(1) Where the Minister is satisfied with respect to every part of an area in England and Wales or in Scotland that the number of persons seeking to become tenants there—
I beg to move, That the C1ause be read a Second time.
This Clause completes the revision of the old Clause 15, in which we deal with transition. As it includes a basic change in the provisions of the Bill, I ought to spend a word on it. In Committee, it was pointed out to me that Clause 15 gave the Minister power theoretically—[Interruption.] I am trying to explain to hon. Members opposite what possibly they could disagree with. Perhaps the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) can give this matter his attention.
This new Clause is the Clause in which we deal with the power which previously existed in Clause 15 to remove a whole area from the provisions of the Bill. I could move the whole of England and Wales out of those provisions by Order. Power was given to remove a whole area from rent control if a Minister so wished. I believe that it was a mistake to give this power to a Minister. If a Bill of this sort is passed, that kind of basic power should be given by amending legislation. That power is not contained in the new Clause. It now merely enables the Minister to vary the level of rateable value at which rent regulation occurs area by area.
This means that a Minister, if he uses Orders, will be able, for instance, to reduce the rateable value limit below which rent regulation occurs far below its present very high limit. We have put this power in. When I was asked about the high level of rateable value and the number of houses included, my reply always was that if the rent assessment committees find that the level is unnecessarily high, we can by Order reduce it. This is the power which is given here.
However, I strengthen the conditions under which that power can be used, by laying down, broadly in line with the old Clause 22, that the Minister must satisfy himself, before he takes any houses out of rent regulation, that in the area in question supply and demand are in balance in the class of houses concerned. Let us suppose that it was found that the Opposition were correct about the more expensive houses in London. Let us suppose that it was found of a group of houses of high rateable value that supply and demand were in balance and there was no need for rent regulation.. If that were clearly and substantially demonstrable, the Minister would be entitled to reduce by Order the level below which houses were under rent regulation.
The criterion is laid down. We have, broadly speaking, given the same criterion here as we have in rent-fixing in Clause 22. Subsection (1) provides that:
Where the Minister is satisfied with respect to every part of an area in England and Wales or in Scotland that the number of persons seeking to become tenants there—
It must be in balance. Scarcity must be eliminated. We have carefully used roughly the same words here as we have used in Clause 22, in the definition of a fair rent, to define the scarcity to which the rent assessment committee and the Minister must pay attention, because scarcity is the justification for rent regulation.
is not substantially greater than the number of such dwelling-houses in that part, he may by order provide.
I should have thought that predominantly the Minister would listen to the president of the rent assessment committee for the area concerned. That will be very important evidence. Members of Parliament will have a perfect right to debate the matter in Parliament, because the Minister must submit any Order of this sort to affirmative Resolution of the House. I should myself have assumed that rent assessment committees, rent officers and local authorities will play their rôle.
I should not have thought that the Minister would require to give the presidents a directive, because he will have to inform himself so as to make the Orders. These Orders are not made on the instructions of the presidents. They are made by the Minister on his own estimate of the situation. He is not required to take the advice of the presidents, but he will be wise to do so. That is the key point of the new Clause. We have limited the Minister's discretion in winding up the machinery of rent regulation. This means that, whereas in the first draft of the Bill it was possible to eliminate rent regulation altogether by Order and to have no more rent assessment committees and no more rent officers in an area, it will be impossible to do this without amending legislation.
I wanted to ask the Minister one question. I am sorry to intervene once again, but this is slightly different from Clause 15 which we discussed in Committee. I should like to know whether the areas mentioned in the new Clause are the same as the registration areas defined in the original Clause 17 and, if so, why they are not called registration areas in the new Clause.
They are not defined as the same. The Clauses give the Minister power to take any area, for instance the area of registration or the area covered by a rent assessment panel or a smaller area within the district. He would be empowered to select any area he chooses for this purpose.
I should like to congratulate the Minister on having succeeded, as I think, in this new Clause in stifling so far what was in Standing Committee an incipient revolution among his own hon. Friends who, in Committee, had some hard things to say about the original Clause 15. My hon. and right hon. Friends also had hard things to say about that Clause, but for different reasons. The Minister has met some of our objections, notably in the movement away from the unsatisfactory intention in the original Clause of legislation by negative procedure. We are now to proceed by way of the affirmative Resolution and that is a very good thing.
I find it disappointing that the Minister has not found it possible to go further with his investigation into whether it would be possible for areas to be taken out of the scope of the Bill from the word "go". No doubt when the Bill receives the Royal Assent it will be one of the highlights in the right hon. Gentleman's career, but it is a pity that he has decided that this will not be possible and that the whole of the country will be covered by the Bill from the initial stages. I disagree with the Bill on the specific point of the imposition throughout England and Wales and Scotland, without regard for the necessity for it, of the act of regulation.
We had a long argument about this in Committee. I gave facts and figures from my own constituency of Poole to prove that in many areas in the country outside the largest conurbations there was no real need for regulation. My hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) has borne out that very point with regard to his own constituency and he supports my case. This judgment on the part of the Minister is typical of the Socialist philosophy of going, I was about to say of going the whole hog, but perhaps I should say, "the whole Crossman".
It would cost the country much money in setting up machinery which I consider to be unnecessary. It would cause unnecessary disturbance in local authorities, amongst landlords and in many spheres in connection with property management. The problem of housing shortage in most areas outside the larger conurbations just does not arise. I think that the Minister would agree that in Committee he was very much in two minds on this problem. One has only to quote what he said in connection with this in Committee to show it.
The right hon. Gentleman said:
… we already have something like an equality of supply and demand in regard to this type of house and where very nearly a fair rent is already reached…"—[OFFICIAL REPORT, Standing Committee F, 18th May, 1965; c. 404.]
I think that when the Minister said that he really meant that he was very near coming to the decision that it should not be necessary in all parts of the country.
Rateable values were mentioned earlier, and the Minister says this could be done by direction, in Orders in Council. We welcome this and think it a good system. It can be done, but I would ask the Minister: will it be done within a reasonable measure of time? It is very easy to impose regulations, but it is not so easy to take them off again. He says that supply and demand must be in the balance. We would agree that must be so, but it has to be left to the estimation of the rent assessment committee and of local authorities to recommend when this should be done. I am quite certain that local authorities will be only too willing to be rid of this rather troublesome child which has been fostered upon them.
I only hope that the type of man who will be chosen for the rent assessment committees will also be willing to give up what may be a lucrative part-time appointment when the time comes. I hope that when he thinks that his job is finished he will stand up and say so, so that the regulation may be removed.
On the subject of transitional provisions, the Minister has said that he would move with speed in some areas. That was in referring from rent control to regulation and from this on to decontrol. I think that he said "Yes" when he was asked that question and I hope that we will have an assurance from him in this respect that the time comes he will move with speed.
I was completely disillusioned with new Clause No. 4 which is to replace Clause 15 of the Bill. In answer to my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), the Minister gave two problematical cases of how this parity would be ascertained. The second one he gave dealt with the Order which would require a resolution of each House of Parliament. Unless the Minister himself has had evidence beforehand that such an Order is advisable it will not come before the Members of Parliament so one must go further back than that.
The Minister's first suggestion was that the chairman of a rent assessment committee might find it necessary to report to the Minister that such parity was the case, but is this really sanity? Is a chairman of an assessment committee, who, presumably, is dealing with appeals from the rent officer, likely to say, "This shows that there is parity in the area. Please Minister take this Order away"? Of course not.
I challenge the Minister in the next two years, or any such period as the Government may be in power, to operate new Clause No. 4, as to the taking off of the regulation, however great may be the merits of an area. I am sure that it will not be used, because I believe that the Minister has taken this the wrong way round. The whole lesson we learn in life is always to take the power and apply it where necessary. A doctor does not operate on a patient to find out what the trouble is. He brings his medical knowledge to where the trouble is and the Minister might have learned a lesson from this. Instead, he has taken the whole country as his province and given us those somewhat nebulous terms under new Clause No. 4. When a parity appears to emerge we shall have the Order publicly debated and a decision made by both Houses of Parliament that no longer will the regulation apply.
I shall look with great interest and anticipation to an occasion when we shall ever have such an Order. The Minister has no excuse because in the three months of Committee sittings that we had, my right hon. Friends gave him many examples of areas where parity, or the ordinary competition of people for accommodation, and no more than that, with no scarcity, existed. He was quite unmoved.
Therefore, the Bill will pass into law with a complete umbrella power for the whole country, with this small solatium that we can, possibly, sometimes expect an area to be taken out of the scope of the new Clause. I do not believe that it will happen. I do not believe that the Minister's hon. Friends will allow it to happen. I do not believe that it is in the Socialist psychology for it to happen. The new Clause, with all due respect to the Minister, is only hoping for the best. I should have far more respect for the whole method had the Minister started with the power and applied it to the many areas to which we all agree that it would be applicable and to operate that way instead of the other way round.
I reiterate the point made by my hon. Friend the Member for Bedfordshire, South (Mr. Cole), because it is one of importance. This will be bad administration. The words set out in the new Clause read reasonably and the explanation given by the Minister sounded well. Legislation should not only sound reasonable and be able to be presented plausibly, however, but it should be acted upon reasonably later. I do not think that this legislation will be. The whole psychology of party politics will mean that it will operate only if we have a Government in power which is not a Socialist Government. That is the sadness of it.
What will happen? My hon. Friend the Member for Poole (Mr. Murton) was slightly wrong. He suggested that the chairman of a tribunal should be able to recommend when effect should be given to the scheme and when an order should be made for a certain area.
No. I understood the Minister to say that the power was fairly and squarely his. He may ask for and get advice from the people in the areas, but the power is his. I tried, therefore, to suggest that he should give a direction to get information from areas and that he would automatically act upon it. The Minister was clear and replied in the negative. The responsibility will be the Minister's, and it will be left fairly and squarely with him. Therefore, if advice was forthcoming from the localities that the system should be brought into operation and an order introduced, it would be for the Minister to do it.
My hon. Friends made their first point and it is a sound one. It is asking a great deal to expect a chairman, with a quite lucrative and worth-while part-time job, to be eager to give a report that would do him out of it. That is the first snag in giving operative effect to the Minister's clear explanation.
If that advice were to come through to the Minister or he were to get advice from other quarters, from the sort of speeches that we had from his hon. Friends in Committee I cannot imagine a Socialist Minister of Housing being keen to give effect to it in face of the prejudice shown by his hon. Friends in their speeches in Committee, and because of his political position he will have to resist giving effect to something to which effect should be given.
Indeed, the Minister himself confessed to the House that he had a built-in prejudice against the private owner. If he can make the speech which he has just made and have that built-in prejudice, it is not surprising that his hon. Friends have the same sort of prejudice in these matters as they expressed in Committee.
I am arguing that the reasonable words in the new Clause and the plausible explanation given by the Minister will not be put into effect as speedily as they should be, if they ever are to be given effect to, if we have a Socialist Government. It is a pity that when we pass legislation which should be administratively carried without partiality or the influence of party politics, it looks as though, if we have a Socialist Government, the new Clause will never be brought into operation. That makes me sad.
I hope that when the Minister is considering making these Orders and he has to balance the probabilities of whether there is or is not sufficient accommodation available, he will, in general, err in the direction of removing regulation a little too soon rather than a little too late. I hope that the right hon. Gentleman will bear in mind the effect, which I agree may be only marginal, which rent regulation, or any kind of control, has in inducing a certain number of people who might otherwise make a special effort to provide accommodation to let not to make that accommodation available.
In my constituency, where there is a grave shortage of accommodation, there is a certain amount of accommodation which people might make available if they think that it is worth their while to do so. I do not pretend that the removal of all controls, or the removal from regulation, would solve our problems. Indeed, it would cause great hardship by suddenly raising rent levels, but if regulation is kept on that much longer than is necessary it will further delay the process of bringing extra accommodation on to the market and so solving our problem.
I therefore ask the right hon. Gentleman to err in the direction of removing regulations a bit too soon, rather than a bit too late.
In the West Country there will be several cases in which the Minister's discretion could well be exercised. I understand from what the right hon. Gentleman said that he is prepared to consider the type or size of an area if he receives a recommendation to that effect. It has not to be any particular size. It will depend on the advice that he receives. I hope that he will clarify that point before we part with the new Clause.
I deal next with the question of parity between demand and supply, which is really the nub of the new Clause. The right hon. Gentleman has to be satisfied, on advice, that there is parity between supply and demand. This seems to me to be an excessively difficult criterion to satisfy. How will the Minister get the information? He says that he will get it from the local authorities, from his officials, and from the new chairmen whom he is to appoint. He says that they will advise him on the accommodation that is available for letting.
Will he include accommodation which could be holiday accommodation? Will he include accommodation which is on short or long lease? I think that this poses a very difficult administrative problem. I think that the right hon. Gentleman will find it very difficult to balance the evidence and decide whether supply is equalling demand, and that in the end he will come down in favour of retaining this machinery.
I refer next to the point raised by my hon. Friend the Member for Poole (Mr. Murton), who talked about the cost of this process. The whole machinery of the Bill will be brought into being in areas such as the West Country. Even though it is known that supply exceeds demand, the whole machinery will be brought into being, and this will, of course, be a costly business. If the Minister is fair and equitable—and I am beginning to have doubts about whether he will be—in assessing the matters at issue and in bringing the levels down, the whole expense will be unnecessary, and will be a great burden on the Exchequer. I hope that the right hon. Gentleman will think twice about this.
I find it rather difficult to understand why, in his opening remarks, he said that the original decision, whereby the Minister had complete discretion, was not correct. I cannot help think that he was assuming that a Conservative Administration would be in charge of matters in a short time and that they would take over responsibility for deciding these matters in those areas where these provisions, quite obviously, should not apply. It must be this fear which has led the right hon. Gentleman to embody this restrictive provision in the new Clause. I regret this, because I do not think that it is administratively right. I think that the expense is considerable and quite unnecessary, and I regret that the matter is to be dealt with in this way.
Remarkably heavy weather is being made of a very simple and ingenious new Clause which I strongly welcome. The test is the same as the test of a fair rent, and I should have thought that this was the key to the whole problem which the Minister will face in deciding whether, in any area, houses of a certain rateable value should be taken out of regulation.
It must necessarily follow, as I understand the Clause, and the test provided for in it, that when, broadly, the stage is reached when the price payable for houses in the rateable range that one is considering is an equivalent capital value to the capital equivalent of the fair rents which are being set by the rent officers and rent committees in relation to that range of houses, one has reached that degree of equality between supply and demand at which that range of houses can be taken out of regulation. It must inevitably follow that if there is equality of supply and demand the prices which people will obtain for a house with vacant possession will be the equivalent of the fair rent for that house.
If the Minister obtains the information from the various areas which enables him to adopt that test, it is an extremely simple one, and all the difficulties suggested by hon. Members opposite will disappear.
From the point of view of drafting the new Clause, in one respect, shows some improvement over the original Clause 15, part of which it is designed to replace. The right hon. Gentleman was right to separate the respective powers of decontrol and deregulation. That makes the position clearer and more practicable. Nor do I attach as much importance as does one of my hon. Friends to the fact that the new Clause introduces what was omitted from Clause 15, namely, the factor of the adequacy of the supply of accommodation. I do not think that any Minister, in making a decision on this matter, would act other than in accordance with that consideration, and I doubt whether it makes a pennyworth of difference whether it is put explicitly into the Bill.
Some of my hon. Friends are sceptical of the value of this Clause. To some extent that scepticism turns on their judgment of the Minister. I would not seek to inflame opinion by commenting on
that; I merely say that these powers are valuable powers, whether for this Minister or some other Minister, and it would be a grave omission not to have them in the Bill. It has been our view that the right hon. Gentleman is quite wrong to extend control throughout the country, regardless of need. It recalls the anecdote concerning her very late Majesty, Queen Elizabeth I, of whom a chronicler wrote:
So cleanly was she that she took a bath once a month, whether she needed it or not.
The right hon. Gentleman is applying control all over the country whether there is a need for it or not. That is a great mistake. As my hon. Friend the Member for Eton and Slough (Sir A. Meyer) has said, if control is applied where it is not needed it diminishes the willingness of people to provide accommodation to let—and one of the grave difficulties running right through the Bill is that whatever else it does it must discourage the provision of accommodation to let, which is the biggest shortage of accommodation.
The right hon. Gentleman having done that, in our judgment wrongly, it is at least a sign of grace to which theologians—and I see that the Parliamentary Secretary is present—will attach great importance. The right hon. Gentleman has at least taken power to effect a speedy repentance. That is what the Clause provides. Having applied regulation throughout the country, he is taking power, as a matter of strict law, to take large parts—indeed, the whole country—out of it again as soon as the Bill is law. Those are the powers. I should like to know one or two things about what the right hon. Gentleman has in mind. First, as I understand the Clause, this power can be exercised in respect of areas. What does the right hon. Gentleman contemplate by way of areas? Does he contemplate large areas moving together, or comparatively small ones? Before entrusting the right hon. Gentleman with these powers, the House would like to know how he proposes to exercise them.
I should like also to know whether he intends to take very early action in respect of certain areas. Hon. Members who were on the Standing Committee will recall that, during our second sitting, I gave at some length details of parts of the country in which the number of households was appreciably less than the number of dwellings. I gave certain percentages. I do not want to weary the House by repeating them all. In column 64, for 27th April—running over, I am ashamed to say, into column 65—I pointed out that in Wales the percentage ran down to 94 per cent. of households to dwellings, and in one case to 92·1 per cent. In such administrative counties as Somerset, Northumberland and the West Riding of Yorkshire, the percentages were 98·5, 98·5 and 98. I gave a number of other figures.
I should like to know, as would the House, what the Minister has in mind if he takes this power. Has he in mind making an Order in respect of these areas promptly, so that it will not be necessary to go to the expense and administrative inconvenience of setting up a whole system of rent officers and rent assessment committees? He has the power to do so, but I should like to know what his intentions are. Again, I should like to know how he proposes to exercise the power. If I understand the Clause aright, he can exercise it in one of two ways. He can apply it in a particular area in respect of dwellings above a certain rateable value, or he can apply it to all dwellings in the area—
The second is not possible. I said in my first speech that it is impossible to remove an area as such out of the Bill. I carefully said that this was the change, that one can only reduce the rateable value. One could achieve the same change in stages, but cannot, by one stroke of the pen, take one area out of the Bill. One cannot take all houses out of the Bill: one can take only houses of a certain class.
I follow that, but I take it that, whatever the right hon. Gentleman intends, there is legally no difficulty—there is some alarm behind him at that—in putting the figure so low that it would take the area out of regulation.
I must make it clear that the Clause is drafted so that that cannot be done. One cannot take an area: one has to take a class of houses. If one did it by a series of Orders, one might achieve a lowering of rateable value of this kind, but that would leave the administrative structure intact.
Then I paid an unnecessary compliment to the drafting of the Clause. Its clarity has proved, to some extent, misleading. I still think, on my reading of the Clause, that, if the Minister has a free power to take out of regulation houses of any rateable value which he chooses, it would be legally possible to take a figure of 10s. and so, in effect, take an area out of regulation.
I may be wrong on this, as we have seen the Clause only during the last day or two and knew which we were to discuss quite recently. I do not wish to be arrogant about my powers of construction, but this is as I read it. I should like some explanation if I am wrong. On the hypothesis that I am right, in this respect too, I should like to know what the right hon. Gentleman's intentions are.
To summarise what I have been saying, the new Clause, whether or not its powers are exercised, confers great powers on the Minister of the day—powers to alter in very substantial degree the impact and effect of the Measure. I do not regret that. For the reasons I have given, the right hon. Gentleman, having decided on the general pattern of the Bill, is right to take powers which will enable him to undo the harm he has done.
However, if we are to confer these powers on him, it is in accord with normal parliamentary custom for the right hon. Gentleman to give an indication of his present intentions about their exercise. No one would expect him to commit himself, still less his successors, for all time. We merely wish to be told, in conferring these powers—whatever they are—on the right hon. Gentleman, his intentions about their use. I believe that certain hon. Gentlemen opposite are equally interested to know the answer to this question.
Perhaps I was being over-anxious when I intervened a moment ago. Exactly the reverse of what the right hon. Gentleman said is the true position. Legally, an area could not be taken out, although de facto one could virtually remove an area by taking the houses out; that is, by reducing the rateable value limit to a low level. It is, therefore, a factual power and not a legal one.
The right hon. Gentleman said that exactly the opposite of what I had said was, the position, but what I said was the hypothesis which I put to the right hon. Gentleman. I think that he is actually saying that what I envisaged was right.
I thought that the right hon. Gentleman said that one would be legally entitled to do it. I might have misunderstood him. Legally, one must put it in terms of houses. Factually, this means that one could reduce the rateable value to a certain level where de facto one wound up the administration in this connection.
I was asked about the size of the areas. It is my intention to use the areas of the panels which I have drawn up. I think that there will be 16 of them in England. One could consider areas like the West Midlands or Greater London. It would be easier to take areas in this way. At present, my mind is fairly clear on this issue. One of our aims will be to have the greatest uniformity possible, although there may be cases later for taking areas out. As I say, I envisage taking the areas in terms of the panels.
The hon. Member for Eton and Slough (Sir A. Meyer) said, "When in doubt take an area out". I would say, "When in doubt protect the tenant". I would not agree that when one is in doubt one should wind up the machinery. In this connection, I was asked whether it would be difficult to assess whether or not one needed the machinery. We will have better information about this in future than we have at present. We are now organising the information that will be required for the functioning of the rent assessment committees. No doubt as they proceed we will collect the facts more easily.
There will be one relatively simple test about the need for the machinery, although I do not say that it will be a decisive test. It will be the number of people who go to appeal. If the number of appeals by landlords and tenants in an area dwindles to a negligible amount that will be an indication that, in a sense, rents are fair in that area. Thus, the number of cases coming to the attention of the rent officer or rent assessment committee in an area will be a reasonably simple test, although the Minister would be unwise to take that as his sole test.
If I consider, for example, the present state of the furnished rent tribunals I would not say that the small number of cases coming to them was sufficient proof that there was no need for the tribunals. People may not be coming to them because they consider that they are not getting protection or because they are not satisfied for some other reason. So we must be careful, even about the single test I mentioned. However, it is one test, and gives the sense of justice or injustice which is felt by landlords and tenants, for we see by that test the number of them who bring cases forward. But we shall need to have further information which I think it will be possible to acquire.
In certain areas local authorities will be able to tell, this year, 1965, that there are certain areas where it will not be necessary to have rent assessment committees. I quite recognise that later their advice might be wanted, but at this stage the advice of the local authorities can be got, and in certain areas all the paraphernalia could be saved.
I do not think the hon. Gentleman has thought of the full problem that we have to face. There is no area of the country, so far as I know, where there are no controlled tenants. The controlled tenant must move into rent regulation, unless he is to stay controlled. Therefore, there is no area where we shall not need the movement from control, because there are controlled tenancies which need to be revised. That is the simple fact with which we start. There is a later new Clause by which we make some provision for this, by providing that members of rent tribunals will in future be able to deal with both furnished and unfurnished problems, so if there were a reduction of business the business could be concentrated on the one set of people.
Could the right hon. Gentleman say whether, for instance, in the West Country, the area would have Bristol in it? An area sparsely inhabited and joined to a large conurbation could never be released from regulation. Is it the intention that in each area there should be a large conurbation?
No, not necessarily, but we have not finalised the boundaries of areas. I was thinking that probably Devon and Cornwall would form a close area, including Plymouth. A sizeable area would probably include a conurbation.
I do not want to be dogmatic about particular areas. We want to get reasonably large areas because we want to get uniformity and to get circulation, but later we may be able to have smaller areas. The needs will manifest themselves quite clearly.
The problem will be there. Even in rural areas there are controlled tenants to be dealt with. There are controlled tenancies in rural areas. Every controlled tenant will have to be either frozen permanently as a controlled tenant or released into regulation, and that will happen.
I think that it is probably in the rural areas that the movement will be more rapid than in great conurbations, for the simple reason that the number of decontrolled cases coming into regulation will be fewer.
I should like to reply to one of the points in the speech of the right hon. Gentleman. The figures he gave of various areas were interesting. It is the question of the number of families, and