, the landlord could still be in a position immediately to raise the rent back to the figure that it was previously. The assumptions of rateable value and rates would not change so far as the licensee was concerned.

Viscount Mountgarret

My Lords, is my noble friend aware that there are many employees who occupy tied cottages for which the employers pay the rates? The employees' wages are commensurate with the benefits of those who live in tied cottages. On that basis, will my noble friend give any indication or assurance of what the Government may be able to do to encourage those responsible for negotiating wage structures for people living in tied cottages, in particular agricultural workers, clergy, firemen, police and so on, so that their wages will take into account the poll tax to be met rather than the employer having the benefit of not having to pay rates? Some measure in this direction will be most necessary.

Lord Hesketh

My Lords, by its very definition, the relationship between an employer and an employee as implied by a tied cottage makes it very different from any other form of residence. There are varying forms of tied cottage. There are arrangements whereby sometimes the tenant pays the rates, in which case the tenant would be a beneficiary under the new system in one sense and could lose in another. Because there are different forms of tenancy of tied cottages most employers who I have come across in this situation are arranging a system whereby they finish up with a net effect that is the same as before. However, if the owner of the tied cottage does not wish to equalise the matters as they were his employee will be more than able to say, "In that case I do not wish to continue in your employment".

Lord Dean of Beswick

My Lords, is the Minister aware that when dealing with this subject last week in another place the Prime Minister gave an undertaking that the Secretary of State for the Environment would be making a leaflet available with points of guidance in it in order for the tenant to be able to protect himself from a landlord who may exploit the situation? Will the Minister urge the Secretary of State to make these leaflets available as a matter of urgency in view of the track record of some landlords?

Lord Hesketh

My Lords, the noble Lord is absolutely correct in attributing the remarks to my right honourable friend the Prime Minister. The leaflet is about to go out. However, better than that, on the bottom of the form of every bill that goes out with the community charge notification will draw the bill payer's attention to the fact that he can receive guidance from the Department of the Environment on this point.

Lord Graham of Edmonton

My Lords, does the Minister acknowledge that we now have the experience of Scotland for the past 12 months to guide us on the way in which landlords will or will not treat their tenants? Will the Minister confirm that it has been estimated by reputable sources that at least £40 million has been garnered by unscrupulous landlords who have failed to act as the Minister and his colleagues would wish them to do? Bearing in mind that for England the estimate has been that in excess of £90 million will be lost, will the Minister demonstrate the same urgency in threatening recalcitrant landlords as he seems to in looking after the interests of other people—for instance, those landords who may have the poorest of the poor as tenants and those who have two homes on which to pay the community charge?

Lord Hesketh

My Lords, it is my understanding that the figure of £40 million to which the noble Lord refers was based on an assumption that all private tenants paid their rates with their rent to landlords in Scotland. The fact of the matter is that 40 per cent. of tenants in Scotland pay their rates directly to the local authority. The figure has to be treated with a certain amount of care.

Lord Glenamara

My Lords, is the noble Lord aware that there is a very special problem here for students? This year not only will they lose their housing benefit but on 1st April every student in the country will be liable to pay from £50 to £100 as their share of the poll tax. Will he make it absolutely clear that after 1st April no student in lodgings need pay that element in his rent which is attributable to rates?

Lord Hesketh

My Lords, it is important to remember that we made a great reduction for students when we introduced the legislation.

Lord Glenamara

My Lords, perhaps I may—

Noble Lords

Order!

Baroness Carnegy of Lour

My Lords, does my noble friend agree that the taking advantage of tenants by landlords who are paying no attention whatever to the change from rates to the community charge is very bad indeed and that the leaflet and its attendant publicity are the best help yet?

Lord Hesketh

My Lords, it is important to remember that the vast majority of tenants are protected by law. If they go to court and are successful, the courts will not enforce that part of the rent which they believe was represented by the rates.

Lord Stallard

My Lords, does the Minister recall that we have already had instructions in a DSS leaflet, document, paper (whatever one calls it) issued in January 1990 to local authority associations? That document stated that it is highly unlikely on the basis of the experience in Scotland last year that landlords will reduce charges to take account of the abolition of rates. That is the Government's advice which was given in their own document in January this year.

Perhaps I may ask the Minister one further question. Have the Government made any estimates of the effects on housing benefit of this landlord racket, as it was called? From the experience of Scotland it will cost £7.5 million extra in housing benefit. How much extra in housing benefit will it cost in England?

Lord Hesketh

My Lords, I do not have the figure with me today. I shall write to the noble Lord.

Viscount Tonypandy

My Lords, will the Minister bear in mind that he sounded uncharacteristically unkind about those who live in tied cottages? Very often they are the people who especially deserve extra consideration. Will he not go back to his office and return with a kinder attitude than he has shown this afternoon, which is quite out of character with what we usually receive from him?

Lord Hesketh

My Lords, I hope that I have not given that impression. I have considerable experience of tied cottages and am very sensitive to the problems that are involved. That is very far from what I hope my answer indicated. I was trying to indicate to my noble friend that it is a separate question, because there are, as they say, many horses for many courses in the different ways that agreements have been reached in the past.

The Minister of State, Home Office (Earl Ferrers)

My Lords, perhaps I may intervene for a moment and point out to noble Lords that we have been on Questions for 31 minutes. The noble Lord, Lord Northfield, has been trying to intervene. I suggest that it might be appropriate if he asked his question and then we passed to the next business.

Lord Northfield

My Lords, the leaflet to which the noble Lord referred was promised in this House when we raised the issue on the legislation passing the poll tax. At that time it was promised that the leaflet would be ready and would go out with the poll tax demands. Will the noble Lord give an assurance that that leaflet drawing tenants' rights to their attention will be distributed with the poll tax demands?

Lord Hesketh

My Lords, it is not possible to distribute the leaflet with the poll tax demands. The leaflet has to go out before the demands. However, as I said earlier, there is a clear statement on the bill that goes out drawing the payer's attention to what guidance he can get.

Lord Molloy

My Lords, is the Minister saying that tenants of private landlords who have to pay rates have also to pay the poll tax?

Noble Lords

Order!

Earl Ferrers

My Lords, whether the noble Lord, Lord Molloy, puts his question, or indeed is able to put his question, is a matter for the House. I rather interpreted the view of the House that your Lordships wished to move on.

Noble Lords

Hear, hear!

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