Housing Rents And Subsidies Bill As amended (in the Standing Committee), considered. New Clause 1 Revocation Or Counter-Inflation Orders '(1) The Counter-Inflation Orders are revoked. (2) In this section "the Counter-Inflation Orders" means— (a) the Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974; and(b) the Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974. (3) Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the Counter-Inflation Orders as it applies to an enactment which is repealed by another Act. (4) Notwithstanding the revocation of the Counter-Inflation Orders by this section. Article 5 of the order mentioned in subsection (2)( a) above (recovery of excess rent) shall continue to have effect, for the purposes of both orders, so as to enable a tenant to recover rent at any time during which he would have been able to recover it if the orders had not been revoked. (5) Notwithstanding the revocation of the orders, Article 8 of the order mentioned in subsection (2)( a) above (jurisdiction of the county court) shall continue to have effect, for the purposes of both orders, in respect of any proceedings commenced before the expiry of a period of two years from the date of the revocation. (6) Subsections (4) and (5) above shall continue to have effect during the periods specified in them, whether or not Part II of the Counter-Inflation Act 1973 (under which the Counter-Inflation Orders were made) is in effect for the whole of those periods'.—[ Mr. Kaufman.] Brought up, and read the First time. The Under-Secretary of State for the Environment (Mr. Gerald Kaufman) I beg to move. That the Clause be read a Second time. Mr. Deputy Speaker (Mr. George Thomas) With the new clause it will be for the convenience of the House to discuss Government amendments Nos. 3, 4, 5, 6, 7, 8 and 9 and the following Opposition amendments: No. 3, in page 2, line 9, leave out Clause 2. No. 9, in Clause 2, page 2, line 41, at end insert— '( ) Nothing in this section shall empower the Secretary of State to make an Order restricting the rents of a particular named local authority or local authorities'. Mr. Kaufman New Clause 1 revokes an order which imposed a rent freeze from 8th March last year and the order which extended it after 31st December. It is designed to prevent the confusion which would arise if there were an overlap between the new provisions and the rent freeze. The Government amendments and new clause would extend the Government's reserve order-making power to limit rents to private sector rents as well as to rents in the public sector. The power to make orders to restrict rents in the private sector under the Counter-Inflation Act 1973 will come to an end when Part II of that Act ceases to have effect in March 1976. The Government accept the arguments that as we have an order-making power for public sector rents it would be inconsistent not to have an order-making power for private sector rents, too. Dwellings in a property subject to a business tenancy under Part II of the Landlord and Tenant Act 1954 are excluded from the definition of "dwelling." Tenancies of mixed premises of this kind are dealt with as business tenancies, and this exclusion ensures that they remain on that side of the business-residential dividing line. Tenancies of mixed premises which enjoy the protection of Part II of the 1954 Act have always been outside rent regulation. The rent-fixing machinery of the Rent Act 1968 is not suited to business premises. The order-making power continues for dwellings the power available under Section 11 of the 1973 Act. Mr. Nicholas Scott (Chelsea) The main question to which the House is addressing itself in all this is whether the powers which are contained in Clause 2, and now in new Clause 1, are appropriate to housing legislation or should more properly be in counter-inflation legislation. The Opposition hold firmly to the view which is apparently held by the Secretary of State who said on Second Reading, "the general level of rents cannot be divorced from counter-inflationary policy."—[OFFICIAL REPORT, 18th November 1974; Vol. 881, c. 906.] We believe that it would be better to keep these powers to control rents, whether in the private or public sector, in legislation specifically for the purpose of countering inflation. The present counter-inflation measures continue until 1976 anyway and whatever succeeds them will be a matter for later discussion, but we do not accept that these powers should be part of a permanent system of housing legislation. In addition to that first complaint we are also concerned that there might be a temptation for the Government to impose orders under Clause 2 on specific local authorities by one means or another. We discussed this matter in Committee but we were not satisfied with the outcome of those discussions. We were told that the whole concept of the Bill was that it restored autonomy to local authorities in rent-fixing matters. We should like an assurance that there is no question of the powers in Clause 2 being imposed on a single named local authority or a group of named local authorities, and that the powers in the new clause cannot be imposed on single named or groups of named landlords. We should like an assurance that the powers can be used only in an overall manner as part of a counter-inflationary package. Will the Minister make it perfectly clear so that we may take it absolutely for granted that when the Bill receives the Royal Assent the rent freeze on residential properties will end and the phasing provisions can begin to operate? If that is the case it will clear up a lot of uncertainty, and once that fact is known outside it will settle a considerable number of worries. Mr. Kaufman That applies to private rents. The freeze on public rents ends on 31st March. Mr. Scott The fact that the business rent freeze was ended before the freeze on residential rents ended has already caused difficulties for some landlords whose lease from the head leasholder may be a business tenancy, whereas their rent onwards comes under the residential rent provisions. They have been caught by their main rent being put up with the ending of the business rent freeze. There is no way in which they can recoup that, as long as the residential rent freeze goes on. At least under the phasing provisions they will be able to recoup that extra burden that they are having to carry on their own. We object in principle to these powers being in a housing measure. We are worried that they could be applied to individual local authorities or to individual landlords. We should like the Minister to deal with the second detailed point when he winds up the debate. 10.15 p.m. Mr. Arthur Latham (Paddington) I find it a little difficult to deal with so many aspects in one group of amendments. I want to comment on three matters. First, with regard to the new clause, it has occurred to me that if, as is desirable from many points of view, the Bill becomes an Act before 31st March, the effect will be that for private tenants the freeze will end sooner than had been expected. There are two arguments why that should not happen. One is that there is a case for the period of the freeze on private rents being in accordance with the period of the freeze applied to local authority tenants. A common date for the phasing and ending of the freeze seems to be more equitable. Secondly, as tenants in the private sector have been led to expect, since the announcement preceding the publication of the Bill, that their rent will be frozen until 31st March, they will have a natural feeling of disappointment if the Act should become operative sooner than 31st March and the new clause has the effect of unfreezing their rents sooner than they had reason to believe. It is too late to do anything about that in this Chamber. I welcome the new clause and the general intentions behind it, but it might be desirable to insert 31st March for the revocation of the counter-inflation orders when the Bill reaches another place. If the Bill does not become law until after 31st March, the freeze will extend until it is operative. There is a strong case for ensuring that the freeze will not end earlier if the Act receives the Royal Assent before 31st March. Next I want to comment on the Opposition's proposal to make it impossible to name an authority in an order made under reserve powers. I hope that my hon. Friend the Minister will confirm the assurance he gave in Committee that the reserve powers, while not directed at a single authority, could in effect bring into line an odd couple of authorities in, say, the London area which were proposing grossly excessive rent increases, completely out of line with the general pattern of the rest of the London boroughs. If under the Bill as it stands, an order could have the effect of being applicable to only one or two authorities out of a number to which it would theoretically apply, I do not see what the Opposition would gain with their amendment. The only difference between the position as it would then be and the definition already given in Committee by my hon. Friends would be that the local authority concerned would lose the opprobrium of having its name cited in the order. The effect would be precisely the same—namely, that a general order could be made which might affect an individual or a couple of authorities whether or not the one or two authorities be named in the order. It is important that my hon. Friend underline too the assurance he gave in Committee about the use of the reserve powers. I turn to the extension of reserve powers to private sector rents. The proposal is one of three welcome responses from the Government to representations made in Committee by Labour members of the Committee. It might be worth placing on record the description that my hon. Friend the Under-Secretary of State gave to our activity in Committee—namely, that we were not providing a substitute constructive opposition for Conservative Members but giving constructive support to the Bill. The extension of reserve powers to private sector rents is one of the three responses to the constructive support that we gave in Committee. Having welcomed the extension of reserve powers and the fact that the Government agree that there is no reason to discriminate between the two sectors in the application of reserve powers, I suggest that the next step will be to persuade the Government to make use of the reserve powers which the House is being asked to write into the Bill. I now ask for some specific assurances. New Clause 2 will deal with a problem which is symbolised by St. Mary's Mansions within my constituency. If the new clause goes into the Bill and has the effect that many of us hope it will have, the problem will have been resolved. But if the problem of tenants facing rent increases of £9 a week, as faces the tenants of St. Mary's Mansions, is not met by the new clause that we shall shortly be asked to consider, I want an assurance that my hon. Friend will agree that the reserve powers now being written into the Bill will enable or empower him to make an order affecting the tenants in the position of those in St. Mary's Mansions. Secondly, having, I hope, received the assurance that the reserve powers will be adequate to meet the situation that I have outlined, I ask my hon. Friend for a political assurance that it will in general principle be the Government's intention to use the powers in such a way. I am trying to tread warily and not to put myself out of order by anticipating a new clause. I think that you understand the difficulty, Mr. Deputy Speaker. The use of reserve powers will be necessary only if the subsequent new clause is not written into the Bill or if it does not operate successfully. That is why I am seeking—I think with some justification—an assurance regarding the use of the reserve powers. It seems that in tabling the new clause that we shall soon be discussing the Government have accepted that there may be instances where the proposed rent increases in the private sector are grossly excessive. I know that my hon. Friend feels—I want to comment on this matter when we come to the new clause—that the factor which has caused grossly excessive rent increases relates to neighbourhood amenities. By introducing such a new clause he is accepting in principle that there is something wrong with grossly excessive increases. In Committee it was established that the probability was that about 15 per cent. of private tenants who might be affected in that way. If the Government accept that there are grossly excessive rent increases which should not occur and if their other method of trying to deal with such increases fails, it seems that the Government would be justified, on the basis of the opinion that is expressed by implication, in using reserve powers to limit grossly excessive increases. I seek an assurance that the Government will have the powers and the will and determination to use their powers in such a way if it proves necessary to do so. Mr. Nick Budgen (Wolverhampton, South-West) I am grateful to you, Mr. Deputy Speaker, for allowing me to take up the point made by the hon. Member for Paddington (Mr. Latham) concerning the possibility that these powers might be used against an individual authority. With great courage and clarity, in Committee the Under-Secretary of State said: "We specifically do not wish to take power to deal with an individual authority."—[Official Report, Standing Committee A, 3rd December 1974; c. 133.] In the light of his important position, we naturally believed that the Under-Secretary of State would adhere to that expression of opinion. But later, when he was pressed by his hon. Friends, it became clear that that was not his intention after all. He spoke movingly of enormous increases of £1 a week as a result of the Bill, adding: "What I was saying in reply to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) was that if a pattern were to emerge of large cities imposing enormous rent increases—my hon. Friend said £1 a week was a possibility being mooted in his city—we should clearly have to consider action under Clause 2."—[Official Report, Standing Committee A, 5th December 1974; c. 196.] It is clear that an increase on average of £1 a week is regarded as enormous, reprehensible and wholly wicked for council rents, which would justify taking the most Draconian powers limiting local democracy. The Under-Secretary of State must make clear whether he is saying that these powers can be used against an individual authority or can only be used generally. In many other areas of the country, an increase of £1 a week on the rents is not regarded as Draconian or reprehensible. In the private sector, the building societies work on the rough guide that an ordinary family will spend about one-third of its income on housing. I suppose that, on the basis of regarding a rise of £1 a week on average in council house rents as enormous, the Minister would be surprised if he heard that at any stage wages were rising by more than £3 a week, but in November they were rising at the rate of 3·4 per cent. in one month alone. Wage increases of 30 per cent. are quite normal. It is reprehensible to describe as "enormous" an increase of £1 per week on average for council houses. Such a rise is a small way in which a section of the community—those who need it are supported by allowances if they cannot meet anything approaching a fair rent—can contribute towards paying off the enormous subsidies now being given to council tenants. In that respect, the House should know the quite extraordinary attitude that the Under-Secretary of State evinced towards public expenditure generally when he was talking about subsidies. I hope that his remarks about them receive widespread publicity, but in the national interest I hope that they will not be translated into Arabic, because if the Arabs were to know about the Government's attitude towards public spending they would cease to lend any more money to us. As reported at column 180 the Minister said: "It is clear that my right hon. Friend the Chancellor, for obvious reasons, would like every Department to spend as little as possible. That is the purpose of Chancellors of the Exchequer, certainly in the eyes of the hon. Member for Wolverhampton, South-West (Mr. Budgen). We are honing to confound my right hon. Friend. I have gone round the country addressing special conferences of local authorities urging them to build far more houses and" —and this is the punch line, the great peroration of the responsible Minister— "put my right hon. Friend the Chancellor in trouble."—[Official Report, Standing Committee A, 5th Dec., 1974; c.180.1 That is the attitude of a Government which has a borrowing requirement of £6·3 billion and which is crucially dependent on the good will of the Arabs. I hope that in the light of the enormous sums of money now being spent on indiscriminate subsidy of council housing the Government will not limit the local democratic right of those councils which take a different view on public expenditure and believe that the time has come for some sanity in our nation's finances. Mr. Anthony Nelson (Chichester) I support a number of the comments of my hon. Friends particularly those made by my hon. Friend the Member for Chelsea (Mr. Scott), dealing with the appropriateness of new Clause 1. The arguments against implanting such powers into Clause 2 have been well argued in Committee. In view of the intention expressed in Amendment No. 4 to extend these reserve powers to the limitation of private sector rent increases it is doubly important that the House should discuss this question. It must be noted that such an innovative new clause has been introduced at this stage. It is an innovation which will have a widespread and important impact and which we should have had the opportunity of discussing fully in Committee. I would like to know whether the reserve powers can be used under Clause 2 to apply solely to the private sector while leaving unrestrained the level of rent increases in the public sector. I do not wish to imply that there might be a political motive for restraint in one sector as opposed to another but the opportunity is undoubtedly there. It is right that the House should question the implanting of this provision. Reserve powers are, or should be, powers which the Government hope they will not have to invoke. Such powers should be of limited duration or at least subject to review. Their inclusion in an Act of Parliament makes them subject neither to duration nor review. It is the immortality of the power to control public and private sector rent increases which I find particularly objectionable. In Committee the Under-Secretary said: "a power of this kind should be of a longer-term nature ".—[Official Report, Standing Committee A, 5th December 1974: c. 168] I do not think it should be. Unless the Government are prepared to accept that the current high rate of inflation will be of a long-term nature they should leave open the possibility at a later stage of enabling local authorities and the private sector to set their own rents without Government intervention. As the main intention is to accord to local authorities the freedom and responsibility of setting their own rents it is fundamentally incompatible to introduce a clause which restricts such actions by local authorities. We have frequently been told that such powers will be used only as a long-stop. Once they become available we know how frequently these orders under reserve powers can be made. The House and Committee have still to receive a satisfactory explanation of the circumstances under which orders under this clause may be made. We have been told that, following the expiry of the Counter-Inflation Act, "the Government do not envisage further statutory wage provisions." If so, to what counter-inflationary criteria does the clause relate? On 18th November last year the Secretary of State said: "rents are a key price … in the context of the social contract."—[Official Report, 18th November 1974; Vol. 881, c. 910] But what provisions of that social contract relate to the point at which the Government will take up their powers under this clause? It is a degree of certainty that local authorities must have in forward planning and meeting their commitments and which the clause does nothing to provide. In Committee I said that this clause was particularly relevant to my constituency, because Chichester has a substantial private housing sector. We have a large number of houses owned by people just prior to retirement and a large number of resort homes which are let on half-yearly rentals, for example. These people are having a very hard time indeed. Last week one gentleman wrote to me saying that he was receiving rents on three properties, which he was obliged to maintain as a life tenant, of between 51p and 81p a week. Although these properties undoubtedly lack certain amenities, there can be no encouragement or incentive for him to maintain them in a satisfactory manner. Furthermore, we have a council housing list of over 3,000 and at the same time large private sector residential accommodation left vacant. The network of Rent Acts and rent restrictions being immortalised in this clause is providing a good deal of vacancy in my constituency and a large increase in the number of homeless families and those awaiting coucil houses. The more intervention we have with this system, the greater the anomalies which are created in the market. I urge the House sincerely to consider those specific arguments before importing into the Bill an important and immortal clause which, under the present counter-inflation orders, would at least be subject to review and limitation. Mr. Stephen Ross (Isle of Wight) I did not intend to intervene until Third Reading, but as the Liverpool City Council has been mentioned in Committee and on Report now by the hon. Member for Wolverhampton, South-West (Mr. Budgen) I should like to refer to some points which have been made to me. I do not want to throw fast balls at the Minister. The Chief Executive of the Liverpool City Council has sent me a note referring to Liverpool's housing revenue account, to which this clause and Clause 3 relate, which states: "From October 1973 rents have been collected at an average level of £3·80 per week per dwelling, but, pending a decision by the Rent Scrutiny Board upon fair rents, the difference between the rents collected and the Council's proposal for provisional fair rents has been held in reserve. This being so, the lower level of rents has been credited to the revenue account, and the maximum subsidies have been claimed and received.The Rent Scrutiny Board has now ceased to operate without making a decision upon the Council's proposal. Under the provisions of the Housing Rents and Subsidies Bill the Council could well be required" —this may apply elsewhere— "to bring into credit the amount of rents held in reserve, reducing the rising cost subsidy claimed for the single year 1974/75 by £2·4 million. As a result the basic element of grant under the Bill for 1975/76 and for each subsequent year would be reduced by the same amount. If such a shortfall of expected subsidy were to be met from rents it would call for an increase of 65p per week per dwelling." I am glad that that is below the £1 a week quoted elsewhere. They are asking for an assurance that the amount already received by way of rising cost subsidies, of about £10 million, can be relied on as the final determination for this and subsequent years. If that is not possible, it would be helpful to have an assurance that, if the rents reserved have to be credited to the housing revenue account, they will give rise to a once-and-for-all adjustment and not to a recurring reduction in grant. I find some of this fairly difficult to assimilate, and I am prepared to pass on the letter to the Minister if he would rather reply in writing. After the comments that we have heard, however, this pinpoints some of the difficulties of local authorities, particularly Liverpool, which was singled out in Committee and has been mentioned tonight, although not in a derogatory way, by my hon. Friend the Member for Wolverhampton, South-West. There is a discrepancy over lodger charges. It appears from a reply of the Minister to my hon. Friend the Member for Devizes (Mr. Morrison) that this will now be something for the local authorities to deal with themselves. Many people have been hit hard by the freeze on rents, which, for reasons that I do not understand, seems to have been applied to lodger charges. Will any directions or advice be given to local authorities? I have in my hand a reply from the Under-Secretary of State. If he could clarify this matter I should be grateful. Mr. Michael Morris (Northampton, South) I do not want to press the Minister much further on these reserve powers, but I should like to quote the interpretation of the matter that he gave in Committee: "The power does not apply to individual councils.' He went on: "If the hon. Gentleman will look at his bruised neighbour on his left, the hon. Member for Melton (Mr. Latham), he will see a man whose amendment to insert the word 'individual' was rejected by the Committee.…" [Official Report, Standing Committee A; 5th December, 1974, c. 171.] That of course means that it was rejected by the Government. So we should be grateful for a clear statement of exactly how these reserve powers will be applied. Either the hon. Member for Paddington (Mr. Latham) will be disappointed or we shall have to realise that we have been misled. Amendment No. 3 comes ill from the Labour Party, who for some time have been the champions of local democracy. One is suspicious when one sees how much is made of reserve powers and when an additional element is brought in even on Report. Would it not be more truthful for the Government to say frankly that they wish to keep a pretty tight control over local authority rents, and that, as soon as they think that local authorities are stepping out of line, they will clamp down? If that is not the situation, I hope that these reserve powers will be clarified. I raised in Committee the question of compensation in the event of the reserve powers being implemented. I have talked with a number of local authorities since Committee. In terms of the broad brush techniques which the Minister is happy to use in Committee, surely broad brush compensation would be better than having to rely on the Secretary of State's generosity in the rate support grant. If this cannot be considered tonight, I hope that it can be considered in the other place. Local authorities will have to force considerable hardships on their ratepayers if these reserve powers are implemented. 10.45 p.m. Mr. Kaufman Turning first to the points made by my hon. Friend the Member for Paddington (Mr. Latham), I congratulate him once again on the fight he has waged in this House on behalf of his constituents living in St. Mary's Mansions. There are a number of matters which require clarification. My hon. Friend is concerned in case the end of the freeze on the rents of private tenants does not occur simultaneously with the end of the rent freeze for local authority tenants. Because of that, he seeks that the freeze for both kinds of tenants should end on 31st March. My hon. Friend said that tenants have been led to expect that the freeze on private rents would continue until 31st March. The private sector order provides that the freeze shall end on 31st March 1975 or the date immediately preceding that on which the principal order is repealed by, or revoked under, any enactment, whichever is the earlier. Therefore, I have never in pronouncements to my constituents told them that the private rent freeze would end on 31st March. I told them it was likely to end some time in March. Even if we were to end the private rents freeze on 31st March this would not mean that local authority rents and private rents would then start rising simultaneously, because it is now open to local authorities to decide when their rents shall rise. It is extremely unlikely that any particular single local authority rents will rise on 1st April. Local authorities will make their decisions and the increases will be scattered over a period, according to the discretion of the local authority and what it wants to do. Therefore, not only will there be no simultaneity on this but there can be no simultaneity. What my hon. Friend seeks—and I recognise his motives in seeking it—is not in fact possible. I should like to repeat and underline the assurances I gave in Committee about the way in which the power will be used. I cannot anticipate the use of reserve powers since the use of a reserve power cannot be anticipated. On the other hand, the fact that we are asking the House to agree to amendments extending that reserve power to the private sector means that we envisage the possibility that it will be used. One cannot anticipate the circumstances. I assure my hon. Friend that what I said in Committee stands—that is about the emergence of a pattern being a signal for the possible use of the reserve power. Naturally I am willing for that to go on record in the House just as it did in Committee. The hon. Member for Wolverhampton, South-West (Mr. Budgen) invented for me a most agreeable fantasy in which my words were to be reprinted in Arabic. I am happy and delighted for any words of mine to be reprinted in that extremely attractive language. On the other hand, I think that the hon. Member, although utterly consistent in what he says, would not wish his words to be printed in any Conservative Party election manifesto. When he described the kinds of reserve powers that we are proposing in this Bill as "most Draconian powers" he is, of course, as he often does, attacking his own Government which, when in office, brought in these powers which we readily used in the Counter-Inflation Act 1973. The hon. Member for Chichester (Mr. Nelson) spoke extremely sternly about the need for local authorities to be able to settle their own rents rather than be confused by this wicked Labour Government. This Bill, which I trust will be passed tonight, will restore to the local authorities the right to settle their own rents which was taken away by his own Government in the Housing Finance Act 1972, which we shall be largely repealing tonight. That being so, I trust that the hon. Member's zeal for local authorities to settle their own rents will lead him into the Division Lobby with us, should there be a Division on Third Reading. The hon. Member for the Isle of Wight (Mr. Ross)— Mr. Arthur Latham I hope that my hon. Friend will return to my points about the use of reserve powers and the scope of those powers as applied to the private sector. Mr. Kaufman I shall be coming back to the question of reserve powers. I was reserving as the bonne bouche of my speech my reply to the hon. Member for Chelsea (Mr. Scott). Returning to my remarks about the hon. Member for Isle of Wight, whom I congratulate on coming so gallantly to the aid of that forlorn remnant who for the time being are running the City of Liverpool, I hope that he will pass to me the letter from the Chief Executive, and I shall be glad to give him a detailed reply as soon as possible. It is a complex matter, but I shall seek to assist him. Mr. Stephen Ross I must quote the hon. Gentleman's words in Committee when he said, referring to Liverpool, "We should have to consider very carefully the use of Clause 2 if a local authority of the size of Liverpool were to put rents up by £1 a week, taking into account the generous subsidies we are making available. There is no reason why average rents should rise anywhere near £1 a week under the subsidy arrangements under this Bill."—[Official Report, Standing Committee A, 5th December 1974. c. 194.] That was why I intervened as I did. The letter to which I referred shows the problem of a city the size of Liverpool, which I believe will continue to be represented by an excellent party, but I am sure that there are other authorities in the same position. I shall pass the letter to the hon. Gentleman, and I am grateful for his undertaking to reply as soon as possible. Mr. Kaufman I am obliged to the hon. Gentleman, though I must say that there can be no responsible authority which will find it necessary, with our subsidy arrangements, including the special element, to increase its rents by an average of £1 a week or anything near it. That will be embodied in my reply to the hon. Gentleman when I take account of what is in the letter from the Chief Executive. As for lodger charges, I recognise that it is puzzling to hon. Members that local authorities can now make these decisions for themselves. It will be for local authorities to decide. The Government will no longer decide every scintilla of local government rent policy, and a happy outturn that is. The hon. Member for Northampton, North (Mr. Morris) very much deplored what he called "the pretty tight control" of local authority rents. He was referring to the reserve power in Clause 2. But this description is far more aptly relevant to the Housing Finance Act, which laid down so rigidly every detail of the way in which local authorities should increase their rents. As for the compensation point made by the hon. Member for Northampton, South (Mr. Morris), I cannot go further than what was said in Committee. If I gave the hon. Gentleman the assurance that he seeks, there would be a temptation for local authorities to impose very large rent increases, knowing that under the commitment which the hon. Gentleman seeks they would qualify for very large assistance from the Exchequer to compensate them for rent increases which they did not really intend and did not need to impose. Mr. Michael Morris How could that happen, when the Bill lays down that the housing revenue account has to be in balance, give or take a little? That safeguard is there, so that the hon. Gentleman's supposition does not stand up. Mr. Kaufman The hon. Gentleman is far too experienced in local authority finance to think that I shall fall for that one. I turn now to the speech of the hon. Member for Chelsea, with whom I shall couple my hon. Friend the Member for Paddington in what might be a happy coupling, considering their previous associations. The hon. Member for Chelsea should not be so appalled about the existence of these powers. They have been in a Housing Act before. It was a Labour Government's Housing Act. It was none the worse for that. We are merely going back to where we were before—namely, inserting these powers into where we believe they ought to be, that is, in a Bill which deals with housing and rents rather than the Counter-Inflation Act. I would tell the hon. Gentleman—I say the same to my hon. Friend the Member for Paddington—that these are long-stop powers. In both the public and the private sector, they are long-stop powers. Amendment No. 9 is unnecessary because the Bill as it stands already achieves what the Opposition seek. This is because the order-making power, Clause 11(5), may apply to any specified description of authorities or dwellings only. But the Bill goes no further as regards orders, in contrast to the determination-making power in Clause 11(6), which gives the Secretary of State the additional power to make determinations applying to individual authorities. The amendment is therefore unnecessary. I assure the hon. Gentleman that—even if I repeat what I said to him and to my hon. Friends in Committee—this is a long-stop power. We hope that it will not be necessary to use it. If local authorities all show good sense in the way that they approach the fixing of their rents, it will not be necessary to use it. But at the same time, we have brought this in as a reserve power in order to deal with the kind of situation which I described in Committee, and that is the emergence of a pattern, a majority or minority pattern of the kind which we discussed in Committee. I stand absolutely by what I said to the Opposition in Committee—namely, that this is not a power designed to deal with individual named authorities, nor can it even if we wished so to use it. I say to my hon. Friend the Member for Paddington, on the other hand, that we have this power ready for use should a pattern of one kind or another—a majority or a minority pattern, as one can so describe them—emerge. As for private rents, I recognise my hon. Friend's concern about the St. Mary's Mansions position. I cannot—he would not expect it of me—give him an assurance that we shall use this power if after the New Clause 2 to be moved has been tested, the St. Mary's Mansions situation is not to his satisfaction or to the satisfaction of his constituents. But I repeat that we are not asking the House to insert this power into the Bill idly. We are asking for it to be inserted in the Bill for use should the occasion require. I hope that my hon. Friend will not seek to draw me any further, just as I hope the Opposition will not do so as I have dealt with the specific Amendment No. 9. Mr. Arthur Latham I shall not press my hon. Friend about the point on which he has asked me not to press. I do not expect to get very far with the question of the hypothetical situation in which the powers would be used. But I think that my hon. Friend is, and should be, able to answer the first of my two questions about the reserve powers in the private sector, including St. Mary's Mansions, and to say whether the powers are such that they could be used to deal with that situation if what many of us hope will be the effect of New Clause 2 proves to be disappointing. I accept that these are long-stop powers. What I am asking, in effect, is whether they can be regarded as backstop powers. The Minister undertook to check that this was so, and if it is so, I want to get it on record tonight. Mr. Kaufman I assure my hon. Friend that there is technically no reason why we should not do what he asks us to do. It is open to us in the use of these powers, in both the public and the private sector, to deal with categories of dwellings. We need not deal with the whole range of private sector dwellings. We can take out a category of one kind or another. I hope that that will help my hon. Friend, although I know that he would like me to give him far more specific assurances. Question put and agreed to. Clause read a Second time, and added to the Bill. Mr. Scott On a point of order, Mr. Deputy Speaker. We were given an indication that it would be possible to have a vote on Amendment No. 3. Mr. Deputy Speaker (Sir Myer Galpern) That is so. We shall have a vote. New Clause 2 Certain Amenities To Be Disregarded In Determining Fair Rent '(1) The following paragraph shall be inserted after paragraph ( b) of subsection (3) of section 46 of the Rent Act 1968 (determination of fair rent):— "(bb) the provision in the locality after the material date of any new amenity or the improvement after that date of any amenity already existing in the locality, where the amenity is provided or improved— (i) at the cost of a person other than the landlord or a superior landlord, or(ii) by a body of a public nature which is a superior landlord, in the exercise of functions of a public nature; and". (2) The following subsection shall be added at the end of the said section 46:— "(5) In subsection (3)(bb) above "the material date" means— (a) where a rent is registered, the relevant date, as defined in section 44(4) above, and(b) where no rent is registered, 8th March 1971.". (3) Where a rent has been registered or confirmed on or after 8th March 1974 but before the coming into force of this section, the tenant may apply, not later than the end of a period of six months from the date on which this section comes into force, for another rent to be determined, in place of that rent, on the ground that the determination or confirmation took account of a matter which would have fallen to be disregarded by virtue of section 46(3)( bb) of the Rent Act 1968 if that provision had then been in force. (4) Schedule [disregard of amenities] shall have effect. (5) Expressions used in this section or in the said Schedule and also used in Part IV of the Rent Act 1968 shall have the same meanings as in the said Part IV'.—[ Mr. Freeson] Brought up, and read the First time. 11.0 p.m. The Minister for Housing and Construction (Mr. Reginald Freeson) I beg to move, That the Clause be read a Second time. Mr. Deputy Speaker With the new clause we may also take the new Schedule. Mr. Freeson The clause amends Section 46 of the Rent Act 1968, which prescribes the basis upon which fair rents are to be determined, in line with our general undertaking in Committee to look at this possibility. It is designed to prevent tenants from being faced with large rent increases when the amenities in the locality of their houses have been improved. This would apply in the case of general improvements and also where properties have their localities improved as a result of the declaration of general improvement areas, housing action areas and priority neighbourhoods under the Housing Act 1974. It provides that in the determination of a fair rent the provision of any new amenity or the improvement of any existing amenity in the locality of the dwelling carried out otherwise than at the cost of the landlord or a superior landlord and completed after a certain date shall be disregarded. The clause also provides that where a rent has been registered or confirmed during the current rent freeze, that is to say on or after 8th March 1974 and before the coming into force of these provisions, and where a tenant claims that the rent officer or the rent assessment committee took into account any matter which would have fallen to be disregarded by virtue of this clause had it then been in force, the tenant may apply for the determination of another rent on the basis of Section 46, as amended by the clause, in place of that which was previously registered. The procedure for applications for the determination of a new rent under this clause is set out in the new schedule. Subsection (1) contains an amendment to Section 46 of the 1968 Act. A new paragraph is inserted into subsection (3) of that section which sets out the matters to be disregarded in the determination of a fair rent. Subsection (2) adds a new subsection to Section 46. It defines the dates from which new or improved amenities are to be disregarded. Where a rent is already registered, the material date is the date defined in Section 44 of the Rent Act 1968, namely the date on which that registration took effect. That is normally the date of application to the rent officer. This means that the clause will allow tenants who, when the Bill becomes law, may be faced with rent increases which are partially due to neighbourhood improvements to apply for a new rent to be determined. It will in the future be for the rent officers and, as appropriate, the rent assessment committees, to ignore such neighbourhood improvements and in one case recommend, or in another adjudicate on an appeal on a rent to be regulated and registered. I shall turn briefly to the new schedule. It sets out the procedure to be followed for the determination of the new rent in place of the registered rent when application is made under the new clause. It requires the rent officer or the rent assessment committee to consider whether the determination or confirmation of the fair rent took account of the matters which, by virtue of the amended Section 46, would have been disregarded, and spells it out in some detail. Mr. Michael Morris I find the clause most surprising. Are the Government saying that where there are amenity improvements—perhaps gardens which were previously bomb sites, or a traffic management scheme, or additional facilities, with traffic removed from an area—the tenants shall be treated as if the improvement had not been made? Are they saying that the rent levels shall remain exactly the same as for comparable properties on a main road, where the tenants suffer from noise and do not have the benefit of any of those facilities? Do the Government realise the implications of the clause? The Minister must know that in determining their reasonable rent, particularly on large council estates, local authorities take the amenties into consideration. Some of the new developments quite rightly have first-class amenities, which the rents reflect. The rents reflect the difference in amenties between one council estate and another, built by identical builders to identical Parker Morris standards. Unless the clause is part of a hidden counter-inflation policy, as a sort of long stop, it does not add up. If it is a serious proposal, it would have been better if it had been put before us in Committe, where we could have considered it in depth. We saw it only just before the weekend. I hope that the Minister will answer the point about what local authorities will do about their amenities. Are they to disregard them as well? Mr. Bruce Douglas-Mann (Mitcham and Morden) I welcome the proposal in the clause, which is much overdue. It is absurd that the landlord should have taken the benefit of an improvement in a locality to which he contributed nothing, collecting additional rent in respect of it. What a rent officer or rent assessment committee regarded as an improvement to a locality frequently meant to the low-income tenants a deterioration in the amenities they required, such as the loss of the kind of shop they needed and the gentrification which changed the nature of the area and increased the rental value but reduced the value of the area to the tenant. I agree with one point made by the hon. Member for Northampton, South (Mr. Morris). It is a pity that we were not able to discuss the clause in greater detail, in Committee, although my hon. Friend the Minister foreshadowed what was coming. I am sorry that we were not able to discuss it earlier, because certain difficulties will arise in the operation of the clause owing to the various dates which may become the material dates under subsection (2). I urge the Government to consider introducing further amendments in another place. If we have a provision that the material date shall be a date three years before the date when the measure comes into force, it will be possible for the rent officers in each locality to get to know the extent to which there have been changes there since a date in March 1972. They will be able to get to know what changes have taken place and will be able to make an appropriate allowance. With the variable dates that we have in subsection (2) the rent officers will have to assess in relation to each specific case that comes before them the changes that have taken place in the amenities of the area since 8th March 1971, 9th March 1971 or 10th March 1971 and so on, depending on the date of the last registration of rent. That will make it almost an impossible task, or at least a very difficult task, for the rent officers. It will very nearly be impossible for the rent officers to make an adequate determination of the amount that they should be disregarding when assessing rents. It will also make it more difficult to use comparable rents as a guide to the rent to be assessed in relation to individual properties. A rent assessed on 7th March would have had taken into account all the improvements that had taken place in the locality during the previous three years. For a rent assessed on 8th March 1974 the improvement in the locality must be disregarded over the preceding period. A lower rent will be registered or the tenant will be entitled to apply for a review of any rent registered after 8th March 1974. The comparable rents will go up to a peak, and then drop down. There will be no adequate basis for using comparables to assess what the new rent should be. I suggest that it would have been much more appropriate—I accept that whatever date is chosen there will be some anomalies—to say that the date should be put as far back as possible, to the earliest date practicable with which the rent officers are capable of coping. I would tentatively suggest a date three years before this measure comes into force. Rent officers would then disregard the improvements in the locality that have taken place since the given date. That could apply as long as a date is chosen that will not overload the rent officers completely. I hope that my suggestion will be considered seriously by my hon. Friend. I believe that it will prove difficult for rent officers to apply the test that the variable dates contained in subsection (2) provide. I believe that there would be fewer anomalies by fixing a date in the past from which could be disregarded the improvements that have taken place since, thereby giving a greater degree of certainty to the rent levels assessed. Such an approach would make life easier for rent officers and provide a greater degree of opportunity to use comparables in determining rents from now on. Subject to that comment, I entirely endorse the principle embodied in the clause. It is one which is wholly in accordance with the principles which I hope will be put forward in our proposals relating to land. Mr. Hal Miller (Bromsgrove and Redditch) I support the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) in his contention that a great deal of confusion is likely to be caused by the question of the material date for the purposes of the new clause. I support my hon. Friend the Member for Northampton, South (Mr. Morris) in his consideration of the likely effects of the clause in relation to other cases. I pay tribute to the Minister for the care that he has taken to brief members of the Standing Committee during the recess. I express my gratitude to him for the material that he has supplied. In the main it has been most helpful but it has also been slightly confusing to myself and to those I have endeavoured to consult during the recess. The new clause follows up a letter from the Minister of 6th January. His letter did occasion some difficulty and I should be grateful if at a later stage he would give us some figures to back his assertions. As I understand the position, we are talking about rents registered since 8th March, 1974. In subsection (3) there is now provided an opportunity to bring a claim for the matter to be reassessed. Is not this trying to gild the lilly? Will the Minister give us some idea how many improvement areas have been introduced since that date? How many registered tenancies does he think are affected? It occurs to me that we are using a steamroller to crack a walnut, quite apart from the danger of giving rise to a lot of false hopes among tenants. The definition of fair rent has worked satisfactorily for a number of years, and scarcity value has been eliminated from it. I would have thought that this attempt to tinker with the definition will only lead us into a great deal of trouble. I should be grateful if the Minister would reconsider and, in another place, do something to resolve the difficulty. 11.15 p.m. Mr. Arthur Latham I first place on record my gratitude to my hon. Friend the Member for Hemsworth (Mr. Woodall), but for whose co-operation I would not have found myself serving on the Standing Committee at some 12½ hours' notice. I was grateful for the opportunity because it gave me the chance to follow up the points I had made on Second Reading. I do not think that it would be right, even at this late hour, for me to let pass the opportunity to pay tribute to my hon. Friends the Minister and the Under-Secretary of State for the care with which they have listened to the representations about the St. Mary's Mansions problem, as it has come to be known. It applies not only to St. Mary's Mansions but to many other properties, both in Paddington and in other constituencies. As I have said, there are three amendments on Report as a result of the constructive support given by Labour Members in Committee. That view of our work in Committee was confirmed by the hon. Member for Shipley (Mr. Fox) when he said, at the last meeting of the Committee, "It is a pity that the hon. Member for Paddington (Mr. Latham) is not with us … because I intend to be constructive this morning.… "—[Official Report, Standing Committee A, 17th December 1974; c. 316.] It was only at the seventh and last sitting of the Committee that he felt able to make that claim. It was indeed the case that attempts to improve the Bill came from the Labour side, but they would not have been fruitful or worth pursuing if the Minister and the Under-Secretary of State had not been so willing to listen, understand, and try to find a solution to the problems. I am disappointed that several suggestions that I made on Second Reading have not proved acceptable to the Government. I thought that a monetary or percentage ceiling, or an extended phasing, would have represented a more certain solution to the St. Mary's Mansions problem than new Clause 2 may do. At the same time, I acknowledge that new Clause 2 is a worthwhile attempt on my hon. Friend's part to try to meet the situation. Those of us who served on the Standing Committee will recall that the Minister had established that about 15 per cent. of private sector tenants were being adversely affected by grossly excessive rent increases, and that, as far as he could discover, the factor that was distorting the rent pattern was that of improved neighbourhood amenities which had nothing to do with the services provided by the landlord. I agree with my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) that that should not be something from which the landlord should benefit, or something to which the tenants should be asked to make an additional financial contribution. I hope that the solution that my hon. Friend the Minister proposes in new Clause 2 and the very detailed new schedule, which bear testimony to the hard endeavours he is making to meet the problem, will be successful, but I am afraid that I have some doubts. I ask the Opposition, in their more constructive frame of mind since the last meeting of the Standing Committee, and following the statement by the hon. Member for Bromsgrove and Redditch (Mr. Miller) that fair rents had worked satisfactorily, to tell us whether they think that a rent increase of £9 a week, with which many of my constituents are confronted, represents a satisfactory operation of the fair rents system, whether they think it should be left alone, or whether they have any alternative constructive suggestion which might alter the difficult plight of those tenants facing such an increase. I should not have thought that such an increase could be regarded as light by anybody's standards. I doubt whether the new clause will do the trick, which is why I have asked questions about reserve powers. I hope that these provisions will not result in giving the Freshwater Company, which is concerned with St. Mary's Mansions among other properties, another £468 a year for doing nothing to contribute to the amenities of a tenancy or district. If the clause is successful and the rent officer or rent assessment committee acknowledges that of that £9 a week perhaps £6 or £7 is on account of neighbourhood improvements, will it be possible for the rent officer or the committee to reduce the rent increase from £9 to £2 or £3? As I understand the new clause and the Bill as now drafted, that cannot happen until the rent officer or the rent assessment committee has considered the representations that the tenant now has the right to make. At the end of the freeze, if Amendment No. 34 is not carried, will the tenant facing a £6 minimum increase have to go on paying that increase until the new determination has been made by the rent officer or the rent assessment committee? I am worried about the delay, particularly when, as in the instance of St. Mary's Mansions, the matter has to come back to the rent assessment committee. It will mean that tenants will have their standard of living attacked by £150 a year during that delay. My hon. Friend the Under-Secretary has already said that he would regard an increase of £1 a week for local authority tenants as rather steep. If such an increase is steep for local authority tenants, an increase of three times as much must be unacceptable. We can avoid that situation if there is some machinery for provisional determination by the rent officer, or some provision to allow that increase not to begin to take effect until after an application by the tenant has been considered and determined by the rent officer and the rent assessment committee. I have been unable to find provision for a refund. If I am unsuccessful in my first plea and the rent is subsequently reduced as a result of new Clause 2, will there be provision for refund to the tenant of any excess rent that he may have paid by having paid a grossly excessive rent in respect of the local neighbourhood factor? I shall be grateful if my hon. Friend can deal with those points. I ask a further question. Will my hon. Friend not agree that there are some cases in which tenants may feel that it is appropriate to apply for a new determination under new Clause 2 but in which the sum of increase is not of the scale to which I have referred? Could my hon. Friend consider offering some guidance to rent officers as to an order of priority, so that they might deal with these applications for new determinations under new Clause 2? If the margin is small, the increase will be much less than those applying to St. Mary's Mansions tenants, who are facing extremly high increases and to whom the decision of the rent officer will be very material indeed. I hope my hon. Friend will not think that in asking these questions I am unappreciative of the way in which he has tried to respond and to be helpful in overcoming these problems. Mr. Freeson May I first deal with the general points raised by other speakers before replying to the points raised by my hon. Friend the Member for Paddington (Mr. Latham) who initiated our fresh thinking on this question in the first place. The hon. Members for Northampton, South (Mr. Morris) and for Reading, North (Mr. Durant) objected to the proposal in the amendment on the grounds that it would result in rents not being related to improvements in an area where private tenants lived, whereas in a similar situation where there are large or even small local authority housing estates, which include environmental improvements, the local authority would be free to take account of the amenities of an area in fixing the rents. The hon. Gentlemen are perfectly correct. Indeed, they have made the central point which is at issue here. The local authority, when it does this, is making an assessment based upon expenditure which it has undertaken. What we are seeking to do, as my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) rightly underlined, is to delete, from the basis for rent fixing in the private sector, elements of rent increases which relate to improvements which have not been undertaken by the landlords who are applying for the rent increase—in other words, improvements in the locality arising from the activity of other people and not of the landlords. That is the sharp distinction to be drawn. The local authority has undertaken the expenditure on these estates. In the situation with which this amendment seeks to deal, the property companies in question have not undertaken the expenditure, which until now has given rise to a difficulty, in certain situations, in relation to rent increases of a certain order. Mr. Michael Morris Surely that would appertain only if it were locally-determined expenditure. If it is not locally determined expenditure, the actual expenditure by the local authority is in most cases met from the central Government fund, from taxpayers who include landlords. It comes from all the people living in that area. Unless it comes specifically from individual ratepayers in the area, the Minister's argument falls. Mr. Freeson The hon. Gentleman is saying that if the general body of taxpayers are specifically liable for expenditure on improvements in the locality, there is an entitlement to an increase, but that in a local authority area, because there are various sources from which public expenditure is met, through the Exchequer or through the rates, such a situation should be treated rather differently. We are saying that, whether it be done by locally determined expenditure or by way of expenditure direct through the housing vote—and it would be unwise to be too categorical about which vote head these expenditures come under in local government—there is an entitlement because the community has undertaken the expenditure. This is not the case with the private landlord, except in the most convoluted of circumstances. I stress to the hon. Gentleman that what he has said about locally determined expenditure is not strictly valid. A considerable volume of the expenditure on improvements or amenities to housing estates by local authorities comes under key sector expenditure under the housing vote. 11.30 p.m. Mr. Nigel Lawson (Blaby) The point made by my hon. Friend the Member for Northampton, South (Mr. Morris) was not at all convoluted. It was perfectly sound. The Minister will doubtless accept that the private landlord will have to pay for the increased amenities, because he will have to pay increased rates if the amenities are enhanced. Is it not also the case that it is unjust for the tenant to benefit from amenities for which he has paid nothing if the assumption behind the Minister's whole case is that the landlord is rich and can pay for everything whereas the tenant is poor and needs to be subsidised all the time? In many cases the landlord is poor and needs to be subsidised as against richer tenants. Mr. Freeson I have been advised that the hon. Gentleman has been or remains a distinguished financial journalist. I am somewhat surprised to hear from him the intervention we have just had in the light of the advice I have just received. I will remind the hon. Gentleman of one or two facts which seem to have totally escaped him. It is not the landlord who pays the rates at the end of the day. It is the tenant. Rates are paid either as part of some kind of consolidated rent arrangement or, as is the practice particularly in the case of the more expensive properties, separately by the tenants and directly to the local authority. The argument here, arising from the second intervention by the hon. Member for Northampton, South, is that, although the general body of ratepayers—and that includes landlords, although for the most part landlords pass on the rate cost to tenants—provide the resources from which trees are planted, open spaces are laid out, and traffic management schemes are provided, the landlord should nevertheless continue to get the benefit of an increased rental value. I do not understand the reasoning behind that argument. I made it clear in Committee that I am not suggesting that by introducing this amendment to Section 46 of the Rent Act we are establishing a pure and rational basis for the future. In Committee I indicated that I should like to have pursued further some of the alternatives which were suggested by my hon. Friend the Member for Paddington as to rent fixing or rent policy for the future. However, this could not be done within the constraints of time related to the Bill. We shall be looking fundamentally at the question of rent policy, quite apart from the review of housing finance upon which the Department will be embarking fairly soon. These are all fundamental questions. I am not suggesting that by these amendments we are asking for some fundamental reform of the criterion of rent fixing which will stand for years to come. It is something that has been proposed, short of a more fundamental look at the basis of rent fixing for the future, which we must come to at a later date. In the meantime, all I am saying is that the principle that we have adopted is a reasonably good one, and it will become even more valid as we move down the road to improving action areas. This consideration extends to the kind of problems that have arisen in cases where it may be clear that grant-aided public expenditure will result in improvements in the neighbourhood. If a property company happens to be in the area of the action authority the property company or the landlord will have received grant aid. In that context we are putting this proposal forward as a way by which we can avoid a sharp increase in rents in these areas where improvements have been attributable to expenditure by the local authorities in question. My hon. Friend raised a very important point about dates. The date we have chosen is the date which comes nearest in time to the date in respect of the rents which are being registered for the first time. I am on record as having said that this is something which I would be prepared to look at again, if it is possible to get some more effective means of date fixing. Before it comes back to us for final decision we shall gladly give such consideration as we can to the matter, but for the present we have done the best that we can do. There may be problems which, as my hon. Friend has said, raise anomalies whichever date is chosen and whatever method is used, but we shall look again at the possibility of tightening up the date situation so that we can get a firmer policy. I hope that I can leave the matter there, with the general undertaking that we shall take what measures we can. On the question raised by my hon. Friend the Member for Paddington, the matter of priorities is something in which the Government have never intervened. It is a matter for the judgment of the rent officers and rent assessment committees, and we shall consult them and be as helpful as we can. But it is not easy for a Government Department to intervene in matters of this kind, and it may be that some tenants would not thank us for our intervention. Nevertheless, I take the point that is worrying my hon. Friend and will consult further. Turning to the question of the waiting period before there has been a reassessment of the rent in the light of the amended Section 46, it is true that at the end of the freeze rents will go up, subject to phasing. If a lower rent is registered, part of the increase will be made retrospectively irrecoverable and the tenant would then be able to deduct it from the rent within two years under the phasing arrangements. This is as far as I have been able to check the position between the time that the Bill left Committee and reached Report stage. I am prepared to consider this further to assure myself, if I can, as well as my hon. Friend, that we have done all we can to protect tenants who might benefit financially from the amended Section 46 but who, in the process, might not be sufficiently protected during the period between the passage of the Bill into law and the time when the rent assessment committees or the rent officer recommend or confirm a revised rent in the light of this clause. I am particularly interested in this question of a refund or something equivalent to it. I am afraid that I cannot give a full undertaking about the position tonight. Mr. Arthur Latham Will my hon. Friend comment on the possibility of some intermediate or transitional determination by the rent officer, so that the period of delay does not result in hardship? One of my worries is that whereas it may be fairly simple for a tenant to go back to the rent officer, when the tenant has to go back to the rent assessment committee there may be considerable delay. There ought to be available to the rent officer the considerations which the committee took into account in fixing that high rent so that the officer should reasonably be in a position to say what the lower rent ought to be. Mr. Freeson The procedure as we have set it out in our amendment will require tenants who wish to exercise rights under it—if their cases are those which have been dealt with previously by the rent assessment committee—to go to the rent officer in the first instance, who would automatically have to refer to the committee. I will look at the possibility, where in any case the application or referral has to be routed through the rent officer, of its being considered by the officer on a provisional basis. I will seek advice and consider that. I cannot undertake that I shall be able to meet my hon. Friend. Question put and agreed to. Clause read a Second time and added to the Bill. New Clause 3 Rent Allowances For Tenants Of The Crown And Government Departments 'Section 19(6) of the Housing Finance Act 1972 shall be amended by leaving out the words "let to him by the Crown Estate Commissioners", so that it reads "A person is also a private tenant if he occupies a dwelling and his tenancy would be a protected tenancy but for section 4 of the Rent Act 1968"'.—[ Mr. Douglas-Mann.] Brought up, and read the First time. Mr. Douglas-Mann I beg to move, That the clause be read a Second time. The object of this clause is to make rent allowances payable to tenants of the Crown and Government Departments. When I moved a similar new clause in Committee I did so under the mistaken impression that the provisions in the Housing Finance Act made rent allowances payable as of right to tenants of county councils, housing corporations, housing associations and housing trusts as well as tenants of private landlords, and that the omission of tenants of the Crown and Government Departments was an oversight. My attention was drawn by the Minister to the fact that the then Minister of Housing Construction—in the early hours of the morning, I expect—had informed the Committee that the leaving out of tenants of the Crown and Government Departments was intentional. He said that assurances had been received from the Duchy of Lancaster and the Duchy of Cornwall that if a tenant could not afford the rent it would be appropriately adjusted. A similar assurance had been given on behalf of the Queen in relation to tenants on her private estates. The Committee may reasonably have assumed, in the light of that assurance, that the Minister was intending to convey a similar assurance that the tenants of Government Departments would similarly receive the appropriate allowances. That did not happen or, if it did, it happened in such a complicated, slow and inefficient way that the great majority of tenants of Government Departments, even though they would be eligible for substantial rent allowances, did not receive them. 11.45 p.m. To be fair, since my hon. Friend came into office the situation has substantially improved. Since our proceedings in Committee, I have had a letter from the Director of Housing of the London Borough of Merton, dated 7th January, saying: "You will no doubt be interested to know that the South Eastern Road Construction Unit of the Department of the Environment have now come to life on the question of the rents that their tenants are paying and a supply of application forms has been sent to them to be used by their tenants for them to submit so that we can establish the level of abated rents appropriate to their tenancies." I congratulate my hon. Friend on that matter. In Committee we got an assurance that from the end of the freeze a more satisfactory and effective scheme would be introduced to make sure that the tenants of Government Departments got their rent allowances. I still think that the rent allowances should be a statutory right and that the machinery to be used should be the same for private tenants as for other tenants covered by Section 19(5) of the 1972 Act so that there is not a considerable loss. We know that a number of private tenants, the tenants of housing associations, and so on, entitled to the allowances, did not get them because they got lost on the way. If we have a wholly separate machinery for the tenants of Government Departments, then even more will be lost. I hope that the Minister will be able to assure the House that a scheme which will operate in the same way for the tenants of Government Departments will be introduced, not an ad hoc or voluntary scheme. The voluntary scheme is working better than was hoped, but it should operate in the same way as the statutory scheme. I hope that we shall have that assurance from the Minister. Mr. Freeson As this is such a nice debate and hon. Members on both sides of the House seem to be congratulating my hon. Friend and I on every speech, may I take this opportunity of congratulating my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) on raising this matter so that action may be taken as promptly as possible. We have gone somewhat further than was suggested by my hon. Friend in his speech. Certainly matters have been improved and tightened up in the meantime. However, in pursuit of the general undertaking that I gave in Committee, the Civil Service Department is now taking action to implement that assurance and will introduce from the beginning of April a system of rent rebates for the tenants of Government Departments identical with that of the local authority for the area concerned. This will be achieved by asking the local authorities to process rebate application forms, and the Departments concerned will then reduce the rents by the amounts of the rebates so assessed. The cost of this processing will be reimbursed to the local authorities. I hope that, after I have stated the position clearly and simply, my hon. Friend will accept that we are acting as he would wish us to act. It is true that, technically and legally, we are acting on a voluntary basis and not as required by law, but the effect for the tenants will be the same. I will make sure that tenants in this type of situation are fully informed about their rights under this voluntary arrangement as would be the situation were they tenants of local authority properties and, sadly I suppose, somewhat more effectively than if they were the tenants of private landlords and having to depend on general publicity material as distinct from the individual approach which a local authority can and does make and which the Civil Service Department will now be making from 1st April. In the meantime we shall do our best to ensure that, although things are done on an ad hoc basis, everyone who is entitled will benefit from the arrangements that we are making now, which will be finalised from 1st April. Mr. Douglas-Mann I am delighted with that assurance, particularly the word "identical". In the light of what the Minister has said, I beg to ask leave to withdraw the motion. Motion and clause, by leave, withdrawn. Clause 1 Rents For Public Sector Dwellings Mr. Freeson I beg to move Amendment No. 1, in page 1, line 13, at end insert 'but without prejudice to the duties to operate a rent rebate scheme and a rent allowance scheme imposed by Part II of the Housing Finance Act 1972'. Mr. Deputy Speaker (Sir Myer Galpern) It would be convenient, I suggest, to discuss at the same time Government Amendment No. 2. Mr. Freeson These amendments follow from an undertaking given in Committee to reconsider the wording of the Bill at this point. The Bill as at present drafted would insert in the Housing Act 1957, in the substantive provisions providing for reasonable rents, a requirement for a local authority to have regard to their rebate scheme in determining rents. This was queried in Standing Committee, and it is agreed that there may be a possible ambiguity in the terms of the provision. It could be interpreted as meaning that rent levels generally in future should be fixed somewhat higher because of the existence of the rent rebate scheme. This was not the intention. The need is to include in the law on local authority rents a reference to the present position on rent rebates—the existence of a mandatory rent rebate scheme—in place of the now out-dated reference in the 1957 Act. Given that it is now mandatory to run a rent rebate scheme, Amendment No. 1 ensures that this duty remains once the freedom to charge reasonable rents is returned to local authorities. It follows that the scheme retains its proper place for the assistance of tenants in need of help towards their rent, and that there would be no need in consequence for local authorities to use their hard-pressed local resources to duplicate this particular function of giving differential help to the most hard-pressed tenants by generally influencing their rent levels in this connection. It is not part of the Bill's approach that local authorities should feel any duty to argue that rents in general should be higher than they otherwise need be in order to free money to reduce some rents on a basis determined by tenant's means. The amendment simply releases them from any such constraint. The reference in the amendment to rent allowances covers the position of a small number of local authority tenants who receive allowances instead of rebates. Amendment No. 2 is consequential on Amendment No. 1. Although I have explained the amendments in a little detail, they are of simple intent. They are to clarify a possible ambiguity which could in some circumstances influence rents in a way in which ---------------------------------------------------------------------------------------------- |Aitken, Jonathan |Hawkins, Paul |Rathbone, Tim | ---------------------------------------------------------------------------------------------- |Atkins, Rt Hon H. (Spelthorne)|Hayhoe, Barney |Rees-Davies, W. R. | ---------------------------------------------------------------------------------------------- |Beith, A. J. |Howells, Geraint (Cardigan) |Renton, Rt Hon Sir D. (Hunts)| ---------------------------------------------------------------------------------------------- |Biffen, John |Hunt, John |Ridley, Hon Nicholas | ---------------------------------------------------------------------------------------------- |Biggs-Davison, John |Hurd, Douglas |Rifkind, Malcolm | ---------------------------------------------------------------------------------------------- |Boyson, Dr Rhodes (Brent) |Hutchison, Michael Clark |Roberts, Michael (Cardiff NW)| ---------------------------------------------------------------------------------------------- |Braine, Sir Bernard |Irvine, Bryant Godman (Rye) |Roberts, Wyn (Conway) | ---------------------------------------------------------------------------------------------- |Brittan, Leon |James, David |Ross, Stephen (Isle of Wight)| ---------------------------------------------------------------------------------------------- |Brown, Sir Edward (Bath) |Jessel, Toby |Scott, Nicholas | ---------------------------------------------------------------------------------------------- |Buchan, Norman |Jopling Michael |Shaw, Giles (Pudsey) | ---------------------------------------------------------------------------------------------- |Budgen, Nick |Kellett-Bowman, Mrs Elaine |Shelton, William (Streatham) | ---------------------------------------------------------------------------------------------- |Bulmer, Esmond |Kershaw, Anthony |Shepherd, Colin | ---------------------------------------------------------------------------------------------- |Carlisle, Mark |King, Evelyn (South Dorset) |Shersby, Michael | ---------------------------------------------------------------------------------------------- |Chalker, Mrs Lynda |King, Tom (Bridgwater) |Silvester, Fred | ---------------------------------------------------------------------------------------------- |Clark, Alan (Plymouth, Sutton)|Kitson, Sir Timothy |Sims, Roger | ---------------------------------------------------------------------------------------------- |Cockcroft, John |Lane, David |Skeet, T. H. H. | ---------------------------------------------------------------------------------------------- |Cooke, Robert (Bristol W) |Lawrence, Ivan |Smith, Cyril (Rochdale) | ---------------------------------------------------------------------------------------------- |Cope, John |Lawson, Nigel |Spence, John | ---------------------------------------------------------------------------------------------- |Costain, A. P. |Lester, Jim (Beeston) |Spicer, Michael (S Worcester)| ---------------------------------------------------------------------------------------------- |Douglas-Hamilton, Lord James |Lloyd, Ian |Sproat, Iain | ---------------------------------------------------------------------------------------------- |du Cann, Rt Hon Edward |Loveridge, John |Stanbrook, Ivor | ---------------------------------------------------------------------------------------------- |Durant, Tony |Luce, Richard |Steen, Anthony (Wavertree) | ---------------------------------------------------------------------------------------------- |Eden, Rt Hon Sir John |Macfarlane, Neil |Stokes, John | ---------------------------------------------------------------------------------------------- |Edwards, Nicholas (Pembroke) |MacGregor, John |Stradling Thomas, J. | ---------------------------------------------------------------------------------------------- |Elliott, Sir William |McNair-Wilson, M. (Newbury) |Taylor, Teddy (Cathcart) | ---------------------------------------------------------------------------------------------- |Eyre, Reginald |Marshall, Michael (Arundel) |Tebbit, Norman | ---------------------------------------------------------------------------------------------- |Fairgrieve, Russell |Maxwell-Hyslop, Robin |Thatcher, Rt Hon Margaret | ---------------------------------------------------------------------------------------------- |Farr, John |Mayhew, Patrick |Thomas, Rt Hon P. (Hendon S) | ---------------------------------------------------------------------------------------------- |Fowler, Norman (Sutton C'f'd) |Miller, Hal (Bromsgrove) |Townsend, Cyril D. | ---------------------------------------------------------------------------------------------- |Fox, Marcus |Mills, Peter |Trotter, Neville | ---------------------------------------------------------------------------------------------- |Gilmour, Sir John (East Fife) |Moate, Roger |Van Straubenzee, W. R. | ---------------------------------------------------------------------------------------------- |Goodhart, Philip |Monro, Hector |Vaughan, Dr Gerard | ---------------------------------------------------------------------------------------------- |Goodhew, Victor |Montgomery, Fergus |Viggers, Peter | ---------------------------------------------------------------------------------------------- |Grant, Anthony (Harrow C) |Morris, Michael (Northampton S)|Walder, David (Clitheroe) | ---------------------------------------------------------------------------------------------- |Gray Hamish |Neave, Alrey |Weatherill, Bernard | ---------------------------------------------------------------------------------------------- |Grist', Ian |Nelson, Anthony |Wiggin, Jerry | ---------------------------------------------------------------------------------------------- |Hall, Sir John |Neubert, Michael | | ---------------------------------------------------------------------------------------------- |Hall-Davis, A. G. F. |Page, Rt Hon R. Graham (Crosby)|TELLERS FOR THE AYES: | ---------------------------------------------------------------------------------------------- |Hannam, John |Parkinson, Cecil |Mr. Spencer Le Merchant and | ---------------------------------------------------------------------------------------------- |Harvie Anderson, Rt Hon Miss |Pattie, Geoffrey |Mr. W. Benyon. | ---------------------------------------------------------------------------------------------- |Hastings, Stephen |Pym, Rt Hon Francis | | ---------------------------------------------------------------------------------------------- ----------------------------------------------------------------------- |Allaun, Frank |Bagier, Gordon A. T. |Bidwell, Sydney | ----------------------------------------------------------------------- |Archer, Peter |Barnett, Guy (Greenwich) |Blenkinsop, Arthur | ----------------------------------------------------------------------- |Armstrong, Ernest|Bates, Alf |Boardman, H. | ----------------------------------------------------------------------- |Ashton, Joe |Bean, R. E. |Booth, Albert | ----------------------------------------------------------------------- |Atkinson, Norman |Bennett, Andrew (Stockport N)|Boothroyd, Miss Betty| ----------------------------------------------------------------------- they were not intended to be influenced by the Bill. Amendment agreed to. Amendment made: No. 2, in page 1, line 16, leave out from 'following' to end of line 19 and insert 'subsection'.—[ Mr. Freeson.] Clause 2 Reserve Power To Limit Public Sector Rents Amendment proposed: No. 3, in page 2, line 9, leave out Clause 2.—[ Mr. Scott.] Question put, That the amendment be made:— The House divided: Ayes 117, Noes 170. -------------------------------------------------------------------------------------------------------------- |Bray, Dr Jeremy |Hughes, Robert (Aberdeen N) |Price, William (Rugby) | -------------------------------------------------------------------------------------------------------------- |Brown, Hugh D. (Provan) |Hughes, Roy (Newport) |Radice, Giles | -------------------------------------------------------------------------------------------------------------- |Buchanan, Richard |Irving, Rt Hon S. (Dartford) |Richardson, Miss Jo | -------------------------------------------------------------------------------------------------------------- |Callaghan, Jim (Middleton & P)|Janner Greville |Roberts, Albert (Normanton) | -------------------------------------------------------------------------------------------------------------- |Campbell, Ian |Jay, Rt Hon Douglas |Roberts, Gwilym (Cannock) | -------------------------------------------------------------------------------------------------------------- |Cant, R. B. |John, Brynmor |Roderick, Caerwyn | -------------------------------------------------------------------------------------------------------------- |Carmichael, Neil |Johnson, James (Hull West) |Rodgers, George (Chorley) | -------------------------------------------------------------------------------------------------------------- |Cartwright, John |Jones, Barry (East Flint) |Rodgers, William (Stockton) | -------------------------------------------------------------------------------------------------------------- |Cocks, Michael (Bristol S) |Jones, Dan (Burnley) |Rooker, J. W. | -------------------------------------------------------------------------------------------------------------- |Coleman, Donald |Judd, Frank |Roper, John | -------------------------------------------------------------------------------------------------------------- |Colquhoun, Mrs Maureen |Kaufman, Gerald |Rose, Paul B. | -------------------------------------------------------------------------------------------------------------- |Cook, Robin F. (Edin C) |Kinnock Neil |Rowlands, Ted | -------------------------------------------------------------------------------------------------------------- |Cox, Thomas (Tooting) |Lambie, David |Shaw, Arnold (Ilford South) | -------------------------------------------------------------------------------------------------------------- |Craigen, J. M. (Maryhill) |Lamborn, Harry |Short, Rt Hon E. (Newcastle C) | -------------------------------------------------------------------------------------------------------------- |Cryer, Bob |Lamond, James |Sillars, James | -------------------------------------------------------------------------------------------------------------- |Cunningham, Dr J. (Whiteh) |Latham, Arthur (Paddington) |Silverman, Julius | -------------------------------------------------------------------------------------------------------------- |Dalyell, Tarn |Lee, John |Skinner, Dennis | -------------------------------------------------------------------------------------------------------------- |Davidson, Arthur |Lestor, Miss Joan (Eton & Slough)|Small, William | -------------------------------------------------------------------------------------------------------------- |Davies, Bryan (Enfield N) |Litterick, Tom |Smith, John (N Lanarkshire) | -------------------------------------------------------------------------------------------------------------- |de Freitas, Rt Hon Sir Geoffrey |Loyden, Eddie |Spearing, Nigel | -------------------------------------------------------------------------------------------------------------- |Dempsey, James |Lyon, Alexander (York) |Spriggs, Leslie | -------------------------------------------------------------------------------------------------------------- |Doig, Peter |Lyons, Edward (Bradford W) |Stallard, A. W. | -------------------------------------------------------------------------------------------------------------- |Dormand, J. D. |Mabon, Dr J. Dickson |Stewart, Rt Hn M. (Fulham) | -------------------------------------------------------------------------------------------------------------- |Douglas-Mann, Bruce |McCartney, Hugh |Stoddart, David | -------------------------------------------------------------------------------------------------------------- |Duffy, A. E. P. |McElhone, Frank |Stott, Roger | -------------------------------------------------------------------------------------------------------------- |Dunn, James A. |MacFarquhar, Roderick |Summerskill, Hon Dr Shirley | -------------------------------------------------------------------------------------------------------------- |Dunnett, Jack |Mackintosh, John P. |Swain, Thomas | -------------------------------------------------------------------------------------------------------------- |Eadie, Alex |Maclennan, Robert |Taylor, Mrs Ann (Bolton W) | -------------------------------------------------------------------------------------------------------------- |Edge, Geoff |McMillan, Tom (Glasgow C) |Thomas, Dafydd (Merioneth) | -------------------------------------------------------------------------------------------------------------- |Ellis, John (Brigg & Scun) |McNamara, Kevin |Thomas, Jeffrey (Abertillery) | -------------------------------------------------------------------------------------------------------------- |Ellis, Tom (Wrexham) |Madden, Max |Thomas, Ron (Bristol NW) | -------------------------------------------------------------------------------------------------------------- |Ennals, David |Magee, Bryan |Thorne, Stan (Preston South) | -------------------------------------------------------------------------------------------------------------- |Evans, John (Newton) |Mahon, Simon |Tierney, Sydney | -------------------------------------------------------------------------------------------------------------- |Ewing, Harry (Stirling) |Marks, Kenneth |Tinn, James | -------------------------------------------------------------------------------------------------------------- |Fernyhough, Rt Hon E. |Marquand, David |Tomlinson, John | -------------------------------------------------------------------------------------------------------------- |Flannery, Martin |Marshall, Dr Edmund (Goole) |Urwin, T. W. | -------------------------------------------------------------------------------------------------------------- |Fletcher, Ted (Darlington) |Meacher, Michael |Wainwright, Edwin (Dearne V) | -------------------------------------------------------------------------------------------------------------- |Ford, Ben |Mellish, Rt Hon Robert |Walker, Terry (Kingswood) | -------------------------------------------------------------------------------------------------------------- |Freeson, Reginald |Mendelson, John |Ward, Michael | -------------------------------------------------------------------------------------------------------------- |Garrett, W. E. (Wallsend) |Millan, Bruce |Watkins, David | -------------------------------------------------------------------------------------------------------------- |George, Bruce |Miller, Dr M. S. (E Kilbride) |White, Frank R. (Bury) | -------------------------------------------------------------------------------------------------------------- |Golding, John |Moonman, Eric |White, James (Pollok) | -------------------------------------------------------------------------------------------------------------- |Grant, George (Morpeth) |Murray, Ronald King |Wigley, Dafydd | -------------------------------------------------------------------------------------------------------------- |Grant, John (Islington C) |Newens, Stanley |Williams, Rt Hon Shirley (Hertford)| -------------------------------------------------------------------------------------------------------------- |Grocott, Bruce |Noble, Mike |Wilson, Alexander (Hamilton) | -------------------------------------------------------------------------------------------------------------- |Hamilton, James (Bothwell) |Ogden, Eric |Wise, Mrs Audrey | -------------------------------------------------------------------------------------------------------------- |Hamling, William |O'Malley, Rt Hon Brian |Woodall, Alec | -------------------------------------------------------------------------------------------------------------- |Harper Joseph |Orme, Rt Hon Stanley |Woof, Robert | -------------------------------------------------------------------------------------------------------------- |Harrison, Walter (Wakefield) |Ovenden, John | | -------------------------------------------------------------------------------------------------------------- |Horam, John |Park, George |TELLERS FOR THE NOES: | -------------------------------------------------------------------------------------------------------------- |Hoyle, Douglas (Nelson) |Parry, Robert |Mr. Walter Johnson and | -------------------------------------------------------------------------------------------------------------- |Hughes, Rt Hon C. (Anglesey) |Prescott, John |Mr. Laurie Pavitt | -------------------------------------------------------------------------------------------------------------- |Hughes, Mark (Durham) |Price, C. (Lewisham W) | | -------------------------------------------------------------------------------------------------------------- Question accordingly negatived. Amendments made: No. 4, in page 2, line 10, leave out 'of local authorities or new town corporations'. No. 5, in page 2, line 13, leave out 'such'. No. 6, in page 2, line 26, leave out 'of local authorities or new town corporations'. No. 7, in page 2, line 34, at end insert— '"dwelling" does not include a dwelling forming part of a property subject to a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies (but without prejudice to the application of this section in relation to a sub-tenancy of any part of the premises comprised in such a tenancy).'. No. 8, in page 2, line 40, after 'or', insert: 'in the case of dwellings of local authorities or new town corporations, to'.—[Mr. Kaufman.] Clause 6 Transitional Town Development Subsidy Mr. Kaufman I beg to move Amendment No. 10, in page 5, line 13, after 'authority', insert: 'for the credit of the receiving authority's general rate fund.'. The purpose of the contributions from a sending authority to a receiving authority under Section 10 of the Housing Finance Act 1972 was to compensate the receiving authority's rate fund for the contributions in respect of town development houses which it was required to make to its housing revenue account under that Act. Clause 6 (6) provides for sending authorities which receive the transitional town development subsidy to continue to make payments of this kind to their receiving authorities. This amendment makes it clear that the latter payments are for credit to the receiving authorities' general rate funds. Amendment agreed to. Clause 9 Increases Of Rent Under Controlled Tenancy Permitted Towards Cost Of Repairs Mr. Marcus Fox (Shipley) I beg to move Amendment No. 11, in page 7, line 8, leave out 'the coming into force of this section' and insert '27th July 1972'. Much to the disappointment of the Government Chief Whip, I regret that I shall have to spend a few minutes on the amendment. But the Opposition have been extremely contained, bearing in mind the provocation from certain hon. Members on the Government side of the House. On this amendment we return to a matter which we discussed in Committee. The new amendment is a compromise in that we seek to cover a period dating only from the introduction of the Housing Finance Act 1972. There is a particular purpose in doing this in that we believe that since that time the situation in the rented sector has got worse. Certainly, on the part of the Opposition—and, I hope, certain hon. Members on the Government side of the House—there is a reluctance to accept anything which would remove housing stock from this sector. Therefore, we regret houses being taken from the rented sector, for whatever reason.—[Interruption.] There are, perhaps, moves afoot to accept the amendment at an early stage. I should be happy to give way if that is so. As politicians we have dabbled in housing on too many occasions. There has been too much legislation, with very little result. People are bewildered by the rapidity with which we in this place introduce successive pieces of legislation, each piece to be superseded by the next. No one is more bewildered than the landlord who in good faith has improved his property on the assumption that he will be able to get a fair rent. For a change, I shall not talk about St. Mary's Mansions. Perhaps we can leave that block of flats alone. It has had a fairly good exposure. Mr. Arthur Latham As we have had, in one sentence, some reference to this problem from the Opposition, am I to take it from the statement which the hon. Gentleman has just made that his policy and that of the Opposition would be to leave those Freshwater rents as they are, with increases of £9 a week? Mr. Fox The hon. Gentleman knows that I detest the activities of certain people in these matters just as much as he does. But in the short time that we have at our disposal it is not unreasonable to look at the large majority of landlords who provide accommodation, many of whom do so accepting the social responsibility to try to keep their property in good repair. It is these people I have in mind in introducing the amendment. Many people many years ago thought that the best investment they could make was to buy one or two houses in the belief that these would provide them with an income in retirement. Over the years the situation has developed so that, far from being provided with an income, the houses have become a liability to their owners who see no hope of getting back the money they put into that asset. They are thoroughly disillusioned and many landlords have taken fright at successive legislation. In all fairness they can see no hope. The Bill puts another nail in the coffin of these people. We appeal to the Minister to give us an instance of a change of attitude. Surely we must accept that landlords have a part to play in the provision of private rented accommodation. Surely it cannot be right not to take the side of the people who took the 1972 Act for what it was and carried out the repairs that were needed. Our proposals would ensure that these people were not penalised. The clause as drafted will penalise them. In Committee the Minister said: "On the general point, I make the further observation that, in so far as one is talking of incentives, and accepting, as I have argued on an earlier clause, that there has been no evidence in the past to suggest that general freeing into the rental market, or indeed into the regulated market as occurred in the 1972 Act, has produced this upsurge of modernisation and good maintenance in this area".—[Official Report, Standing Committee A; 12th December 1974, c. 306.] If he is saying there that there has been very little upsurge, the commitment we are entering into is a very limited one. Surely these are the landlords the Minister is seeking to encourage by introducing the factor of 12½ per cent. on repairs. During 1972–74 there were particular problems in the building industry. I am not making a political point here. It is well known that economic overheating or whatever we may call it made it impossible for many small landlords to get repairs done. All available labour was attracted to new work, where the wages were considerably higher. Therefore, through no fault of their own, the landlords found that completion of improvements or modernisation was delayed and they now find that they are outside the scope of the Bill. I hope that my plea will not fall on stony ground. I refer the Minister to what he said in Committee in reply to my hon. Friend the Member for Chelsea (Mr. Scott) who pressed him to look at the plight of these people: "I am predisposed towards such treatment, but I see great practical difficulty in undertaking it." Surely a large part of that difficulty has been removed by virtue of what the Minister said in reply to his lion. Friend the Member for Salford, East (Mr. Allaun). He said, "Hon. Members will bear in mind that I have undertaken to look at the point raised with me by my hon. Friend the Member for Salford, East (Mr. Allaun) at a previous sitting, that is, to try to establish some means whereby there can be a check made on the expenditure undertaken to establish the basis for the rent increases".—[Official Report, Standing Committee A, 12th December 1974; cc. 314–5.] That yardstick is further instanced in a letter sent on 6th January by the Minister to those of us who served on the Committee. He said, "The landlord will not of course be entitled to an increase simply by claiming that he has spent money on repairs. A tenant doubtful of the justification for any increase claimed under this section will be able to bring the issue before the courts—either by his own action or by refusing to pay the increase without evidence in support of it—where the landlord must prove his right to it." I accept that point and therefore the Minister will be doing a great service in accepting the amendment. The safeguards are there for the tenant. There must be evidence to support any claim. I ask the Minister, in the name of equity, to see that these people are cared for. 12.15 a.m. Mr. Freeson The amendment, like the attempts to move in this direction in Committee, is broadly in line with what the Government have proposed in the Bill. I expressed some sympathy for the proposal in Committee, as the hon. Member for Shipley (Mr. Fox) said, but added that there was serious practical difficulties, as there still are, in accepting the proposal as the Opposition have moved it. The difficulty is the improbability that genuine evidence of expenditure on repair would still be available two years or more after the work had been carried out. It is essential that documented evidence of expenditure should be available for the settlement of dispute. I am still looking into the possibility of including in the Bill an entitlement for the tenant in those circumstances to be given access to the relevant documents, without having to challenge the increase through the courts, as a means of securing evidence for the justification of the rent increase claimed in connection with supposed repairs expenditure. It would be anomalous, therefore, for the right to recover increases in respect of repairs costs to be extended back beyond the period for which the evidence of those costs is likely to survive. However, it is reasonable to suppose that documentation of repair costs will normally be kept—for tax reasons, if for no other purpose—for the year after the carrying out of the works. Therefore, I propose to introduce in another place, because I have not yet had time to work out these matters fully, an amendment which would create an entitlement to an increase in rents on the 12½ per cent. basis, for the dwellings under the clause, in respect of repairs carried out in the year preceding the coming into force of the Bill. That is the period for which we can reasonably expect documentation of expenditure still to be available in order that tenants or the county court can, if need be, check the accuracy of, and justification for, the proposed increase. I hope that in view of this assurance, which is in line with my general reaction in Committee, and which would keep the matter fully in line with the Bill as now drafted, the Opposition, will agree to withdraw the amendment. Mr. Fox I am grateful for the Minister's concession. I take it that it is the previous tax year, the year 1973–74— Mr. Freeson We have not yet worked it out in detail, and it may vary by the time it is dealt with in another place, but what is in mind is to cover the year preceding the enactment of the Bill. We have a definite and clear 12-months' period. I gave the point about the income tax year to illustrate that it is a period for which one can reasonably expect documentation to have been held for other purposes than the administration of the property. To go back beyond that would be to move into an indefinite period and create all sorts of uncertainty about documentation. Mr. Fox We accept the Minister's proposals, but I do not accept for one moment that landlords dispose of receipts as quickly as is suggested. To many people the expenditure of £100 or £200 is a considerable sum. It is my experience in my part of the world that people do not part with receipts of that kind for many years. Be that as it may we must be grateful for small mercies. I thank the Minister for what he has said. Mr. Hal Miller I wish to take the Minister up on the subject of repairs and perhaps refresh his memory. In the case of improvements, where I believe percentage increases have been operating since 1920, there have been no difficulties experienced about the actual improvements and their costs according to the people I have consulted. Any vouchers necessary have always been produced to the tenant in case of dispute. There is, as the Minister is no doubt aware, a considerable volume of case law as to what constitutes repairs. If he is relying on such case law for the determination of reasonable repairs, I do not see why he should not also be guided by the same case law relating to other aspects of repairs. I hope that he will bear that in mind when he considers the amendment that he has been discussing. There was discussion in Committee about the cost of borrowing money to effect necessary repairs or desired repairs. When we were discussing the possibility of increasing the figure of 12½ per cent. I do not think that the members of the Committee were aware that in other spheres it is already allowable. I should like the Minister to consider that matter when he is considering the amendment that will be determined in another place—namely, that the cost of borrowing money to carry out the repairs should be allowable. Mr. Freeson I shall read carefully the points that have been made so that we can give further consideration to them in introducing the amendment in another place, on which I have given an undertaking. For the present I stand by the undertaking that I have given to the House. If there are grounds, on reflection, for varying it somewhat in the direction suggested, I shall consider them. There is at least a firm undertaking that we shall act on the basis of one year. I cannot guarantee that we shall go beyond that, but I shall consider the matter further in the light of what I read in the record. Amendment negatived. Clause 11 Orders Etc Mr. Kaufman I beg to move Amendment No. 12, in page 8, line 14, leave out 'giving directions or'. Mr. Deputy Speaker With this we may discuss Government Amendments Nos. 13, 18, 20, 21, 22 and 23. Mr. Kaufman These amendments change the two new powers of the Secretary of State to give "directions" as to the method of calculating entitlement to subsidies into powers to deal with those matter by making "determinations". It is now felt that the powers could be better exercised by making determinations applying either generally or in particular cases than by giving directions. The difference between a determination and a direction is in a sense technical. Directions are generally used to tell authorities in a formal way that they have to do something. Determinations are more akin to decisions arising out of particular circumstances, although they may then be applied generally. The new sub-paragraph (1A) to paragraph 11 of Schedule 1, Amendment No. 23, maintains the power to vary or revoke Treasury directions under that paragraph. It is a consequential of the removal from Clause 11(4) of the general power to vary or revoke directions, which is now not required because paragraph 11 now contains the only power in the Bill to give directions. Amendment agreed to. Amendment made: No. 13, in page 8, line 17, leave out 'directions or determinations given or' and insert 'determinations'.—[ Mr. Kaufman.] Clause 13 Citation Etc Mr. Kaufman I beg to move Amendment No. 14, in page 10, line 23, leave out from 'Act' to end of line 24 and insert: '1975.(1A) The Housing Acts 1957 to 1974 and and this Act may be cited together as the Housing Acts 1957 to 1975'. Mr. Deputy Speaker (Mr. George Thomas) With this amendment, we may take Government Amendments No. 38 and No. 39. Mr. Kaufman These three drafting amendments deal with the references in the Bill to the collective citation of the Housing Acts. The need for them arises because we have moved into a new calendar year. But as the term "The Housing Acts 1957 to 1974" is a complete and meaningful expression in itself, which could stand unamended in spite of the new year, it is necessary to make the matter clear by these amendments. Amendment agreed to. Mr. Kaufman I beg to move Amendment No. 15, in page 10, line 25, leave out 'Part II' and insert 'Parts II and III'. Mr. Deputy Speaker With this amendment we may take Government amendments Nos. 25, 32, 37, 41, 44 and 45. Mr. Kaufman This group of amendments replaces those provisions already in the Bill as drafted which deal with housing associations to which an order under Section 80 of the Housing Finance Act 1972 applies. At present, there is only one such association—the North-Eastern Housing Association Ltd. It was established to assist in the provision of houses in districts where there was serious unemployment and where local authorities had insufficient income from rates to meet their statutory obligations in respect of slum clearance and overcrowding. It differs from other housing associations in that it now confines its activities solely to providing new dwellings to rent for tenants from a local authority's waiting list, under Section 120 of the Housing Act 1957. It has in the past provided a certain number of houses for various special purposes, such as for the employees of firms operating on trading estates, but when such dwellings fall vacant they, too, are now made available for tenants from the local authority's waiting list. The NEHA operates in practice more as a local authority than a housing association, although it retains the main characteristics of a housing association. It is thus sui generis, and it was not considered appropriate to apply to the NEHA either the arrangements in the 1972 Act for local authorities or those for housing associations. Section 80 of the 1972 Act therefore permits the Secretary of State to vary, by order, the provisions of the 1972 Act in relation to an association to which the section applies, and to make certain other provisions—for example, as to the keeping of accounts and as to rate fund contributions to be made by local authorities. This power was exercised in the Housing Finance (North Eastern Housing Association) Order 1972, as affected, in relation to the relevant local authority areas, by Article 4(1) of the Local Authorities etc. (Miscellaneous Provision) (No. 2) Order 1974, and as varied in relation to the debiting of certain items of expenditure to the various accounts by the North-Eastern Housing Association (Amendment) Order 1974. Transitional provisions in relation to the association's entitlement to residual subsidy under the 1972 Act to take account of the new authorities established by the Local Government Act 1972 were made by the Housing Finance (North-Eastern Housing Association) (Transitional Provision) Order 1974, made under Section 254(1) and (2)(a) and (c) of the Local Government Act 1972, as extended by Section 102(5) of the Housing Finance Act 1972. The provisions of the 1972 order in relation to subsidies substitute a different subsidy system from the one provided generally for housing associations in Part VII of the 1972 Act. The provisions as to rents and subsidies which were included in the Section 80 order for the North-Eastern Housing Association now need in most respects to be amended consequent upon the changes to the local authority rent and subsidy provisions which are made in the Bill. But the provisions for the payment of rent rebates to the tenants of the association's dwellings do not need to be changed. Thus, a power is needed both to vary the existing Section 80 orders which have been made in respect of the association and to make new orders. The provisions already included in the Bill for this purpose have been found on further consideration not to be entirely adequate and this group of amendments therefore replaces them. As amended, the Bill will provide for rents of NEHA dwellings to be determined by the local authority in whose area they are situated, on the same basis as local authorities must adopt in fixing rents for their own dwellings. Amendment agreed to. New Schedule Disregard Of Amenities 1. An application under section [certain amenities to be disregarded in determining fair rent] above must be in the prescribed form and contain the prescribed particulars in addition to the rent which it is sought to register. 2. Any such application shall be made to the rent officer. 3. Subject to paragraphs 4 and 5 below— (a) in any case where the registered rent was determined or confirmed by the rent officer without a reference to a rent assessment committee, Part I of Schedule 6 to the Rent Act 1968 shall have effect with respect to the procedure to be followed on any such application, and(b) in any case where there was a reference to a rent assessment committee under paragraph 6 (1) of the said Schedule 6, it shall be the rent officer's duty to refer the application to a rent assessment committee, and paragraphs 7 to 9 of the said Schedule shall have effect in relation to the procedure to be followed as they have effect in relation to a matter referred to a committee under the said paragraph 6 (1). 4. In the application of Part I of Schedule 6 to the Rent Act 1968 to any case such as is mentioned in paragraph 3( a) above, there shall be omitted from paragraph 5 of that Schedule— (a) the words "as the case may require". and(b) paragraph (b) and the word "or" immediately preceding it. 5. In the application of paragraphs 7 to 9 of the said Schedule to any case such as is mentioned in paragraph 3( b) above, paragraph 9(1)( a) shall be omitted. 6. If it appears to the rent officer or, as the case may be, the rent assessment committee, that the determination or confirmation of the rent took account of a matter which would have fallen to be disregarded by virtue of section 46(3)( bb) of the Rent Act 1968 if that provision had been in force, it shall be the duty of the rent officer or the committee to determine what would have been the fair rent if that provision had been in force; and a rent assessment committee shall be under a corresponding duty on a reference to them under paragraph 6 of Schedule 6 to that Act, as applied by paragraph 3( a) above. 7. Section 44(4) of the Rent Act 1968 (which defines the relevant date for the purpose of determining the period that must elapse before an application for the registration of a different rent can be entertained) shall have effect, where a rent is registered under this Schedule, as if the following paragraph were inserted after paragraph ( a):— "(aa) where on an application under section [certain amenities to be disregarded in determining fair rent] of the Housing Rents and Subsidies Act 1975 a rent is substituted for the rent previously registered, the date as from which the substituted rent takes effect; and". 8. Subsection (1) of section 48 of the Rent Act 1968 (effect of registration of rent) shall have effect, in any case where the application for registration was made under section [certain amenities to be disregarded in determining fair rent] above as if there were added at the end the words "except where, on an application under section [certain amenities to be disregarded in determining fair rent] of the Housing Rents and Subsidies Act 1975, a new rent is substituted for the rent previously registered; and in that case the registration shall take effect as from the date as from which the registration of the rent for which the new registered rent is substituted took effect". 9. The provisions of this Schedule shall apply in relation to a rent notwithstanding that the registration of that rent has ceased to have effect under subsection (2) of the said section 48, by reason of a subsequent registration; and the register shall be amended to show the rent determined or confirmed under this Schedule. 10. The following provisions of the Rent Act 1968, namely— section 20(2) (contractual rent limit);section 22(2) (limits of rent during statutory periods);section 33 (recovery from landlord of sums paid in excess of recoverable rent); andsection 48(3) (validation of certain notices of increase); shall have effect in relation to rent determined or confirmed in pursuance of this Schedule. 11. The power to make regulations under section 50 of the Rent Act 1968 for the purposes of Part IV of that Act shall extend to this Schedule'.—[ Mr. Freeson.] Brought up, and read the First and Second time, and added to the Bill. Schedule 1 Rents And Subsidies Amendment made: No. 18, in page 14, line 3, leave out 'direct' and insert 'determine'.—[ Mr. Freeson.] 12.30 a.m. Mr. Freeson I beg to move Amendment No. 19, in page 14, line 42, leave out 'The' and insert 'Subject to paragraph 8A below, the'. Mr. Deputy Speaker With this Amendment it may be convenient to take Government Amendments Nos. 20, 35 and 36. Mr. Freeson If I may, I shall delay the House on this matter for a few minutes as it is the introduction of a new policy. On 11th December 1974 I told the House that I had set up a working party under the chairmanship of Mr. Harold Campbell to report to me on ways in which the Government, local government, housing associations and other bodies could sponsor housing co-operatives and co-operative management schemes, enabling tenants to participate collectively in decisions affecting them and to have a financial stake in the ownership of their own homes. The working party includes members from the Housing Corporation, the local authority associations and the housing association movement and has undertaken to provide a first report early this year. I am anxious to do everything possible to encourage the development of co-operative housing and in the light of the report will make a further statement of policy. Meanwhile, Circular 70/74—"Local Authority Housing Programmes"—issued in April 1974 has asked local authorities to consider co-operative housing schemes in appropriate circumstances and the recent circular on the Housing Corporation and housing associations refers to the opportunities open to housing associations in the field of co-operative housing. I see this initiative as an essential part of a Socialist housing policy for the future. Thus these amendments are but a new starting point in housing policy. They introduce co-operative housing into housing legislation for the first time in this country—a means by which the people who live in what would normally be rented dwellings may have a recognised and legal share in the ownership and/or the management of the property, with the financial backing of Government. The proposed provision achieves this end by a simple device. It has been the well-understood practice for many years that housing subsidies may be paid only on dwellings that remain in the ownership and full control of local authorities or a housing association. If a local authority disposed of houses other than to a conventional housing association, subsidy should be promptly cut off. These amendments will change this so far as co-operative housing is concerned on the principle that such housing should be an essential part of any policy of social ownership. But under present law it is made quite unviable financially for such a policy to be pursued. The amendments proved that where the disposal is an approved lease to a co-operative, that cut-off of subsidy should not happen. I hope that local authorities will use their new powers vigorously. In the early days much will no doubt be exploratory. This will be a new avenue for exploration by local authorities, tenants' organisations and the Government. We shall improve arrangements as we go. I can think already of several situations and problems where this device may be helpful early on. First, there is the old-established local authority estate, inhabited by families who have lived there for many years, who intend to go on living there, and for whom it is fully their home as much as any owner-occupier's house is his. Yet they have no say as to how the houses shall be managed, not even about the colour of the paintwork. I allow at once that many local authorities have a good practice of consulting their tenants' associations on such points, but a courteous habit is not the same as a legal right and responsibility. This lack of rights and responsibilities strikes very deeply at the attitude people hold towards the houses and neighbourhoods in which they live—the level of identity they have with home and community. There can be something cold and impersonal about even very good, well-run estates. What is done tends to be done only when management does it. What is not done is sometimes simply the cause of complaints that "They" in the town hall ought to "do something about it." But if the residents as a body, on a street or block or neighbourhood scale, were directly involved in the sense that, "We decide what should be done, because we pay for it and it is our families' and friends' environment", we should receive more prompt action before little defects and problems grew into big ones. Where there were choices as to what should be done, the course followed would be the one selected by the residents, and the decisions they took would determine how the neighbourhood would develop. The very action of doing things together in this way would help to fight some of the alienation that characterises so much of modern urban society. Alternatively, there may be a block of old property in private ownership where the tenants want, would value and could pay for, better things, but where the landlord either could not or would not provide them and would simply want to sell the property. In such a case, the tenants could ask the local authority to buy the property. The local authority would receive the new capital costs element of subsidy, which is 66 per cent. of its loan charges. It could then let or lease it to a co-operative formed by the tenants at a rent that reflected the fact that subsidy was payable. The co-operative could then have a lease for a period of years, perhaps for a period determined by the expected life of the property, perhaps shorter in the first instance. The co-operative would enter into an agreement with the council, to be approved by the Secretary of State, as set out in the amendment. I am arranging for my Department to draft a model agreement to be used as a general framework. This could cover arrangements that were either more or less wide in their terms. It could, for example, provide for co-operative management schemes, to deal only with pure management questions, and if the agreement were confined to this, the powers of such a co-operative would be much the same as those of agents managing property for a landlord, except that here it would be a joint arrangement by a public authority and its tenants. Alternatively the agreement could go much wider and make the co-operative substantively the landlord—a full tenants' co-operative, subject to a procedure set out in the agreement, fixing rents in the same way and deciding how the property should be run. With such a wider agreement, and a reasonably long interest in the property, we have the prospect of exploring means of giving the tenants a form of equity stake. Such a prospect requires further study, but it is a means of offering a new form of home ownership as an alternative to conventional owner-occupation or renting—not just a half-way house or cut-price owner-occupation but, one with its own possibilities, its own individual and community values. This is something which could evolve in the future; but meanwhile, the amendments do not envisage any startling change in the immediate circumstances of tenants who move to co-operation from renting direct from the authority. They would not become Rent Act tenants, so their rents would not be subject to rent officers. They would remain in the local authority rent régime. Where they qualified for a rent rebate, they would still get the same assistance. What would happen would be that they would have a right and duty, together with their neighbours, to consider and settle questions now left to management at the town hall and elsewhere. The legislative provision proposed does not establish any formal connection between co-operatives and the housing association movement. But I hope that the housing association movement will take an interest in the possibility of co-operatives, and will see its way to fostering them. They will have to be run rather separately, and there would be an interest of a supervisory kind by the local authority, by the Secretary of State, and sometimes by the Registrar of Friendly Societies. The consequential amendments are designed to achieve two ends. First, the co-operators will remain primarily associated with the local authority housing sector. Second, the amendments achieve the purely mechanical change from the rent rebate scheme to the rent allowance scheme to which I have already referred. The effective result would be the same. We have, of course, the Campbell Working Party on co-operatives to which I have already referred, which will want to consider how this provision can be used. It is intended to open the way for at least some of the possibilities which that working party may wish to recommend, and I do not doubt that in time there will be further legislative reform which this Government will wish to introduce to enfranchise tenants and expand co-operative housing as part of our democratic socialist policies. This is the start of the process and I commend the amendments to the House and the policy to the community at large. Mr. Michael Morris May I say how much many of us welcome this initiative. Indeed, those of us who have been associated with large groups of council tenants know that there are many of them who look forward to the day when they can be part of a co-operative. However, it is fair to say that where co-operatives are successful—one has in mind Sweden where about a quarter of the housing stock is in co-operatives—their success depends upon two things—that members of the co-operatives have a financial stake, and that they operate as a unit. For these co-operatives to be successful, the financial stake must be real. If, as I understood the Minister to say, it will be on the basis of a long or medium-term lease situation, I am not sure that many tenants will jump for joy at the prospect of being medium-term leaseholders of the local authority. The Minister should ask the working party to face the true facts and strong evidence from Sweden and elsewhere and consider whether it would not be better to release such people altogether and make them true owners of their property. Another point which arises is the point the Minister made about housing associations and the voluntary movement. This concerns the housing co-ownership scheme, which is in its death throes. It is perfectly possible for the option mortgage scheme to be reviewed in relation to current interest rates and current building costs. It is still a viable concept. I greatly hope that the working party will be asked to make a quick examination of this scheme, for if there is not quick action in this area there will be a quick end to co-ownership. Mr. Sydney Irving (Dartford) These are very important amendments. In reply to a question I put to him on Amendment No. 11 the Minister said that he was anxious to do everything possible to encourage the development of co-operative housing. I welcome these amendments, which are evidence of his determination and of the work of the working party. I am sure that Mr. Harold Campbell will take every advantage of the powers which are being given to make proposals which are viable and which will be acceptable. As the Minister said, Amendment No. 20 will enable local authorities to undertake experimental schemes without losing the subsidy. This was the impediment to experiment in the past. This will give local authorities the chance which I hope that they will take to give to tenants by the formation of co-operatives an interest in their homes and control over their environment. The other amendments deal with the control of rents and the important matter of rent allowance. I congratulate the Minister on what he has been able to do in such a short time. Mr. Stephen Ross I congratulate the Minister on an imaginative and welcome addition to the Bill. The Campbell committee which is looking into the whole co-operative idea of housing should be prepared to consider suggestions emanating from any quarter. I think of my own party which has debated this subject on numerous occasions and which has made recommendations which the committee may find helpful. I greatly welcome this first step and look forward to reading the Minister's remarks in Hansard. Mr. Douglas-Mann I, too, congratulate the Minister on this proposal. In 25 years' time we shall probably be looking back at this proposal and regarding it as an historic amendment introducing a substantially new element into the housing sector. I look forward to a change in the structure of local authority housing estates. This is a valuable development with possibilities for co-operative management of local authority housing schemes and also for the taking over by associations and tenants' co-operatives of parts of the private sector. With the private landlord inevitably dying, I do not wish to see the local authority becoming the only landlord in any locality. 12.45 a.m. I raise one strong note of dissent on Amendment No. 35, which will exclude tenancies under co-operative schemes from the protection of the Rent Act. I appreciate that it would be complicated for the tenants of co-operatives to have their rents fixed by the rent officer rather than in accordance with the local authority rent pattern. But it is highly undesirable that tenants of co-operatives should not have the security of tenure protection of the Rent Acts. The Minister is anxious to introduce security of tenure for housing association tenants, but if the housing co-operative scheme is to work the tenants must have protection against an arrogant and arbitrary majority. It is possible to have a majority of controllers of co-operative organisations who become arrogant and arbitrary in their management of estates. It is possible to imagine a situation in which a group in a locality decides that it does not wish to have any Protestants, or white people, or black people, and so on, in their estate. That could wholly destroy the objective proposed in the main amendments. I therefore urge the Government—I appreciate the difficulties involved in dealing with the matter simply by opposition—to introduce as rapidly as possible a scheme for the granting of security of tenure to tenants of such co-operatives, even if it has to be introduced in advance of provisions for the security of tenure for council tenants and tenants of housing associations. Subject to that strong reservation, I join other hon. Members in the praise they have given the amendments. Mr. Freeson I take the last point first, because it is an important and serious one—the question of security of tenure and related matters, given that the amendments are accepted in their present form. The model agreement which we shall be drafting in the Department, as I indicated earlier, and which will be circulated following the enactment of the Bill and possibly following the receipt of the first report of the Campbell Working Party, will ensure that there is as much security of tenure for people moving into this field from the conventional local authority tenancy and as much security with regard to rent fixing and rent allowances, and so on, as would be the case if those people had remained as conventional local authority tenants. I have this in mind to cover the period until such time as we can consider the question of security of tenure for tenants in the public sector generally, which, as my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) will know, is something which members of our party have been looking at and to which we are generally committed. Although there is no immediate plan to introduce!such legislation, in due course we shall look at the question of security of tenure and of tenants' rights in many respects in the local authority and housing association field. Although they are now partly covered by the Rent Acts, under the fair rents régime, in this context it will be my intention to cover the fears and anxieties which could arise in extending into the field of housing co-operatives. In other words, I accept the anxiety that has been referred to. I experienced it myself in the past, when I was involved in sponsoring one of the few housing co-operatives that we have—there are only about half a dozen altogether. This was a point that I was seized of some years ago, when I was involved. This is no disagreement with my hon. Friend. It is a matter of procedure. We shall cover it by the agreements, and hon. Members should bear in mind that without such agreements being approved by the Secretary of State, as the amendments require, the co-operative schemes cannot proceed. I hope it will not be long before we can come back to this question of security of tenure generally in the social ownership area to see what further action can be taken on this question of tenants' rights and to look at other aspects of what I call, broadly, tenants' enfranchisement. The hon. Member for Isle of Wight (Mr. Ross) asked whether the working party would be able to receive submissions from party sources. The answer is "Yes—from any source." This is a working party, mainly concerned with the nuts and bolts of proposals for co-operative housing and it is not a working party to consider resolutions and philosophy. Before I appointed him I had a long consultation with the chairman of the working party, Harold Campbell, making it clear that we did not want general statements. That is the line he wants to take. The working party will not discuss philosophy except in so far as it is relevant to looking at options for action. Any evidence or other material submitted should be practical, rather than consisting of the generalities which we could all find time to set down on paper. Dealing with the points raised by the hon. Member for Northampton, South (Mr. Morris), while I accept that it is desirable to work out, as one of the ways of developing co-operative housing, some kind of ownership stake in a collective, it is not factually correct to say that in countries where the co-operative housing movement has grown considerably over the years such growth has been due wholly or primarily to a financial stake. It is not true in Sweden. This is a complex area to examine at this time of night, particularly against the background of a country which has a different legislative and housing history from ours. It is oversimplifying things, to put it mildly, to say that the success of the Swedish movement, and the movement in one or two other countries, has depended on what we loosely refer to as a large financial stake. This is one method but there are others. Similarly, it is not true to say that in such situations movements are dependent upon full freeholding being a part of any scheme. The amendments make it clear that I will not be a party to encouraging the establishment of housing co-operatives with full freehold of the land. They must be seen as a form of social ownership, as being closely linked to the community at large. One of the key ways of ensuring this is to retain the land ownership in the hands of the community at large. It will be no weakness for co-operative housing. On the contrary—and this will be a matter for future discussion—it will be a good way of ensuring the strength of a growing movement, which I hope will result following these amendments and further initiatives which I hope to take. Question put and agreed to. Amendments made: No. 20 in page 15, line 10, at end insert: ' Subsidy where local authority housing functions are exercised by co-operatives 8A.—(1) Where a local authority have made an agreement to which this paragraph applies with a society, company or body of trustees for the time being approved by the Secretary of State for the purposes of this paragraph (in this paragraph referred to as a "co-operative"), neither the fact that they have made the agreement nor any letting of land in pursuance of it shall be treated as a ground for the reduction or discontinuance of their housing subsidy under paragraph 8 above. (2) The agreements to which this paragraph applies are agreements between a local authority and a co-operative— (a) for the exercise by the co-operative, in such terms as may be provided in the agreement, of any of the local authority's powers relating to land in which they have a legal estate and which the authority for the time being hold for the purposes of Part V of the Housing Act 1957 and the performance by the co-operative of any of the local authority's duties relating to such land; or(b) for the exercise by the co-operative, in connection with any such land as is referred to in paragraph (a) above, of any of the local authority's powers under section 94 or 95 of the Housing Act 1957 (powers to provide furniture, board and laundry facilities). (3) An agreement to which this section applies may only be made with the approval of the Secretary of State and the terms of any such agreement shall be approved by him. (4) The Secretary of State's approval, both to the making and to the terms of any such agreement, may be given either generally to local authorities or to any local authority or description of local authority or in any particular case and may be given unconditionally or subject to any conditions. (5) Without prejudice to any power to let land conferred on a local authority by any enactment, the terms of an agreement to which this paragraph applies may include terms providing for the letting of land to the co-operative by the local authority. (6) A housing association which is registered under Part II of the Housing Act 1974 shall not be entitled to a grant under Part III of that Act in respect of land for the time being comprised in an agreement to which this paragraph applies.' No. 21, in line 23, leave out 'direct' and insert 'determine'. No. 22, in line 36, leave out 'direction' and insert 'determination'. No. 23, in page 16, line 6, at end insert: '(1A) It is hereby declared that the power of giving directions conferred on the Treasury by sub-paragraph (1) above includes power to vary or revoke directions given under that subparagraph'.—[Mr. Freeson.] Mr. Freeson I beg to move Amendment No. 24, in page 16, line 22, at end insert— ' Amendment of section 105 of Housing Finance Act 1972 11A.—(1) For section 105(3) of the Housing Finance Act 1972 (power to direct that Part I of that Act shall apply to a housing authority's dwellings subject to modifications) there shall be substituted the following subsection:— "(3) The Secretary of State may direct that Part I of this Act shall apply to a housing authority subject to such modifications as are specified in the direction, being modifications which do not increase all or any of the sums payable by the Secretary of State to the authority under the said Part I.". (2) The substitution of the subsection set out in sub-paragraph (1) above for section 105(3) of the Housing Finance Act 1972, as originally enacted, shall not affect the validity of any direction under that subsection, and any such direction shall continue in force and have effect as if made under the substituted section'. This amendment is necessary in consequence of the repeal of Parts V and VI of the Housing Finance Act 1972. It has a simple purpose—namely, to enable the Barbican development to remain outside the City's housing revenue account, as is the case at present. For various reasons concerned with the history and nature of the scheme it would be undesirable for the City's housing finance for general housing needs to be distorted by this special development. Mr. Douglas-Mann I do not think we should allow this amendment to pass without expressing disappointment at what amounts to a drafting amendment relating to Section 105 of the Housing Finance Act 1972 in its application to the Barbican. In Committee on 17th December the Minister—I appreciate that he has had very little time to do anything about the matter—expressed the intention of taking certain action after looking further into the Barbican in particular. Problems arising from cases in which directions have been made under Section 105 of the 1972 Act are by no means confined to the Barbican, but in the Barbican rents are rising at such a rate that the rents of St. Mary's Mansions look quite moderate. The provisions that we have introduced into the Bill by virtue of new Clause 2 will not give any protection to the tenants of the Barbican. We shall have housing committees making their determinations on local authority rents, we shall have rent officers to assess the level of rents in the private sector, and we shall have the rents disregarding the improvements being carried out by local authorities in their capacity as landlords. In the Barbican—this point was made by the City Remembrancer—improvements being made in the locality are put forward as one of the justifications for the further rise in rents which is now taking place. New Clause 2, if my understanding is correct, will not give protection to tenants in the Barbican because their rents do not go to the rent officer and local authority improvements will be disregarded when assessing the level of rents there. I hoped that the Minister would introduce a further change which would protect and improve the situation of tenants in the Barbican. As Section 105 of the Housing Finance Act stands, or even as amended, there seems to be no provision for a direction once given to be later revoked or varied, because subsection (4) is not affected. Unless the direction originally given was a radical one or for a limited time, under the legislation now proposed, even with this amendment, there will be no opportunity for the Minister to make any change without yet further legislation. There will be no opportunity in future for the Minister to take the action that he indicated in Committee he was contemplating. Mr. Freeson It would be unwise and it is unnecessary for me to go over the ground that was covered in Committee on this matter. Section 105 of the 1972 Act enabled the Secretary of State to exclude from certain of the Act's provisions special categories of dwellings. It was specifically intended to be used for the City of London's Barbican development, although other properties could be covered by it. The Barbican scheme was built to a very high standard for letting to tenants who could afford high rents and for which there was never any intention to pay Exchequer subsidy. The whole purpose of the amendment is to continue the position whereby this estate and others like it may be excluded from the housing revenue account and from coverage by Exchequer subsidy. It does not alter the position of the City of London in using its discretion as to how it would fix rents for the Barbican Indeed since the Committee stage, when my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) raised the matter, I had arrangements made for the Barbican to be visited by representatives of the Department. The flats there, quite apart from their location, are built and equipped to a far higher standard than houses for general needs, which themselves are built to adequate standards well in excess of those which obtained in the past. 1.0 a.m. I do not deny that the rents are high, but they have to be viewed in the light of the standard and location of the dwellings. I understand that they are by no means more than the market rent for comparable dwellings and I have certainly satisfied myself that rent income covers, and in the immediate future is likely to cover, only about one-third of the cost to the City of London of Barbican housing. I have also satisfied myself that the costings do not include any burden for non-housing development, for example the arts centre, which was a matter of concern and anxiety to some people in the Barbican. They are based on loan charges which include interest at a lower rate than that prevailing in most areas. There is nothing in what I propose to prevent further consideration and consultation on matters of concern with regard to the Barbican, but I must stick to the specific intention of the amendment. Amendment agreed to. Amendment made: No. 25, in page 16, leave out lines 23 to 45.—[ Mr. Freeson.] Mr. Freeson I beg to move Amendment No. 26, in page 17, line 11, leave out 'rental period which ended on or after 1st October 1971 and insert 'relevant rental period'. Mr. Deputy Speaker Perhaps it would be convenient to take at the same time Government Amendments Nos. 27 to 30. Mr. Freeson The amendments are designed to clarify the rental periods for which refunds of rent may be made under Part II of Schedule 1. Amendment agreed to. Amendments made: No. 27, in page 17, line 16, at end insert— '(2) In sub-paragraph (1) above "relevant rental period" means— (a) where sub-paragraph (1)(a) applies, a rental period which ended on or after 1st October 1971 but began before the determination of a rent under section 56 of the Housing Finance Act 1972, and(b) where sub-paragraph (1)(b) above applies, a rental period which ended on or after 1st October 1971 but began before the coming into force of this Part of this Schedule'. No. 28, in page 17, line 18, after 'rent', insert 'paid for any relevant rental period'. No. 29, in page 17, line 20, at end insert— '(1A) En sub-paragraph (1) above "relevant rental period" means a rental period which ended on or after 1st October 1971 but began before the coming into force of this Part of this Schedule'. No. 30, in page 17, leave out line 29. No. 31, in page 18, leave out lines 9 to 12 and insert 'amount arrived at under paragraph 13 (and, where relevant, paragraph 16) above; and where this paragraph requires the deduction of one amount from another, but the amount to be deducted is the greater, the two amounts shall be taken to cancel each other out.' No. 32, in page 18, line 27, at end insert— 'Part Iii Provisions Relating To Certain Housing Associations 21A.—(1) The local authority for any area in which there are dwellings provided by a housing association to which at the passing of this Act an order under section 80 of the Housing Finance Act 1972 (power to apply to certain housing associations provisions of Act relating to local authorities) applies shall have the same powers and be under the same duties in relation to the determination of rents for those dwellings as are conferred or imposed, in relation to dwellings provided by the authority themselves, by sections 111 and 113 of the Housing Act 1957, as amended by section 1 above. (2) Subject to sub-paragraph (3) below, it shall be the duty of the association to charge any rent determined by the local authority under this paragraph. (3) So long as any order under section 11 of the Counter-Inflation Act 1973 relating to rents of such a housing association is in force, nothing in sub-paragraph (2) above shall authorise the charging of any rent which would not be authorised by the order. (4) In relation to the determination of rents under sub-paragraph (1) above, a local authority shall have the same powers and be under the same duties in relation to any separate account of income and expenditure in their area which an order under the said section 80 requires such an association to keep as are conferred or imposed on them in relation to their Housing Revenue Account by section 1(3) of this Act. 21B.—(1) An order may provide for the application to any such housing association, subject to such exceptions and modifications as may be prescribed— (a) of sections 2 to 4 above, and Parts I and II of this Schedule, and(b) of paragraphs 8, 10 and 14(2) of Schedule 1 to the Housing Finance Act 1972 (Housing Revenue Account). (2) Such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament. (3) Section 80 of the Housing Finance Act 1972 is repealed, but its repeal shall not affect the validity of any order under it, and any such order shall accordingly continue in force subject to sub-paragraph (4) below. (4) An order which is continued in force by sub-paragraph (3) above may be varied or revoked by an order under this paragraph. (5) The powers of variation conferred by sub-paragraph (4) above includes power to make any provision which could have been made by an order under section 80 of the Housing Finance Act 1972'.—[ Mr. Freeson.] Schedule 2 Phasing Of Rent Increases Mr. Kaufman I beg to move Amendment No. 33, in page 18, line 34, after 'means', insert: ',subject to sub-paragraph (1A) below,'. Mr. Deputy Speaker For the convenience of the House, perhaps we might debate at the same time Government Amendment No. 34. Mr. Kaufman These amendments would alter the definition of "period of delay" so that, in the case of a rent registered on or after 8th March 1974 but before the coming into force of the provisions phasing rent increases in the private sector, the period of delay would begin on the date on which Clause 7 comes into force. The anniversary for phasing purposes in these cases would then date from the date of the coming into force of the section and not the date of registration of a rent. These amendments ensure that tenants who have had rents registered during the freeze will not be faced with two phased increases in a single year, the first coming shortly after Clause 7 comes into operation and the second coming on the anniversary of the date of registration, as would otherwise have been the case. Mr. Arthur Latham This is the third of the responses to which I referred earlier. One appreciated the spontaneous response of both Ministers in Committee when it was realised that, because of the Bill, some people would face a two-thirds increase immediately and a one-third increase subsequently—a nonsensical form of phasing. The amendment will get rid of that anomaly. However, will the Minister confirm that, as a result of the amendment, re-registration will take place when only two instalments of the phasing have been passed on to the tenant? This means that there will be an overlap between the three years of phasing of a current increase which is due at the end of the three years and a subsequent increase which is due as a result of re-registration. Can my hon. Friend make it clear that my understanding is correct that the third instalment will be added to any new total rent increase and then divided by three for a further period of phasing? It is important to establish this and to get it on the record, otherwise it could mean that tenants could be faced with a double increase at the end of three years, which would simply have shifted the anomaly from the beginning to the end of the phasing. At the fifth sitting in Committee, in response to my suggestion about a five, six, or even seven-year phasing in some cases, the Minister said: "I believe there are serious problems raised by extending phasing beyond the three-year period, or a two-year period …" [Official Report Standing Committee A, 10th December 1974: c. 253.] As I understand the arguments from private discussions I had with the Minister, one of the problems concerning the extended phasing would be that a fair rent would be fixed but might never be reached as a consequence of extended phasing. Having now accepted, in consequence of this amendment, that an unfulfilled stage of the first set of phasing can be carried forward, after re-registration, and included in a new phasing, does not that remove the objection to extended phasing and, in a number of circumstances, meet the problems of excessive rent rises? In further observance of the undertaking to reconsider this matter which the Minister gave in Committee, will he see, between now and the time the Bill goes to another place, whether there might still be a case for considering extended phasing where there are three grossly excessive rent increases, any unfulfilled phases being carried forward to any subsequent re-registration? Mr. Kaufman I am obliged to my hon. Friend for the graciousness with which he accepted the concession that we have felt able to make. I fear, however, that I cannot tonight offer him any further concession along the lines he requests, for the reason which emerges from my answer to his question—namely, what happens if a completely fair rent has not been reached because of the concession which these two amendments embody? The Bill already caters for that situation. Schedule 2 provides in paragraph 4(1) that where re-registration starts in the period of delay—that is, before a fair rent is reached—the new phasing starts from the date of re-registration, and the rent recoverable at that date becomes the previous limit for the new phasing. This means that the fair rent which would have been reached will not be reached. It does not mean that the result will be extended phasing. It means that the landlord loses a certain amount of the rent which he would otherwise have received but that the new fair rent comes into play not literally in the middle of the period of delay but at a stage in the period of delay when the new phasing for the new fair rent starts. This does not mean an extended phasing situation. It means that the previous phasing will have been truncated or unfulfilled. Therefore, while I am highly grateful to my hon. Friend for the way in which he has received these amendments, I am afraid that I cannot offer him anything further at this stage. Amendment agreed to. Amendment made: No. 34, in page 19, line 15, at end insert: '(1A) In the case of a rent registered on or after 8th March 1974 but before the coming into force of section 7 above, the period of delay begins on the date on which that section comes into force'.—[Mr. Kaufman.] Schedule 4 Minor And Consequential Amendments Amendments made: No. 35, in page 23, line 23, at beginning insert: Rent Act 1968 0. The following subsection shall be added at the end of section 5 of the Rent Act 1968 (cases excluded from protected or statutory tenancy):— "(7) A tenancy shall not be a protected tenancy at any time when the interest of the landlord under that tenancy belongs to a co-operative, as defined in paragraph 8A of Schedule 1 to the Housing Rents and Subsidies Act 1975 (housing subsidy where local authority housing functions are exercised by such co-operatives) and the dwelling-house is comprised in an agreement to which that paragraph applies."'. No. 36, in line 24, leave out from beginning to '(which' and insert: '1. After -section 19(6) of the Housing Finance Act 1972 (rent allowances) there shall be inserted the following subsection:— "(6A) A person is also a private tenant if he occupies a dwelling let to him by a co-operative, as defined in paragraph 8A of Schedule 1 to the Housing Rents and Subsidies Act 1975 (housing subsidy where local authority housing functions are exercised by such co-operative and his tenancy would be a protected tenancy but for section 5(7) of that Act". 1A. In section 25(2)(c) of that Act'. No. 37, in line 27, leave out paragraph 2. No. 38, in page 24, line 8, leave out '1974' and insert '1975'. No. 39, in line 13, leave out '1974' and insert '1975'.—[ Mr. Kaufman.] Mr. Kaufman I beg to move Amendment No. 40, in page 25, line 32, at end insert: '(4) The houses to which sub-paragraph (2) relates do not include houses occupied, pursuant to a contract of service, by persons employed by the local authority on the maintenance, supervision and management of houses and other property within the account'. The provisions in Schedule 1 to the 1972 Act which stipulate what rates can be charged and what rates can be credited to the housing revenue account are being amended by paragraph 5 of Schedule 4 to the Bill in order to remove certain anomalies and to provide for hostels, which are to be brought into the housing revenue account from 1st April 1975. The provisions of the Bill as at present drafted preclude an authority from charging to its housing revenue account rates on dwellings occupied as service tenancies by, for example, caretakers, wardens and essential maintenance staff. This amendment widens the provisions to include these categories. Amendment agreed to. Amendment made: No. 41, in page 26, line 21, at end insert: '7A. In paragraph (a) of section 18(1) of that Act (special rules applicable to tenancies of registered and certain other housing associations) after "1972" there shall be inserted the words "or paragraph 21B of Schedule 1 to the Housing Rents and Subsidies Act 1975"'.—[Mr. Kaufman.] Mr. Kaufman I beg to move Amendment No. 42, in page 26, line 21, at end insert— '7B.—(1) The words in paragraph (a) of section 56(2) of that Act (grants for provision, improvement and repair of dwellings) from "or", in the second place where it occurs, to "purposes" shall be omitted.(2) For paragraph (b) of that subsection there shall be substituted the following paragraph:— "(b) an intermediate grant' in respect— (i) of works required for the improvement of a dwelling by the provision of standard amenities which it lacks (including works such as are referred to in section 65(3)(b) below); or(ii) of works required for the provision for a dwelling for a disabled occupant of any standard amenity where an existing amenity of the same description is not readily accessible to him, by reason of his disability;".7C.—(1) In subsection (2) of section 65 of that Act (intermediate grants) for the word "An" there shall be substituted the words "Subject to subsection (2A) below, an".(2) After that subsection there shall be inserted the following subsection:— "(2A) An application for an intermediate grant in respect of a dwelling for a disabled occupant may contain, as an alternative, in relation to any of the standard amenities specified as mentioned in subsection (2)(a) above, to a statement under subsection (2)(c) above, a statement that the dwelling possesses such an amenity but that is not or will not be readily accessible to the disabled occupant, by reason of his disability.".(3) In subsection (3) of that section— (a) for the words "A local" there shall be substituted the words "Subject to subsection (4) below, a local"; and(b) in paragraph (a) the words from "except" to "apply" shall be omitted.(4) After that subsection there shall be inserted the following subsection:— "(4) Where an application for an intermediate grant in respect of a dwelling for a disabled occupant contains a statement under subsection (2A) above, this section shall have effect, in relation to any amenity mentioned in that statement, as if for subsection (3) above there were substituted the following subsection:—'(3) A local authority shall not approve an application for an intermediate grant unless they are satisfied that any existing amenity mentioned in the statement under subsection (2A) above is not or will not be readily accessible to the disabled occupant, by reason of his disability'"' Mr. Deputy Speaker With this, we may discuss Government Amendments Nos. 43 and 46. Mr. Kaufman These amendments are intended to clarify certain provisions of the Housing Act 1974 dealing with improvement grants and intermediate grants in relation to disabled persons. Last summer, during the concluding stages of the then Housing Bill, amendments were introduced in another place which were designed to extend the scope of improvement grants and intermediate grants in favour of disabled persons. Although the Government spokesman at the time expressed doubts whether it was appropriate to include in the system of house renovation grants specific provisions for meeting the special needs of disabled people, on the basis that these could be dealt with quite separately under the Chronically Sick and Disabled Persons Act 1970, the amendments eventually received the Government's support and were accepted. It has since become clear, however, that, although well-intentioned, the provisions as they now exist—they were brought into force on 2nd December along with the rest of the new grant provisions—are not sufficiently precise to enable local authorities to interpret them sensibly. These amendments are intended solely to clarify the original position of the 1974 Act, and they do not alter the general intention of those provisions. Amendment agreed to. Amendment made: No. 43, in page 27, line 2, at end insert: '9A.—(1) In the definition of "improvement" in section 84 of that Act (interpretation of Part VII) after the word "enlargement" there shall be inserted the words "and in relation to a dwelling for a disabled occupant, includes the doing of works required for making it suitable for his accommodation, welfare or employment,". (2) The following definitions shall be inserted in that section in the appropriate places in alphabetical order:— "disabled occupant" means a disabled person for whose benefit it is proposed to carry out any of the relevant works;"disabled person" means— (a) any person who is registered in pursuance of arrangements made under subsection (1) of section 29 of the National Assistance Act 1948 (handicapped persons' welfare); and(b) any other person for whose welfare arrangements have been made under that subsection or, in the opinion of the welfare authority, might be made under it; "dwelling for a disabled occupant" means a dwelling which— (a) is a disabled occupant's only or main residence when an application for a grant in respect of it is made, or(b) is likely in the opinion of the local authority to become a disabled occupant's only or main residence not later than the expiry of a reasonable period after the completion of the relevant works; "welfare authority", in relation to a dwelling for a disabled occupant, means the council which is the local authority for the purposes of the Local Authority Social Services Act 1970 for the area in which the dwelling is situated;'.—[Mr. Kaufman.] Schedule 5 Repeals Amendments made: No. 44, in page 28, leave out lines 11 to 14. No. 45, in page 29, line 17, column 3, at end insert—'Section 80'. No. 46, in page 29, line 27, column 3, at beginning insert: 'In section 56(2)(a), the words from "or", in the second place where it occurs, to "purposes". In section 65(3)(a), the words from "except" to "apply"'.—[Mr. Kaufman.] Motion made, and Question proposed, That the Bill be now read the Third time. 1.13 a.m. Mr. Scott It had been my intention now to move "That the Question be not put". In any event, the point I wish to make is that simply because, both tonight and in Committee, the Opposition have expedited the Government's business and given them the co-operation they required to get their Bill according to the time-table for which they asked, I hope the Government do not feel that we do not regard this as an extremely objectionable measure in many ways. We believe that in several ways the Bill is taking the public and those whom it affects for a ride. The Bill was widely trailed by the Secretary of State and others as restoring local government autonomy in rent fixing. It has become clear as our discussions have proceeded, not least from those earlier tonight on Clause 2, that that is not the case. The Government are not restoring autonomy to local authorities to fix rents. In fact, they are now taking unto themselves reserve powers which, it may be, are for use only as a long stop. Clearly, however, the Under-Secretary will be under considerable pressure from some of his hon. Friends who are totally, ideologically and in a doctrinaire way opposed to any increase in rents for any housing, whether it be in the local authority or the private sectors. No matter what burdens might be placed on landlords or on ratepayers, no matter what slums might be created in the process, they will always seek to oppose any increase in rents and will be constantly pressurising the Minister to use the long-stop powers he is taking in the Bill. We know that local authorities feel that the reserve powers in Clause 2, if exercised, could cause havoc with their housing revenue accounts. The Government have refused to accept the arguments which would have placed the financial responsibility for any order under Clause 2 on the Exchequer rather than the ratepayer. All in all, we do not believe that the measure lives up to its promise of restoring autonomy to local authorities. Secondly, the Bill continues the Labour Party's vendetta against the private landlord, both in its going back on the progress towards decontrol which was laid down in the 1972 Act and in the attitude it has taken towards ratepayers. We are grateful for the one small concession we got this evening. But the 12½ per cent. figure in the Bill which landlords will be able to recoup for any repairs they carry out is wholly inadequate. The 12½ per cent. was set at a time when Bank Rate was 4 per cent. With a minimum lending rate now of 11 per cent., no one is able to borrow money for this sort of purpose at less than 12½ per cent. Yet 12½ per cent. remains the limit of the return that a landlord can get. I hope that the Minister will consider whether it will be possible to include in the cost of repairs at least the cost of borrowing for a period of three or four years. In this measure the Minister is failing to appreciate that even if eventually he is able to realise his dream of all rented accommodation coming into social ownership, for many years ahead we shall depend on the private rented sector. We shall not serve anyone well, tenants or the nation, if we allow the stock of housing at present in private hands to deteriorate. That means that landlords must be able to get a fair return. We ought to be setting out to maximise the use we can make of our housing stock, both public and private. The way in which the Bill will affect the private landlord will be counter-productive in that respect. Finally, the Bill was trailed as repealing the Housing Finance Act 1972. It does not do that. In large measure the 1972 Act will be intact when this Bill reaches the statute book. Certainly one of the main arches of the 1972 Act, the mandatory system of rent allowances and rebates, will remain in existence. The Bill insulates the public sector of housing against the fair rent system. If one had believed the horrific forecasts about the likely movement of fair rents made by hon. Members now on the Government side of the House when the 1972 Act was passing through Parliament, there might just have been some justification for insulating the public sector from the system. We know, however, that the movement of fair rents has been much more modest than hon. Members opposite forecast at that time. Even in the City of Westminster, which the hon. Member for Paddington (Mr. Latham) represents, we now hear that the average increase in rents registered during 1973 was 18 per cent. That covers at least a three-year period. There has, therefore, been an average annual increase of less than 7 per cent. In other words, the fair rents were rising at well under the rate of inflation at the time. I do not believe in the circumstances that it is right or necessary that we should insulate the public sector from the fair rents system. I believe that there are considerable advantages in having a common system of rent determination in both public and private sectors. What would a change from fair rents to reasonable rents in the public sector achieve? We have pressed the Minister several times in Committee and he has been remarkably coy about what "reasonable rents" are likely to mean in practice. During Second Reading of the Housing Finance Bill, the Secretary of State said that "the only proper and sensible principle is to set rents at a level people can pay without a means test and without a rebate."—[Official Report, 15th November 1971; Vol. 826, c. 54.] Nothing in this Bill will restore that situation, and I am sure that the Minister will not pretend that it will. We know that the percentage of household income which is paid on average in council rents is 7½ per cent. That was stated in a Written Answer by the Under-Secretary this week. No one could say that this figure is unduly high or harsh or is one which cannot be borne. On the question of rents, as in the autonomy of local authorities, the Government in this measure are playing to the gallery and they will achieve very little by the passage of the Bill. Since the end of the Committee stage we have seen publication of a book by Mr. Berry called "Housing—The Great British Failure". Both the major parties must share the blame for that failure but I am sad that by passing this Bill on to the Statute Book the Government will be compounding rather than mitigating that failure. 1.22 a.m. Mr. Stephen Ross I do not accept all the strictures by the hon. Member for Chelsea (Mr. Scott). The Bill certainly has its faults, and I agree with him about the terrible mess that exists in the housing situation. I also accept that his party bears some of the responsibility just as much as the Government must bear responsibility for past records. Anyone who has tried to work or understand the Rent Acts emanating from 1918 or even before lands himself in a complete and utter mess. The sooner we clear up that mess and have a radical rethink of the whole subject, the better. I take heart from the fact that the Minister has said that he is to carry out some such reappraisal, and I hope that it will be a full-hearted reappraisal of the whole situation. There was a leading article in The Times last week on the question of the short-term lease, and bodies like Shelter have been putting forward suggestions which should be taken very much to heart. I support the principle that the Bill is returning to local authorities much of the responsibility for dealing with their own affairs. That is absolutely correct. Although Clause 2 has been retained, I take the Minister at his word and I trust that he will not be implementing it. We shall, therefore, be supporting the Government in the Division that I presume is to take place on Third Reading. 1.24 a.m. Mr. Arthur Latham I make no apology for rising to put forward a few brief comments on on Third Reading. There should be no cause for complaint from my right hon. Friends if I do so, especially when one contrasts the situation which existed when the Housing Finance Bill was before the House and we spent many nights trying to resist it. There were 57 sittings to deal with that Bill in Committee and the whole process took about six months. My right hon. Friend the Secretary of State said on Second Reading that the Bill was cutting the throat of the Housing Finance Act. That Act has bled to death rather quietly, in contrast to its painful and protacted birth. I cannot accept what the hon. Member for Chelsea (Mr. Scott) said. As one who served on the Committee dealing with that Act, he will recall that the points that were fought over at such length were the very ones of which the Bill rids us. The Bill does what the Labour Party undertook to do for local authority tenants. I rise particularly to emphasise that it does not go as far as necessary for private tenants. I think that by a slip of the tongue the hon. Member for Chelsea referred to me as representing the City of Westminster. In fact I represent only one-third of it. But I think that I represent the views of tenants in all three constituencies of the City of Westminster on this matter. I complained on Second Reading that the Bill as it then stood would simply mean that private tenants in Westminster and elsewhere would be as badly off in three years with a Labour Government as they would have been if the Tory Government had stayed in office. All that was offered then was the three years of phasing—execution by instalments rather than quick guillotining. There have since been three additions to the Bill which help. I hope that the new clause which we debated tonight will have the effect that my right hon. Friend the Minister intends. Amendment No. 34 means that for one-third of tenants the increases they face will at least be delayed for a further year. Most important are the reserve powers in the private sector. If they had not been introduced, those of us who wanted to make representations on behalf of tenants could have been correctly told by the Minister "I have no power to intervene." The door is now there. It may not be open. It may be only just ajar, but I and others will be knocking very hard on it to get my hon. Friend to use those reserve powers in proper cases in the coming months and year or two. I have offered my hon. Friend many congratulations tonight. Will he please re-emphasise that the Bill does not attempt to grapple comprehensively with the private sector problem? There is a need for far more comprehensive legislation dealing with the private sector within a relatively short time. Such legislation comes under three headings: new criteria for determining rents in the private sector; a different composition of the rent assessment committees, which seem in the main to be landlord-biased; and a system of appeal or moderation, so that there is not the present inconsistency between one rent assessment committee area and another. The Bill may not be much comfort to local authority tenants in my constituency, who are at the mercy of the City of Westminster to a large extent. I hope, however, that my hon. Friend will accept the thanks of the private tenants for the Bill, so far as it goes, and reassure them that he and the Government will undertake a comprehensive review of private rents legislation and introduce a far more comprehensive measure as soon as they can. 1.30 a.m. Mr. Freeson I assure the House that my comments will be brief. I do not intend to take up in detail the points made by the hon. Member for Chelsea (Mr. Scott) despite his grumbling and rather carping approach. I accept and understand that he has to make some effort at this late stage because until now the Bill's proposals have had a quiet response from the Opposition. One day when we have time we shall try to probe, out of interest, why that should have been so. I must state again, whatever reservations there may be about certain of the reserve powers in the Bill, that the Bill does its prime job—namely, to restore to local authorities a large measure of freedom of action which was destroyed by the Housing Finance Act 1972. It provides a subsidy system which will be directed towards getting more houses started and built as well as more houses purchased and modernised. It will provide a subsidy system which at the same time will help to restrain the impact of high rises in costs on rent levels. Whatever increases have to be introduced in future will be restrained to a relatively modest level by what we propose in the Bill. I do not propose to labour such points in detail. We have been over this ground many times in the past. No doubt there will be a further opportunity to go over it again when the Bill returns from another place. For the future there is, as has been indicated on previous occasions, a very fundamental housing finance review now to be put in hand. It will go well beyond the conventional practice of reviewing only local authority rents and subsidy policy. That has been the main burden of finance reviews in the past. It will be a comprehensive review which will include a wide range of aspects well beyond the realms of local authority building and of rents and subsidies. The same may be said, although it will not be given the same urgency, in response to the last point made by my hon. Friend the Member for Paddington (Mr. Latham). It will be the Government's intention to undertake a review of the Rent Acts. I have stated that intention in the past year during the course of the legislation that we have been handling and I state it again. I must make it clear that our first priority will take a lot of the resources of the Department's personnel. We hope to see the completion of the housing finance review during the next 12 to 15 months. Even that will be a tight timetable. It will leave a lot of work still to be done on an on-going basis. On the basis of such a review we shall be able to come to conclusions on future policy developments across the board. We shall be dealing with some of the points that have been put by the hon. Member for Chelsea, with which I have --------------------------------------------------------------------------------------------------------- |Allaun, Frank |Garrett, W. E. (Wallsend) |Millan, Bruce | --------------------------------------------------------------------------------------------------------- |Archer, Peter |George, Bruce |Miller, Dr M. S. (E Kilbride) | --------------------------------------------------------------------------------------------------------- |Armstrong, Ernest |Golding, John |Murray, Ronald King | --------------------------------------------------------------------------------------------------------- |Ashton, Joe |Grant, George (Morpeth) |Newens, Stanley | --------------------------------------------------------------------------------------------------------- |Bagier, Gordon A. T. |Grant, John (Islington C) |Noble, Mike | --------------------------------------------------------------------------------------------------------- |Barnett, Guy (Greenwich) |Grocott, Bruce |O'Malley, Rt Hon Brian | --------------------------------------------------------------------------------------------------------- |Bates, Alf |Hamilton, James (Bothwell) |Orme, Rt Hon Stanley | --------------------------------------------------------------------------------------------------------- |Bean, R. E. |Hamling, William |Ovenden, John | --------------------------------------------------------------------------------------------------------- |Bennett, Andrew (Stockport N) |Harper Joseph |Park, George | --------------------------------------------------------------------------------------------------------- |Bidwell, Sydney |Harrison, Walter (Wakefield) |Parry, Robert | --------------------------------------------------------------------------------------------------------- |Blenkinsop, Arthur |Horam, John |Pavitt, Laurie | --------------------------------------------------------------------------------------------------------- |Boardman, H. |Howells, Geraint (Cardigan) |Prescott, John | --------------------------------------------------------------------------------------------------------- |Booth, Albert |Hoyle, Douglas (Nelson) |Price, C. (Lewisham W) | --------------------------------------------------------------------------------------------------------- |Bray, Dr Jeremy |Hughes, Rt Hon C. (Anglesey) |Price, William (Rugby) | --------------------------------------------------------------------------------------------------------- |Brown, Hugh D. (Provan) |Hughes, Mark (Durham) |Radice, Giles | --------------------------------------------------------------------------------------------------------- |Buchan, Norman |Hughes, Robert (Aberdeen N) |Richardson, Miss Jo | --------------------------------------------------------------------------------------------------------- |Buchanan, Richard |Hughes, Roy (Newport) |Roberts, Albert (Normanton) | --------------------------------------------------------------------------------------------------------- |Callaghan, Jim (Middleton & P)|Irving, Rt Hon S. (Dartford) |Roberts, Gwilym (Cannock) | --------------------------------------------------------------------------------------------------------- |Campbell, Ian |Janner, Greville |Roderick, Caerwyn | --------------------------------------------------------------------------------------------------------- |Cant, R. B. |Jay, Rt Hon Douglas |Rodgers, George (Chorley) | --------------------------------------------------------------------------------------------------------- |Carmichael, Neil |John, Brynmor |Rooker, J. W. | --------------------------------------------------------------------------------------------------------- |Cartwright, John |Johnson, James (Hull West) |Roper, John | --------------------------------------------------------------------------------------------------------- |Cocks, Michael (Bristol S) |Jones, Barry (East Flint) |Rose, Paul B. | --------------------------------------------------------------------------------------------------------- |Coleman, Donald |Jones, Dan (Burnley) |Ross, Stephen (Isle of Wight) | --------------------------------------------------------------------------------------------------------- |Colquhoun, Mrs Maureen |Judd, Frank |Rowlands, Ted | --------------------------------------------------------------------------------------------------------- |Cook, Robin F. (Edin C) |Kaufman, Gerald |Shaw, Arnold (Ilford South) | --------------------------------------------------------------------------------------------------------- |Craigen, J. M. (Maryhill) |Kinnock Neil |Short, Rt Hon E. (Newcastle C)| --------------------------------------------------------------------------------------------------------- |Cryer, Bob |Lamborn, Harry |Sillars, James | --------------------------------------------------------------------------------------------------------- |Cunningham, Dr J. (Whiteh) |Lamond, James |Silverman, Julius | --------------------------------------------------------------------------------------------------------- |Dalyell, Tam |Latham, Arthur (Paddington) |Skinner, Dennis | --------------------------------------------------------------------------------------------------------- |Davidson, Arthur |Lestor, Miss Joan (Eton & Slough)|Small, William | --------------------------------------------------------------------------------------------------------- |Davies, Bryan (Enfield N) |Litterick, Tom |Smith, Cyril (Rochdale) | --------------------------------------------------------------------------------------------------------- |Dempsey, James |Loyden, Eddie |Smith, John (N Lanarkshire) | --------------------------------------------------------------------------------------------------------- |Doig, Peter |Lyon, Alexander (York) |Spearing, Nigel | --------------------------------------------------------------------------------------------------------- |Dormand, J. D. |Lyons, Edward (Bradford W) |Spriggs, Leslie | --------------------------------------------------------------------------------------------------------- |Douglas-Mann, Bruce |Mabon, Dr J. Dickson |Stallard, A. W. | --------------------------------------------------------------------------------------------------------- |Duffy, A. E. P. |McCartney, Hugh |Stewart, Rt Hn M. (Fulham) | --------------------------------------------------------------------------------------------------------- |Dunn, James A. |McElhone, Frank |Stoddart, David | --------------------------------------------------------------------------------------------------------- |Dunnett, Jack |MacFarquhar, Roderick |Stott, Roger | --------------------------------------------------------------------------------------------------------- |Eadie, Alex |Maclennan, Robert |Swain, Thomas | --------------------------------------------------------------------------------------------------------- |Edge, Geoff |McMillan, Tom (Glasgow C) |Taylor, Mrs Ann (Bolton W) | --------------------------------------------------------------------------------------------------------- |Ellis, John (Brigg & Scun) |McNamara, Kevin |Thomas, Jeffrey (Abertillery) | --------------------------------------------------------------------------------------------------------- |Ellis, Tom (Wrexham) |Madden, Max |Thomas, Hon (Bristol NW) | --------------------------------------------------------------------------------------------------------- |Ennals, David |Magee, Bryan |Thorne, Stan (Preston South) | --------------------------------------------------------------------------------------------------------- |Evans, John (Newton) |Mahon, Simon |Tierney, Sydney | --------------------------------------------------------------------------------------------------------- |Ewing, Harry (Stirling) |Marks, Kenneth |Tinn, James | --------------------------------------------------------------------------------------------------------- |Fernyhough, Rt Hon E. |Marquand, David |Tomlinson, John | --------------------------------------------------------------------------------------------------------- |Flannery, Martin |Marshall, Dr Edmund (Goole) |Urwin, T. W. | --------------------------------------------------------------------------------------------------------- |Fletcher, Ted (Darlington) |Meacher, Michael |Wainwright, Edwin (Dearne V) | --------------------------------------------------------------------------------------------------------- |Ford, Ben |Mellish, Rt Hon Robert |Walker, Terry (Kingswood) | --------------------------------------------------------------------------------------------------------- |Freeson, Reginald |Mendelson, John |Ward, Michael | --------------------------------------------------------------------------------------------------------- to a degree some sympathy, although not in the way he has put them and not with the objections that he has put forward on behalf of his party. When we have completed that sort of work we shall at some time—I cannot give a date—embark upon a review of the Rent Acts. We shall pick up the sort of points that have been stated once more by my hon. Friend the Member for Paddington. I hope that the House will give this measure a Third Reading and that we shall be able to proceed to our beds. Question put, That the Bill be now read the Third time:— The House divided: Ayes 161, Noes 107. ---------------------------------------------------------------------------------------- |Watkins, David |Wilson, Alexander (Hamilton)|TELLERS FOR THE AYES:| ---------------------------------------------------------------------------------------- |White, Frank R. (Bury) |Wise, Mrs Audrey |Mr. Thomas Cox and | ---------------------------------------------------------------------------------------- |White, James (Pollok) |Woodall, Alec |Miss Betty Boothroyd.| ---------------------------------------------------------------------------------------- |Williams, Rt Hon Shirley (Hertford)|Woof, Robert | | ---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------- |Atkins, Rt Hon H. (Spelthorne)|Hunt, John |Pym, Rt Hon Francis | ---------------------------------------------------------------------------------------------- |Biffen, John |Hurd, Douglas |Rathbone, Tim | ---------------------------------------------------------------------------------------------- |Biggs-Davison, John |Hutchison, Michael Clark |Rees-Davies, W. R. | ---------------------------------------------------------------------------------------------- |Boyson, Dr Rhodes (Brent) |Irvine, Bryant Godman (Rye) |Renton, Rt Hon Sir D. (Hunts)| ---------------------------------------------------------------------------------------------- |Braine, Sir Bernard |James, David |Ridley, Hon Nicholas | ---------------------------------------------------------------------------------------------- |Brittan, Leon |Jessel, Toby |Rifkind, Malcolm | ---------------------------------------------------------------------------------------------- |Brown, Sir Edward (Bath) |Jopling, Michael |Roberts, Wyn (Conway) | ---------------------------------------------------------------------------------------------- |Budgen, Nick |Kellett-Bowman, Mrs Elaine |Scott, Nicholas | ---------------------------------------------------------------------------------------------- |Bulmer, Esmond |Kershaw, Anthony |Shaw, Giles (Pudsey) | ---------------------------------------------------------------------------------------------- |Carlisle, Mark |King, Evelyn (South Dorset) |Shelton, William (Streatham) | ---------------------------------------------------------------------------------------------- |Chalker, Mrs Lynda |King, Tom (Bridgwater) |Shepherd, Colin | ---------------------------------------------------------------------------------------------- |Clark, Alan (Plymouth, Sutton)|Kitson, Sir Timothy |Shersby, Michael | ---------------------------------------------------------------------------------------------- |Cockcroft, John |Lane, David |Silvester, Fred | ---------------------------------------------------------------------------------------------- |Cooke, Robert (Bristol W) |Lawrence, Ivan |Sims, Roger | ---------------------------------------------------------------------------------------------- |Cope, John |Lawson, Nigel |Skeet, T. H. H. | ---------------------------------------------------------------------------------------------- |Costain, A. P. |Le Merchant, Spencer |Spicer, Michael (S Worcester)| ---------------------------------------------------------------------------------------------- |Douglas-Hamilton, Lord James |Lester, Jim (Beeston) |Sproat, Iain | ---------------------------------------------------------------------------------------------- |du Cann, Rt Hon Edward |Loveridge, John |Stanbrook, Ivor | ---------------------------------------------------------------------------------------------- |Durant, Tony |Luce, Richard |Steen, Anthony (Wavertree) | ---------------------------------------------------------------------------------------------- |Eden, Rt Hon Sir John |Macfarlane, Neil |Stokes, John | ---------------------------------------------------------------------------------------------- |Edwards, Nicholas (Pembroke) |MacGregor, John |Stradling Thomas, J. | ---------------------------------------------------------------------------------------------- |Elliott, Sir William |McNair-Wilson, M. (Newbury) |Taylor, Teddy (Cathcart) | ---------------------------------------------------------------------------------------------- |Eyre, Reginald |Marshall, Michael (Arundel) |Tebbit, Norman | ---------------------------------------------------------------------------------------------- |Fairgrieve, Russell |Maxwell-Hyslop, Robin |Thatcher, Rt Hon Margaret | ---------------------------------------------------------------------------------------------- |Fowler, Norman (Sutton C'f'd) |Mayhew, Patrick |Thomas, Rt Hon P. (Hendon S) | ---------------------------------------------------------------------------------------------- |Fox, Marcus |Miller, Hal (Bromsgrove) |Townsend, Cyril D. | ---------------------------------------------------------------------------------------------- |Gilmour, Sir John (East Fife) |Mills, Peter |Trotter, Neville | ---------------------------------------------------------------------------------------------- |Goodhew, Victor |Moate, Roger |van Straubenzee, W. R. | ---------------------------------------------------------------------------------------------- |Grant, Anthony (Harrow C) |Monro, Hector |Vaughan, Dr Gerard | ---------------------------------------------------------------------------------------------- |Gray, Hamish |Montgomery, Fergus |Viggers, Peter | ---------------------------------------------------------------------------------------------- |Grist, Ian |Morris, Michael (Northampton S)|Walder, David (Clitheroe) | ---------------------------------------------------------------------------------------------- |Hall, Sir John |Neave, Airey |Weatherill, Bernard | ---------------------------------------------------------------------------------------------- |Hall-Davis, A. G. F. |Nelson, Anthony |Wiggin, Jerry | ---------------------------------------------------------------------------------------------- |Hannam, John |Neubert, Michael | | ---------------------------------------------------------------------------------------------- |Hastings, Stephen |Page, Rt Hon R. Graham (Crosby)|TELLERS FOR THE NOES: | ---------------------------------------------------------------------------------------------- |Hawkins, Paul |Parkinson, Cecil |Mr. Michael Roberts and | ---------------------------------------------------------------------------------------------- |Hayhoe, Barney |Pattie, Geoffrey |Mr. William Benyon. | ---------------------------------------------------------------------------------------------- Question accordingly agreed to. Bill read the Third time and passed.