§ 4.27 p.m.
§ House again in Committee.
LORD GARNSWORTHY moved Amendment No. 109FM.
Page 37, line 20, leave out from ("court") to ("been") in line 21 and insert ("may confirm the certificate if it is satisfied that the interests of the appellant have not").
§ The noble Lord said: Clause 32 gives rights of appeal to the county court in respect of qualification certificates. In our view on this side of the Committee, as the clause stands at the moment it imposes a burden on the tenant that he ought not to be called upon to bear. We think that it places the tenant in a quite unfair position; that the situation is indeed biased in favour of the landlord. What we aim to do in the Amendment, therefore, is to lay on the landlord the onus of proving that, despite the fact that he had failed to give the necessary notices 40 and had not done things that he was called on to do even by this Bill, the interests of the tenant are not prejudiced in the event of the court confirming the certificate. Surely, if somebody fails to comply with the Act it is just and proper that the burden of proof should rest squarely on the person in default to prove that the interests of the tenant have not thereby been prejudiced. I have put that point concisely, and I hope accurately. I gather that through the Minister of Housing and Construction, the Government have expressed some sympathy with the object of this Amendment; but the Minister further expressed the view that he thought the time factor was too short to warrant its acceptance. Well, since when has justice been subject to a duration test in terms of law? It seems to me this is a comparatively simple issue, which provides an opportunity for the Government to show a willingness to be fair and reasonable in regard to the position of the tenants. I beg to move.
§ LORD SANDFORD
The need for a provision of this sort has been with us for some time. It was included in a paragraph of the Housing Act 1957, the Housing Act 1964, and as recently as the Housing Act, 1969; and at that point if the Party opposite, who were in power, had thought it right to shift the onus in this way they could certainly have done so. But they were not persuaded, any more than we are persuaded, that circumstances had changed in any way so as to require this change in the onus of proof. We do not think the noble Lord has made any case for changing it now. I would confirm in passing that having remained as it is for 12 years it is a little odd to be pressing that it should be changed when the whole system will be superseded in a year or two. I would not press that point particularly. I think it rests on the arguments that have applied ever since 1957, and which applied when this legislation was last reviewed and changed under the Party of the noble Lords opposite, in 1969.
§ LORD GARNSWORTHY
I thank the Minister for what he has said. I really do think that we ought to get away from the position that, because something was not done in 1957 and it was not dealt with in 1969, in 1972 there is a first-class case for doing nothing about it. 41 We are at a point where a great many more people than ever before will be affected. Since the noble Lord has repeated the point about 1957 and 1969, may I again say that if we had had the advantage of foresight in 1969 we might have done a little more than we did do. Certainly if it had been possible to anticipate that any shortcoming in the 1969 Act was going to be repeated against us again and again, I think on those grounds alone further thought might have been given to the matter. I had not intended pushing this Amendment to a Division. Therefore, with the leave of the Committee, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 4.33 p.m.
LORD GARNSWORTHY moved Amendment No. 109FN:
Page 37, line 23, leave out subsection (2).
§ The noble Lord said: If indications are anything to go by, I hope I may be on a better wicket on this one. We on this side of the Committee have been, and are, concerned about the position of the tenant, and this Amendment was tabled in the interests of the tenant. Clause 32(3) as it stands limits his rights of appeal. He would not be notified of proposals to carry out works on his premises as a result of Clauses 28 and 29. He would not be notified of the application for the qualification certificate. Now he is to be denied the right of appeal where a qualification certificate might have been wrongfully issued, and that again against the background of his not having been notified of the application for a qualification certificate. I think I have good reason for believing that this Amendment commends itself to the Government, and therefore I would not wish unduly to take up time. I am judging by the expressions on the faces opposite. My noble friend said I am being optimistic; I hope I am not overoptimistic. I thought some indication was given earlier, but if I am in error I shall have more to say. Meantime, being optimistic and having no wish unduly to take up time, I beg to move.
§ BARONESS YOUNG
I had hoped that the noble Lord, Lord Garnsworthy, would have been more than optimistic, because when he moved his Amendment No. 109FKA which was a paving Amend- 42 ment for this one, I did indicate that the Government would be prepared to accept it.
§ LORD GARNSWORTHY
I am very grateful to the noble Baroness. My noble friend on my right was wrong in suggesting that I was being over optimistic. I am indeed obliged, and I am delighted that the noble Baroness has announced this concession.
LORD GARNSWORTHY moved Amendment No. 109FO:
Page 37, line 33, leave out ("the following provisions shall apply").
The noble Lord said: I think I have earlier this afternoon referred to Amendments 109FP and 109FQ, and what I have to say now to some extent relates to the ground that they are intended to cover. These Amendments together would confer on the county court, when an appeal is taken there, discretion to award costs. The Bill says:
the court shall make no order for costs unless it appears to the court, having regard to the conduct of the parties and all other circumstances, that it would be equitable to do so.
I am told by lawyer friends that a provision that costs shall not be awarded tends to lead to greater injustice than a provision which gives the court discretion. It is on that last point that I would lay emphasis, and I would ask the Government to give favourable consideration to this Amendment. I beg to move.
§ BARONESS YOUNG
The really important point here is that contained in Amendment No. 109FQ. As the noble Lord has said, it provides that the court shall make no order for costs unless it appears to them, having regard to the conduct of the parties and all other circumstances, that it would be equitable to do so.
May I say that we on this side are rather surprised that noble Lords on the other side should he interested in taking out paragraph (b), which in effect is designed to protect the tenant. I am not a lawyer, but I understand the principle that the noble Lord, Lord Garnsworthy, has enunciated, that in law it is generally true that costs follow judgment. The effect of this Amendment, if passed, 43 would be to benefit always the successful parties at the expense of the unsuccessful. In this case the effect would be that, where the tenant is successful in the appeal proceedings, the local authority or the landlord would be called upon to pay the tenant's costs, but it is equally true that if the landlord or the local authority is successful the tenant could be called upon to pay the costs. I understand that in the Housing Act 1969, Section 49(3)(b) an identical provision is made. It seemed that this had the support of the previous Government as the kind of provision that would be of help to tenants in certain kinds of circumstances and therefore was well worth keeping in the Bill. It is for that reason that the Government are not minded to accept the Amendment.
§ LORD GARNSWORTHY
I must express appreciation to the noble Baroness, Lady Young, for the way in which she has replied to the point I tried to make. My argument probably deserved a fuller exposition than I gave it. I am no lawyer, and I have no intention of standing at this Box and talking as though I were an expert on the matter. I thank the noble Baroness, and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 32, as amended, agreed to.
§ Clause 33 [Consent of tenant]:
§ 4.42 p.m.
§ LORD GARNSWORTHY moved Amendment No. 109FR:
§ Page 38, line 43, at end insert—
( ) the age and health of the tenant.").
§ The noble Lord said: It will be appreciated that I am asking the Committee to allow me at this point to insert also the word "and". The Amendment requires the county court to have particular regard to the tenant's age and health. These are considerations which I am sure will be generally acceptable not only to the Committee but also, I hope, to the Government. I trust. I have good reason for thinking that of the Government. If that is so, again I do not wish to take up the time of the Committee unduly. I beg to move the Amendment, and shall be interested in the reception it gets from the Government.44
§ LORD SANDFORD
I am grateful to the noble Lord, Lord Garnsworthy, for moving this Amendment, which I think has merit. It would not have been excluded from the considerations the court might take into account, but it is as well to have such an important factor as this mentioned specifically, and the Government are happy to accept it.
§ LORD GARNSWORTHY
I am most grateful to the Minister for indicating acceptance of this Amendment. I feel we now have reason to hope, as these concessions are being made, that the Government will be increasingly conciliatory. If it is correct, we shall be able to make more rapid progress than perhaps we have done up to date. May I say that I am glad it is the noble Lord, Lord Sandford, who has been able to indicate acceptance of this Amendment? He has shouldered a pretty heavy load at times in Committee, and I am sure he must be pleased that he is able to make this further concession to our side.
§ 4.46 p.m.
§ LORD GARNSWORTHY moved Amendment No. 109FS:
Page 38, line 44, leave out ("but the Court shall not take into account the means or resources of the tenant") and insert—
("( ) his means in relation to the increases of rent that would result
( ) the stages in which that increase would become recoverable under the provisions of section 38 of this Act
( ) the age and health of the tenant, and
( ) the period of the tenant's occupancy.")
§ The noble Lord said: With the leave of the Committee, I should like also to speak to Amendment No. 109FT, which at line 45 seeks to insert the new subsection set out in the Marshalled List. The Bill deals here with the right of entry into a person's home. Many people to-day already resent the number of public and other bodies which have a statutory right of entry. I believe they number forty-six in total; but before we know where we are, and unless we contain the situation, it will be up to fifty. I am not suggesting that this Bill will necessarily give us fifty, but if it increases the number in any way it takes us towards that figure. For most people forty-six would seem more than enough.45
§ Here, the clause empowers the county court to grant the landlord of a statutory tenancy an order enabling him to enter and carry out improvement works required to satisfy the qualifying conditions, notwithstanding that the tenant is unwilling to consent to them. The Amendment would seek to ensure that the court shall pay regard to a number of factors, all of which ought properly to be taken into account. What is being sought in these Amendments is largely what is contained in Section 54(5) of the Housing Act 1969. That Act seems to commend itself from time to time to members of Her Majesty's Government. It is really remarkable that this Bill retains only two of the considerations the 1969 Act set out, namely, the two matters covered in subsection (4), paragraph (a) of which refers to any disadvantage to the tenant that might be expected to result from the works, and paragraph (b) of which asks the court to have regard to the accommodation that might be available for him while the works are being carried out.
§ To these two considerations we on this side of the Committee would like added provision to take account of, first, the tenant's means in relation to the increases of rent that would result from an order; secondly, the stages in which that increase would become recoverable under the provisions of Clause 38 of the Bill; thirdly, the age and health of the tenant; and, fourthly, the period of the tenant's occupancy. It has been claimed that the provision of rent allowances removes the basic need for the court to take the tenant's means into account. The court ought to look at this to make absolutely certain that there is no hardship. There are always, or nearly always, the hardline cases, the border-line cases, and it will be a sad day when individual circumstances are left out of consideration in such matters. It is desirable to give the court discretion to say that these rent increases should take place in stages, avoiding hardship that would be unreasonable if the whole of the increase was imposed at once.
§ Next I would urge that consideration of the age and health of the tenant is nothing more than an act of decency. I think the Committee has already recognised that. I shall call it an act of humanity if that word is preferred to 46 "decency". Surely there is a case for taking into account the period of the tenant's occupancy. Not everyone wants change. Many of these people have lived so long in their homes that compulsion exercised as this Bill permits could have not beneficial effects but deeply disturbing ones. The new subsection (5) restores the position laid down in Section 54 of the 1969 Act. These are all considerations which might commend themselves to the Government or, if not, to the Committee. I beg to move.
§ 4.50 p.m.
THE EARL OF BALFOUR
Although I have great sympathy with this Amendment and can see very well what the noble Lord, Lord Garnsworthy, is trying to do, I feel that we need to be a little careful here. Too often old people have for 30 or 40 years been living in houses which have been getting steadily more damp. Those people have not got very much money behind them. Suddenly, the landlord says, "I should like you to move out into a modern cottage. Will you go?" The dear old souls may say, "We have lived here all our lives. We will not move". I had a case of this kind very recently. I was keen to get people out of a house which was very damp and I had almost to use a shoehorn to get them to move. I am glad I did because they are now very happy and would not go back again.
I am thinking particularly about people in the income group which would get rates relief. These people are desperately worried about increasing costs because their finances may be very limited. They feel that they would just like to stay where they are, however dreadful the place may be. One of the problems is that the landlord may in all good faith want to do up the cottage or house, but if he feels that there is any risk, because the people are getting rates rebate, that the court may throw out his application or that something may go wrong, then the poor people will have to stay there in their dreadful slums. Although, as I say, I sympathise with this Amendment I feel that it might have the completely opposite effect to that desired and result in people like that being left to rot.
§ LORD SANDFORD
The intervention of my noble friend the Lord Balfour has 47 served a very useful purpose in reminding the Committee that in this legislation, particularly this part of the legislation, we have to steer a very careful course between giving tenants the protection which it is right for people to have and giving them so much protection that we condemn elderly and needy people to live in increasingly squalid conditions. I am afraid that this is a very great danger. If we make it too difficult for landlords to bring housing up to the standards which most of us would regard as being acceptable, this would put the tenants in a very difficult position. I am grateful to my noble friend for having drawn our attention to that side of the coin.
I should now like to refer more precisely to the Amendment itself. We have already agreed that within all the circumstances which the court can consider it has been right to emphasise especially the age and health of the tenant. I would remind the Committee that the court will be free to discuss the period of the tenant's occupancy and this may very well be another factor; but I would suggest to the Committee that it would not have the same degree of importance as the age and health of the tenant. With or without the Amendment the court will be able to consider these factors. I agree that it is convenient to discuss these two Amendments at the same time and the discussion boils down to the question of whether it is right for the court to consider the resources of the tenant. Under the 1969 Act it had to do so.
As the noble Lord, Lord Garnsworthy, said, I have to refer back to the 1969 Act from time to time. Sometimes circumstances to-day are identical with circumstances in 1969; sometimes they are quite different. This is a case in which they are quite different because we are introducing rent allowances and this means that the tenant's personal resources and means have no longer the same importance and relevance. It could be argued that if rent allowances have come into the picture, this factor should also he taken into account by the court in considering the tenant's means. Looked at superficially this is an attractive argument, but the fact of admitting this point in practice would be that, instead of the tenant having to satisfy the local authority as to his entitlement to rent allow- 48 ance or the Supplementary Benefits Commission as to his entitlement to supplementary benefit—these are both things which can be done in private and everyone will agree that they ought to be done in private—his entitlement to rent allowance would have to be considered in open court and he would have to go through the embarrassing procedure of having his private circumstances discussed in public. I do not believe that this is a position into which we should want to put a tenant.
Furthermore, it would oblige the landlord in every case to get a certificate of fair rent from the rent officer. This would bring in another factor if the tenant's means in relation to the rent that he is going to be charged are to be considered by the court. So I hope that the noble Lord, Lord Garnsworthy, will recognise that in resisting this Amendment we are not in any way wanting to deprive the tenant of any protection but seeking to save him from the embarrassment of having to go through a procedure which he might find offensive. This will not be necessary under the new arrangements under which he will be protected, as far as his means are concerned, by the availability of both supplementary benefit and rent allowance.
§ LORD AVEBURY
The noble Lord, Lord Garnsworthy, predicted accurately that the allowances would be invoked by the Government as a reason for declining to accept the Amendment. The noble Lord, Lord Sandford, has discussed the allowances in a way that suggests that all the tenants are going to claim them. On an earlier occasion he gave us some figures of estimated take-up with a number of qualifications attached. I agree that it is difficult to say how many tenants who would be entitled to the allowances would actually apply, but let us suppose that in the case of an order before the court for approval the tenant happens to be one of those who have not claimed the allowance. The noble Lord, Lord Sandford, said that the percentage of such people could be as high as 25. So one in every four of the tenants who might be affected by this clause is not going to receive any allowance at all. The noble Lord would say that the court has no power to take that into consideration. This is entirely wrong. In those circumstances it would be only right and proper 49 that this should be one of the things to be taken into account.
§ LORD SANDFORD
I do not recall expressing any view about take-up, although, now that the noble Lord, Lord Avebury, has mentioned it, I agree that it is very important. But I do not remember expressing any view on the extent of take-up or lack of it.
§ LORD AVEBURY
Perhaps it was not the noble Lord, Lord Sandford; it may have been one of his colleagues. It happened during one of the discussions that we had in the middle of the night and I cannot find the paragraph. But the noble Lord has not answered my point. One in every four of these tenants is not going to be receiving rent allowance, so his argument falls to the ground.
§ LORD GARNSWORTHY
I thank the Minister for the explanation which he has given of the Government's position. The point raised by the noble Lord, Lord Avebury, is an extremely important one, because he has brought us back to the point, made again and again from this side, that we are dealing with a particular class of persons—people who are, many of them, not very literate; who are, many of them, poor; and who are not proud of their poverty. Their sense of pride causes them not to take up such benefits as are, as indicated by the noble Lord opposite, available to them. I have the feeling—and it remains with me—that the Government are not sufficiently seized of the reaction of this kind of person to the situation that is going to be created for them under this Bill.
I listened very carefully to what the noble Earl, Lord Balfour, had to say, and I want to make it abundantly plain that we on this side of the Committee do not desire, have never desired and, I am certain, shall never desire that people should live in unnecessary squalor. Let me make that absolutely clear. But there is a point at which the situation changes; that is, when people become so old and have lived for so long in poor conditions (conditions which have been tolerated by many of those who, in these more enlightened days, seek to criticise them for their squalor) that it would be wrong to move them. I would further make the point that I think there has been no good reason why these houses should have been neglected as long as they have 50 been. Many landlords could have done a very great deal more than they have done in years gone by. Grants were available when these people were younger, and landlords might have received a better response when asking, "Can we do work to improve your property?" I think the Government need to apply their mind to this class of persons, who, as the noble Lord, Lord Avebury, has said—and it has been admitted from the other side—are not inclined to take up what is available to them. It would surely be better, if error is to be made, that we should err on the side of overconsideration rather than seem to show lack of sympathy and understanding of their position. I do not propose to press this Amendment to a Division, and in the circumstances I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Clause 33, as amended, agreed to.
§ Clause 34 agreed to.
§ Clause 35 [Conversion of controlled tenancies: general decontrol]:
§ 5.3 p.m.
LORD GARNSWORTHY moved Amendment No. 109FU:
Page 39, line 32, after ("controlled tenancy") insert ("if the conditions contained in subsection (2A) of this section are satisfied").
§ The noble Lord said: We now come to Part IV of the Bill. With your Lordships' permission, I should like, in discussing Amendment No. 109FU, to speak also to No. 109FV. Clause 35 provides for the conversion of controlled tenancies into regulated tenancies by stages under what is termed "general decontrol". The only buildings exempted are those which, under existing statutory procedures, are classified as unfit for human habitation; but houses without basic amenities and houses which may well not be in a good state of repair are included. I have little doubt that some people will say that higher rents will enable landlords to improve their properties, and who will tell us how hard done by many of those landlords are. I wonder why such landlords have not disposed of their properties long ago, and ridden themselves of the burden. When we come to the next Amendment we may find that we have discovered a method whereby we can help them.51
§ LORD DRUMALBYN
I am sorry to interrupt the noble Lord, but would he repeat the number of the other Amendment that he is taking in conjunction with this one? I missed it.
§ LORD AVEBURY
I was wondering whether the noble Lord was taking 109FW as well, because in fact 109FU refers to it.
§ LORD GARNSWORTHY
I am quite prepared to take No. 109FW and to speak to it, if that is to the convenience of the Committee. With regard to No. 109FW, may I say that I have it in mind to pursue this matter pretty thoroughly. As I indicated, I think No. 109FW might help.
The fact is that, generally, landlords bought these properties for what are to-day absurdly low figures, or they inherited them; and have held on to them, very often, in the hope that they would be decontrolled; that there would arrive a day when it would be possible to turn ownership to advantage. I should like to see these houses acquired by local authorities at reasonable prices, and so relieve the present owners of the cross of balsa wood under which many of them have struggled. Many of them have held on, as I have already indicated, in the hope of receiving the sort of incomes that would make these properties really profitable, much more worthwhile investments than they have been for some time, just as many people are buying land at the present time in the hope that before long it will be released for building purposes and, as a result, fortunes made overnight. This Government's policy, I think, can be relied upon to encourage property companies to move in increasingly in expectation of, eventually, a big kill. The Government talk about containing inflation, but the possibilities of inflation developing under this Government are absolutely fantastic.
In an estate agent's window in the little village where I live I noticed a property offered for sale. I knew it very well, because in point of fact in the late 1920s I was engaged in the building industry and was employed, with a number of other people, in construction in this particular road. These were little blocks of 52 four cottages with an outside toilet, one living room, a bathroom running off the kitchen and three little box bedrooms. The house that is advertised in the shop window was at that time sold for £425. There was a subsidy to the builder of a further £75. So let us say that the overall cost to purchaser and Government was £500. I realise that some small improvements have been made—by which I mean that instead of having a cesspool they are now on main drainage, and the road has been made up. This property is advertised at a figure of no less than £11,450—and I took the trouble to go to the estate agent's window this morning to check that this was so. On Saturday I went to have a look at the outside of the property, at least, to satisfy myself that nothing substantial had been added to it.
The point I am making is that under this Government, with all the talk of containing inflation, there is no indication at all that they have any idea or any intention of doing anything worth while in regard to containing house prices. I venture to think that Amendment No. 109FW could be very helpful, for it gives the Government an opportunity to show that what they want done in the public sector can be done in the private sector. I have the advantage of a statement issued last week by the Minister for Housing and Construction, Mr. Amery, saying that the local authorities are being told they ought to sell. If it is good enough for the Government to tell local authorities that they ought to sell—and there are indications that if they do not increasing pressure will be brought to bear upon them—it is reasonable that they should view favourably a proposal that tenants of these old properties should be given an opportunity of buying them.
The clause that we are discussing affects about 1[...] million families; that is to say, 4 million to 5 million people. The rents they are being called upon to pay are likely, under this Bill, to go up at least two and a half times, and perhaps more—and this for houses some of which lack amenities such as baths and inside lavatories, not to mention hot water. As the Committee will appreciate, the second Amendment (No.109FV) would delay the implementation of Clause 35 beyond the date of the next General Election. I think it would be a good thing to do that, 53 first because we might see a change of heart on the part of the Government, and secondly because I feel we can reasonably anticipate a change of Government as a result of legislation such as this Bill.
In the third Amendment (No. 1095FW) we are proposing that the tenant should be offered the house and we are indicating a selling figure at which the offer should be made. If the tenant does not accept it, the local authority might be offered it in his place. At this stage I think that I shall leave the matter to give the Government an opportunity of indicating that they are as enthusiastic in the field of home ownership in regard to this particular class of property as they appear to be in regard to publicly owned houses.
§ LORD AVEBURY
May I say one or two words on this Amendment, and also declare an interest as a landlord of some properties which might be affected under this Amendment and under this Part of the Bill? In my opinion, the noble Lord's suggestion that landlords should be obliged to make an offer of sale to the tenant is an extremely good one and one that should be welcomed by the Government, because I think that when people realise the increase in house prices which has taken place in the last year or so they will see that it is worth while to take advantage of the further increases that they may expect so long as a Tory Government remain in power. Although in the past some tenants of controlled properties have not been very keen to buy their houses (one has experience of making offers at a reasonable price and of tenants preferring to continue renting), I think that this attitude is going to change and that it will be sensible, while making this sort of alteration in the law, to provide that the landlord should automatically offer dwellings to the tenants in the circumstances mentioned.
Furthermore, I agree with the noble Lord that if the tenant does not want the house, the next stage in the proceedings should be to make the offer to the local authority. Unfortunately, in the past when landlords of controlled properties have come forward and voluntarily offered to sell, the local authorities have been reluctant to take up that offer. I myself have had experience (not with property that I own) of people who want 54 to escape the obligation of being landlords and to whom I have suggested that they go to the local authority to negotiate a sale. But housing managers almost always used to say that the properties offered to them were of no use because they were not near a housing estate and that it would be costly to collect the rents and to get somebody to call to do repairs. I think it short-sighted—and even more shortsighted now that local authorities are selling more and more of the dwellings on their own housing revenue account—not to take this opportunity to try to replace them.
I mentioned this matter once before when discussing the run-down in privately rented property. I think the noble Lord, Lord Garnsworthy, has outdated figures; because the figure I have in mind is that there are 1.1 million controlled dwellings in England and Wales: that is the number of families we are talking about. This number is declining at about 6 per cent. per annum. Therefore, as I reiterated, we are losing about 6 per cent. of one million dwellings every year as they are taken over for improvements or the landlord, having obtained vacant possession, immediately sells them for owner occupation. This imposes an unnecessarily large additional burden on the local authorities who have not only to build for the people on their waiting lists but also to make up the deficiencies caused by the loss of properties which were formerly in the privately rented sector. I am sure that the landlords of controlled properties would have no objection to making such an offer to the local authority, though not necessarily at the price the noble Lord has suggested in paragraph (a) of his Amendment. Since he has drawn an analogy with the circular which Mr. Amery has said is to be distributed to the local housing authorities, I think that we should set up that formula here. Let us take the market value and deduct 20 per cent., and make that the price at which these controlled dwellings should be offered, first to the tenant and subsequently to the local authority.
With those minor criticisms of the Amendment—and I agree with its principle— I hope that if the Minister does not accept it as it stands he will come forward at Report stage with an Amendment of his own in similar terms.
§ 5.19 p.m.
§ LORD DRUMALBYN
The noble Lord, Lord Garnsworthy, has spoken to three Amendments together. The first Amendment is obviously a paving Amendment to the second; and the third is a more general one postponing the coming into operation of decontrol as a whole. The noble Lord started by saying that a great many landlords of controlled houses have been holding on to them in the hope that they would become decontrolled. Certainly some of them have inherited these houses as an investment which was expected to provide for them in their old age; others have bought them. But many of them are holding on simply because the houses are not in themselves assets, but are a liability. In many cases the rent does not suffice to cover the outgoings; so they are a liability, almost unsaleable unless they are in such nice surroundings that they can be turned into pleasant country retreats.
The point of the provisions in this Bill is that there is at least a prospective asset there. The owners will now be in a position to sell if they wish; but that is different from saying that they must sell. There is nothing to stop them from selling; some may prefer to sell rather than spend money on improvements to the dwellings. That is not to say that it is a good thing to compel them to sell. If sitting tenants will not purchase the property, the dwellings then, under the Amendment, are to be offered to the local authority. Local authorities are being told that they should sell to their tenants, said the noble Lord, Lord Garnsworthy, but this Amendment turns that on its head and says that landlords ought to sell to local authorities. That seems to me a totally different proposition. I hope that there is a different way of looking at this matter from that which the noble Lord has put forward.
If the Amendment were accepted it would remove from landlords of controlled tenancies the prospect, for which many of them have been waiting fror 15 years, of getting some reasonable return from their assets. Unnaturally small rents for controlled tenancies could gradually be moved to fair rent level, and to force on landlords at that time a sale well below the market price would be wrong. I entirely take Lord Avebury's 56 point that that is not what the Amendment intends. To force on landlords a sale well below the market price would be inherently unjust, particularly to those landlords who were less well off than their tenants. Many tenants would then be able, under this Amendment, to purchase their dwelling and sell it again, with vacant possession, on the open market, at a considerable profit. If the dwellings were not offered to them, and the local authority did not want to buy them, the tenants would then be able to continue a controlled tenancy until the house fell down around their ears. That is the alternative.
I think it ought to be borne in mind that although controlled tenants are generally thought of as being among the poorest—and many of them are undoubtedly poor—this is not always the case. It would be the better off ones who would be buying their homes at an artificially deflated price to secure a capital advantage—in any case a capital advantage for the future. The poorer tenant might not be able to find the purchase price, or sufficient to obtain a mortgage. The poorest controlled tenants might have difficulty in buying at a price under the formula proposed. These are the people that the Amendment presumably seeks to protect. I do not think that this is a proposition that should commend itself to the House. There is nothing to prevent the landlord and tenant from reaching agreement on a contract of sale, any more than on a contract of rent. And as for the local authorities, the reason which the noble Lord, Lord Avebury, gave for local authorities' not wanting to take over these buildings is certainly valid, but there is another reason. Most of these dwellings are different in type and kind from those already owned by local authorities and would involve considerable expenditure; local authorities may not think that a proper use of the ratepayers' money. For these reasons I am afraid that I cannot recommend your Lordships to accept this Amendment.
I ought to add that there are technical reasons why the proposal should be rejected. For example, it is a fact that the state of maintenance of these dwellings will vary very much from property to property, and under the noble Lord's formula it would not result in differing 57 purchase prices; all that would be reflected would be the controlled rent, so injustice would be done between one present landlord and another. Again, the proposal does not say what is to happen to tenancies in non-controlled dwellings and in dwellings in multi-occupation, particularly where facilities are shared. Not even the Leasehold Reform Act of 1957 provides for the enfranchisement of flats, yet this cuts across the whole field.
There is also the fact that controlled tenancies are not necessarily held directly from the freeholder. Superior landlords could be involved, and in the case of disputes they might be involved in Land Tribunal proceedings and purchase money might have to be shared. There are an enormous number of problems and we do not think the advantages to be gained by the tenant or anybody else would compensate for all these difficulties, nor do we think that it would result in justice being done.
That brings me to the next point—the timing when decontrol is to come into operation. Decontrol is timed to come into operation at the same time as rent allowances are to be made available. To postpone them beyond that time would mean perpetuating a system which is doing a measure of injustice to landlords at the present time and prolonging it quite unnecessarily. Now that rent allowances will be available on the date of decontrol, surely delay cannot be justified. It is time that the landlord as well as the tenant was treated fairly, so I am afraid I must reject the Amendment.
§ BARONESS LEE OF ASHERIDGE
This is a very difficult problem. There are three distinct cycles to it. Many people who have put their life savings into small properties have tenants in those properties and are not getting economic value from them. We know that situation. We also know that there are people who have bought properties with tenants in occupation, and they harass those tenants. Having bought below the market value all that they are concerned about is getting rid of the tenant so as to sell at a higher price. This is the dilemma. There are people who are disadvantaged and seriously embarrassed by having tenants from whom they do not get an economic rent, nor can they afford to maintain the house. In my opinion 58 there are even more rapacious owners who obtain property and make life impossible for the tenants. How can we resolve those two distinct problems, that of the poor people who have a little property and are getting a poor return from them and that of the people who are buying property and doing everything possible to get tenants out? I could give many instances of the cruel harassment of sitting tenants to get them out in order that the property may be sold with vacant possession.
It seems to me that we need a great many more houses to rent in this country. We say that we must have mobility of labour, and we speak about areas of high unemployment and the need for people to be ready to change their jobs and their homes. But every time someone has to do that they must negotiate the sale of their home and buy a new home, and for a great many people that is almost impossible. I have always believed in mobility; but surely to achieve that means that we need a great many more houses available for renting. The notion that people can buy new houses overlooks the fact that so many people cannot even find the down payment for a mortgage. We need more houses to rent because, for the good of the economy, we need labour to he mobile, and to achieve that the landlord has to be the local authority.
We cannot expect a local authority to buy derelict property that no one else wants. The "wide-eyed boys" manage to get hold of property and to evict the tenants and sell at a profit. But it seems to me that we shall get no answer to this problem until there is a proper understanding between local authorities and central Government. Where a local authority can show that there is a property which it would not be financially advisable for the authority to take over, but which could be put into a good state of repair for renting, there should be some arrangement between the authority and central Government. I am talking wide of the Amendment but, frankly, I do not see any answer to the problem until we differentiate between people who are being badly treated; people who have invested in a small property; the great many who harass tenants to get rid of them in order to sell the property at a profit and local authorities which are 59 asked to take over sub-standard property. Unless we can have some financial arrangement between local authority and the central Government there is nothing that can be done to change the situation, either by this or by any other Amendment.
§ 5.35 p.m.
§ LORD SLATER
I think that the Minister has been given a brief with which to reply which seems to support the financial speculator, and it is about time that someone said a word in defence of local authorities. They are not all alike. I can speak for my local authority which took over a number of houses which formerly belonged to the old railway companies, and modernised them and made them available for local people. Noble Lords on this side of the Committee have never forgotten the old attitude of Rachmanism, but noble Lords opposite never attempted to do as much as we did about it. At the present time the speculator is getting a financial benefit because of the high prices of the property which comes on to the market.
Something was said about people not being prepared to move out of the towns into villages. Noble Lords need only come to the area in Yorkshire where I live and they will find that much new property is going up in the villages and people are moving away from the city centres to occupy such accommodation. I am disturbed by the plight of aged people who have invested their life savings in property on which there may be a demolition order which can be operated by a local authority. Often when people buy such old property they do not seek the advice of the local authority about how long is to elapse before the property is demolished. If people would take such advice many would not fall into the trap of buying property which has only a short life before it is due for demolition; and they would avoid having to carry on making mortgage payments on property which no longer exists, with the sole compensation of the small value attaching to the land upon which the property stood.
I think that my noble friend has made out a good case for the Amendment proposed, but it is obvious from the reply which we have received from the Government Bench that the Ministers have not examined the situation. If the Ministers 60 responsible for housing had had the "guts" to do so they would have taken a stand against the financial speculator and said, "So far, no further". It is argued that some property is old and has been in the same family for generations; that it would cost too much to repair and that it should be transferred to the local authority, or the sitting tenants should be given the chance to purchase it. People owning such property must have made colossal profits out of it. I could show noble Lords property in the area where I come from and they would be shaken at its condition. At the present time a Minister in the Government is still paying a pension to employees who are living in the same property as they occupied in his grand-father's time. I hope the Government will have second thoughts about the Amendment; that we shall see a change of front and that we shall get away from the old attitude of mind of the Government which seems to be controlling them not only in respect of housing but also of other subjects.
I think the noble Baroness made a temperate and understandable case, and we appreciate what she said. But I wish to know whether any of the associations have made any approach and whether they wish to do this. Noble Lords opposite have quoted the associations freely in support of their case, but have requests been made in connection with this matter? If not, I do not see where we are getting to, unless there is some method of compelling local authorities—and I thought that the noble Lord, Lord Garnsworthy, disliked the idea of compulsion. He is all for freedom for local authorities. The noble Baroness may be right in saying that there should be a conference.
§ LORD AVEBURY
I do not know whether the noble Lord was addressing his question to me, but he seemed to be looking in this direction. The answer is that so far as I am aware we have had no representations from the local authority associations to the effect that they would like this sort of Amendment to be made. As I have explained, many local authorities are reluctant to take over controlled properties, and the noble Lord on the Front Bench gave additional reasons why this should be so. It is not suggested anywhere in the Amendment 61 that they should be forced to do so but only that the landlord could offer them in the second instance after the tenant has refused to purchase. What is unreasonable about that? One is not forcing the local authorities to accept it. If the noble Lord had been listening he would have realised that this was purely voluntary. In the present climate, where local authorities are being cajoled and bullied into selling off some of their existing privately-rented accommodation, they would be sensible to take advantage of this provision, to top it up, and prevent a loss out of the rented sector altogether of so many properties that the waiting lists are going to lengthen and people are going to find it impossible to get into a rented house whether private or council.
THE EARL OF BALFOUR
I should like to say a few words, because I think that somehow or other we have gone slightly wrong in this Committee. I am absolutely certain that the noble Lord, Lord Drumalbyn, explained the position very clearly indeed. I do not think that we are at variance over the principles of trying to look after people seeking rented accommodation or living in rented accommodation, but if there is a variance it is because of this Amendment which I am confident will not achieve the objects that have been talked about. It would be a mistake for the Government to accept this Amendment.
I should like to mention four brief facts of the situation when it conies to property. First, a demolished building is worth much more than a site with a building standing on it; secondly, rented property is worth approximately one-eighth to one-tenth of its vacant possession price; thirdly, local authority tenants do not have security of tenure; fourthly, many farmers allow people to occupy farm cottages rent free but they would not let anybody rent their cottages at any price because of the rent laws.
§ LORD GARNSWORTHY
We have had a very interesting debate so far. More of your Lordships have joined in the discussions this afternoon than on any other occasion. I was in some doubt whether Amendments Nos. 109FU and 109FV really went with No. 109FW. Having acceded to the suggestion that we should take them together, I have 62 rather regretted as the debate has gone along that we have been talking to the three Amendments together. Nevertheless I think it will be agreed that probably No. 109FW is the one that has given rise to more discussion than any other.
If I may say so, it seems to me that the debate has brought out quite clearly the great divide. We on this side see housing as a social service. On the other side it is viewed as a profit-making enterprise, and I do not think that anything will ever disguise that great difference between us. If the noble Lord who is to reply for the Government will indicate agreement in principle with what Amendment 109FW aims at achieving, I will withdraw it. I should like him to indicate that the Government will give some thought as to how the principle behind it is to be implemented and to give us an undertaking that they will introduce the necessary legislation without which I think it is unlikely that any progress is going to be made on this front. I take the point made by the noble Lord, Lord Avebury, with regard to the price we have suggested. A great many people would feel that our suggestion is not ungenerous, having regard to all the circumstances; but if it were possible to reach agreement on some other kind of figure I have no doubt that my noble friends would be prepared to discuss it constructively. That really is the issue.
The noble Lord, Lord Drumalbyn, spoke about standing something on its head. I think it is a question of whether the Government are prepared to stand on their head. It is about time they got a rush of blood to their head, so as to give some warmth of thought to the position of the poorest section of our community. We have not yet gathered, as this debate has progressed, that the Government are as mindful as we think they ought to be of the needs of that class of the community who are going to be most affected by rent allowances, by decontrol. But I should like to thank the noble Lord, Lord Drumalbyn, for the great care that he took to try to meet the points that I endeavoured to make.
These houses have now become, as he put it, prospective assets. Are the Government so unsympathetic to our proposal that the field of home ownership 63 should be extended in the way we are indicating because they think that those who have held them for so long should now be allowed to cash in on the new situation that the Government themselves are creating? I took the noble Lord's point about the temptation that might be afforded to tenants if they bought these properties on the kind of terms we are suggesting. A short time ago I indicated the price of a house being offered for sale that I know full well has risen from £425 to £11,450 since the late 1920s. As the noble Lord was speaking it went through my mind what a temptation is created when one owns a house and thinks about selling it. It is happening throughout the length and breadth of the country. The price of houses bears no relation at all to what is going on in terms of earnings. The inflationary spiral appears to be quite uncontrollable and utterly out of control.
The noble Lord made the comment about the temptation to give way to a quick sale and to make a quick kill, and I think that we should do well to dwell upon that. But I am certain that if the Government were sympathetic to the principle of Amendment No. 109FW we could find ways and means whereby the situation could be controlled. Local authorities have sold houses to tenants, and there has been a condition that if they re-sell within a given period of time the properties must be offered back to the local authorities. I should have thought that it did not call for a great deal of ingenuity to find a formula whereby the situation of which the noble Lord spoke could be met.
There is nothing to prevent a landlord and tenant from agreeing a contract for sale. This Amendment would create a condition where there would have to be consideration, and in that sense I think it would introduce a worthwhile element. If the tenant decides that, for one reason or another, he does not want to buy—and of course there is a point at which we could have a mass of literature available to persuade these tenants why it would be worth their while to buy—then the local authority should be given the opportunity of purchasing. May I say that if we have to have a landlord and tenant situation I think that we can rely 64 on local authorities, by and large, and can look to them to be exemplary landlords. That would mean that slowly we should get the houses brought up to a reasonable condition—I say "slowly" because the problem is a large one. The tenants would be well cared for and in this way we should in point of fact be treating housing increasingly as a social service—because local authorities tend to do this. I realise there are many difficulties, and I appreciate that the Amendment is far from perfect; but it is putting forward an idea that deserves serious consideration. The Committee obviously thinks so, since it has discussed the Amendment at such length this afternoon.
I am very grateful to the noble Lord, Lord Avebury, for the points he raised. He corrected the figure that I have given, but I do not think that I was very substantially in error. I do not think I was very far out as regards the number of people concerned when I said it was something between 4 million and 5 million. I am grateful to my noble friend Lady Lee for what she had to say. It is a fact that there are some people who have invested life savings in the expectation that that investment would keep on growing. We are lucky people if we in this House have made an investment which has kept up with the present inflationary situation, so that those people who have invested money in the hope that their return will grow with the development of the inflationary situation are in many respects no different from those who have invested their money in other ways. But the point of real significance—and I rather think that this will affect more people than the earlier one—is the way people have bought these houses and have harassed the tenants. No one in this House is going to stand up and defend the harassing of a tenant, trying to get him out in order to secure a position of decontrol, with the opportunity for a quick and a big "kill". I am grateful to the noble Lord, Lord Slater. While he was speaking my mind reflected for a moment that if we must have rented properties, local authorities make the best landlords.
Having regard to what the noble Baroness said about the mobility of labour, I am wondering whether we ought 65 not to be a little more active than perhaps we have been in advocating municipalisation of all rented properties. I do not know when this will be, but I think that at some time we shall have to give a great deal more consideration to that than we have done so far. I appreciate what the noble Viscount, Lord Gage, said when he intervened. At the end of his speech he seemed to realise that at no point did we intend to introduce compulsion on local authorities. We have no desire to compel them: all the compulsion on local authorities comes from the other side. The Government are compelling local authorities to do things which they have never sought and which to-day they do not want to do. They are landed, for instance, with the cost of administering this scheme of rent allowances.
The noble Lord also asked whether associations had made representations. I would join with the noble Lord, Lord Avebury, in saying that I have had no such representations, but even without them it is not too difficult to see the need for bringing forward a constructive proposal whereby a very difficult situation could be met. I was also interested in what the noble Earl, Lord Balfour, had to say. When he tells us that a site with a demolished building is worth more than a site with a house standing on it, that is far from being always true. There is a place—is it not Central Point?—which does not seem to support that conclusion.
§ 5.56 p.m.
§ LORD DRUMALBYN
I think the noble Lord will expect me to make some reply to the points he has raised. As I understand it, the Committee has two propositions before it. The first is that houses should come out of decontrol three years later than the Bill provides for, and the second is that a house can be decontrolled only if it has first been offered to the tenant at a price not exceeding ten times the present controlled (and therefore depressed) price and then to the local authority at the same price, and if both the tenant and the local authority have declined to buy. That is the proposition. I have pointed out that this is open to objection on the grounds that the landlord is either being deprived of his property or is being compelled to retain it at a controlled rent; because these are the two effects—unless of course 66 the landlord then proceeds to improve the property so as to emerge from control.
The noble Lord asked whether I could indicate agreement in principle. I have explained why I cannot do this, and I do not see any point in giving the reasons again. What I do not think has been sufficiently understood by noble Lords is that, whether the tenant buys or remains in occupation, decontrol does not affect security of tenure. The tenant will continue to occupy that house; and if he is the original tenant, then his successor is also entitled to occupy it. So there is no very great possibility of harassment. On the contrary, the provisions that we are going on to consider will make it much less likely that there can be harassment. I entirely agree with other noble Lords that harassment is contemptible and ought to be prevented. In fact the Criminal Justice Bill which is now before your Lordships increases the maximum penalties for harassment, making it indictable at the prosecuting authority's discretion—in which case there is no limit on the fine that may be imposed. This is a very strong deterrent against harassment, but the fact is that decontrol will make a tenant not more but less likely to harassment, because the gap between the value and the receipts then becomes less. We shall be proceeding before long to consider the various safeguards for the tenant, and I think noble Lords will then find that these are very considerable.
We have had a very interesting debate on this Amendment. One of the points that has come out of it relates to what the noble Baroness, Lady Lee, was saying, because one of the objects of this Bill is to secure that the houses in the rented sector of housing will increase in numbers. It does that, as we have already seen, by encouraging local authorities to build through the rising price subsidy. We do not want in this way to encourage the loss of houses from the pool of housing by forcing—and this is what it amounts to—landlords to sell the houses because that seems to be the only way in which they will be able to get rid of the houses: if they are going to be controlled they will still remain a liability to the landlords. The only alternative is to encourage them to improve the houses. That is what we have already seen is to be done under Part III of the Bill.
67 It is in the interests of the tenants themselves that we should encourage the improvement of these houses; it is in the interests of mobility that the houses should remain in tenancy rather than all of them being sold off to sitting tenants; and it is also in the interests of landlords. I believe that it is in the interests of all parties and I do not think, with respect, that the Committee should agree to this Amendment, even in principle. It would be—I was going to use the word "oppressive", but I will say unfair so far as landlords were concerned. It would work out unfairly between landlord and landlord, and between tenant and tenant, and would also bring some pressure on local authorities. It would not compel them to buy, but it would bring some moral pressure on them to do so. For these reasons the Committee ought to reject these two Amendments and the following one.
§ BARONESS GAITSKELL
Before the noble Lord sits down may I ask whether it is a fact that in a regulated tenancy the tenants have absolute security of tenure? Is that so?
§ LORD GARNSWORTHY
I thank the noble Lord for the further explanation that he has given and for the replies that he has made to the points that have arisen. He has given no satisfaction on this side in regard to Amendment No. 109FW. May I at this point beg leave of the Committee to withdraw Amendment No. 109FU.
§ Amendment No. 109FU, by leave, withdrawn.
§ LORD GARNSWORTHY moved Amendment No. 109FW:
Page 40, line 17, at end insert—
("(2A) The conditions referred to in subsection (1) above are that—
- (a) before the relevant date referred to in column 3 of the Table to subsection (2) above and in accordance with the regulations referred to in subsection (2B) below the landlord shall have made a bona fide offer to the tenant of the dwelling-house to sell the landlord's interest in such dwelling-house to the tenant or to any member of the tenant's family who is residing with him and is nominated by the tenant for the purpose at a price not exceeding ten times the gross value of such dwelling for rating purposes on 31st March 1971;
- (b) the Local Authority (or a Building Society which qualifies as a Trustee Investment) is prepared to offer to the tenant (or to the member of his family nominated in accordance with paragraph (a) above) a mortgage advance of such price on a 15 year or longer repayment basis;
- (c) the tenant has refused such offer; and
- (d) the landlord shall then have offered to sell such dwelling-house to the local housing authority at the same price and that the local housing authority shall have refused such offer.
(2B) The Secretary of State shall by regulation prescribe the dates when such offers as are referred to in subsection (2A) above shall be made, the periods for which they shall remain open, the information which must be supplied when such offers are made and such other matters relating to such offers and the procedure for acceptance thereof and the implementation of the resulting contracts as he shall think fit.")
§ The noble Lord said: I beg to move Amendment No. 109FW and I shall press it to a Division. We have already had a lengthy debate and I have no wish to cover again the ground that we have traversed. We think this is an issue of principle. If the Government were prepared to accept the principle, and to indicate that they would do something to implement it, we would not press the matter. But the noble Lord has indicated a complete divergence of opinion as compared with our point of view on this matter.
§ 6.5 p.m.
§ On Question, Whether the said Amendment (No. 109FW) shall be agreed to?
§ Their Lordships divided: Contents, 51; Not-Contents, 70.69
|Archibald, L.||Champion, L.||Gaitskell, Bs.|
|Bacon, Bs.||Collison, L.||Garnsworthy, L.|
|Bernstein, L.||Crook, L.||Granville-West L.|
|Beswick L.||Davies of Leek, L.||Greenwood of Rossendale, L.|
|Blackett, L.||Diamond, L.||Hale L.|
|Blyton, L.||Douglas of Barloch, L.||Henderson, L.|
|Brockway L.||Douglass of Cleveland, L.||Hoy, L.|
|Buckinghamshire, E.||Fiske, L.||Jacques, L.|
|Kennet, L.||Ritchie-Calder, L.||Summerskill, Bs.|
|Leatherland, L.||Royle, L.||Taylor of Mansfield, L.|
|Lee of Asheridge, Bs.||Rusholme, L.||Watkins, L.|
|Llewelyn-Davies of Hastoe, Bs.||Segal, L.||Wells-Pestell, L.|
|Lloyd of Hampstead, L.||Shepherd, L.||Willis, L.|
|Maelor, L.||Shinwell, L.||Wootton of Abinger, Bs.|
|Morris of Kenwood, L.||Slater, L.||Wright of Ashton-under-Lyne, L.|
|Phillips, Bs. [Teller.]||Snow, L.|
|Platt, L.||Strabolgi, L. [Teller.]||Wynne-Jones, L.|
|Aberdare, L.||Gisborough, L.||Mowbray and Stourton, L. [Teller.]|
|Ailwyn, L.||Gowrie, E. [Teller.]|
|Alexander of Tunis, E.||Greenway, L.||Northchurch, Bs.|
|Balfour, E.||Grenfell, L.||Nugent of Guildford, L.|
|Belstead, L.||Grimston of Westbury, L.||Oakshott, L.|
|Berkeley, Bs.||Hailes, L.||Onslow, E.|
|Bethell, L.||Hailsham of Saint Marylebone, L. (L. Chancellor.)||Orr-Ewing, L.|
|Brougham and Vaux, L.||Pender, L.|
|Colville of Culross, V.||Hanworth, V.||Rankeillour, L.|
|Cottesloe, L.||Hawke, L.||Redesdale, L.|
|Courtown, E.||Hertford, M.||St. Just, L.|
|Cowley, E.||Howard of Glossop, L.||Saint Oswald, L.|
|Craigavon, V.||Hurcomb, L.||Sandford, L.|
|Crathorne, L.||Hylton, L.||Savile, L.|
|Crawshaw, L.||Hylton-Foster, Bs.||Sempill, Ly.|
|Daventry, V.||Killearn, L.||Somers, L.|
|de Clifford, L.||Lansdowne, M.||Strathclyde, L.|
|Denham, L.||Lothian, M.||Strathcona and Mount Royal, L.|
|Drumalbyn, L.||Loudoun, C.|
|Elles, Bs.||Luke, L.||Sudeley, L.|
|Emmet of Amberley, Bs.||Macleod of Borve, Bs.||Swansea, L.|
|Ferrers, E.||Merrivale, L.||Trefgarne, L.|
|Fortescue, E.||Milverton, L.||Vivian, L.|
|Gage, V.||Morrison, L.||Young, Bs.|
Moved accordingly, and on Question, Motion agreed to.
§ 6.13 p.m.
LORD GARNSWORTHY moved Amendment No. 109FX:
Page 40, line 20, leave out ("earlier or").
§ The noble Lord said: This Amendment relates to the provision in Clause 35(3) which gives the Secretary of State the power to advance or to retard the dates at which the provisions for decontrol come into effect. May I suggest to the Committee that its acceptance would improve the clause? It would mean that the earlier dates that are possible under the clause as it is now phrased would no longer threaten the tenant. I am sure we shall he told that there is no intention of exercising the power which these two words give; but at the same time we shall be told that it is necessary to give the Secretary of State power to substitute earlier or later dates than those in the Table in subsection (2). I should like to think we could agree that there is no need to rush the dates of decontrol; that there is no need to bring them forward; but discretion 70 to delay, of course, is an entirely different matter and certainly highly desirable. May I hope that this Amendment will meet with a favourable reception by the noble Lord who is to reply?
§ LORD DRUMALBYN
There is no ideological content in this provision at all. It is one for administrative convenience. Allowing for the considerable expansion in the rent officer service which is mentioned in the Explanatory Memorandum, it is clear that it will not be able to cope with the full weight of work resulting from decontrol all at once, and the programme set out in the Table represents the best estimate the Department has been able to make of how the work should he spread out so as to make it a possible task for the rent officer service to deal with. But these estimates may prove wrong. They may prove wrong either way. They may prove right for one batch of dwellings coming out of control, but they may prove an underestimate of time for one and an overestimate for the next. Therefore it seems good sense to provide the power to bring forward the date where the caseload 71 on the rent officers has dwindled to practically nothing, so that they can start with a fresh caseload, or to retard it when there is still too heavy a caseload to start on a new batch of houses being released from control. There is really nothing more to it than that, and I hope the noble Lord will accept that explanation.
§ LORD GARNSWORTHY
I thank the noble Lord for his explanation and the reason why he is unprepared to accept the Amendment. It is perfectly clear that the Government are always prepared to see things brought forward in terms of decontrol, and very unwilling to see them brought back. The provision gives the power to retard, but one doubts that that is going to be used very often. However, having regard to what the noble Lord has had to say, I have no wish to take up the time of the Committee unduly, and, with the Committee's permission, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
LORD GARNSWORTHY moved Amendment No. 109FZA:
Page 41, line 23, leave out subsection (10).
The noble Lord said: As I understand subsection (10), it provides that there can be no application for a certificate of disrepair or the cancellation of a certificate of disrepair, as the subsection says,
later than six months before the date applicable to the dwelling under this section.
It would be helpful if the Minister would explain why this provision has been included in the Bill.
§ LORD MOWBRAY AND STOURTON
This Amendment goes with Amendments Nos. 109FZB and 109FZE because they all cover the same point, and they are trying to bring the availability of the certificate of disrepair procedure to an end in any individual cases before the date due for decontrol under Clause 35(2). So there will then be firmly established a controlled rent level from which the rent could progress to the fair rent. Of course, the fair rent would in itself take into account any disrepair which existed. Clause 36, as the noble Lord will recognise, excludes unfit houses from the decontrol programme. This is not because the fair rent procedure is not capable of taking unfitness into account, 72 but because so long as there remain so many repairable houses which could, through decontrol, be prevented from decaying further, and possibly irretrievably, it would be wrong to use the resources of the rent officer service on condemned houses. But so far as non-condemned houses are concerned I think we are all agreed that decontrol is most urgently needed, and this is where we hope the repairs will be done. To exclude from the decontrol programme houses in disrepair would thus defeat one of the main reasons for this particular part of the Bill. No-one need fear the prospect of any fancy rents being registered for houses in disrepair because the fair rent formula specifically deals with this point and requires the state of repair to be taken fully into account.
There is one small point which I think the noble Lord will not mind my pointing out. There are one or two small defects in the Amendment. We would assume that the sponsors—the noble Lord and his friends—would not want dwellings to go forward into the decontrol programme if the disrepair had been remedied, or at such time as it might be remedied in the future, and if this Amendment as it is drafted were to be carried this would not be provided for.
§ LORD GARNSWORTHY
As to whether the Amendment is faulty I think is of only relative importance at this stage. If the Government were prepared to accept it I am quite certain that they could deal with that matter without any difficulty at all. So that is not an argument of any substance. I have listened to the noble Lord and I thank him for the explanation he has given. We shall be interested to read it to-morrow so that we may understand exactly what he has had to say.
§ LORD AVEBURY
I have listened carefully to the noble Lord, Lord Mowbray and Stourton, and if I understood him aright he said that the state of the house and the fact that there is a certificate of disrepair in operation is fully taken into account, and I appreciate that. Therefore I cannot understand why subsection (10) should be included at all. It says that one cannot apply for a certificate of disrepair within six months of the date mentioned. If the certificate of disrepair would make no difference to 73 the assessment of fair rent why should there be this provision at all?
§ LORD MOWBRAY AND STOURTON
If these properties were left in control then surely the incentive to repair would be even stronger. The fact that the abated rent will have been allowed to remain in force suggests that the landlord may not always be in a good enough financial position to get the repairs carried out. In the view of the Government it is better to allow some increase in the rent to start with, to help to get the repairs put in hand, and to leave it to rent officers and rent assessment committees to bring the rent up to the full fair rent. I think the time factor is in line with all the other timings of this Bill.
§ LORD GARNSWORTHY
I am grateful to the noble Lord, Lord Avebury, for his intervention. I hope to-morrow we shall discover that it has shed a little more light on the situation. With the agreement of the Committee I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 35 agreed to.
§ Clause 36 [Unfit houses excluded from general decontrol]:
§ 6.25 p.m.
§ LORD GARNSWORTHY moved Amendment No. 109FZB:
The noble Lord said: This clause deals with unfit houses excluded from general decontrol. It states that
If at some time not later than three months before the date applicable to a dwellinghouse under the last preceding section a notice or order applying to the dwellinghouse has been served or made,"—
and then sets out sections of the Housing Act 1957 dealing with unfit tenancies and clearance areas and an order made under the Land Compensation Act 1961. Any dwellinghouse coming under one of the four subsections will
subject to the provisions of this section, be excluded from the last preceding section.
§ I hope I have read that correctly. I think there is no need for me to labour again and again the point that this is a cumbersome Bill, but I think I have correctly summarised the situation. This Amendment would add another subsec- 74 tion and it would seem appropriate to further exclude from decontrol dwellings where a certificate of disrepair has been issued under Schedule 9 to the Rent Act 1968. I hope that this will commend itself to the Government. I personally imagine that they will welcome this improvement to the Bill. I beg to move.
§ LORD MOWBRAY AND STOURTON
This is a point which in general principle I really dealt with in what I was saying on the first Amendment of this series moved by the noble Lord; namely, Amendment No. 109FZA. The unfit houses we did not exclude because the fair rent procedure is not capable of taking the unfitness into account. This is done before any disrepair which exists is taken into account in the fair rent.
§ LORD DIAMOND
I am sorry to interrupt the noble Lord. I would not do so unless I were in a total state of confusion. That state of confusion is shared by several other noble Lords, and we are at his mercy. I am going to ask him first whether he would be good enough to read a little more slowly because this is a difficult situation. There are three Amendments, two of which my noble friend is dealing with, and I am dealing with the third. Certainly the Front Benches of both the Liberal and the Labour Parties are in a total state of confusion, and from looks that I got from behind the noble Lord that confusion is not limited to one side of the Committee. I am anxious to know at this minute whether the noble Lord meant what he said just now, when he said that the fair rent procedure could not take into account a state of disrepair.
§ THE EARL OF KINNOULL
May I ask the noble Lord, Lord Diamond, how the Front Bench of the Liberal Party can be in total disarray since I cannot see any members of it present?
§ LORD DIAMOND
Perhaps I may answer that. The noble Earl has not been in his place throughout the debates, of which we have had many. They have lasted a very long time and they have gone all through the night. I know that the noble Earl is expert in these matters and we have missed him. I will be very frank. We have missed him, especially during the all-night session. He would have known, had he been present, that the noble Lord, Lord Avebury, who is 75 leading for the Liberal Party, has been here throughout.
§ LORD MOWBRAY AND STOURTON
I am grateful to the noble Lord, Lord Diamond, for rebuking me for reading too fast and not being suitably explanatory. I stand corrected and I will try to do better. The noble Lord did not get me aright. If I omitted a negative I have to apologise to the Committee because what I should have said is that the clause excludes unfit houses from the decontrol programme, not because the fair rent procedure is not capable of taking unfitness into account but because so long as there remain so many repairable houses which could, through decontrol, be prevented from decaying further, and possibly irretrievably, then it would be wrong to use the rent officer service in condemned houses. So what we are saying is that the fair rent is taking into account any disrepair which exists, and these Amendments would allow the certificate of disrepair procedure to run on to the due date of decontrol. The Amendment would prevent the decontrol programme from applying to a tenancy if a certificate of disrepair had been issued and was then in force. Therefore, it might not help the housing situation in the way the noble Lord would no doubt wish.
§ LORD AVEBURY
In replying to the debate on the last Amendment the noble Lord, Lord Mowbray, said that he could not agree to the deletion of subsection (10) because it would prevent the landlords of houses to which certificates of disrepair applied from putting necessary work in hand, as they would not be able to afford to do so. The noble Lord now says that a certificate of disrepair is taken into account in the fair rent formula, so that we need not write it into this clause. The two statements seem to conflict. I may be dense, but even having listened to the noble Lord's more thorough and carefully measured explanation I still believe that there is a discrepancy between the two provisions. If what the noble Lord says is true, he might care to say why a notice under Section 16 of the Housing Act 1957, relating to unfit premises, is included among the dwellings to be excluded from general decontrol. If one of his arguments is correct, then those houses should be decontrolled 76 along with the rest so that landlords with such notices may have more money to put necessary repairs in hand. The noble Lord has not clarified the situation at all.
§ LORD DRUMALBYN
Perhaps I can help the Committee. Subsection 10 of Clause 35, with which we have dealt, makes it clear that no application for a certificate of disrepair by the tenant can be made within six months before the date applicable for the dwelling coming out of decontrol; nor can it be made by the landlord for the cancellation of a certificate of disrepair. That being so, as no application by a landlord for the cancellation of a certificate of disrepair can be made, it follows that there may be some houses which are still technically in disrepair—because their certificate of disrepair have not been cancelled—but which in fact are in good repair. On the other hand, what' my noble friend Lord Mowbray and Stourton was saying was that, so far as the state of the house itself is concerned, it does not so much matter whether or not the property is in disrepair as it did at the time when it came under decontrol, because then it is a matter for the registration of a fair rent, which takes into account its state of repair. There is therefore no point in leaving this out in respect of houses, such as unfit premises, which are excluded from decontrol.
§ LORD BERNSTEIN
I apologise to the Committee for not being in my place throughout to-day's deliberations. Nevertheless, I fail to see why this Amendment should not be accepted. Would it make any difference if these words were inserted?
§ LORD DRUMALBYN
I was trying to explain why. The answer is that some houses will not be in disrepair, although there will still be outstanding certificates of disrepair on them simply because the landlord has not been able, in the six months before decontrol, to apply under the provisions of this Bill for the certificate of disrepair to be cancelled. If the landlord cannot apply for his certificate of disrepair to be cancelled, in spite of the fact that he has put the house into repair, it would be quite wrong to exclude the house that has been put into good repair but which still has a certificate of disrepair outstanding against it.
§ LORD GARNSWORTHY
I feel that I am almost treading where lawyers are timid about putting their feet. I had hoped to be able to set out the position precisely, but after listening to the Government reply I confess to being somewhat confused. We shall have to read in Hansard what the noble Lord, Lord Mowbray and Stourton, said, because my noble friend Lord Diamond was justified in pointing out how difficult it is to understand the implications of a statement when it is delivered at great speed. We on this side of the Committee do not have the advantage of people in an official Box able to put words into our mouths and almost mesmerise us with legal jargon.
I was grateful to the noble Lord, Lord Avebury, for drawing attention to our difficulties and reiterating the point that confusion exists over this issue. Inevitably this Bill will provide lawyers with a rich harvest; not only landlords, but lawyers also will do very well out of it. The noble Lord, Lord Mowbray, has done his best on two occasions to enlighten us, and we have now had the version of the noble Lord, Lord Drumalbyn. We shall have to see not only whether they have spoken with the same tongue but whether they have spoken to the same effect.
§ LORD GARNSWORTHY
Therein I suspect lies danger, since the noble Lord, Lord Mowbray, apologised to the Committee earlier for having omitted a negative. It will be with considerable interest that we shall read in to-morrow's OFFICIAL REPORT what the Government spokesmen have said. As we shall have an opportunity, if we wish, to return to this subject later, I beg the Committee's leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 36 agreed to.
§ Clause 37 [Conversion of controlled tenancies: general provisions]:
LORD DIAMOND moved Amendment No. 109F7E:
Page 43, line 29, leave out subsection (9).
The noble Lord said: Perhaps I had better preface my remarks by saying that
I hope there will be no misunderstanding about the reason why my noble friend is having a short rest and I am moving the Amendment. The reason has nothing to do with the fact that in his last speech he likened lawyers to angels. This is yet another occasion on which we deal with the problem of certificates of disrepair. Subsection (9) provides that
No certificate of disrepair shall be issued or cancelled by the local authority after the time of the conversion.
I had the intention earlier of moving this Amendment merely to seek an explanation of how the old system of certificates of disrepair and their cancellation would fit into the new system and particularly how it would bridge the gap in moving from control to regulation. I think we have had a part explanation of that but still I should be very grateful if we could be told how the old disrepair certificate system fits into the new situation—it may be that I have got the wrong impression of how the old certificate of disrepair worked.
§ In particular, I should like to know from the Government the extent to which the pressure, or indeed legal compulsion, towards effecting repair has been lightened. Under the new system there will be a rent which takes account of the state of disrepair if that disrepair exists. I understand that; but what I am concerned with also is whether under the new system there will still be the same pressure, persuasion, or compulsion upon a landlord to effect the repairs. Not only are we concerned with the aspect of financial payment, namely, that a tenant should pay what the Government is pleased to call a "fair" rent, that the tenant should pay a rent appropriate to the state of repair of the dwelling in which he is living, but we are also concerned with the fact that a tenant should have a well-repaired dwelling to live in. And if the effect of repairing a dwelling so as to bring it into a proper state of repair—there is a wide gap between premises which are unfit for human habitation and are condemned and premises which can be satisfactorily repaired—is that an additional rent is payable and that the tenant gets a rebate, the tenant's pocket is not affected at all. In that case the tenant would get, at no extra cost at all, or negligible extra cost, a much more satisfactory dwelling.79
§ So I hope I have made it clear to the Government why we are interested not only in the financial aspect of fairness to the tenants, because that may not be very material or relevant in the total circumstances of the Bill, but also in the level of repair. It is for those reasons that I still move this Amendment and should be grateful for an explanation. Before I leave this point, may I also say that I hope the noble Lord, who was good enough to respond to my requests, for which I am more than grateful, as it is very helpful indeed, will allow me to make another request. I hope that he will be good enough to ask his private secretary to check his speech in Hansard before it is printed to-morrow because we shall be paying great attention to it with regard to the Report stage. This is a convenient way to ascertain the meaning of the Bill and the intentions of the Government so that we can do battle on the Report stage.
§ LORD AVEBURY
May I ask the noble Lord two questions before he deals with any replies? First of all, if the argument that we heard on the last Amendment is correct, then, as I pointed out, a notice under Section 16 of the Housing Act 1957 would seem to be on a par with a certificate of disrepair and therefore is unnecessary. I know that we have passed that clause, but the noble Lord did not deal with it in his reply and we appear now to be getting a situation where as a result of the paragraph that is going to be left out there will not be any certificates of disrepair except those which remain in force and can never be cancelled at all, as I understand it, under subsection (10) of Clause 35. If the landlord has not made an application for cancellation within the six months' period before decontrol comes into force, it cart never be made under the subsection we are looking at now. It says that the certificate of disrepair cannot be cancelled after the time of the conversion. So if it was in force six months prior to the date of decontrol of these particular dwellings, it is never removed at all. As the noble Lord has said, this has no effect because the state of repair is fully taken into account in the fair rent procedure, but it would seem to me rather odd that notwithstanding that the rent is varied according to the 80 state of repair, the dwelling may have been fully brought up to modern standards, but that certificate of disrepair remains in force for evermore.
§ LORD BERNSTEIN
May I ask a question of the noble Lord opposite? Do I understand that if in subsection (9) we delete the words, "or cancelled" and it will read:No certificate of disrepair shall be issued by the local authority after the time of conversion ",that means in perpetuity?
§ 6.45 p.m.
§ LORD DRUMALBYN
It is precisely in order to make certain that these certificates of disrepair disappear altogether that we have this clause. From the date of conversion there will no longer be a controlled rent on which the issue or cancellation of a certificate of disrepair can operate. This subsection still gives local authorities ample time to dispose of applications for the issue or cancellation of such certificates, since under Clause 35(10) such applications must be made at least six months earlier, before the decontrol date applicable to the tenancy. If the certificate of disrepair is not complied with, then under Section 16 of the Housing Act the controlled rent finishes up at 1[...] times the 1956 gross value instead of twice the 1956 gross value—that is to say, the rent is reduced. This fixes the controlled rent from which the rent is phased up to the fair rent. That is what happens when a certificate of disrepair is issued and the tenant is entitled to withhold the difference in the rent.
I have forgotten the other question I was asked.
§ LORD DIAMOND
If I may refresh the noble Lord's memory, what I was asking was whether he would assure us that the new regime of not having certificates of disrepair will not remove any pressure towards providing a tenant with a suitably repaired dwelling.
§ LORD DRUMALBYN
Section 72 of the 1969 Act says that where a local authorityare satisfied that a house is in such state of disrepair that, although it is not unfit for … habitation, substantial repairs are required to bring it up to a reasonable standard, having regard to its age, character and locality, they may serve upon the person having control of 81 the house a notice requiring him, within such reasonable time, not being less than twenty-one days, as may be specified in the notice, to execute the works specified in the notice, not being works of internal decorative repair.The local authority, therefore, can still do that. That is not the same as the certificate of disrepair procedure which I have already mentioned.
Apart from that, of course, there is the fact that the fair rent will reflect the disrepair if the house is going rapidly into disrepair. This will represent a change of circumstances which can be considered, and an application can then be made to the rent officer accordingly. These seem to be the applicable provisions which will be no less effective than the certificate of disrepair. After all, as I said, the effect of the certificate of disrepair is to reduce the rent. If the house falls into disrepair then the fair rent can be brought down, and the same applies. But the point of this particular subsection is that whether or not there is a certificate of disrepair, it is necessary for pending procedures under the certificate of disrepair procedures to be brought to an end. It would cause confusion if these procedures were still in local authorities' hands at the date of decontrol because the rent depends on knowing firmly the controlled rent, so that phased rent up to the fair rent can be calculated and the fair rent will then reflect any disrepair. This is the point of the subsection.
§ LORD DIAMOND
I am going to make a statement and then ask a question. The statement is to thank the noble Lord for trying yet again to remove all possible confusion from our minds. He said that if the circumstances were left as they are under existing legislation there would be confusion. I regret to say that with the new Bill there is, if anything, greater confusion. Therefore, I come to the question: would the following suggestion find favour with him? I know it was in his mind to have a suitable rest period, because obviously the Government Front Bench are in dire need of it, and that might include the Opposition Front Bench, too. Would it be convenient, if I were now to seek leave to withdraw this Amendment, to come back to this matter on the Question that the Clause stand part, because I see in Clause 10 in the last two lines a further complexity. Having dealt with the ques- 82 tion of whether a certificate of disrepair exists or does not exist, we are now getting to the stage where itshall be deemed to have been issued before the conversion".So we have a deemed certificate of disrepair which will extend all our wits to understand fully. Therefore I would ask the noble Lord, in order to help not only us on this side of the Committee but, I am sure, all the public who are interested in this matter, would it be convenient for the noble Lord to propose a break, during which period he could refresh his memory as to the precise situation affecting the disrepair certificates, and be willing to start our proceedings on the Question, That the clause stand part, after the break, with a carefully prepared statement, which would be helpful to everybody?
§ LORD DRUMALBYN
I am sorry if we have not quite managed to get this over clearly to noble Lords. The point is that so long as a certificate of disrepair is outstanding the rent is brought down. This is important from the point of view of coming out of decontrol. However, I think the noble Lord's suggestion would be a good idea, in order to have a considered statement about this matter. Perhaps he would be good enough to withdraw this Amendment, and I shall move that the House be resumed, or the appropriate Motion.
§ LORD DIAMOND
I am all on edge to hear what the appropriate Motion is, and in those circumstances I seek your Lordships' permission to withdraw this Amendment.
§ Amendment, by leave, withdrawn.
§ LORD DRUMALBYN
The appropriate Motion, which I now move, is that the Committee do adjourn during pleasure until 7.55 of the clock.
§ [The Sitting was suspended at 6.55 p.m. and resumed at 7.55 p.m.]
§ On Question, Whether Clause 37 shall stand part of the Bill?
§ LORD DIAMOND
Perhaps it would be convenient, on discussion of the Question, whether Clause 37 shall stand part of the Bill, that we should turn our minds 83 once more to the important arrangements the Bill makes in relation to the general administration of certificates of disrepair. We are grateful to the noble Lord, Lord Drumalbyn, who intervened on the last two Amendments to explain to us, first, that this does not affect, so I understand (I am sure the noble Lord will correct me if I am wrong) the legal compulsion which existed under the previous legislation for a landlord to repair his property if required to do so. Nevertheless, there are various matters which are of importance in relation to a tenant's wish and right to live in a well-repaired house. I see particularly that under subsection (10) of this clause there is reference to yet another aspect; namely, the position where a certificate of disrepair shall be deemed to have been issued; so obviously there is a complicated set of rules to provide for the new situation as compared with the old situation.
I should be very grateful indeed if the noble Lord would explain fairly fully, if he is in a position to do so, these changes in the arrangements. I recognise that the situation is difficult. It is probably my fault that I have not been able to turn up all the references to the other Acts. I believe that in the last few clauses I have counted seven other Acts to which reference is made. It is rather complicated to legislate by reference in this way, as compared with the Scottish Housing Finance Bill, which does not adopt this procedure. I gather from my noble friend who is looking after that Bill on behalf of the Opposition that it legislates directly, rather than indirectly by reference. Be that as it may, I should be very grateful if the noble Lord would be good enough to explain the arrangements in relation to certificates of disrepair.
§ LORD DRUMALBYN
I am grateful to the noble Lord, Lord Diamond, for giving me the opportunity to do so. The noble Lord will find the provisions relating to certificates of disrepair in Part II of Schedule 9 to the 1968 Rent Act. The heading there, which is significant, is, "Abatement for Disrepair". It provides broadly for the service by the tenant of a notice of defects in the dwelling. Six weeks later, after the service of the notice, unless the landlord has undertaken to remedy those defects, the tenant, in pre- 84 scribed forms throughout, can apply to the local authority for a certificate of disrepair. If the local authority is satisfied that the building is in disrepair and that the defects referred to exist, then in that case it can issue a certificate of disrepair.
But before that happens, of course, the landlord can give his undertaking to remedy the defects. That is referred to in paragraph 5 of the Schedule. Then the landlord, if he gives such an undertaking, has six months in which to carry it out. If he does not do so, the certificate of disrepair can be re-issued. There is also the possibility that, if the tenant feels the local authority ought to have issued a certificate of disrepair and it has not done so, he can apply to the county court for a direction to the local authority to issue the certificate of disrepair. That is where subsection (10) of Clause 37 comes in.
It might be that at the time of decontrol the county court had before it an application from a tenant to issue a certificate of disrepair. In such a case it would be able to order the local authority to issue a certificate of disrepair despite the fact that certificates of disrepair had disappeared. In that case the certificate of disrepair would be deemed to have been issued immediately before the conversion. The effect of the issue of the certificate of disrepair is to enable the tenant to reduce the rent from twice to 1[...] times the gross rateable value. No doubt he is told at the time when the certificate of disrepair is issued to him of his right to do so—there are explanatory notes on the form—and he will withhold the rent accordingly.
The landlord can remedy the defects and apply for a cancellation of the certificate of disrepair. If the local authority are satisfied that the defects have been put right, they can grant such a cancellation and the landlord will be able to restore the decontrolled rent to what it was before. Of course, this is a part of the Bill dealing entirely with controlled rents. The position after decontrol will be that certificates of disrepair will disappear altogether because their effect was only on the rent; there was no compulsion, The landlord did not go to prison if he did not repair the house; he merely suffered a loss of rent. In the same way, after decontrol the landlord will suffer 85 loss of rent because the house is in disrepair, and the tenant will be able to apply to the rent officer for a reduction in rent on the ground that there has been a change in the circumstances in the house.
The other point to which I referred was the right of a local authority under Section 72 of the 1969 Act to give a direction for bringing a house up to a good state of repair. These are safeguards, and in the circumstances there does not seem to be any object in continuing in force a system designed to operate upon a controlled rent which will no longer exist. I hope that I have explained the matter with reasonable clarity.
§ 8.3 p.m.
§ LORD AVEBURY
I am extremely grateful to the noble Lord, Lord Drumalbyn, for his explanation, which has clarified one or two of the points at issue but not all of them. I can understand that the certificate of disrepair as such must go once decontrol comes into force because the situation with which it was designed to cope—that is, the situation under which rents are tied to some multiple of the gross value—no longer exists. The noble Lord told us that the rent can be reduced from twice the gross value to 1[...] times the gross value and that this would be the basis on which the progression towards the fair rent would take place if a certificate of disrepair was in force at the time of conversion. Therefore, it would take the landlord that much longer to obtain his fair rent than it would if he had to put the dwelling in a proper state of repair prior to conversion.
So the problem with which we are dealing here is a transitional one. What will happen at the time of conversion? What provision is being made to safeguard the rights of the tenant and for the possible hearing of his application before a court? This is where we begin to run into some difficulties. The noble Lord has referred us to paragraph 5 of Schedule 9 to the 1968 Act which says that if a tenant applies for a certificate of disrepair the landlord has a period of some three weeks within which he can undertake to carry out the repairs. He then has a moratorium of six months during which the local authority will not serve him with a certificate. I hope I have understood paragraph (5) correctly.
86 Perhaps the noble Lord will entertain the supposition that a tenant has applied for a certificate of disrepair six months and one day before decontrol. A period of three weeks elapses and the landlord says, "I will undertake to carry out the repairs". The local authority is obliged to give him six months by which time the date of decontrol has passed and the local authority cannot serve him with a notice bringing into effect a certificate of disrepair. This is because of subsection (9) of this clause, which says:No certificate of disrepair shall be issued or cancelled by the local authority after the time of the conversion.Because of the passing of the three weeks plus the six months the local authority has no power to issue a retrospective certificate of disrepair, notwithstanding the fact that the landlord has given a false promise to carry out the work.
The basis on which the progression to a fair rent then operates is not a fair one. If the local authority had known that the landlord was not going to carry out the repairs it could have issued an order, but for the provisions of subsection (9). Also, the tenant cannot go to the court to invoke its aid after the conversion has taken place. When the noble Lord comes to consider what he has said in conjunction with what I have said about the provisions of subsection (9) he will see that although the transitional provisions, broadly speaking, will operate satisfactorily there is one respect in which they will not. A tenant could be placed in a very awkward situation because of the six-month period mentioned in subsection (10) of Clause 35. So I hope the noble Lord, having heard what we have to say on this Question, Whether the clause shall stand part, and on the previous clause, will give the matter some further thought and clear these anomalies up before we reach the Report stage.
When the noble Lord considers the matter, could he educate me on the subject? I assume that in the circumstances just related the fair rent could be nil; that is, if the property was in such a state of disrepair that the rent-fixing authority said, "This property is very badly in need of repair", the rent might be almost nil.
§ LORD AVEBURY
I can answer the noble Lord very simply. What I said 87 would make no difference to the fair rent. The noble Lord, Lord Drumalbyn, has cleared up this point. The fair rent is determined by the state of the property, and not by the existence of a certificate of disrepair. What we are talking about at the moment is the stages by which the controlled rent, or the rebated controlled rent, rises towards this fair rent which is determined under the Bill. As the noble Lord, Lord Drumalbyn, has explained, this could be either twice the gross rateable value or 1[...] times the gross rateable value, depending on whether a certificate of disrepair is in force at the time. So the ultimate rent is still the same: what we are talking about is the progression by which this rent is reached.
I do not follow that at all. Nobody can alter the state of disrepair of a property, whether a certificate has been issued or not. The person who is going to fix the fair rent will come and look at the property and say, "This property is worth less than the controlled rent", and therefore he will fix it accordingly. So the tenant may not have the property repaired, but he will at least get his rent greatly reduced.
§ LORD DIAMOND
I am grateful to the noble Lord, Lord Avebury. I think I have understood his point; and he is making the very relevant point that the rent payable prior to conversion would be different depending on whether the landlord promised or did not promise to carry out something which in any event he was not going to do. In those circumstances, if he is not going to do it, then the very fact that he promises to do something which he knows the clock is going to save him from doing ought not to have an effect on the rent—and I take the noble Lord's point completely on that. While the noble Lord, Lord Drumalbyn, is answering that point, perhaps he would confirm the other point about which I was anxious: not merely that there is no alteration in the legal compulsion (he has, I think, answered that one), but that there is no alteration in the pressure on the landlord to have premises put into a reasonable state of repair. That is the thing we are still slightly concerned about.
There is one further thing. I think I followed everything the noble Lord said 88 in his earlier remarks, and I am very grateful to him, but I was not able quite to fit into the general pattern his statement that if the repair had not been carried out the tenant could apply to the rent officer for a reduction in the rent owing to a change of circumstances. I am sure that that is a relevant provision in another scenario, but not in relation to the one we are discussing; namely, where you are on conversion in a state of disrepair. So I should be grateful if the noble Lord would confirm that where that is the case—where on conversion a house is in a state of disrepair—there is no question of applying for a variation in the rent, but that the fair rent fixed takes into account the state cot disrepair ab initio; that is to say, from the date of conversion.
§ LORD DRUMALBYN
Yes, I can certainly confirm that right away. In fact, this is one of the reasons why it is not felt necessary to keep in operation the certificate of disrepair machinery. It would be difficult anyway, because, as I said before, there is not a controlled rent on which to operate. But I think the answer to the noble Lord, Lord Avebury, is simply this. If the work which a landlord has undertaken to do has not been done, or if the house is in disrepair and an application for a certificate of disrepair has never been made in the first place, or a notice has never been sent to the landlord, the effect will be just the same, because the tenant will then have the chance to apply for a fair rent. If the landlord applies for a fair rent, that fact will be taken into account. Thus if the rent is still twice the gross value it might happen, in an extreme case, that the rent would actually be reduced. In any case, the state of disrepair would be reflected in the fair rent fixed.
If, on the other hand, there was the opposite case that I referred to earlier—where the repair had been carried out but the certificate of disrepair had not yet been cancelled, and therefore the rent was still at the level of 1[...] times the gross value—the landlord would have every reason to apply at the first opportunity for a registration of new rent; and he would presumably also be able to get a qualification certificate if he had done improvements. At the first opportunity, when the band in which the particular house was came up for decontrol, he would obviously apply for a fair rent, 89 and the fair rent would take account of the fact that the house was in good repair. This is just the way the system will work. There does not seem to me to be any great mystery about it; it is simply a changeover from one system to another. The noble Lord also asked me to confirm that Section 72 of the 1969 Act will come into operation in the extreme case. I am not aware that it is repealed by this clause but I will certainly make quite certain. I will let the noble Lord know if it is, and we can consider it in that light.
I think I have covered all the points. It is very difficult to dovetail exactly the rights and wrongs here, but the termination of this system works both ways: sometimes a little to the disadvantage of the tenant, sometimes a little to the disadvantage of the landlord. But in order to get a certificate of disrepair the tenant must apply to the local authority six months before the conversion. If he does apply six months and a day before, then of course the local authority will not give the landlord another chance, since we are repealing paragraph 5 of Schedule 9 from January 1, 1973. That repeal comes in paragraph 10 of Schedule 9 to this Bill. We are repealing the whole Schedule, I should have said; and that is done in Schedule 9(10) to this Bill. There are a few rough edges in this, but I think that that is inevitable in bringing a system of this kind to an end. In some cases it will work to the disadvantage of the landlord and in some cases to that of the tenant. One cannot help that.
§ 8.20 p.m.
§ LORD AVEBURY
The noble Lord is now referring us to paragraph 10 of Schedule 9. I am looking at this for the first time. This repeals paragraph 5 of Schedule 9 to the Rent Act 1968; and the noble Lord says that that repeal comes into effect in 1973. In any case then our discussions are rather academic. But I do not think that the noble Lord fully understood the point that I was trying to make. Subsection (10) of the clause which we are discussing says:… where the court is satisfied that a local authority have failed to issue a certificate of disrepair and make an order …that order canbe deemed to have been issued immediately before the conversion".90 Therefore, obviously, the Government in drafting this Bill have taken into account the fact that an application might be made to the court out of time, and the court would say that this was most unfair because the local authority ought to have made a certificate of disrepair and has failed to do so. Supposing that the starting rent from which the increases towards a fair rent are to be calculated is 1[...] times the gross rateable value and not twice the gross rateable value, it is not quite so unimportant as the noble Lord has indicated. I think it is important enough to be in the Bill. You start at a lower level if, through some failure of the local authority, the certificate is not issued as the court finds it ought to have been.
I am saying that there are circumstances other than the failure of the local authority in which this might happen. The time scale is longer than I outlined in my previous contribution because, looking again at Schedule 9 to the 1968 Act, first the tenant has to serve a notice on the landlord calling upon him to remedy the defect specified in the notice; then under paragraph 4 the landlord is given six weeks in which to reply to that notice; at the end of that time the tenant has a right to call on the local authority (and this is sub-paragraph (3)) and the local authority has to satisfy itself "that the dwelling or any part of it is in disrepair by reason of defects specified in the notice served on the landlord". This means that the local authority must inspect the dwelling and compare the defects, which may or may not exist, with those specified in the notice served by the tenant. So there is a further delay. First there is the six weeks for the landlord to reply to the notice; then the period in which the local authority has to inspect and to decide whether the defects exist; then the landlord has a period of time in which to reply to the notice served on him by the local authority. He can undertake to carry out the works specified, and to do so Within the next six months.
So, going back to the last subsection of Clause 35, this six months is not adequate because you have a situation in which perhaps there could be three months elapsing before then wherein the tenant serves the notice; then there is the inspection period, and then there is the period for the landlord to reply. If 91 these have not happened, the chopper falls; the local authority is not entitled to issue a certificate of disrepair where it would have done so had the time scale been different, and the tenant is deprived of the remedy of going to court to ask them to deem that the certificate is issued, as provided for in subsection (10).
I would appeal to the noble Lord not to say to the Committee that there are a few rough edges; but to look carefully at what I have said and see whether there is not some glaring defect in the Bill that he would like to remedy and then to come back on Report stage and make a further statement.
§ LORD DRUMALBYN
I made it clear that there are rough edges—and there are rough edges the other way, too. Where the landlord has completed the works within six months and, has done so within the six months when no cancellations can be made, he will not be able to increase the rent. This is what it amounts to. I am willing to look at the matter again although I am sure it has been looked at carefully and that everyone is conscious of the position. If we need to find a solution I am sure that every effort will be made to do so.
§ LORD BERNSTEIN
Can the noble Lord tell the Committee what is an extreme case and what is not an extreme case?
§ LORD DRUMALBYN
By and large, it must be true that where a reasonable amount of maintenance to the house has been done over the years, a rent which was fixed 16 years ago must be below the market rent. So the normal case will obviously be one in which the rent will be increased as a result of decontrol. I do not think there can he any dispute about that. You may think it right, you may think it wrong; hut that is what is intended. Where, however, there has been a lack of maintenance, this will be reflected in the rent. It may be that in a proportion of cases the fair rent is actually below the controlled rent. In some cases it might almost be—as one of my honourable 92 friends said—reduced to zero. But this is the way the thing is expected to work.
§ LORD GARNSWORTHY
The noble Lord uses the phrase "by and large" and is almost getting me to use it. It would be helpful at some time if he could define that. When he says that the fair rent may be zero and well below the controlled rent, is he informing the Committee that in fact a tenant may enjoy a zero rent?
§ LORD DRUMALBYN
It was one of my honourable friends who said that; but I am told that there is on record a rent of 2s. 6d.
§ LORD DIAMOND
We have had a useful debate and I am grateful to the noble Lord, Lord Drumalbyn, for the help he has given us and also to the noble Lord, Lord Avebury, for picking on this point which I myself would not wish at this stage to leave, at least to leave for all time. The noble Lord, Lord Drumalbyn, said that we have to move away from the certificate of disrepair system. That we can understand. He also said that this does not affect the right of the tenant to have a well-repaired house or the pressure on the landlord to repair it. Then he said that the reason why the tenant has to pay an excessive rent while the house is under disrepair prior to the date of conversion is to balance other occasions when the landlord cannot collect his full rent because the repairs which he has carried out do not entitle him (because of the time limits in the Bill) to a cancellation of the certificate of disrepair.
§ LORD DRUMALBYN
I did not say that the reason was because one balances the other. The reason is largely administrative, because the local authority will have a great deal on their plates in calculating the values of their own houses and other duties. They will not want to issue certificates of disrepair which may, in fact, be inoperative because of the fact that under the new system they must end on January 1, 1973.
§ LORD DIAMOND
I am grateful to the noble Lord. We are on the same point. It was loose language on my 93 part to say "because of". But the justification for the injustice falling on the tenant in certain cases is the injustice falling on the landlord in other cases. The noble Lord will not be surprised to hear that I do not equate those injustices. I take the normal view that there are times when the landlord can afford the injustice more readily than the tenant. If the system is such that for administrative reasons you need to have a good deal of injustice falling at one time on the tenant and at another on the landlord, one has to ask whether the administrative set up is the best possible one. It is convenient for local authorities not to have to concern themselves with these matters during the last six months because they have so much else to do; but how does this administrative convenience justify the injustice falling on the tenant in particular? The position is that we now know where we stand. We are grateful to the noble Lord. I will read carefully what he says and hope that he would himself consider between now and Report stage whether the administrative arrangements are such as to reduce injustice to a minimum. I am not saying that it can be removed completely when there is a changeover, but I think it is reasonable to ask that injustice is reduced to a minimum and if you have a priority—though of course all citizens should get justice—I think the need of the tenant is even more pressing than that of the landlord.
§ LORD AVEBURY
I am extremely grateful to the noble Lord, Lord Drumalbyn, for promising to look at this point again. If I may make a suggestion, the part of Schedule 9 to the Rent Act 1968 which is under the control of the tenant is the initial service of notice on the landlord under paragraph 3. After that, the period of six weeks and the inspection period which I have mentioned must elapse before the certificate of disrepair is issued. To be fair, I would suggest that the six months specified in Clause 35(10) should be dated from the application by the tenant to the landlord. It would then be clear to the tenant, and 94 to the landlord as well, and it would remove the difficulty which I have tried to explain of the timing of certificates of disrepair in relation to the six months provided for in Clause 35(10).
The noble Lord said that the repeal of Section 9 of the Rent Act 1968 became effective in 1973. Does that mean that in spite of the fact that decontrol is phased up to July 1, 1975, from 1973 to 1975 this course will not be open to the tenant, so that the tenants who are decontrolled up to January 1, 1973, or maybe July 1 (I am not sure which), will at least have the right, six months before decontrol, to go after a certificate of disrepair, and if they are within the time scale they will get it and they will start off with 1[...] times gross rateable value instead of twice the rateable value; but that after 1973, when this repeal becomes operative tenants will have no such right at all? They will have to start from twice the gross rateable value. This seems to me extremely unfair to the tenant who is paying the smaller rent and is decontrolled later on. Since the rateable value is higher they will not have the same right as people living in more expensive property which comes out of control earlier. I think the noble Lord should say a little more about the repeal of Schedule 9 to the Rent Act 1968.
§ LORD DRUMALBYN
The main point is that Schedule 9(10) to this Bill says that it is Schedule 9(5) to the Rent Act and Part III of that Schedule (the certificate of repair where the landlord is an overseas company) that will cease to have effect. The noble Lord will see that Schedule 5 is the one which gives the landlord a second chance, the six months' period in which to carry out the defects. I will look at this point again, hut I think it is about right. I think the certificate of disrepair could be given in such a way and at such a time as to avoid hardship. I will look at this point again and perhaps we can revert to it at a later stage.
§ Clause 37 agreed to.
§ Clause 38 agreed to.95
§ Schedule 6 [Restriction on rent increases]:
§ 8.37 p.m.
LORD DIAMOND moved Amendment No. 109FZF:
Page 140, line 12, leave out ("greater") and insert ("smaller").
The noble Lord said: Perhaps it would be convenient to discuss with this Amendment the following Amendment, No. 109FZG,
Page 140, line 18, leave out ("£0.50") and insert ("£1.50").
We are now on the Schedule which fixes the rate of progression to registered rent from the previous rent limit upon a conversion. The Schedule provides alternatives and states that the one to be taken is the greater one. The Amendment provides alternatives and states that the one to be taken is the smaller one, so it is my duty to explain to the Committee why I think the basis proposed in the Amendment is a better one. The main complaint that I have against the Schedule is that the progression to registered rent is too fast. There will in most cases be a substantial increase. It is inevitable, from what the noble Lord said about the years that have gone by, that the inflationary effect, as well as the hardship of too fast a progression towards a substantially increased rent, will be great and damaging, and must be taken into account in present economic circumstances.
§ Even greater than the inflationary effect is the hardship that will be inflicted on a tenant who will find himself having to pay annual increases of an amount which will totally wreck the family budget. I recognise that there will be cases where assistance towards the increased steps will be given by way of rebates, but there will also be cases, especially in the London area, where the increase will be very substantial and where the steps provided in the Bill will not entitle the tenant to an adequate sum by way of rebate. In such cases the increase will represent serious hardship, and sometimes, I repeat, will wreck the family budget. It will force the tenant to look for rented accommodation elsewhere; that is to say, instead of looking for it in the private sector he will look in the public sector. Ex hypothesi he is 96 not in a position to attempt to buy his own house—he cannot possibly afford to do that. So he has to go and put himself on the local authority list. The noble Lord will understand, therefore, why I have the greatest possible hesitation about the Government's pressure on local authorities to dispose of their stock of houses by sale when they are bound to get an influx of new would-be tenants as a result, in many cases, of people's inability to cope with the increases in rent in the private sector. So I think I should repeat my request to the noble Lord to let us know what is the pressure for rented accommodation which I think we asked for during the debates last week. I am sure that the noble Lord has the answer at his fingertips.
§ I come on to the proposals in the Amendment for reducing the rate of progression to registered rent. At the moment the Bill provides for payment by three instalments over two years, with a minimum of 50p per week increase. The Amendment provides for progression at a rate at the maximum of £1.50. Why do I say £1.50? Because it is a round sum that approximates to £1.66[...], the figure which, after applying the 40 per cent. reduction available by way of rebate, reduces the rent to £1. So what this Amendment is getting at, only it sensibly rounds the figures, is to provide an increase here for the private sector tenant which is comparable with the increase for which the Government legislate in the public sector. The Government are saying that in the public sector the maximum increase shall be £1 a week for those tenants where the local authority have not anticipated the legislation, have not been willing to be dictated to by a Minister, but have preferred to await the decision of Parliament and have not put up their rents prior to this Bill's coming into force and therefore will, if the Bill goes through, be compelled to put up their rents by £1 a week for the rest of this fiscal year.
§ Similarly, I think that the maximum which the private tenant should be compelled to pay by way of increase in rent should be, out of his own pocket, £1 a week which is, I think, equivalent approximately to £1.50. I hope that I have explained the point of this Amendment. I have gone a long way to attempt to meet the Government's point of view 97 as compared with the situation when an Amendment was discussed in another place—and turned down by the Government—making the case that there would be rent allowances available for private sector tenants and therefore they would be in a position to make a contribution towards the progression from the old rent to the registered rent under the new system. In order to meet that argument, instead of following the lines of the Amendment discussed in another place, this Amendment proposes a maximum of £1.50, leaving about £1 or 90p—let us call it no more than £1—as the maximum contribution the private sector tenant should be required to make towards the progression to the registered rent. I hope the Government will see in that a serious attempt to meet their argument, and at the same time to avoid excessive hardship on the tenant and unnecessary inflationary pressure on the economy.
§ 8.46 p.m.
§ LORD DRUMALBYN
The short point to make in reply to the noble Lord, Lord Diamond (I fully understand the logic of his Amendment; it was not apparent to me before, but he has now made it quite clear) is that in this sector we are dealing with rents which have been held down to a specific amount. Therefore we have to face the fact that the amounts by which they may increase in certain parts of the country, and in certain circumstances, are likely to be greater than the amounts by which local authority house rents are required to be increased in order to reach the fair rent. The noble Lord's Amendment has the curious implication (I do not know whether he intended this) that as the Schedule provides that the fair rent shall be reached in three stages, if you impose a maximum at any stage you may not reach the fair rent in three stages. The noble Lord does not seem to have taken any steps in his Amendment to deal with that situation; and as a result there might be the situation where the final rent was below the fair rent. That does not seem to be logical in a system where we are aiming at fair rents all round and where rent allowances will be available for those who cannot afford to pay the fair rent.
The main purpose of this Schedule is to secure that where rents are increased after decontrol, under the provisions of 98 this Bill, they must be phased; and there is no exception to this rule, although of course a landlord is to be entitled to increase the controlled rent by 12½ per cent. of his expenditure on improvements made before decontrol. Where the improvements are completed after decontrol, the 12½ per cent. is to be phased along with the increase of the fair rent. The conception in the Schedule is that the whole lot will be phased in three years. Apart from improvements, rent increases may result either from registration or from a new agreement; but where a fair rent is registered the limit of increase in any year during the period of delay must not be more than the permitted limit of increase in the case of the registered rent. If a tenant thinks that it is more than the fair rent, he can apply to the rent officer for registration of the rent.
As to the phasing, normally this will take place in three stages: the first stage at once, the second after one year and the third after two years. This is case A, the one which the noble Lord has amended, and I have assumed that he wanted to extrapolate that to all the other cases as well but wanted merely to debate the question of principle here. There are variations of this general rule to meet particular cases. For example, case E arises when a rent officer takes longer than the normal maximum period of three months to deal with an application. In that case the second increase may be less than 12 months after the first increase, but not less than 15 months after the application, and the third increase a year after that. The increase provided for by the Schedule at each stage are to be not less than 50 per cent. per stage up to the point where the fair rent is reached.
§ LORD DRUMALBYN
I am sorry, not less than 50p per stage up to the point where the fair rent is reached. I say "not less than" because the intention is that the fair rent shall be reached in three stages, and the difference between the controlled rent and the fair rent may be more than £1.50. It could in some cases be considerably more. To require that each step should be not more than a particular amount would 99 therefore have the effect either of prolonging the period of delay for years, where there is a big difference, or, alternatively, of cutting off the final rent before it had reached the fair rent.
It is true that the increases up to the regulated fair rent under Part I of the 1969 Act were to be made in five stages, as compared with three under the Bill, but the reason for this was that since there were no rent allowances at that time a five-stage period was necessary if hardship was not to be caused for those who could not afford to pay the full rent. This Bill provides for rent allowances which will mean that nobody will be asked to pay more than they really can afford to pay. Some tenants, in fact, will pay less rent than they are now paying.
The noble Lord's Amendments rather cut across the arrangements in the Bill. They raise a question of fairness between tenants. It may be easiest to illustrate this by an example. Suppose, that there is a house in London (there are unlikely to be such cases outside) with a registered fair rent of £6.50 per week, and suppose that next door is another house of the same size, with the same number of rooms, the same shape, the same amenities and the same landlord, but subject to a controlled rent of £1.70—it could quite easily happen—the total increase would be £4.80, so that the annual increase under the Bill would be £1.60. That is more than the maximum the noble Lord is proposing. That is no doubt a sizeable increase, but when he has paid it the tenant will still be paying only £3.30 a week in the first year for a house the fair rent for which, excluding all scarcity value, would be £6.50. Large though the annual increases may be, they have to be considered against the exceedingly low rent paid hitherto by these tenants and against the amounts which have throughout been paid, and will continue to be paid, by those who are already occupying regulated tenancies. We have to bear this in mind, and I think it would be wrong if there were considerable disparity between equal houses, one already subject to a regulated rent and the other subject to a controlled rent; if at the end of the period, because of the limit which the noble Lord is suggesting, the rents for those 100 two equal houses were not equal. This could happen.
§ LORD DIAMOND
I am sorry. The noble Lord is talking about equal houses which are subject to different rents at present; where there is injustice at present, according to his definition of injustice. He is complaining that all that injustice is not removed by a stroke of the pen within two years.
§ LORD DRUMALBYN
I think the noble Lord means that all that injustice ought not to be removed in two years.
§ LORD GARNSWORTHY
We are asking the noble Lord whether he thinks it right that it should be removed in such a short time.
§ LORD DRUMALBYN
The noble Lord said I was complaining that the injustice is not removed in two years—those were his words. The difference between the five-year period and the three-year period is counterbalanced very much by the introduction of rent allowances. These rent allowances will operate to ease that transition. Where the full new rent has to be paid it will be because people really can afford to pay it. It is bound to mean, if their circumstances do not change in the meantime, a readjustment of their household budget. But the fact of the matter is—and one has to face this—that if they can afford to pay the new rent they will be losing a present advantage which is supposed to be made available to local authority tenants as a whole—or to tenants as a whole, if you will—in order to help the poorer people. Is it right in principle that the people who can afford to pay should get this benefit which was intended to help the poorer people? If it is not right, then the only question is, at what speed should one rectify the wrong?
The proposal the noble Lord has put forward, as I understand it, is to say "You cannot do it too fast". He says, "I accept that the rectification should take place in two years, and if in that period you cannot reach the fair rent by stages that I would regard as reasonable, then you just cannot reach the fair rent". I do not think that is fair or right. Those who can afford to pay the fair rent should pay it. I quite agree that it means some adjustment of incomes, but there is 101 a real difference between us here and I do not think that very prolonged discussion of it is likely to resolve it.
§ 8.59 p.m.
§ LORD AVEBURY
I do not think there is any difference between us, so far as the ultimate objective is concerned. As the noble Lord says, it is really one of timing—whether the tenants in control of properties should have to face very steep annual increases to bring them up towards the fair rent which somebody next door may already be paying, as the noble Lord points out. It may be that a landlord has two identical properties in the same road; that he has possession of one of them and has re-let it at a registered rent under the 1965 Act, whereas in the second property there is still a controlled tenant paying twice the gross rateable value. This is a fairly unlikely situation, if I may say so, because the landlord, if he did get vacant possession of the second controlled property, would probably have sold it and would not have re-let it under the 1965 Act at all. But for the sake of argument we will pursue his line of thought.
What I found particularly interesting about the noble Lord's speech was what it told us about the scale of increases that tenants in controlled properties could expect, because he said it was quite on the cards that people would not get the fair rent by means of the three increases of £1.50 which the noble Lord, Lord Diamond, has postulated in this Amendment. Let me just explain to the Committee what this means as a factor which we have to apply to the present-day rents to find what the fair rents are going to be. At an earlier stage we were told that the average controlled rent in Greater London was £1.50 and in England and Wales it was 90p. If you have three increases of £1.50 on top of the Greater London rent that brings you to £6.00, which is four times as much as the London tenant is paying at the moment. If you have three increases of £1.50 on top of the 90p which the tenant is paying outside Greater London, that brings him up to £5.40, which is six times the present rent.
This is the scale of the increases we are talking about. It is not twice as much (which is the figure that was bandied about at an earlier stage of the Bill in 102 another place) in relation to local authority rents. We are talking about four or six times as much rent as the tenant is paying at the moment and, notwithstanding anything the noble Lord may say about the availability of allowances I must come back once again to the point which he always seems to lose sight of in these discussions—that many of these tenants are not going to apply for these allowances. Therefore they will be very much worse off than hitherto. I am not saying that as a result of my argument you should not make some progress towards fair rents from the artificially low levels that operate at present. But I agree with the noble Lord, Lord Diamond, that since you have to do this you must do it most carefully and equitably over a number of years.
If the noble Lord, Lord Drumalbyn, now tells us that as a result of the work done by his Department he finds that the fair rents of controlled dwellings in Greater London are going to exceed £6 on a substantial scale, and £5.40 in the provinces, then I would say that this Amendment might be modified so as to add on another year and to put on another £1.50 at the end of the third year. I would even go so far as to say that the noble Lord perhaps should not have rounded it: he should have put back the figure of £1.66, from which a deduction of 40 per cent. is made to reach the £1 which is imposed on the tenant of a local authority house. I would accept that, but I think the noble Lord, Lord Drumalbyn, must agree that what is suggested in this Amendment is broadly in line with what has been proposed by the Government for a fair rent for local authorities. It is therefore perfectly reasonable.
The noble Lord has repeated what was said earlier about a zero rent. I think he said there was a case where someone was paying half-a-crown. He must be a little out of date, because we have had decimal currency now for the better part of two years. I very much doubt whether there are many controlled tenants who are paying rents as small as the equivalent of half-a-crown in England and Wales. I think that might be true in Scotland, if I might say so to those of your Lordships who to-morrow will be discussing a similar Bill to this for Scotland; but I very much doubt whether 103 there is any substantial number of controlled tenants paying rents as small as 12½p Certainly I know of none in Greater London, or in the areas in the Home Counties with which I am familiar.
§ LORD DRUMALBYN
I am much obliged to the noble Lord, and I specifically said that I had even heard of one rent of 2s. 6d. I quite agree with him: I am sure there are not very many of that size, but I was taking an extreme example—as others have done from time to time.
§ LORD AVEBURY
If I may say so to the noble Lord, hearsay is no better evidence in Parliament than it is in a court of law; and if one is going to produce a rumour of the house that is let at a rent of 12½p per week then one ought to substantiate that by a reference. If the noble Lord has actually got evidence to show this, perhaps he might produce it to the Committee at some point of time. I am not asking him to do it now because it is quite clearly a rumour—just like these stories of the Pill where somebody has left a box of them in the bathroom cabinet and the daughter has taken them and substituted aspirin. That is the sort of story that circulates at social workers' conferences. So we have now got the noble Lord, Lord Drumalbyn, corning to this Committee and talking about a controlled tenant who is paying 12½p per week. I dare say this example will now go into the folklore. Some people will pick it up from the noble Lord's speech, and the next—
If I may interrupt, my noble friend Lord Drumalbyn said that he had heard of one case. I think that the noble Lord is making much too much of this.
§ LORD AVEBURY
No; I think the noble Lord was probably making too much of it in mentioning it at all without giving its authenticity. What I was about to say was that the next time there is a Tory Party conference on housing noble Lords opposite will stand up and say, "We have had a statement in our House saying that people are only paying controlled rents of 12½p per week". Therefore this will achieve a much wider 104 currency than the noble Lord has given it in this debate. I will give way if the noble Lord wants to intervene.
§ LORD DRUMALBYN
If the noble Lord does not want to proceed, may I? The noble Lord has challenged me on this. This is not a question of folklore. The 2s. 6d. case is not a rumour: it was fixed by the London Rent Assessment Panel about two or three years ago.
§ LORD AVEBURY
I thought it must have been several years ago, as the noble Lord gave the rent in the old figures. I must really ask him whether he thinks it is useful to the Committee to produce an isolated figure of this kind which is certainly not typical. He himself at an earlier stage gave an average figure of 1.50 for Greater London and 90p for England and Wales. But this is not really the point at issue. I only mentioned it en passant and I would not have gone on with it if noble Lords opposite had not been so sensitive about it.
§ VISCOUNT HANWORTH
Perhaps I might just remind the noble Lord that from these Benches we—or, at least. I—also thought that a great deal of time was being wasted about this matter.
§ 9.8 p.m.
§ LORD AVEBURY
I do not know who the noble Lord is addressing as "you". I thought it was "your Lordships". In another place the noble Lord would have been addressing the Chair, and I am sure that the noble Lord in the Chair has made no such suggestion. We are entitled to argue the rights of tenants in this Committee. If the noble Lord does not wish to take part in our discussions then he is welcome to remain silent. All he does in intervening in my speech is cause me to prolong it, as the noble Lord opposite did on another occasion. Noble Lords come here out of the blue and sit without making any remarks at all until they disagree with something which is being said and then they suggest that the discussion ought to be brought to a close. 105 I hope that is not how you conduct your proceedings in this Committee. I hope that we are sensible people and that we can make criticisms of the Amendment to which we are perfectly entitled, and that noble Lords on the Government Front Bench will respond, as they do occasionally when we have a good case. What we are arguing on this Amendment is the phasing of rent increases for people living in controlled dwellings to reach a fair rent. That is something which is perfectly reasonable for us to take up with noble Lords on the Government Front Bench. I hope the noble Lord who has intervened will join us in this discussion and give us the benefit of his advice instead of merely telling the rest of us to shut up.
The noble Lord opposite said that where the full new rent has to be paid it is because tenants can afford it. Is this so? Or is it a fact that on an earlier stage—it has been disputed—we were told that something like 25 per cent. of the tenants in privately rented properties will not claim the allowances at all? If that is a fact are not some people going to find great hardship in even paying the increase as suggested in the Amendment of the noble Lord, Lord Diamond? After this Bill has come into operation we can see whether people claim their allowances. That will be the time to come back to the scale and modify it in the light of our experience. In the meanwhile I should feel far happier if we adopted the suggestion of the noble Lord, Lord Diamond, and phase these increases at the same rate as the Tory Government is applying to the rents of council tenants.
§ LORD DIAMOND
I am grateful to the noble Lord who has appreciated the point immediately that there is no difference between the two sides of the Committee over the principle. The principle is that the progression of rents should be phased, because the movement from the old rent to the new rent will be too great to be encompassed in one step. The Government say, "You must phase it", and the only question is, "Over what period?" The Minister has not adduced a single argument for saying that two years is the right period and three years or, if you like, three-and-a-half or four years, is the wrong period. There is not one single argument. I am saying that I agree with the Government 106 that the increase must be phased. What should the phasing period be? I suggest that it should be the same as the Government's phasing amount for the public sector. This was not the suggestion made in another place; this is the suggestion that we are making here in order to meet the point of view of the Government, and it is a very reasonable suggestion. It means that a person will have to pay an additional £1 a week or so out of his own pocket. What the noble Lord says about everybody being able to afford an increase in rent, whatever it is, is at variance with my understanding of how the rent allowances are fixed. I thought that 40 per cent. fell on the tenant, so if there is a rent increase there is some increase falling on the tenant and therefore there is a possibility of hardship.
The Government have instanced a case of a small increase. I do not think it necessary to instance a case of a rent increase of over £14 a week which is contemplated and which was mentioned in another place. Both of these increases are excessive. The point is that where an increase is to be more than £1.50—which means that the tenant, whoever he is, has to pay the £1 out of his own pocket—if that increase is not sufficient to bridge the gap in two years then the gap must be extended over three years. That is why I did not go any further in the Amendment in the detail of the consequential alterations. It is, as the noble Lord said, an attempt to discuss a principle.
If the noble Lord and the Government are not prepared to accept that what is right in the public sector is right in the private sector—that is to say, that the maximum rate of increase, for reasons of hardship, inflation, and all the other reasons, which they have fixed for the public sector is not right for the private sector—then I do not know where the Government's consistency or philosophy is. I certainly would not let this point go without a Division.
§ 9.14 p.m.
§ LORD GARNSWORTHY
I hope that the Government will give sympathetic consideration to this Amendment. The case made by my noble friend is a very strong and powerful one. The noble Lord, Lord Drumalbyn, said that people can afford it. Let us take the case of people 107 who are entitled to no allowances. Does the noble Lord really feel that these people can afford these very considerable increases in rent, having regard to the fact that this is not the only item that is likely to increase in price? Does he not appreciate that these people are probably living up to their financial limits, and that the imposition of increases, even of the nature that my noble friend has indicated, means a real reduction in their standard of living? We may think that the standard of living they are enjoying is one that they ought not to be enjoying. But how drastically, how suddenly, can reductions be made? It is time that some thought was given to the fact that the cost of living, quite apart from what is happening in this sphere, is rising at a very considerable rate.
The Government are trying to stem wage claims. Do the Government think they can succeed unless they give more thought than they are showing in regard to this particular matter? The noble Lord would be well advised to say that the Government will have a serious look at this point with a view to adjustment and to extending the phasing, as my noble friend has suggested. I certainly think the Government have nothing to lose by indicating that they are so agreeable. They are put at a great deal of risk if they refuse to look at this matter sympathetically.
§ VISCOUNT HANWORTH
I also should like to suggest that the Government might look at this problem again. It is very easy to say that some people can afford to pay a greater rent. But one has to remember that, within a fairly wide limit, people are living on their incomes, and hardship does come if they are required to pay a greater rent, even though their income might be considered above the breadline. I hope that most people in this country in fact have something slightly above that. But there is hardship, or there may be hardship, and I hope that the Government will consider this point now without forcing the issue to a Division.
§ LORD DRUMALBYN
The last three noble Lords' requests of course were perfectly reasonable, but before the Committee decide whether to have a Division 108 on this perhaps I might make it clear—I thought I had made it clear—that the example I took was taken purely in order to show that, marginally or otherwise, a maximum increase of £1.50 might not quite do justice as between one tenant and another in similar conditions. I gave the case and I do not think I need give it again. It was a pity that the noble Lord, Lord Avebury, then proceeded to treat this for the purposes of verbal argument as if this were a typical case. Of course it was not intended as such. All I was saying was that there may be cases—in my view there will undoubtedly be a small minority of cases—where a maximum of £1.50 will not be enough to cover the difference between the fair rent and the controlled rent.
Perhaps it would be worthwhile my saying that for decontrol following improvements (and these are the figures it is easiest to give) the average increase up to now has been £3.20 a week in London; £2.00 elsewhere in England and Wales—an average of £2.15 over the whole country. In 1971, there was an average total rent increase of £2.15. Only 117 registrations out of 3,393—that is a little over 31 per cent.—resulted in a total rent increase of over £200 a year, which is £3.85 a week. We do not have any computer figures giving a breakdown among increases higher than that. But these were cases where the whole increase was made at once; there was no question of phasing. So it is tolerably plain that any cases involving over £1.50 would be a minority of cases. It is none the less reasonable that the fair rent should be reached in all cases and, given the impact of rent allowances, I do not think any hardship, in the sense in which the word hardship is used in regard to legislation and so forth, will occur.
I am not certain that the noble Lord's figures are quite right. My advisers have worked this out and they say that a gross increase of £1.50 means that a tenant drawing rent allowances will pay 60p net; a gross increase of £2 weekly means that a tenant drawing rent allowances will pay £1 net. This seems to me to be right, 40 per cent. being the amount in question. So it does not seem that his maximum of £1.50 is the right figure, even on the basis of what he himself has argued. But in any case we 109 do not think that this is the right way to go about it. We think the right way to go about it is the way that I have indicated: that the increases should be one third of the total or 50p, whichever is the greater.
§ LORD GARNSWORTHY
The noble Lord has said that fair rents ought to be reached in all cases. Let us assume for a moment that we all accept that. But let us come back to what he said about injustices between tenants. I am not going into figures; I shall rest what I have to say on what I hope is principle. The inequalities that exist are there, and they are not of the tenants' making. This is not something of their choice; it is a situation which exists, and exists because of nothing that they have done or failed to do. I think we must grasp that.
The noble Lord seemed to indicate that these people who are not going to enjoy any form of rent allowances ought to be prepared to accept some reduction in their standard of living. Supposing there is a child of a tenant belonging to
§ that peculiar section of the community that believes in private education, and supposing this rent increase means that the parents have to withdraw the child from the private school, does the noble Lord regard that as the kind of situation the Government have contemplated and would readily accept? If we are going to approach equality and what the noble Lord calls justice as between tenant and tenant, then I think the case made by my noble friend is a great deal more powerful than the noble Lord, Lord Drumalbyn, appears to have appreciated. Because all my noble friend is asking for is phasing over a longer period, with a view to avoiding harsh, unjust and inequitable cuts in living standards brought about by a situation for which the tenants themselves are in no way responsible.
§ 9.25 p.m.
§ On Question, Whether the said Amendment (No. 109FZF) shall be agreed to?
§ Their Lordships divided: Contents, 33; Not-Contents, 47.109
|Archibald, L.||Diamond, L.||Popplewell, L.|
|Ardwick, L.||Garnsworthy, L.||Seear, Bs.|
|Avebury, L.||Gladwyn, L.||Segal, L.|
|Bacon, Bs.||Greenwood of Rossendale, L.||Shepherd, L.|
|Bernstein, L.||Hale, L.||Stow Hill, L.|
|Beswick, L.||Hanworth, V.||Taylor of Mansfield, L.|
|Blyton, L.||Hoy, L.||Watkins, L.|
|Boothby, L.||Janner, L.||Wells-Pestell, L.|
|Chalfont, L.||Milner of Leeds, L. [Teller.]||Wright of Ashton under Lyne, L.|
|Champion, L.||Phillips, Bs. [Teller.]|
|Davies of Leek, L.||Platt, L.||Wyne-Jones, L.|
|Aberdare, L.||Falkland, V.||Milverton, L.|
|Ailwyn, L.||Ferrers, E.||Molson, L.|
|Auckland, L.||Fortescue, E.||Mowbray and Stourton, L.|
|Balfour, E.||Gage, V.||Moyne, L.|
|Belstead, L.||Gainford, L.||Nugent of Guildford, L.|
|Berkeley, Bs.||Gisborough, L.||Oakshott, L.|
|Bethell, L.||Gowrie, E.||Orr-Ewing, L.|
|Brabazon of Tara, L.||Hailes, L.||Rankeillour, L.|
|Cowley, E.||Hailsham of Saint Marylebone, L. (L. Chancellor.)||Sandford, L.|
|Craigavon, V.||Selborne, E.|
|Crathorne, L.||Hatherton, L.||Sempill, Ly.|
|Crawshaw, L.||Hawke, L.||Strange, L.|
|Denham, L. [Teller.]||Hylton, L.||Terrington, L.|
|Drumalbyn, L.||Killearn, L.||Thomas, L.|
|Elles, Bs.||Lothian, M.||Vivian, L.|
|Emmet of Amberley, Bs.||Macleod of Borve, Bs.||Young, Bs. [Teller.]|
Resolved in the negative, and Amendment disagreed to accordingly.
§ On Question, Schedule 6 agreed to.111
§ Clause 39 [Application to rent officer by local authority]:
§ 9.33 p.m.
LORD DIAMOND moved Amendment No. 109GA:
Page 44, line 5, at end insert "or a number of dwelling-houses which may be defined by it specifically or by reference to the dwelling-houses within a defined area being
§ The noble Lord said: I beg to move this Amendment, and perhaps it will be convenient at the same time to take Amendments 109GB, GC, GG and GH. I hope that I may be forgiven for not repeating the "109" each time, but we have been on No. 109 for two days now, and look like being on it for another day, so that it is in all our minds. The Amendment that I beg to move, together with the consequential Amendments which I hope it is convenient to discuss at the same time, makes it possible for local authorities to refer groups of tenancies to the rent officer, as opposed to referring just an individual case. To put the matter quite shortly (and I am sure we should put it very shortly at this time of night), there may be—I imagine there will be—cases where the examination of a fully adequate sample of houses would show that in the case of, shall we say, a particular landlord, or in the case of a particular agent who is collecting rents for a company, the likelihood is that the bulk will follow the sample. In normal commercial practice, therefore, it is totally unnecessary to examine every single grain in the bag; you can examine a handful and draw a reasonable conclusion as to what the rest are like. I should have thought that there ought to be the possibility in these circumstances of referring a number of dwelling houses. I therefore beg to move Amendment No. 109GA.
§ LORD DRUMALBYN
The effects of this group of Amendments would be to empower local authorities to refer groups of dwellings to the rent officer and oblige the rent officer to consider them, regardless of whether the authority considered that the rents being charged for them justified the making of any such reference. I should point out to the noble Lord that nothing in the clause as it stands would prevent a local authority from simultaneously referring to the rent officer a number of tenancies for each one of which they felt that consideration of 112 the rent by the rent officer was justified. Such a move is already possible in respect of furnished lettings, under Section 72(1) of the Rent Act 1968, which permits local authorities to refer such lettings to the rent tribunal. This has become well established by the recent Court of Appeal decision in the Frey Investments case: the full title of the case is R. v. Barnet and Camden Rent Tribunal, ex parte Frey Investments Limited. That being so, I do not think this Amendment is necessary. It would be undesirable to give local authorities power to refer large blocks of tenancies, including tenancies about which neither had any complaint been received nor had the local authority themselves made any inquiry to see whether there was anything to indicate that there was any unfairness in the rent charged.
Here again in the furnished sector there is a legal decision on this, known as the Bell case. In 1949 the High Court held that a local authority could not make a block reference of that kind, indeed, it seems obvious that any reference of that sort would be unreasonable. Nor would such a reference be in tenants' interests. The Francis Committee's survey of unregistered rents led to their conclusion that registered rents seemed generally higher than unregistered rents for dwellings of the same type. This point, in the Government's view, adds to the importance of the point that the local authority should not make block references to the rent officer without considering the individual circumstances of each case. I hope therefore that the noble Lord will not press this Amendment, because it seems that this is something the local authorities can do where they are justified in so doing on the facts of each case.
§ LORD HYLTON
I think it is perhaps right to remind the Committee that there may be very great scope for references by local authorities to the rent officer, particularly in a situation such as we have now in London, where there is an acute shortage of rented properties and a very high income is required for an individual to buy his own house. In this situation of shortage it is quite a possibility that the individual would-be tenant and the landlord may agree together a figure considerably in excess of what the fair rent would have been, 113 and it is just on this kind of thing that action by the local authority will be particularly needed to counterbalance the effect of shortage.
§ LORD DRUMALBYN
I think I heard the noble Lord referring to the individual tenant in this position. Of course, this can be done in the individual case. What we are here considering is block references. I am pointing out the difference between block references where the local authority has reason to believe that there is an excess rent being charged, and block references where they have no facts on which to found such a reason.
§ LORD HYLTON
While I appreciate the point made by my noble friend Lord Drumalbyn I think we need to be aware of the difference in the position as between the potential tenant and the sitting tenant.
§ LORD DIAMOND
I am most grateful for what the noble Lord, Lord Hylton has said, from his great knowledge of the pressure of events in London. That factor creates a situation in which a local authority may wish to move faster than it otherwise would; the urgency of the situation requires a local authority to move faster. We are not talking about a situation of which the local authority has no knowledge; nor are we talking about a situation where a local authority can refer a number of cases in which it has full knowledge of each individual case. We are talking about the halfway house where the local authority has tested individual cases in such numbers as to constitute a reliable sample of the whole.
For example, in a block all in the ownership of one landlord, if it were well established that he was treating all alike and if all the rents were being collected by one agent—if quite obviously it were a homogeneous group—and the local authority had examined 25 per cent. of that block and had found in each case the identical circumstances—namely, resulting in a reference, in a decision to refer—why is it necessary for the local authority to go through the remainder of the cases when the reasonable assumption is that they will all follow the sample; when there is urgency, as has been pointed out, and great pressure, and where one wants to protect the situation as much as one can, and where, I repeat, the first 25 per cent. have shown in each and every 114 case identical figures for identical flats or dwellings and therefore the identical conclusion to refer the matter to the rent officer?
That is what we are talking about. I have no need to remind the noble Lord, who looks after all trade matters, that the process of dealing on samples has been very well-established over the centuries. All I am saying here is that he should name what he likes to call a reasonable sample. If he wants to make it 50 per cent., let him name it. It should not be necessary to spend the time, to delay the remedy, long enough for each busy local authority, as they will be with the advent of this Bill, to go round to each single flat, knowing full well that this is a block, that they are all similar, the dwellings let on identical terms by the same agent for the same landlord company. In those circumstances I should have thought the noble Lord would agree that there was a case for a responsible local authority—we are not talking about an irresponsible individual; we are talking about a responsible local authority—making a group reference, a group application.
The noble Lord has asked me to withdraw the Amendment. In view of the figures we have just listened to I am not going to put the whole of the Government in jeopardy by making them go to a Division again and probably having them fall. I do not consider that would be fair on a matter of this sort, on which obviously the Government are in grave risk of falling. But I want to press the noble Lord. This is not of fundamental importance, but it is a sensible, practical administrative arrangement to meet undoubted need and urgency, and I hope he will consider it further.
§ LORD DRUMALBYN
The difficulty I have in responding to the noble Lord, Lord Diamond, arises on the Amendment itself. I shall certainly consider the principle that is involved here, but the advice I have received is that this Amendment is unnecessary. All that has to be done if the local authority—the noble Lord is shaking his head. Would he please just listen to what I have to say?
§ LORD DIAMOND
I can assure the noble Lord that I was not shaking my head I am just practising to he an umpire at Wimbledon.
§ LORD DRUMALBYN
The point is this. What I was saying is that I do not think the clause as drafted would prevent what the noble Lord wants being done. My advice is that it would be quite possible to name a lot of dwellings in a block. What would not be possible would be to refer a whole block, and I do not think that even under the Amendment it would be possible, because the Amendment refers to:… a number of dwelling-houses which may be defined … specifically or by reference to the dwelling-houses within a defined area …".I do not think that would be possible if it meant that the rent officer then had to start ab initio, so to speak, without any inquiry on the part of the local authority, to find out the facts. I do not think this was the case the noble Lord was making. He was talking of sampling, and was even talking about 25 per cent. sampling.
It might help the noble Lord, Lord Diamond, if I were simply to read to him what Lord Justice Salmon (as he then was) said in his judgment in the Frey Investments case:The present case is entirely different [from the Bell easel, not only because we are dealing with a different class of property and a different type of tenant"—and these are the important words—but because in this case there was an investigation and a careful investigation, and inquiry by the council into the relevant facts. Indeed, one of the complaints made by the landlords is that the council made too many inquiries, not that they made none.Under the clause as it stands there is nothing to prevent a number of dwellings from being referred en bloc, provided sufficient investigation has been carried out in regard to them and there is reason to believe that they are all of a certain pattern. But I will look at this again and, if I am wrong in anything I have said, I will come back to it. I do not think there is anything between the noble Lord and myself here, but we could not accept the wording of the Amendment because it would go much too far.
§ LORD DIAMOND
I never put such a prize upon our wording. We have to do the best we can as we go along. The whole point is that one can have 50 fiats in a block, all may seem to be identical, 25 of them may have been inspected and found to be homogenous and therefore 116 the whole 50 can be put forward. The noble Lord, Lord Drumalbyn, is leading me to believe that under the Bill the whole 50 could be put forward on that amount of information in respect of half of them. If that is the case, I should be much relieved. He has been good enough to say that he will look into this again, and in those circumstances I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 9.47 p.m.
LORD DIAMOND moved Amendment No. 109GD:
Page 44, line 12, leave out ("take account of") and insert ("review").
§ The noble Lord said: Perhaps we could consider this Amendment in conjunction with Amendments Nos. 109GE and 109GF. All I am asking the Government in connection with this group of Amendments is for confirmation that the Bill, as at present drafted, provides for the circumstances described in the Amendments and that the regulations that the Government intend to bring in will be consistent with that. This matter was discussed in another place and there is no need for me to go over the ground again. The Government clearly intend to bring in certain regulations. I am anxious to know whether they will be consistent with the wording of the Amendments. If I receive that assurance I will hurriedly withdraw the Amendments.
§ LORD MOWBRAY AND STOURTON
I do not think I can give the noble Lord in exactly the same terms the assurance for which he is asking. He appreciates that this matter was considered in another place. The proposed subsection (3) is intended to make sure that the rent officer is looking at the appropriate rent before he considers whether it exceeds a fair rent. Under Clause 44 the prescribed form recording particulars of a rent agreement for a tenancy coming out of rent control has to be deposited with the local authority 28 days before it is to come into effect. If the local authority refers the case to the rent officer during those 28 days, the rent officer should compare the likely fair rent, not with the current recoverable rent, which would be the controlled rent, but with the rent or highest rent in the agreement to come into force in the near future.
117 The same point would arise for a rent agreement for an already regulated tenancy where the local authority had its attention drawn to the agreement and referred it to the rent officer before it was due to come into effect. There might also be cases where the rent currently in payment was in fact higher than the recoverable rent though neither of the parties nor the local authority realised this. It would impose an enormous extra burden on rent officers if in each case referred they had to attempt to establish the legally recoverable rent. This would not be greatly adding to the tenant's protection, since the action proposed under this clause would in all cases ensure that the rent being paid did not exceed a fair rent. The rent officer is not, and in the Government's view ought not to be, involved in reviewing existing leases or agreements, or in delving into the circumstances in which they were entered into. Rent officers are concerned with determining fair rents or, in this case, ensuring that fair rents are not being exceeded.
I could go into the matter at greater length, but I think that is the kernel of it. Perhaps the noble Lord would like me to say a few words on the third of the Amendments, because the effect of that one is slightly different. This Amendment seeks to ensure that the rent officer is not bound by any lease or agreement drawn up between the landlord and the tenant when he is considering a rent referred to him by the local authority. In this case, one must draw attention to Section 46 of the Rent Act, which contains the provisions that guide the rent officer in determining a fair rent; and there is nothing in the Housing Finance Bill that changes the criteria under which the rent officer determines what is a fair rent for a regulated tenancy.
Amendment No. 109GF may be intended to suggest that if rents higher than existing fair rent levels were agreed in areas of housing shortage, they could he used in evidence before rent officers and could thus affect fair rents. But they could just as well be a yardstick of the extent to which scarcity has affected the rent. Rent levels do of course go up, as does everything else, but evidence of higher rents being agreed in scarcity areas will not have a great deal of relevance. In any event, the Amendment is unnecessary because even if such 118 agreements were relevant there is nothing in the Act to suggest that rent officers are bound by any such evidence. They must determine the fair rent in accordance, and only in accordance, with the provisions of Section 46 of the Rent Act. I think the gist of what I have said was understood in the Commons, and I think the noble Lord's honourable friends there agreed to let it go.
§ LORD DIAMOND
I am very grateful to the noble Lord. He has dealt with the matter very adequately, and I shall read very carefully what he has said. The Amendment was not very happily chosen to bring out the essential points. He has given me a lot of information, and I shall read that. I hope it will not be necessary to revert to this at a later stage. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 9.53 p.m.
LORD DIAMOND moved Amendment No. 109GJ:
Page 44, line 25, leave out subsection (5).
The noble Lord said: Subsection (5) states:
No application under this section"—
that is, for registration of rent for regulated tenancies—
shall be entertained at a time when an application under section 44 above has been made but has not been determined or withdrawn.
The purpose of moving this Amendment is to make sure that a landlord cannot deliberately delay proceedings by lodging a reference first and then, if I may use a well-worn phrase, "going slow" on the proceedings.
§ To go back to group references, one can imagine that if there is a reference of a large number in a particular flat or street and the local authority wants them all considered, the landlord could play havoc with that, simply by lodging a reference on one of them and taking his time on it. The whole of the street or the whole of the group of flats, as the case may be, will be held up while this is going on. So one reason for raising the question of this subsection is to get clarification on that point. It seems to me that there is no particular need for the subsection, and therefore its inclusion causes one a certain amount of anxiety.119
The last two lines of it seem to be inadequate protection because of the great delays that can take place before abandonment. It says:
The rent officer may treat an application as withdrawn if he is satisfied that it has been abandoned.
He has to be satisfied that it has been abandoned. Presumably there is no question of the landlord's having said, "I abandon it". There has to be a number of weeks or months of gradually wider-spaced proceedings becoming less and less frequent over a longer and longer period. From one's knowledge of how an unwilling participant in litigation can hold up a matter by delaying bits of proceedings literally over years in the ordinary High Court procedure, one can imagine how the landlord who is anxious to hold up a reference could do so. I want to be absolutely sure that that cannot take place and that the local authority and the tenants are sufficiently protected. I beg to move.
§ LORD DRUMALBYN
The noble Lord has drawn attention to two points which might perhaps operate to the disadvantage of the tenant. I think it is possible to exaggerate the extent to which a landlord might delay proceedings. The rent officers have ways of seeing that he does not do so. But of course this is a matter for the rent officer himself and it is within his own discretion, It is not intended to fetter the freedom of the rent officer more than is absolutely necessary, and it may be that this subsection is going a little further than is necessary in this case. On balance, I am inclined to agree that this is something better left to the rent officer and I am happy to accept the Amendment.
§ LORD DIAMOND
My noble friend is anxious, as I am, to say how grateful we both are that the noble Lord has seen fit to accept the Amendment and to recognise the way in which the Government have helped us on this.
§ On Question, Amendment agreed to.
§ 10.0 p.m.
§ On Question, Whether Clause 39, as amended, shall stand part of the Bill?120
§ LORD DIAMOND
I have only one question to ask on this clause which is a good example of legislation by reference. The whole clause is about another Bill. It begins by saying:In the Rent Act 1968 after section 44 there shall be inserted the following section:—Therefore, as I have already said, these pages are inevitably littered with references to other Acts. All I want to ask the Government is whether it is their intention to produce a consolidated measure in the reasonably near future.
Might I follow up that point? The difficulty in these matters, when you have legislation by reference, is that a considerable amount of confusion arises, particularly in the minds of lay people who read the Acts. Is it really necessary to wait until a consolidation Bill is introduced for some clarification to be given, by actually giving the terms of the various sections of the Act within the Act itself? I have been on the consolidating Committee for many years, and the greatest difficulty we have is to try to get an Act into such a form that a layman, in so far as it is possible unless the Act happens to be a very complicated one, shall know what it is all about. I am very much against this type of reference to Acts when a layman would have to find the various sections to see what the Act really means. I support the point made by my noble friend and would ask whether there is a possibility of moving many of these references and having them put in such a form that the Act itself will incorporate the terms of the other Act to which it refers.
§ LORD DRUMALBYN
I am not quite sure that I understood everything that the noble Lord, Lord Janner, said, but the main point which the noble Lord, Lord Diamond, raised on the question of consolidation is always very much borne in mind. This is largely a question of timing. The noble Lord said at an earlier stage that he was pretty certain that before very long there would be more legislation on housing. Indeed, we still have to consider to what extent to implement the Francis Committee Report and possibly there will be further changes there; but I have no doubt that after that consolidation will be considered. This would be the sensible way to go about it.
121 I note what the noble Lord said about references. They are extremely difficult to follow, but I am a little more surprised that the noble Lord, Lord Janner, as a lawyer himself, found it difficult to follow. But he was pleading on behalf of the layman, whereas the noble Lord, Lord Diamond, has almost pleaded on behalf 122 of the lawyer—quite a strong combination, each one taking up the other side. I can assure the noble Lord, Lord Diamond, that consolidation will not be unduly delayed.
§ Clause 39, as amended, agreed to.
§ Clause 40 agreed to.123
§ Clause 41 agreed to.
§ Clause 42 [Repeal of rent limit for contractual periods]:
LORD STOW HILL moved Amendment No. 109 GK:
Page 46, line 43, after ("shall") insert "if the condition contained in subsection (3) of this section is satisfied and").
§ The noble Lord said: I beg to move Amendment No. 109 GK. It is really a paving Amendment for Amendment No. 109 GN, to Clause 43. I should prefer, if it is for the convenience of the Committee, to present the arguments in support of not only Amendment No. 109 GK but also 109 GL and 109 GM, which relate entirely to the same point.
§ LORD DRUMALBYN
I am sorry to interrupt the noble and learned Lord, but I thought he said, "GL" twice over. Would he say which was the third Amendment?
§ LORD STOW HILL
The Amendment I should like to move is No. 109 GK. The Amendments I should like to support together with that Amendment are Nos. 109 GL and 109 GM; and 109 GK is a paving amendment for 109 GM in Clause 43. In other words, one can, in effect, argue those four Amendments together. In arguing in relation to the paving Amendment, I must explain the purpose of Amendment 109 GM, to Clause 43.
I think it important to have clearly in mind exactly what is dealt with by Clause 42. It is dealing with a situation where there is a regulated tenancy which is a protected or statutory tenancy and not a controlled tenancy. I think it important to try to circumscribe the ambit of this clause. If one asks what is a controlled tenancy, it is, one finds from Part I of Schedule 2 to the 1968 Rent Act, a tenancy which, broadly speaking at any rate, if not entirely, is within the rate limits of £30 in London and £20 outside London which were those laid down in the 1957 Rent Act as being the limit within which the old Rent Restrictions Acts were to continue to operate. The 1965 Act, and the 1968 Act, which consolidated previous Rent Acts and the whole of the 1965 Act except Part IV, 124 which related to harassment, brought again within the scope of protection all tenancies which fell within the rateable limit of £400 in London and £200 outside London. In relation to those tenancies brought within the protection that Act provided security of tenure and also brought into being the fair rent registration system.
What we are dealing with in Clause 42 is regulated tenancies, tenancies within the £400 and £200 limit; but it does not apply to controlled tenancies within the £30 and £20 rate limits dealt with in the 1957 Rent Act. In relation to those regulated tenancies which are dealt with by Clause 42 it deals with the situation where no fair rent has been registered with regard to those regulated tenancies; in other words, a situation where there has been no registration of a fair rent in relation to a tenancy within the £400 and £200 rate limits but in excess of the £30 and £20 rate limits. That is the scope of the Clause.
Sections 20 and 21 of the 1968 Rent Act, in relation to that situation, froze the amount of rent which might be charged under a rental agreement—I speak somewhat inaccurately, but, broadly speaking, it is true to say—to the rent chargeable under the agreement in December 1965. Putting in shortly, loosely and not entirely accurately, it froze rents at December, 1965, limits in relation to those regulated tenancies where no fair rent had been registered. What Clauses 42 and 43 do is this: they repeal Sections 20 and 21 of the 1968 Rent Act. In other words, they cancel that December, 1965, freeze in relation to those tenancies, subject to this exception: they do not cancel the freeze in relation to those tenancies—again I am speaking rather loosely but, broadly speaking, accurately—that were entered into before January 1, 1973. In other words, the freeze is cancelled in relation to those regulated tenancies, not being controlled tenancies, which are entered into after January 1, 1973.
What the Amendments to which I speak seek to do is this. It is a provision of Clause 43 that if the freeze is to be cancelled it can be done only by a rental agreement which conforms with the requirements of subsection (3) of Clause 43. It conforms with the re- 125 quirements of that subsection if, whatever form it is in, it contains… in characters not less conspicuous than those used in any other part of the agreement"—words stating—that the tenant's security of tenure under the Rent Act 1968 will not be affected if he refuses to enter into the agreement, and that entry into the agreement will not deprive the tenant or landlord of the right to apply at any time to the rent officer for the registration of a fair rent …".That is all that the agreement has to say in order to provide protection for the tenant concerned.
What the Amendments seek to do is to provide that the agreement must be in a formal specified form. One cannot have, if this Amendment is accepted, an agreement informally entered into. The sort of difficulty that is envisaged by those who prepared these Amendments is this. Frequently in the case of these regulated agreements one does not have a formal type of agreement at all. One has letters passing between solicitors or passing even between the individual landlord and the individual tenant. The agreement is made in correspondence. Half a dozen letters pass and the result of them is that the two sides agree and a new rent agreement is thus brought into being. That can be done extremely informally.
It can be the case that the words which subsection (3) of Clause 43 require to he inserted can be perfectly well inserted in the agreement in that correspondence and that the tenant is almost unconscious, there being an exchange of letters between perhaps his solicitor and the landlord's solicitor, of those words which are the only words upon which his protection is to depend. It is extremely important that he should know about them and that he should understand what his protection is. But the effect of that sort of informal agreement is that he just does not know about them and therefore enters into the agreement wholly in ignorance of his rights. This Amendment seeks to cure that situation and avoid that danger by providing that the form of agreement can be specified. It can be stated by Order that the agreement must be one which contains specified particulars. It must set out, if the Order so requires, the names, the full terms of the agreement, and, in a way which cannot escape the notice of the tenant, the 126 actual words which give him the protection that it is desired by Clause 43 to give him.
That is the object—indeed the whole object—of the Amendments which I now beg to move. I submit that they are fair. They give a protection to the tenant which, if the matter is treated informally (as it often is) he will not get, because although the words may be inserted in one of the letters which pass he may very well not read the letters or, if he does, may not read them with any degree of care, and he may be wholly unconscious that these very important words are contained in them. That is the purpose of these Amendments.
§ 10.16 p.m.
§ LORD DRUMALBYN
I am grateful to the noble and learned Lord for the way in which he has explained the purpose of his Amendments: he has made it very clear. The structure of Clauses 42 to 45 is based on the proposition that the 1965 freeze on unregistered rents should end, and that the new safeguards in Clauses 43 to 45 should begin on January 1, 1973. I think that by a slip of the tongue the noble Lord twice referred to the repealing of Section 20 of the Rent Act 1968. It is Section 20 subsection (3), of course.
§ LORD DRUMALBYN
The noble Lord has drawn attention to the fact that agreement may be achieved informally by an exchange of letters. What he is anxious to do, if I understood him correctly, is to see that a form is prescribed for the contract itself. In the course of this Amendment, although he did not quite refer to this, he referred to Amendment No. 109GL. I do not quite understand why he wants to take that subsection out. It is necessary to preserve the freeze after January 1, 1973, where the contractual rent exceeds the frozen rent. But preserving the freeze here would ensure that tenants who as a result of the freeze are paying less than their contract would allow were not suddenly exposed to a rent increase on January 1, 1973. Where the rent paid exceeds the frozen rent it will prevent the rent being paid suddenly becoming validated as from that date; but it is intended that the rent should remain frozen in these cases until an agreement 127 complying with the requirements in Clause 43(3) is entered into. It is Clause 42(2)(b) which extends the freeze in these cases. Clause 42(3) ends the freeze even in these cases where there is an agreement complying with the requirements in Clause 43(3). So Clause 42(3) is needed only in the limited cases coming under Clause 42(2)(b). Where, however, a contractual rent does not exceed the frozen rent, the contract itself will prevent the landlord from increasing the rent for the sitting tenant for so long as that contract continues unchanged, and where a new rent agreement is entered into it will have to comply with Clause 43(3). There is therefore no need to preserve the freeze for these cases after January 1, 1973; so Clause 42(2)(b) and Clause 42(3) will protect tenants against having their rents increased between January 1, 1973, and the date of the first agreement thereafter which complies with Clause 43(3).
The first two of these three Amendments are not needed to achieve this. The third Amendment is to delete the words.or if they provideat the end of Clause 42(3). Clause 42(3) deals with cases where the contractual rent exceeds the frozen rent. Where the tenant is paying more than the frozen rent the landlord may wish, when rent agreements become permissible, simply to regularise the rents currently being paid. Without the words mentioned, however, the landlord could not get the rent unfrozen except by getting his tenant to agree to a rent increase. He could not get the existing rent that is being paid regularised. This is because Clause 43(1) covers only the agreements which increase the rent. The words after "section" in line 14 are designed to allow the parties to regularise their present rents without having to have a rent increase which neither party might otherwise be seeking. They could do this by means of an agreement which complied with Clause 43(3) and under which the parties agreed that the freeze was no longer to apply. The Clause 43(3) requirements make it quite clear to the tenant that he does not need to make such an agreement if he does not want to do so.
128 I do not think the second and third Amendments would be appropriate. I come now to the main question of the form of the agreement. The noble Lord argued that the statement of tenants' rights which appear in Clause 43(3)(b) could quite easily be lost in a long legal rigmarole and he thinks it would be better to prescribe a form of contract. The trouble is that this would be doing it for once and for ever and it is not always easy to do this. I would be willing, if he is agreeable, to consider a form giving the particulars of the contract and bearing this information so that the tenant will know exactly what he is committed to and exactly what his rights are. This would be preferable to having a contract in a specified form because there are so many variables. If the noble Lord is willing to accept that I will give an undertaking to see what can be put in at the next stage of the Bill to meet this point.
§ LORD STOW HILL
I can only say to the noble Lord, Lord Drumalbyn, that I am extremely grateful to him for what he has said. With regard to the earlier part of his reply, I was at this hour of the night taking the matter a little compendiously on purpose. The substance of the point I wanted to make he has generously met, and I am most grateful for what he has said. Having said that, if it is agreeable to your Lordships, I should like leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 42 shall stand part of the Bill?
§ 10.25 p.m.
§ LORD STOW HILL
I am most anxious not to take the time of the Committee at this late hour, but I think I should hardly be doing my duty if I did not call attention to the very grave doubts felt by noble Lords on this side of the Committee, and which were very potently voiced in Standing Committee E, as to the necessity of Clause 42 at all, and whether it is not a very undesirable clause. Why cancel the freeze? I am aware that the Francis Committee recommended that it should be cancelled, but the main reason I think they gave was that the freeze was not generally observed and a very large number of agreements are entered into in excess 129 of the freeze ceiling. That, I think, was relied upon as a reason why the freeze should be brought to an end. If it were in any sense an offence to enter into an agreement of that kind, I should be the first to say that the law must not be brought into ridicule by repeated and unpunished transgressions of it. That is not the case. You can enter, consistently with the provisions of the 1968 Rent Act, into these agreements in excess of the freeze allowed. The only result of your so doing is that you, the landlord, cannot recover the excess, and indeed the tenant has the right to recover back any excess amount he has paid over the freeze limit for a period of two years back.
Even if the freeze is frequently disregarded, I would submit, as it was submitted in Standing Committee E, that the presence of the freeze at least has some deterrent effect; it must have. The knowledge on the part of landlords—and here I speak of those who are perhaps a little less scrupulous than other landlords—that they may be faced with a claim for repayment of rent over a period of two years back, and that they may suddenly realise that they cannot recover the excess over the permitted freeze anyhow for the future, must be some deterrent. The existence of the freeze, even if it is constantly disregarded, must be of some utility. To cancel it openly by a section of a Statute that is passed I should have thought, as it was argued in the other place, was in a sense a kind of invitation to enter into agreements in excess of the December, 1965, limit.
I should like to put a figure to the noble Lord, Lord Drumalbyn, that I take from a speech of Mr. Freeson, in the other place, who is extremely experienced in these matters. He said that some 200,000 rents have been registered and that some 3 million tenancies—I do not know whether that is right or not and I should like information—are within the freeze provision. In relation to all those tenancies, to cancel the freeze I should have thought was a measure of very doubtful wisdom. At this hour I do not think I would seek to divide the Committee, but I should be very grateful for the noble Lord's observations on the proposition I advance 130 that it is undesirable and unwise to cancel Section 20(3) and Section 21 of the 1968 Act. They must surely have some deterrent effect, and that is for the advantage of both landlord and tenant. I would hope that the Government might see their way to abandon this clause, which would mean abandoning Clause 43 as well; but I will not ask to divide the Committee. This is a matter which no doubt the Government have reflected upon carefully, and I should be grateful if we might have their reasoning upon it.
§ 10.29 p.m.
§ LORD DRUMALBYN
The reason why the freeze is being cancelled is really twofold. The noble Lord mentioned that the freeze is not being observed. He said that that was not a good reason for cancelling it. Perhaps it is not by itself. But I think what is perhaps the more potent reason is that a 1965 rent is now some seven years out of date, and if we go on with this indefintely we are precipitating ourselves into exactly the same trouble we have over controlled rents, and we ought not to do this. We ought to be able to move to a situation where rents are much more fluid—fair rents are much more fluid—to the point eventually, we would hope, when there is a sufficiency of housing in the country as a whole, so that the fixing of rents may not be required at all, provided always that you have sufficient safeguards for the tenant to make sure that he knows exactly what he is doing and what he is agreeing to, where the snags are, and so on. That is what we are trying to do in Clause 43, which we are about to come to.
Whatever happens we were bound to do something about Sections 21 and 20(3) because one cannot go on, so to speak, ante-dating the rent in the way that these clauses do without doing considerable harm to the economic structure of housing, and we think that this is the right time to act and the right way to do it. As I have said, we have sought to introduce proper safeguards here but the movement towards rents by agreement is one to which we attach considerable importance, both on emergence from control and embodying already the regulated sector.
§ Clause 42 agreed to.
§ Clause 43 agreed to.
§ Clause 44 [Protection of tenant with security of tenure: special provisions following conversion]:
LORD STOW HILL moved Amendment No. 109G:
Page 48, line 35, leave out subsection (4).
§ The noble Lord said: This is a probing Amendment as I think it is not clear to noble Lords on this side of the Committee what is the purpose of making the provisions inapplicable where there is a case in which there is an application to cancel a fair rent registration under Clause 41 of the Bill. After all, what is it that one is making inapplicable in a case of that sort? One is making inapplicable the provisions of subsection (5), that the landlord is to give the local authority a document in a prescribed form and that the tenant is to get a copy of it; that the local authoritiy, having recived it, is to serve on the tenant a notice saying that a rent increase shall not apply for 28 days, and that then that notice is to be made open to public inspection for a period of time under subsection (7).
§ If a fair rent has been registered under Clause 41, an application can be made to cancel the registration. The procedure is that you bring in a new rent agreement. You go to the rent officer and if he thinks it is appropriate he cancels the previous registration and fixes the new rent. It is not apparent why, in those circumstances, the provision as to the service of the notice, as to its being made open to public inspection, as to the rent not being liable to be increased for 28 days, is inappropriate. I would submit at any rate for the consideration of the Committee, that the notice, and certainly the making open to public inspection of the notice, was just as desirable in a case where there was an application under Clause 41 to deregister a rent which has been registered as a fair rent as in the ordinary case where the landlord and the tenant voluntarily enter into a new rent agreement, increasing the rent. In both cases the tenant is aware of what is going on and if it is desirable that the notice 132 should be served on the local authority and treated as is required in subsection (5) of Clause 44, where there is an ordinary agreement entered into between the landlord and tenant, why is it not equally desirable where there is a new agreement which is submitted to the rent officer in order to induce the rent officer under Clause 41 to cancel a fair rent which has been registered? I submit that the two cases are parallel so far as these relevant considerations are concerned and that what is appropriate in one case is equally appropriate in the other. I beg to move.
I am grateful to the noble and learned Lord, Lord Stow Hill, for explaining the purpose of his Amendment. As he will be aware, there are special procedures for tenancies which come out of rent control and go into regulation and are protected. Subsection (4) provides that these special procedures are not applicable to a rent agreement for an ex-controlled tenancy where, following decontrol, a fair rent was registered but is later cancelled. The three-year period of adjustment is intended to start with the date on which the rent first starts to increase from the controlled level. Under Clause 44 (3) the three-year period runs from the date when the first rent agreement took effect. There might, however, be cases where a fair rent is registered following decontrol but the registration is later cancelled under Clause 41. The registration must, under Clause 41, have been effective for three years before it can be cancelled. In such a case the first rent agreement would be at least three years after the date when the landlord took the first normal step to get the controlled rent increased, by applying to the rent officer. The three-year period of adjustment to rent regulation would be over, and the special procedure for rent agreements under Clause 44 would no longer be appropriate. Rent agreements with the sitting tenant entered into after cancellation of registration would be subject to Clause 43 in the normal way.
§ LORD STOW HILL
I am grateful to the noble Lord for that explanation, in view of which I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.133
§ LORD STOW HILL moved Amendment No. 109 GR:
Page 49, line 18, a; end insert—
("(6A) The local authority shall refer the agreement to the Rent Officer in accordance with section 44A of the Rent Act 1968 unless it is satisfied that the rent, or the highest rent payable under the rent agreement does not exceed a fair rent for the dwelling.")
§ The noble Lord said: Although this is an Amendment of some substance, I will not deploy the arguments in favour of it at length. Again, perhaps we should remind ourselves of the purpose of Clause 44. It provides the protection which a tenant is to have when he ceases to be a controlled tenant and becomes a regulated tenant—a protected or statutory, regulated tenant—and that can happen either under Clause 27 or Clause 35. Clause 35 is the usual provision—it is the clause which sets the time limit—and under either clause what I previously described as a controlled tenancy can become a regulated tenancy. I submit that it is of great importance that a person who has enjoyed the protection, both in the limitation of rent and in the matter of security of tenure under a controlled tenancy, in terms of the old Rent Restriction Acts, and who receives in exchange for that the fair rent registration protection, plus the security of tenure protection granted under the terms of the 1968 Act and this Bill, should be accorded some quite drastic protection.
§ What he is accorded under Clause 44, as it at present stands, is set out in subsection (5), to which I have already referred. At risk of wearying your Lordships by repetition, I hope I may very briefly say that that is the subsection that requires that the landlord is to serve a particular notice containing particular information on the local authority and on the tenant, and that the local authority under subsection (6), when it gets that notice, has to deal with it in a certain way, to serve it on the tenant, and then under subsection (7) make it available to public inspection. That is the protection which is given to the tenant who ceases to be a controlled tenant and becomes a regulated tenant.
§ The Amendment seeks to require the local authority when it receives that notice from the landlord in that situation (that is to say, when there is a tenancy agreement entered into with a tenant who 134 has ceased to be a controlled and become a regulated tenant), in the first place to examine it and form a view as to whether the rent chargeable under that agreement exceeds what would be a fair rent, and unless it is satisfied that the rent does not exceed a fair rent to refer it under Section 44A which is inserted into the 1968 Act by Clause 39 of this Bill to the rent officer, in order that he may make a decision as to whether it is a fair rent or not. In other words, whenever a rent agreement is entered into with a tenant who emerges from control under Clause 44, there will be a check that a rent is not being charged in excess of the fair rent. That check will consist of this: either the local authority on getting a notice must be satisfied itself that the rent is not in excess of the fair rent, or if it is left in doubt after examining the rent and considering all the circumstances, the rent officer will he asked to pronounce his view as to whether it is in excess of the fair rent or not.
§ The submission I make to the Committee in support of this Amendment is that without that additional protection the service of the notice is of very little value. What is likely to happen is that when the local authority receives it, nobody in the local authority under the terms of the Bill will be under any special duty to take any special action with regard to it. It is surely likely in many cases to be pigeon-holed and nothing more done about it. The tenant, therefore, is really left with next to no protection. I do not speak in any sense critically of local authorities, but if somebody is not required to act upon a notice then probably it will not be acted upon. It will be treated as at present Clause 44 requires and no further action will be taken upon it. The Amendment seeks to put upon the local authority—and I apologise if I repeat myself—the duty either of satisfying itself that the rent is not in excess of a fair rent or, if it is left in doubt, referring it under this new Clause 44A to the rent officer. I beg to move.
§ LORD DRUMALBYN
The noble Lord has moved his Amendment with his customary clarity, and I think I have correctly understood him that the question raised by the Amendment is whether local authorities should be statutorily bound to use the Clause 39 power to 135 apply to the rent officer whenever they are not satisfied that the rent does not exceed a fair rent. So the onus of satisfaction would be on the local authority and the question whether to apply to the rent officer would have to be decided without any statutory right or duty to consult the rent officer in advance. A responsible local authority might feel they could only discharge this onus by applying to the rent officer in all cases except where the agreed rent or highest such rent—that is, where the agreement provides for a series of rents—was below the authority's lowest estimate of the fair rent likely to be determined by the rent officer or rent assessment committee.
This might result in an unduly large number of references to the rent officer. What is more, the Amendment would to some extent conflict with the general intention of Clause 39 that a local authority reference to the rent officer should be in the nature simply of a request to the rent officer to check the rent, rather than an indication that in the local authority's view a certain rent is excessive. The Amendment would involve local authorities in reaching their own conclusions as to whether a fair rent was being exceeded, and the fact that a local authority referred a case to the rent officer would generally be assumed to reflect those conclusions and to be a strong suggestion by the local authority to the rent officer that he should reduce the rent. As, in London Boroughs and county boroughs, rent officers have to look to the local authority for their staff, premises, equipment, et cetera, such a suggestion could damage the public's confidence in rent officers' impartiality. This is just what Clause 39 seeks to avoid.
The intention of the Bill is that local authorities should exercise their new rights under Clause 39 in appropriate cases, and the Government intend that this expectation will be conveyed to local authorities following the passing of this Bill. As agreements are to be available for public inspection in their offices, local authorities would be open to criticism if they did not refer to the rent officer an agreement which provided for an excessive rent, and they are not likely to court such criticism. In the light of these considerations, I would advise the Committee not to accept this Amend- 136 ment. I quite accept that there is some force in it, but we certainly think it goes too far.
§ LORD STOW HILL
The noble Lord has given a careful and thoughtful answer, for which I am grateful to him. I know he will not take it amiss if I say that it does not leave me altogether convinced, but it is very late and I do not think that there would be any useful purpose in inviting the Committee to vote upon it. Therefore I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 44 agreed to.
§ Clause 45 agreed to.
§ 10.49 p.m.
§ Clause 46 [Failure to comply with provisions for protection of tenant]:
LORD DIAMOND moved Amendment No. 109GS:
Page 50, line 36, leave out subsection (4).
§ The noble Lord said: Clause 46(4) refers to the default which consists only in delay. The short point of this Amendment, which is put forward for probing purposes only, is that it is felt that there is already a withdrawal of protection from the tenant and an increase in protection for the landlord. Subsection (4) would enable the landlord still further to be protected and this would push the balance too far. We think it would be far better that this subsection should be removed and that the landlord, although perhaps it would be a little rough on him in certain circumstances, should have to be pushed, as he would be pushed by the rest of the clause, into complying with the provisions of the clause for protecting the tenant. I hope that I have made the position clear. As I say, the Amendment is not moved with a view to forcing it but with a view to probing the situation and finding out from the Government whether, if they are not willing to remove the whole of the clause, which part of it they would be willing to remove. I beg to move.
I should like to explain to the noble Lord. Lord Diamond, what the purpose of this clause is and to congratulate him, in a period of apparent temporary disarray, on being able to gather his thoughts so 137 quickly. Where on decontrol a landlord and tenant enter into an agreement increasing the rent, the landlord must, in accordance with Clause 44(5)(a), give to the local authority, not later than 28 days before the agreement takes effect, a document in the prescribed form which contains the prescribed particulars, and in accordance with Clause 44(5)(b) must, not later than 28 days before the date on which agreement takes effect, serve a copy of the document on the tenant. Under subsections (1) and (2) of Clause 46, if the statutory requirements relating to the making of agreements are not carried out, the landlord is not entitled to a rent increase which is agreed in the rent agreement.
This particular subsection modifies this position in cases where the landlord, for one reason or another, has omitted to comply with the time limit in Clause 44(5)(a) but has subsequently rectified his error. If the date on which the local authority receives the document containing the agreement is less than 28 days before the date when the first rent increase under the agreement becomes due, the landlord must not charge that increase earlier than 28 days after the receipt by the local authority of the document. Neither can he charge his 138 tenant the increase until the first rental period beginning after the tenant has had a copy of the document. A tenant's rights, therefore, are completely safeguarded by this subsection in that he cannot be called upon to pay any increase in rent unless and until the local authority has had the document con-taming the agreement for four weeks, and the tenant himself has received from his landlord a copy of the document containing the agreement. I hope that the noble Lord, Lord Diamond, will be satisfied that the tenant's rights are just as safeguarded as the noble Lord feared they might not be.
§ LORD DIAMOND
I am grateful to the noble Earl, Lord Ferrers, for what he said. I still have certain anxieties as to whether the tenant is as fully protected as he ought to be, but I shall read very carefully what the noble Earl has said. In the circumstances, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 46 agreed to.
§ House resumed.
§ House adjourned at five minutes before eleven o'clock.