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Phasing Of Rent Increases Where Rent For Dwelling-House Under Tenancy Is Registered

Volume 885: debated on Wednesday 5 February 1975

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I beg to move Amendment No. 5, in page 4, line 21, leave out from 'rent' to 'which' in line 27 and insert:

'(whether registered before or after the commencement of this Act).'

With this we may consider Government Amendments Nos. 6, 8, 9, 10, 11, 21, 24, 26 and 28 to 36.

The purpose of these amendments to to deal with especially steep increases in rents following the end of the freeze. Before I go any further, I direct hon. Members' attention to the explanatory material on the effect of these amendments, which has been made available. It was circulated to all members of the Committee and I hope that they found it helpful. Under existing legislation tenants whose rent increases were in course of phasing when the freeze began, and those who had rents registered in the early months of the freeze, might have to pay an increase made up of two phased increases immediately after the end of the freeze—either together or within a short time of each other. In many cases this would result in very steep increases and would wipe away much of the counter-inflationary benefit of the freeze.

The effect of the amendments is to allow rents to be increased at a steady rate towards fair rent levels, following the end of the current standstill. The amendments can be summarised as follows.

For rents registered before the freeze which were already subject to phasing the new paragraph 5A provides that they shall resume phasing at the next stage which they would have been due to reach had the freeze not occurred, instead of resuming at two levels of phasing higher. This would have happened in a very large number of cases.

Sub-paragraph (3) of the new paragraph 5A provides that for rents registered during the freeze which would have been subject to existing phasing provisions, phasing shall begin from the end of the freeze instead of from the date on which the rent was registered.

Paragraph 5B introduces the same arrangement for rents registered before or during the freeze which were not previously entitled to phasing and which had not been increased to the registered rent when the freeze began.

The amendments are made within the framework of the fair rents system, which we introduced in 1965. As my right hon. Friend indicated on Second Reading, we are undertaking a longer-term review of housing policies and finance and we shall be looking closely at the system of "fair rents" as part of that review. In putting down these amendments, we are attempting to reduce the impact of steep increases in the post-freeze period. In that sense, they are designed to deal with a situation at a particular period of tme.

The changes will, however, enable us to make steady progress towards "fair rents" from what we must recognise as in many respects a low rent situation in Scotland. As I said when we discussed an earlier group of amendments, this perhaps has made worse some of the problems arising from that policy. The amendments are made in keeping with the "fair rent' system. They do not significantly impede progress towards "fair rents", and they do not interfere with established rights of application for re-registration of a fair rent three years after the original registration.

The new phasing arrangements make it possible to repeal—and so rationalise—the existing phasing provisions contained in the initial Rent (Scotland) Act 1971 and the 1972 Act immediately, instead of in two years as the Bill provides at present. Most of the amendments in this group are consequential upon this change. We are all concerned, in the interests of the public, whom the Bill affects so directly, to simplify the legislation on private rents as far as possible, and we are therefore proposing that we should make this Bill the sole piece of legislation to which anyone need refer concerning phasing, instead of perpetuating phasing provisions in two other Acts.

I hope, therefore, that my hon. Friends will support me in these amendments, which attempt to solve sympathetically yet rationally the problems of phased rent movements, particularly in the post-freeze period. I commend the amendments with enthusiasm as being an attempt to introduce an element of justice to all concerned in a situation which has arisen because of the freeze.

Will the hon. Gentleman answer two brief questions?

First, has he discussed this proposal with representatives of rent assessment committees, and do they envisage any practical difficulties? The committees will be meeting to consider new rents and a period of re-registration when the tenants will not be paying the rents which would have been paid according to their previous decisions.

Secondly, the Minister explained that new Clause 1 was not being introduced in England and Wales. To what extent is this bringing about a variation in practice, compared with the situation in England and Wales?

Dealing with the hon. Gentleman's first question, as I said earlier, I have had informal discussions with some of the people concerned in the operation of the Rent Act. Again, I can give the hon. Gentleman a fairly categorical assurance that this proposal should not present any problems from the point of view of administration or from that of the application of the fair rents policy.

As the hon. Gentleman knows, we are proposing simply a phasing arrangement which does not alter what might be described as the anniversary date of the registration of a rent. In some cases the tenants will arrive at the anniversary date where the rent can be re-registered, even though in some cases they will not have reached the fair rent. It does not cut across the basic principle of aiming towards a fair rent. However, because of the freeze and because of what we are doing, there is this difference in the final stage when the next registration may take place. In other words, it does not alter the date for that, but it means that in some cases the fair rent may not have been reached. It will not present any problems. It does not even introduce a new consideration, because the existing fair rent is already known and established.

As for the hon. Gentleman's second question, we are happy to be able to say that what we have done here is slightly better than the English and Welsh have done. This might have been appropriate to our debates in the past two days. The only provision made in the English and Welsh legislation is for those rents registered during the freeze. We are bringing in the category of rents which were registered before the freeze. I am sure that hon. Members will compliment us on having the initiative and vision to be slightly different and, as usual, better.

Amendment agreed to.

Amendment made: No. 6, in line 30, leave out subsection (4) and insert:

'(4) The following provisions shall cease to have effect—
  • (a) section 79 of the 1971 Act and Schedule 13 thereto;
  • (b) section 37 of the 1972 Act and Schedule 6 thereto.'.—[Mr. Hugh D. Brown.]