Nearly one in four families in Britain will be affected by Labour's Rent Act, 1965. The Act is a serious attempt to undo the grave injustices caused by the Conservative Rent Act, 1957, which has probably caused more suffering than any other Measure since the means test of 1931.
The 1957 Act permitted landlords to raise their rents roughly by two-thirds, but in addition, for the first time since 1915, when the Rent Restriction Act was introduced, it removed control entirely from a dwelling which, for any reason, had changed hands—"creeping decontrol," as it became known.
The landlord could double, treble or quadruple rents and that, because of the terrible housing shortage, is what he often did. High rents have become a curse for many people and to two sets of people in particular—those on low incomes and those living in London. Both are paying more than one-third of their total income in rent in many cases, which is an appalling predicament. I know of a gardener employed by a London borough, who earns £12 a week. He pays £5 10s. a week for a single-bedroom flat for himself, his wife and his baby. That is an unconscionable proportion.
This housing shortage still exists. The 1965 Act aims at fixing rents which will ignore the pressure of demand—that demand which has caused such fantastic market rents to be secured. Several million families will eventually be involved. At the moment, only a small proportion of the new rents have been decided. They are, however, sufficient to indicate the new pattern likely to be followed. Same of the results are satisfactory. Others are so disquieting that there will have to be big changes if the tenants are not to become disillusioned and the Government discredited.
I am grateful for having been granted two Adjournment debates on this subject. The first was in February and in that I drew attention to the first rents fixed by the newly-appointed rent officers in London. I intend to take a second look at this in a moment. Although some hon. Members from the Metropolis may not realise it, the majority of British people live outside the Metropolis. I am glad this afternoon to be in the position, following interviews I have had with rent officers in a number of towns, to say something about the new rents fixed in the rest of the country.
In the great industrial areas of the North and Midlands the ordinary family lives in a house in a long row of terraced houses, two up, two down, no bath, no hot water and no inside toilet. These are "Coronation Street" type houses, but for the most part they are not nearly as nice as the "Coronation Street" houses we see on our television screens. They were built 80 to 100 years ago. They lack damp courses and this has serious effects. They have been paid for over and over again in rents and some of them are so bad that the landlords should pay the tenants to live in them. Throughout Europe I doubt whether housing is as bad as it is for millions of our fellow citizens in Britain.
Mostly, these houses lie outside slum clearance zones, only becouse of the sheer weight of numbers of houses waiting for clearance and replacement. I will give the figures for a typical house of this kind. I have chosen it because it could be repeated one hundred thousandfold and because the new rent fixed for it is being approximated by other rents of a similar type.
This is an actual house in Gorton, Manchester. The rent before 1957 was 8s. a week plus rates, which is all that it is intrinsically worth. It was built 95 years ago for about £80. The controlled rent under the 1957 Act was raised to 12s. a week plus rates. Then the house became hit by creeping decontrol, thanks to a change of tenant, and until last week the tenant was paying £2 3s. plus 7s. rates. He took his case before the Manchester rent officer and, I am glad to say, the rent was reduced to 18s. 6d. plus rates. I could list similar houses in other parts of the city, the rents of which have been reduced to 18s. from 28s. 6d., to 20s. from 56s. 3d. and to 19s. from 28s. 8d.
In Sheffield, the rent officer is fixing rents for "two ups" and "two downs" varying from £1 in the poorer situations to 25s. in the better ones, and about 30s. where there is a bath or bathroom in the house. For the 75-year-old property or older—this is the stuff with which we are dealing—the new Sheffield rents are being fixed at roughly twice the controlled rent and one and a half times the gross value, but I think that for the modern semidetached houses they are being fixed at nearly three times that amount. In Leeds, back-to-backs in good condition are averaging £1 to 25s. In Bradford, the rent of a typical back-to-back with two bedrooms, possibly bigger than usual, has been fixed at 19s. In Salford, rents of £1 7s. 6d. and £1 12s. 6d. have been determined for terrace houses without baths.
The fact that the landlords have, for the most part, not challenged these figures seems to indicate that they regard them as not unreasonable. These tenants are fairly satisfied customers and I profoundly hope there will be no reversal of these determinations by the rent assessment committees, should the rents be appealed against in the disturbing way that they were dealt with by the panels in certain earlier cases in London, about which I will say something shortly.
The next reservation I will mention—and everything I say from now on concerns London houses as well as provincial ones—is that while decontrolled rents has been dealt with by the rent officers and the panels, the Act gives the Minister of Housing and Local Government, should he pass a special Order in the House after affirmative assent, the right to empower the officers then to proceed with the majority of the remaining houses; those dwellings at present controlled. Indeed, certain private landlords have formed an organisation to lobby and bring pressure to bear precisely for this purpose. I dread the consequences if my right hon. Friend gave way.
I refer again to the Manchester house for which I gave figures. Nearly every other house in the street is paying the controlled rent—12s. a week plus rates. But if the rent officer has held that 18s. 6d. plus rates is the fair rent for that house, it will be argued that all the other houses should have their rents raised to the same figure because they are almost identical houses.
Similarly in London, where there have been fairly substantial reductions. For example, many of the new rents are, I estimate, about three times the old controlled rents. That means that the majority of rents in London and elsewhere would be roughly tripled at some future date. That will happen over my dead body and over the dead bodies of many of my hon. Friends.
I profoundly hope that a Labour Minister of Housing would never seek this power. It would be utterly wrong if it turned out that the Labour Party, which I and many other Labour supporters thought would bring rents down, instead was responsible for pushing them up. Even if increases can be in stages now of only 15 per cent. per year—thanks to an Amendment which some of my hon. Friends and I pressed—it would still mean death by a thousand cuts.
My second main point is that in the first few cases brought before the rent assessment committees—or, for brevity's sake, "panels"—the panels partially reversed the determinations of the rent officers. These were disastrous decisions and only this morning I heard from my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) equally disturbing reports about the position in Scotland.
Is my hon. Friend aware that of the two cases referred to the rent assessment committee in Glasgow, in one case an increase of 13 per cent. over the rent officer's figure was accepted and in the other an increase of 26 per cent. was accepted? It seems that scarcity value is determining the level rather than the considerations that most of us had in mind. Unless the Government watch this carefully, confidence will be destroyed not only in the rent officers but in the intentions of the Government.
I am grateful for that intervention, because it confirms what I am saying.
In the February debate I expressed satisfaction that rent officers throughout London were reducing rents fairly substantially. I admit that there may be exceptions even to the rent officers' findings but, on the whole, I was reasonably satisfied. So I was dismayed to find that of the first six decisions of the panels, five had overruled the rent officers and gone against the tenant. In not one case had the decision gone in the other direction.
For example, where the rent of a flat had been £442 exclusive, the rent officer had reduced it to £338—only to have it raised to £375 by the panel. In another case, a rent of £230 was raised to £280 by the rent officer, and when it went before the panel it was further increased to £351. Similarly, a rent of £364 a year was reduced by the rent officer to £200, and put up again by the panel to £305—an increase of £2 a week on the rent officer's finding. It seemed that the panels were fixing a figure roughly half way between the original rent and that fixed by the rent officer. Those cases were among the first six dealt with by the panels in London.
I am a little, but only a little, relieved to be able to tell the House that this has not been exactly the picture presented by later sittings of the London panels—and I am trying to give a fair and balanced account. I feel strongly. I should like to thank the office of the London Rent Assessment Panel which has kindly supplied me with complete details of every one of the 23 cases decided up to Tuesday of this week. In eight of the later 17 cases, the panel has upheld the rent officer's determination; has reduced it in two cases, and raised it in six cases.
I should very much like to be able to adopt the practice in the United States Congress, where I am told that Congressmen can "read in" statements for publication in the report of their Chamber. I should like to be able to read into our OFFICIAL REPORT full details of these rent assessment committee findings, as they are of great public interest—
I do not wish to interrupt my hon. Friend unduly, but I am a little perplexed. His figures do not add up, and if he is to put this information in the OFFICIAL REPORT it should be accurate. My hon. Friend referred to 17 cases, and said that in eight the decision was upheld, in two it was reduced and in six it was increased. That makes a total of only 16.
I apologise for the error. I should have said that the panel unheld the rent officer's decision in eight cases, raised the figure in seven cases, and reduced it in two cases.
Obviously, I cannot "read in" these findings, so it must suffice me to give instances of rents finally decided, and registered for the next three years with panel approval. The rent of a small terrace house in Plaistow has now been finally fixed at £3 a week, the rent officer having determined £2 10s. I may say that all these figures are exclusive of rates. A rather similar house in Bow has been fixed at £2 12s. 6d. against the £2 10s. determined by the rent officer. Two rather poorer houses in Plaistow—£2 5s. each; in both cases confirming the rent officer's findings.
A ground floor flat in a newer house, occupied by two families, was fixed at £4 9s. for the single flat compared with the rent officer's £3 5s. A terrace house in West Croydon—£5 as against £4 12s. A self-contained basement flat in Croydon—£3 1s. 6d.; confirming the rent officer's findings. A self-contained ground-floor flat in Sudbury—£4 15s.
Here, it is interesting to note that the rent officer's figure was £5. I must give credit, where it can be paid, to the panel. Two self-contained purpose-built flats in a four-storey block in Brent—£5 each, as against the £4 16s. assessed by the rent officer. Most of these are increases to which I am absolutely opposed, but they are not quite so bad as the first six decisions.
I find it very hard to understand those first six decisions. In one case the rent was £9 a week, plus £2·7s. for rates—£11·7s. a week for what was by no means a luxury penthouse. How could it be held that such rents as were fixed in those six cases excluded the shortage factor which the Act expressly requires to be ignored? Could it be that the eminent lawyer and the chartered surveyor, who comprise two of the three members on every panel, are overborne by considerations of property market values? After all, it must be very hard for a chartered surveyor to avoid that kind of thing. He has always worked against that kind of background, and I can quite understand his difficulty.
I agree that it is early days yet, but of such findings were to set a pattern the dissatisfaction would be deep and widespread. The whole of Labour's rent legislation would be in jeopardy—and that may still happen. The rent solution is still in the melting-pot. Indeed, the effect of those very early decisions is now being felt. At first, only a small proportion of rent officers' determinations were being appealed against, but the landlords saw how the land lay; a far higher proportion of them—about one in four—are now taking their cases to the panel. One property company has decided as a matter of policy to appeal against every decision. It evidently thinks, "We are likely to gain something and not likely to lose anything." The panels will be flooded with references, and it will take them many months to catch up.
The decisions in those first half dozen cases must have been mystifying to rent officers. I know that to be so. I know of one rent officer, with a lifetime of experience in these matters, who says, "Well, if the rent assessment committee is right then I've been registering rents about £2 a week lower than I should have done—and I don't think that I was out in my reckonings".
If such high rents were to continue to be fixed by the panels then, against their own experience and judgment, rent officers would feel compelled to move in the upward direction. That would be a calamity. What is more, rent officers personally inspect each dwelling inside and out, and measure it, before making a recommendation or registration. The committees do not. They depend on what they call a referencer—a word that I have never heard of previously—an employee who may go to the property, so the panels are less well-informed than the rent officer.
For instance, in a recent case in Wembley a member of the panel said, "Well, Wembley is a residential district." But the street in question was by no means of a "residential" character. I understand that some rent assessment committees now drive up in a car just before the hearing and look at the outside of the house or flat. That is better than not going at all, but it is not as good as the practice of the rent officer, who goes inside the house, where a very different picture may be revealed.
My contacts with rent officers all over the country convince me that they are doing their work most conscientiously. They are spending weeks surveying their areas before getting down to inspection of individual houses, having approached their difficult task with diligence, wisdom, patience, sympathy and experience. What has struck me most forcibly when attending recent rent assessment committee hearings is that the chairmen have bent over backwards to help inarticulate tenants. I am grateful for that. Nevertheless, the dice are heavily loaded in favour of big property companies. Those firms, with hundreds or even thousands of properties, are employing most expensive lawyers and chartered surveyors to represent them before the tribunals.
To give tenants a fair chance, I hope that the Government will give further thought to allowing free legal aid to be available to tenants. This is desirable when they appear before rent officers and it is absolutely essential when they appear before the panels. This week the Attorney-General told me, when temporarily turning down the request, that the maximum of informality was desirable. I agree, but in fact, lawyers and chartered surveyors are at the moment representing the big property companies before the tribunals.
A question which puzzles nearly everybody concerned with the application of the Rent Act—it certainly puzzles me—is why so few tenants who are paying exorbitant rents take their cases to rent officers. Up to 16th April only 8,201 applications had been made in England and Wales, which is a very small proportion of those who feel deeply aggrieved. Many rent officers are of the view that there is still a lurking fear among tenants that the landlord will be able to evict them in reprisal. This, of course, is not the case.
This is one thing which the Rent Act has done, although there is one loophole which still needs closing more tightly. Nevertheless, tenants are mistaken on this matter. I know of some who have been told by the rent collector, not that they will be evicted, but, "Go ahead if you like, but I warn you there will be precious few repairs done in your house in future if you do."
Then there is widespread anxiety about going to anything which has any semblance of a court. Many working-class people would sooner run a mile; I do not altogether blame them. There may be another reason. If the rent is registered for a typical house—and I think that this is happening—landlords may be privately approaching tenants living in similar houses and reducing their rent, although whether they are reducing it to the same extent is another matter. Some tenants have been holding back to see what will happen.
I am coming to the end of my speech, because I know that several hon. Members with valuable experience to quote in this connection wish to take part in the debate. In most areas, although the Minister has made an attempt to publicise the Act, its provisions have not been thoroughly made known. Even today the majority of tenants do not know what their new rights are. A big drive is called for. I recommend that the provisions should be publicised on television in order to tell people about how to get a fair rent. When the news gets round of some recent rent reductions—again if the panels do not overrule the rent officer's determination, which is my main point—numbers of tenants will soon be making applications to rent officers. This is exactly what I advise them to do.
The Government must decide whether they accept the view of the big property companies that rents must go up. If so, the Rent Act will not have done what millions of people believe it was intended to do. The Government should reject the pressure of big landlords who have a formidable lobby. My goodness, hon. Members should read the Estates Gazette, a most lavish publication in which every week we see the very big interests involved. If the Government reject that pressure and restore reasonable rents, they will be blessed by the people of the country.
My hon. Friend the Member for Salford, East (Mr. Allaun) has rendered a most valuable service to the House and country by arranging for the operation of the Rent Act to be once again ventilated on the Floor of the House. He is absolutely right when he says that the kind of people which the Act is intended to protect are the last to want to appear before tribunals or rent assessment committees.
I quote the case of a constituent who is threatened with an increase of rent and is even afraid to go to the rent officer because she knows that it might mean that eventually should would have to appear before the rent assessment committee.
In a letter which she wrote to the Minister of Housing and Local Government, of which she sent me a copy, she refers to the advice to people to go before the committee and says:
They will, but they have no one to help them. Most lay people are quite incapable of presenting and stating a good case; the opposition in the form of the brain capacity of the landlords, the agents, and no doubt their solicitors, is so overwhelming as to demoralise any ordinary person. It is so difficult to be objective when the threat of being priced out of one's home is hanging over one's head. The opposition are in no danger of being priced out of their homes.
That summarises the attitude of many people when they see how the Rent Act is working in practice.
When my constituent sent that letter to my right hon. Friend the Minister, he suggested in a letter to me:
I would be grateful, therefore, if you could see your way to advising Mrs. —; you might possibly wish to represent her before the committee.
I do not know whether it is the Government's intention that any constituent in difficulty and having to appear before a rent assessment committee should call upon his or her Member of Parliament to represent him or her. I do not mind doing so as far as I can, but I should like the Minister to tell the powers that be that if there is a three-line Whip on a very important debate in this House, I shall probably be absent from the House attending a rent assessment committee to defend the interests of constituents against extortionate landlords.
The proposal is, unfortunately, symptomatic of the attitude of the Ministry. It seems to think that the process will work out all right, and to say, "It is true that M.P.s concerned will have a little extra work in these matters, but leave it to them to fight the matter before local rent assessment committees".
That confirms one of the points made by my hon. Friend the Member for Salford, East. It is a pity that tenants appearing before rent assessment committees will be denied any form of legal aid. It is wrong that they should be treated less considerately in this respect than criminals.
In mentioning the facts in one or two cases, I shall speak only of the London Borough of Lambeth, where I have been watching as closely as I can the operation of the Rent Act. The latest figures produced by the Ministry show that over the whole of London 1,841 cases have been determined and that in 310 of those cases the rents were increased by a decision of the rent officer.
I am talking about the rent officer now. I have not got as far as the rent assessment committees.
In the London Borough of Lambeth 122 cases have been determined, in 29 of which the rents were increased by the local rent officer. In the whole of the London area rents were increased in 16 per cent. of cases, whereas in the London Borough of Lambeth rents were increased in 24 per cent. of cases. This is an alarming state of affairs. I have never been under the impression that rents in Lambeth were so low as all that. Perhaps the local landlords have been afraid of the local M.P. and have been deliberately under-charging their tenants during the whole time I have been the Member for Parliament for Brixton.
I come to two specific cases. The lady from whose letter I quoted lives in a block of more than 100 flats which is privately owned. The average freely negotiated rent as between landlord and tenant when the decontrol was brought in by the previous Government worked out at about £360 per annum. In the one case where the tenant in that block of flats went to the rent officer, the rent was increased to £400 a year.
As a result of the rent officer's decision, the tenant of one flat in this very large block of flats has to pay a higher rent than all the other tenants. Inevitably, as a result of this one decision the rents for the 100 other flats will be increased from £360 to £400 a year. What the tenants of those flats cannot understand is that, whereas when it was possible to negotiate an agreement between landlord and tenant the rent on the average was £360, the rent officer has now increased one rent from £360 to £400.
I come to an even worse case, that of a small row of terraced houses anything up to 100 years old. I will quote one case there. The rent was £3 5s. 5d. including rates—admittedly, a very low figure. The landlord asked the tenant to agree to an increase. The tenant was willing that the rent should be increased from £3 5s. 5d. including rates to £5 5s. a week excluding rates. The rent officer looked at the house and fixed the fair rent as £8 10s. a week exclusive. The rates are 25s. a week in addition.
So the 77-year old tenant who has been living in the house for goodness knows how many years finds that by a decision of the rent officer a rent of £5 5s. which the landlord would have accepted has been increased to £8 10s. exclusive of rates. The rateable value of the house is about £118 a year. Hon. Members will notice the difference between the rateable value and the rent fixed by the rent officer.
I do not know to what extent instructions or advice notes have been issued to local officers by the Ministry. I have documentary evidence which leads me to believe that rent officers are taking into account as a general principle that the landlord must be allowed a fair return on his investment. That may sound all right on paper; but where the landlord, for one reason or another, has paid an inflated price based upon scarcity value for the property, it is quite wrong for the rent officer to say that the landlord should get a fair return on his inflated investment. Unfortunately, this is what is happening in many cases.
It was all very well for the Government to say, when the Rent Bill was going through the House, that scarcity value could not be taken into account. It was all very well for them to issue instructions to rent officers and rent assessment committees that scarcity value must not be taken into account. Where the rent officer believes that the landlord must be allowed a fair return on his investment, the ground is being entirely cut away from the principle that scarcity value shall not operate.
I am sure that the hon. Gentleman does not want to mislead the House in any way. Rent assessment committees, on appeal, have made it quite clear to rent officers that in taking a capital value on which to calculate a percentage return the valuer must take into account scarcity value and reduce the capital value by reason of scarcity.
I should like to see how that will operate.
As soon as one begins to talk about what the capital value is and say that the landlord must get a fair return on his capital value, one embarks upon a dangerous twilight area. It may be that rent assessment committees, in their wisdom or innocence, will try to separate scarcity value from capital value, but the damage has been done at a very much earlier stage. The damage was done in the case I have referred to by a false or misunderstood basis on which rent officers are working.
Nobody can tell me that in the street I have in mind in Brixton a small house is worth £8 10s. a week exclusive of rates. I can understand that in some of the more fashionable areas of London rents of that order would be regarded as an absolute bargain, but not in an area like Brixton. Unless the Government take some action in this matter, it will be the duty of Members representing constituencies in the London area, and Members from other parts of the country, for some time to come to wtach with great vigilance, first, the decisions taken by rent officers, and, secondly, the decisions taken by rent assessment committees on appeal.
One effect of the decisions that have been announced so far is that tenants are afraid to go to the rent officer. They lie low and say nothing, in the hope that, if they do not go to the rent officer themselves, the landlord will not create any trouble, and, in the case of small property owners, will not bother to go to the trouble of appealing or getting the rent officer in and appealing to the rent assessment committee. The whole object of the exercise was to persuade as many people as possible to take advantage of the machinery that is now available. The decisions which have been made so far are having a deterrent effect.
I hope my hon. Friend the Joint Parliamentary Secretary will tell us that the Government are taking some note of the serious doubts and disquiet which have been expressed by so many hon. Members since it has been seen how the Rent Act is operating.
My hon. Friend the Member for Brixton (Mr. Lipton) has given some rather alarming information about occurrences in his constituency. If what he has told us proves to be at all general, it would seem that the main purpose of the Act will be thwarted and that, instead of the Act being an instrument to bring fair rents to people it will be regarded as the basis of widespread injustice. I hope that the Minister will consider very carefully the facts which have been put forward by my hon. Friend, for, I repeat, if they are at all general the position will be extremely serious.
I should like to add my congratulations to my hon. Friend the Member for Salford, East (Mr. Frank Allaun) on having raised this matter today. It is a subject of widespread importance that should be considered by the House now. My hon. Friend said that it might be considered that the present is too early to judge how the new machinery to arrive at fair rents is working. The Minister may tell us that the number of cases adjudicated to date is insufficient to enable anyone to arrive at any general conclusion about the way it is working. It is true that, compared with the number of cases which may yet come to light, the number already dealt with is fractionally small and it might be difficult to form a general judgment upon the cases of which we have any knowledge so far.
However, let me put this point to the Minister. If these early cases do set a pattern for the future, great harm and injustice may follow. If in the early stages the panels, who are new to their work, have yet to acquire the experience necessary to enable them to make informed judgments, if in these early days as a result of inexperience the panels arrive at wrong and unfair decisions, the whole future of the machinery for arriving at fair rents may be undermined and may take a wrong turn.
Therefore, I submit that it is not too early to consider this matter. Indeed, I believe that it is right to seize the opportunity now to look at the whole situation in case there is this early tendency for panels to go astray as a result of inexperience. It is important that the decisions now being made by the panels and rent officers should be acceptable by the populace generally as fair.
It would be a mistake and against the purposes of the Government and of the Act if these early decisions were to implant in the public mind the idea that rent officers and panels are biassed towards the landlord instead of trying to arrive at just and fair decisions. I repeat, it is very important that at this early stage in the operation of this machinery we should look at the matter to make sure that as far as possible fairness shall prevail and that people accept the idea that the officers and the panels are tending to arrive at fair conclusions.
The Minister, I believe, should now look coolly at what has happened to date. He might well go into consultation with the chairman of the London Panel. He might save the whole situation by calling a conference of the rent officers in the London area and analysing their experience. This is the time for the Minister to take stock, to bring the rent officers into consultation, to make contacts between the panels and the rent officers so that between them they can understand one another and arrive at a basis for their future operations, based on a general understanding of the position and resulting in fair decisions.
It would be lamentable if there were to grow up now between the panels and the rent officers tension, division and suspicion. Already, the rent officers are in a very difficult position. Theirs is not an enviable task. The rent officer has got to find his way through a lot of conflicting factors. He has got to try to work out a just decision in each case. But in almost every case he is a man with local experience. He understands his locality. He knows the type of population in the locality. He knows the degree of scarcity. He really understands his own ground and one cannot say that for the rent panels.
If, as a result of a panel turning down the rent officer's decision and increasing the amount which he thinks is a just rent, the rent officer loses his confidence and feels that he is being overturned by the panel in too many cases, he may well feel harassed in his judgment. One rent officer has told me that this is his state of mind. In many instances the panel increased the amount which he thought was a just rent, and he said to me, "What can I do?" He is a disappointed man, struggling with a problem which he finds a bit too big for him because he is not getting co-operation from those on the higher level who man the rent panels.
The Minister should, in any consultations which he might arrange, have full regard to the local experience of the rent officer. I am sure he will have a better assessment of what is fair locally than the rent panel can ever have. As my hon. Friend the Member for Salford, East said, the rent officer actually goes to the accommodation and inspects it, and, in the light of what he sees, in the light of his knowledge of surrounding properties and the general position in the area, he decides what he consider to be a fair rent.
But, with all respect to them, the members of the panel are not people who have had the advantage of knowing the local background of the cases coming before them. They can hardly do so. It is a London panel which covers a whole variety of different areas and different classes of areas, and it is not possible for the panel really to have a close and accurate view of the ground in each particular area.
There is a strong case immediately, before the thing runs away in a wrong direction, for the panels and rent officers, possibly with the help of the Minister, to exchange views and try to reach a basic understanding of how they will proceed in the future.
I wonder whether the hon. Gentleman would consider the attendance of the rent officer on appeal? The rent assessment committees have decided they will not have the rent officer before them. I think that it follows from his argument that the hon. Gentleman might disagree with that view of the committees.
That is rather a matter for the Minister to consider. I would support the suggestion. I think that the local knowledge of the rent officer, which is unrivalled in this field, should be available to the panel, but it is a matter for the Minister to consider, and consider promptly, before this business turns in a wrong direction, possibly implementing the suggestion made by the hon. Gentleman.
We very much want this business to run fairly and in such a way that people generally will accept the decisions as being fair. We do not want it to deteriorate into a series of bickerings about particular cases. We want it to be generally accepted that justice is being done, and the Minister should look at the matter now to make sure that things will run along well and be acceptable to most people as fair.
My hon. Friend the Member for Salford, East mentioned the second half of this machinery for arriving at fair rents, the properties that are at present controlled. I hope that the Minister will soon be able to say when, at any rate in London, those properties will come under consideration and the landlords or tenants of them can apply to the rent officer for adjudication as to what he considers to be a fair rent. I hope that he will soon be able to tell us—not today, perhaps, but soon—how soon he can announce that controlled properties will be brought under review by the rent officers and panels.
That ought to be decided as soon as possible. [HON. MEMBERS: "As late as possible."] I hear my hon. Friends saying that they want it as late as possible. But it is an essential element in arriving at generally fair rents that these controlled rents should be looked at. Let us be quite honest with ourselves about it, if we can. Let us, if we can—I know it is difficult—be non-political about it.
I accept it as honest, but no one can live rent-free. That is quite certain. We are trying to arrive at fair rents. I do not believe that anyone wants to live rent-free. Most people are quite prepared to pay a rent which they regard as fair.
I hope that the Minister will consider how soon he can bring the controlled lettings under review because, at present, there are some instances of landlords receiving a very unjust deal. There is no question that there are such cases. As long as it continues, that factor will vitiate the whole scheme of the Minister to arrive at generally fair rents. If we are to have fair rents, we must be fair and we must be ready to consider the controlled rents as soon as practicable.
I agree that the uncontrolled rents are most urgent. The Minister knows that, and has taken them first, but there will come a time—I hope not too long delayed—when the Minister can say that, in fairness, the controlled rents should now be considered.
This debate is remarkable for the total absence, except for two hon. Members opposite, of those whom we usually regard as the landlord's friends and who usually put his case with great force and eloquence in this place. I must, therefore, ask the forgiveness of the House if I concern myself more with the problem of the tenants.
We have put on our rent officers an immensely difficult job, and as the Minister made clear at the time, it was in many ways an act of faith. This was a new vocation. It reflected a completely new attitude to the whole problem of rents, and I am sure that all of us, especially those who worked in detail in the Standing Committee on the Rent Bill, have been watching its progress most anxiously. We are all most grateful to my hon. Friend the hon. Member for Salford, East (Mr. Frank Allaun) for bringing this progress report, for such it is, before the House. It is especially important because, unless the early decisions are right decisions and are seen to be right, we may have a completely wrong pattern of precedent set which will distort the whole future working of the Act.
I realise the difficulties of the rent officers. I know that many of them come from very varied backgrounds, but I am sure that they are all trying, according to their lights, to arrive at fair and just conclusions. I am not sure, however, that we have been completely fair to them by the almost complete absence of instruction as to the way they should go about their work. I have spent quite a lot of time going into some of the decisions which have been made already, and I am worried because I find not only considerable differences in approach between officers in one area and those in another but even between rent officers within the same area where different conclusions have been reached in respect of similar properties. The result has been to create a certain amount of confusion and concern. It would be helpful to tenants, landlords and rent officers if the Minister could fairly soon have some form of conference with the people concerned just to see how things are going and to make sure that we are not having unfair disparities in the decisions being made.
I draw attention to one case which seemed to me to be an example of this sort of difficulty. There was an appeal heard on 28th April at Friends' House regarding a one-bedroomed flat over a shop in Upper Street, Islington, not a particularly luxurious neighbourhood. The tenant was paying a rent of £7 a week exclusive. The tenant, thinking that this was too much, was very happy when the Rent Act was passed and, quite rightly, went to the rent officer. The rent officer gave a decision that a fair rent would be £3 17s. 6d. Everyone was happy with that, except, of course, the landlord. The landlord appealed and, when the case was heard, a new rent was assessed. The rent officer was overruled, and it was decided that £5 15s. was a fair rent for a one-bedroomed flat over a shop in Upper Street, Islington.
This case happens to be from my own constituency, and I have dealt with it in detail. It is not a one-bedroomed flat. I decided not to mention particular cases because they can be identified, as this one now will be. I can assure my hon. Friend that on some of her facts she is quite wrong. This is a three-bedroomed flat with a bathroom—not a one-bedroomed flat.
Perhaps, Mr. Speaker, you will allow me just to support my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger). I was at the rent assessment committee hearing. The facts that she has given are correct. It was a one-bedroomed flat. The main point is that when the young lady concerned was asked by the landlord's representative why she had been willing to pay £7 a week when she had seen 12 other flats first, she said "Because I was desperate for somewhere to live".
I thank my hon. Friend the Member for Salford, East. My hon. Friend the Member for Islington, South-West, will probably accept that there may be more than one case from his constituency before the rent assessment committee.
I should now like to refer to the reasons which the chairman of the rent assessment committee gave for his decision, because this gets at the heart of the whole problem. The chairman, Sir George Bull, was reported as saying that the amount of £5 15s. had been decided:
bearing in mind that this is a rising district, and also taking into account the scarcity element".
I really must ask the Joint Parliamentary Secretary whether he feels that such a statement should be publicly disowned or supported. If the statement by the chairman means that there is a scarcity element in the neighbourhood, this contradicts assurance after assurance that we were given at every stage of the Bill.
Would not my hon. Friend agree that there are a number of us watching the progress with these early cases who believe that the present chairman should be removed because of the way in which he is conducting the business of the rent assessment committee?
I must leave the decision about the chairman to the Minister, but I feel it my duty to put this matter before the House because there have been repercussions throughout London as a result of that statement and the apparent increasing prevalence of this attitude.
When the chairman was challenged on this he quoted Section 27 of the Act, which says:
For the purpose of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwelling-houses in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms.
The chairman emphasised that, because the Section refers to there not being a substantial imbalance between supply and demand, where there was a substantial imbalance the scarcity element was rightly to be taken into account. I feel that if this attitude persists it will destroy the whole purpose of the Act. In respect of very many cases into which I have gone in great detail, visiting the tenants and seeing the amenities, I cannot escape the feeling that in the back of the minds of the assessors, if not deliberately in the front of their minds, is the routine, conventional market value.
I know that we are asking for a revolution of sorts when we suggest that there should be another attitude. I remember the Minister seeking to help us over this matter in Committee. He said that he thought that the best way in which to get an idea of values as distinct from scarcity values was to think of a district where there was no scarcity. He mentioned Sowerby and told us to imagine that any house or flat that we were considering for assessment of fair rent was in Sowerby. I am sure that if the flat to which I have referred had been in Sowerby, far from the landlord getting £5 15s. per week, which the rent assessment committee gave him, he would not even have got the £3 17s. 6d. which the rent officer gave him.
I stress the difficulties of those who have to make these decisions. We should have given them more help and guidance. I recall a case in my constituency where a one-roomed flatlet—it is in a block of flats, and it has services; I want to be honest about it—has been assessed at £315 per year exclusive as a fair rent. When I try to get at the thinking behind this assessment, I am told "Think where the flat is. Think what it is worth." Once we begin to think what the flat is worth to the tenant—in this case the tenant has accepted the ruling because it is so important for him to continue living in the place—it seems to me that the whole analysis of fair rents which was behind our thinking in passing the legislation is being called into question. It is because of these disparities—I emphasise again that I do not think they are wholly the responsibility of those who are trying to administer this very complicated and difficult Act—that I hope that the Minister will indicate his Department's concern and his willingness to take some action.
May I join a number of my hon. Friends in congratulating and thanking my hon. Friend the Member for Salford, East (Mr. Frank Allaun) for raising this matter in the House? He was fortunate in that the debate started at an early hour, and those of us who have been privileged to take part in it are fortunate, too.
This debate illustrates one fact which has become increasingly apparent particularly to London Members since the Rent Act machinery has been working, and looking around the Chamber I do see a large number of my hon. Friends from the Metropolis. Since the first few decisions of the rent assessment committees were published and made known, there has been an increasing doubt, suspicion and concern whether these committees, first of all, are excluding the scarcity element from their consideration and, perhaps even more important, whether they can exclude the scarcity element from their considerations.
When the Rent Act was first introduced I supported the whole thinking and the conception behind it wholeheartedly. It was my view at the time that it was a good idea to separate security of tenure, so that a tenant cannot be evicted, from the question of the rent which the tenant might have to pay. I felt that if we could have some machinery which at one and the same time gave the tenant the security of his own home but thereafter had a sufficient degree of flexibility to allow the landlord and tenant to arrive at a fair rent, subject to some kind of appeal machinery to ensure that it was fair, then this was a more flexible and novel approach to the whole question of the very difficult relationship between landlords and tenants.
Therefore, when the idea was mooted of having rent officers established for each municipality who would know the area and could go round to see the property, who would operate on some specific guide lines given to them by the Minister—such as the comparable level of controlled rents in the area and the comparable level of local authority rents in the area—and who could then decide what was a fair rent of the property, excluding scarcity value, I thought that this was a very good principle. I recognised at the time that if there were to be a system of municipal rent officers we must have some system of appeal so that people could go from the rent officers to some appellate tribunal.
But having seen the way in which the rent assessment committees seem to be dealing with the problem, I am bound to tell the Government that my support for the new and flexible type of rent-fixing machinery is not quite as wholehearted as it was when the Bill was passing through the House. I thought that it was a very good idea to get away from the conception of having a mathematical formula which could be universally applied to all rents, because, frankly, I could think of no mathematical formula which could be so applied—apart from rateable value, which is a ludicrous formula for reasons which we all know—which was not so involved that the complications of applying it outweighed the results at the end of the day. The idea of having someone to look at the property and then define what was the fairness or otherwise of the rent seemed an excellent idea.
It was inevitable that from area to area different rent officers would come to different conclusions. It is inevitable in any system which tries to get away from mathematical formulae and which allows for flexibility that we shall have variations between the assessments of different rent officers. But from all the evidence which one is gathering in and around London it seems to me that the variations from borough to borough are over-large. I have had cases pointed out to me of almost identical houses, the only difference being that one is in one borough in London and another is in another borough in London, for which, there has been a considerable difference in the rents assessment. If one looks at the type of property it is very much the same; the sort of area the property is in is much the same; the comparable levels of municipal rents are very much the same; but the rents assessed by the rent officers seem to differ a great deal. If we are to continue with this policy of flexibility, then at some stage the Ministry must issue sterner directions and more obvious guidelines to rent officers as to the basis on which rents should or should not be assessed.
It is wholly appropriate that we should be discussing the matter this afternoon. I have no doubt that in his reply the Parliamentary Secretary will point out that these are early days and that the Act has been in operation for only a short time. I believe that my hon. Friend the Member for Salford, East said that there had been only 23 cases before the rent assessment committees. It is true that these are early days, but every hon. Member from the back benches has emphasised that it is in the early days that patterns are being set. There is no doubt about this. There is a block of flats in my constituency about one of which the landlord is to go to the assessment committee. If he gets the right result, then perhaps 100 more tenancies will be affected. It therefore does not seem to me that these are too early days to discuss the matter when so much is involved.
I should like to make two practical suggestions if we are to keep this type of machinery although, as I have said, my doubts about it are beginning to grow. There are two things which the Ministry could do which would help. First of all, not only should rent officers be present at the hearing of the appeal but it should be possible to call upon them to justify their decision at that first instance. It may be that the rent officer has local knowledge which is not available to the assessment committee which, when it is put before the committee, might result in a different type of decision.
It therefore seems to me that the rent officer should, if possible, be there when the appeal is to be heard, and that he should be called upon—at the instance of either side or at the instance of the committee, it matters not—to justify his decision. It should then be open to argument by either party whether the original decision was right or wrong.
My second practical suggestion concerns a matter raised by my hon. Friend the Member for Salford, East. It is ludicrous—and I use the word advisedly—that tenants are not permitted legal aid to come before a rent assessment committee. I have no doubt at all that the big property companies, in the centre of London for instance, will employ lawyers and that they will be the best possible lawyers they can get. They will employ surveyors and valuers who also will be the best surveyors and valuers they can get.
Speaking as a practical lawyer—and perhaps here I should declare an interest, for what I am doing in one way is advocating more work for my own profession, although it is very refreshing to hear my hon. Friend the Member for Salford, East saying that the Bar should have more work—I can say that anybody with experience of any type of judicial proceedings, whether formally in court or before some kind of tribunal, knows that the man who is represented has a head start.
Even if he is badly represented, he is still better off than the person who is not represented at all, particularly before a committee like a rent assessment committee which is somewhat technical and where he may find himself faced on the other side by people with much greater technical skill and knowledge and certainly much greater expertise and experience in putting a case. It is very important when dealing with this type of committee that tenants should be represented. I hope that at some stage the Government will rethink that part of the matter.
Finally, the criticisms which I have voiced and other criticisms which have been voiced from the back benches today about the operation of the Act are based on one thing and one thing alone. The Act was passed to benefit tenants, and indeed it has. But in my constituency, regrettably, I have yet to be wholly convinced that the way in which the Act is operating is benefiting tenants to the extent it should. I am not yet convinced that rent assessment committees are doing the job which they were set up to do in the way in which they were empowered to do it by the Act and the way in which the Minister himself told us that they would operate.
It is, therefore, in this attitude of concern about the way in which this aspect of the Act is operating that the debate is taking place. Although these are early days—and although I do not want to cut away the ground from the Parliamentary Secretary's argument as I am sure that this is one of his main points—it is time that the Government had another look at the way in which the committees are operating, to see whether clearer guidelines and rather more direction are needed from the centre to ensure that the scheme is working properly.
It is not "although these are early days" that we are speaking, but "because these are early days". I have been disturbed—and I hope that he will not take offence at this—by the way the Minister to date, at Question Time, has reiterated the phrase "these are early days", or words to that effect, saying that, therefore, we cannot make judgments about how the Rent Act is operating. It is because these are early days that we are so anxious about some of the notable cases which are coming to the public eye and to our attention.
The object of the exercise must be to make sure that the Rent Act works fairly. There is no doubt that because of the manner in which the rent assessment committees are operating, the Act is already beginning to break down, that the fair rents procedure is already beginning to break down. I assure the Minister that I am not using exaggerated language.
This must not be taken as a rather inconveniently long Adjournment debate. That is fortuitous, but this is a very serious occasion when some of us—and we are not alone—have come to speak of the experiences resulting from these relatively few but very important decisions which have been made. In my own district it is known that there are people who are—I hope that the Minister will listen to this, because it is vital—withdrawing their cases from the rent officer as a result of these decisions.
There are landlords who, having first indicated their intention to accept the decisions of rent officers, see the results of some of the cases that have gone before the rent assessment committee, and then change their minds, refusing to accept the fair rent recommendation of the local rent officer and submitting their case to appeal. There are cases in which the rent assessment committee is recommending higher rents than the landlords have been requiring. This is ridiculous. This is when the tenant has gone on appeal against either the recommendation of the local rent officer, or in cases where the landlord has not accepted the suggestion of the local rent officer.
I have said that people are withdrawing their cases. The Minister can and should check up on this quite quickly and easily. Tenants are withdrawing their cases and landlords are withdrawing their proposed acceptance of the fair rents recommended. What is more a situation is already arising whereby, as a result of the conduct of the Chairman of the London Rent Assessment Committee in accepting applications by landlords after the 28 days allowed them in which to make submissions, the phraseology relating to the 28 days is having to be deleted from the local forms.
As a result of this landlords are getting on to the telephone to the local rent officer and say, in so many words, "In view of what has been happening in the London Rent Assessment Committee, I have changed my mind. Although the 28 days have gone by, I intend to submit my appeal to the London Rent Assessment Committee, because I am fairly confident that it will give me a rent higher than you are recommending for the property." These are examples of some of the experiences of people brought about as a result of the conduct of this committee. Some of us are concerned with what seems to be a very high-handed attitude being adopted by the present chairman.
So far, all of the cases being handled by the London Rent Assessment Committee are being dealt with by the Chairman and two other members only. The chairman has decided that the other members of the London Rent Assessment Committee shall not come into operation. He has decided that when they do start to operate they will not necessarily be allocated to areas which they know best.
I have been very patient in not intervening in this debate, but my hon. Friend is going a hit too far. On the first point, it is not true that all cases are being taken by the chairman and vice-chairmen. The other committees have been sitting. In a second place, the rules about the panel make it perfectly clear that the panel applies to the whole area. One does not have one's own little nest where one is well known. The whole point in having a panel of this size was to enable it to cover the whole area.
The Parliamentary Secretary is getting very near to misleading the House, because it has been decided, whether by the Minister or the chairman of the rent assessment committee, that the committee will be broken up into panels covering areas in London. What he has indicated to the members of the London Rent Assessment Committee is that they may be allocated anywhere in London. Would it not have been far wiser for them to be allocated to areas which they know well? One of the troubles about what is going on in the London Rent Assessment Committee so far is that the decisions are being made about properties which are not sufficiently well known to members of the committee.
On the first point, my information comes from a member of the London Rent Assessment Committee. If there is some dispute about the facts, I suggest that the Minister gets in touch with either the chairman or the other members of the committee and finds out why they were told that the first few cases would be taken by the chairman and the two vice-chairmen only.
That is quite a different story. What my hon. Friend says about the first few cases is perfectly correct. But he said that no cases are being taken by the rest of the panel. That is untrue.
Perhaps my hon. Friend will say when they started to operate as a panel—that would be most interesting—and how many cases have been dealt with by the chairman and vice-chairmen compared with the number dealt with by other members of the committee. I should very much like to have information on when all the members of the committee will be authorised to start work. They have not all started work yet, and I had that information from a member of the committee.
What is also disturbing us is a point raised by my hon. Friend the Member for Salford, East (Mr. Frank Allaun) in a Question in the House early last week. The Attorney-General said, quite rightly in principle, that he did not foresee that the rent officers or the London Rent Assessment Committee would conduct their proceedings in a formal manner or in such a way as to intimidate or inhibit tenants who were not represented by surveyors or other professional people. We happen to know that the Attorney-General was wrong.
Whereas the rent officers are acting in a very formal manner, sitting round a desk and talking with people, quite rightly, the committee is not conducting itself in this informal fashion. It is very formal—so formal that when the chairman enters all those in the room rise, as in a court of law. Am I correct on that point? It is no small matter if all the proceedings of this committee are to be conducted in this way when tenants are not represented by counsel or by professional people and are cross-examined as if in a court of law. That is the way in which the proceedings are being conducted.
Lastly, I come back to the sort of point which we discussed when the Rent Bill was going through the House. I will not go over all the ground or points which, even if we were not members of the Standing Committee, we put forward. We were concerned that no clear guidance was laid down in the Bill on the question of fair rents. We accepted the argument in the end that it was very difficult to base the rent on the traditional rateable value standards such as those to which my hon. Friend the Member for Barons Court (Mr. Richard) referred. I was as persuaded as he was that it was not the right way to do it. But we still expressed concern about the loose and vague way in which the relevant Section of the Act was worded.
There is no guidance in the Act, and far too little guidance has been given to the rent officers and, in particular, the London Rent Assessment Committee, about how they are to arrive at fair rents. It is ludicrous that the chairman and vice-chairmen of the London Rent Assessment Committee should be assessing rents at a higher level—and a considerably higher level—than the landlords want. It is surely not impossible for the Minister to give the kind of guidance which the other members have asked him to give about the principles on which the London Rent Assessment Committee, in particular, and, if necessary, the rent officers should operate.
Broadly speaking, the guidance should be on the basis of what is known to be the capital, management and repair costs to the owners of the properties concerned—it is possible to get this kind of assessment—and a given percentage return on the capital and running costs. This is a principle in the 1949 Act which has been accepted for years, subject to revision. It has been raised progressively from a 6 per cent. return to a 12½ per cent. return on the capital cost of carrying out improvement works.
I cannot see why this principle cannot be applied in the operation of the Rent Act. It is possible to obtain information as to what the actual cost of property is in given areas—what the cost of running that property is and what the approximate cost of repairs is—and come to a conclusion as to what a reasonable rent might be on the capital and running costs of the landlord in operating the property.
That is a very rough and ready way of doing it, and it would mean a good deal of sophistication, but I cannot see why it should not be undertaken. Until it is undertaken, we shall remain in the realm of guesswork. What concerns us is the inconsistency of decisions which are being made by the London Rent Assessment Committee and, to some extent, by the rent officers.
I want to end on a somewhat more friendly note. Except for the criticism that we are making of the London Rent Assessment Committee and its conduct, most of us would accept that the Rent Act is operating fairly and has been a tremendous boon to many thousands of people in London and other big cities. That is all the more reason why we are concerned at the arbitrary and inconsistent conduct of the chairman, vice-chairmen and other members of the London Rent Assessment Committee.
I want to ask the Government, in their whole approach both to this question and to housing, to see the matter not in terms of property values but in terms of human values, and not be shackled by any straitjacket of past thinking in their approach.
A Labour Government should recognise that a decent home is an elementary human right, like health and justice. It is a basic necessity for every family and a foundation on which they might have the chance to build their own lives. So often, hon. Members opposite, either by their words or by their absence, as today, reveal that they view homes in terms of balance sheets. The professional type of person, who is so often appointed to rent tribunals and who is in the majority on almost all of them, inevitably tends to view things in that old fashioned way of thinking.
I ask the Government to remedy that by appointing, instead, experienced social workers and people who have experience of human values rather than of the less important matter of property values.
Finally, will the Government give a specific assurance that in every single case where the landlord is represented, the tenant has an automatic right to be represented as well?
Mr. Deputy Speaker, I am aware that there are one or two other hon. Members on this side of the House who anticipate catching your eye. I must be brief, although it is a great temptation not to be, because there is so much that one could say.
The quintessence of the arguments which have been advanced by my hon. Friends is that we are now witnessing the worst possible situation at which any Act of Parliament can arrive. There have been a few good Acts of Parliament and quite a lot of bad ones. It was intended to pass a good Act of Parliament, but, now that it has got outside, it has gone sour and is becoming a bad Act. That is a very serious situation.
It has gone sour and is becoming bad because it would appear in the initial stages that the rent assessment committees have either not understood their work, have not been qualified to do their work, or probably come from a class which does not really appreciate what is involved. That may be a reasonable excuse for them, because they might not know what life is about for the average person who has to pay a rent. I do not mean that at all viciously, because it is a reasonable excuse. However, if that is so, it is one reason why they should be removed immediately or sent on some sort of course.
I know a number of slum properties in London which would be admirable establishments in which to put these people on such a course for a couple of months. It would have a remarkable and salutary effect. Such a course would surely be followed by proper assessment of rents and rent officers themselves would get the "stick" from rent assessment committees if they arrived at decisions which put rents at too high a level.
I believe that it was my hon. Friend the Member for Islington, South-West (Mr. Albert Evans) who referred to the need to be practical, realistic and honest. Those are admirable sentiments. Indeed, if the landlords had been like that before the Act, it would not have been necessary. He argued that, when people have invested in property, they are entitled to some form of return. Are they? Are people who have deliberately got hold of bad property, primarily through the operation of the 1957 Act, and who have cashed in on scarcity justified in claiming that they are allowed to make profit out of human suffering and misery?
Not all of them. What I am saying is that it seemed to me that, at one time, my hon. Friend was arguing that control should be looked at again more quickly. I hope that it will be looked at only in the time of my grandson—who I hope will serve in this place—but not before.
Surely one cannot accept as decent the behaviour of the minority who deliberately invest in bad property, knowing full well that they are doing so on the basis of cruel scarcity and are expecting to make profits out of it. [HON. MEMBERS: "Hear, hear"] I should have thought that those "hear, hears" would have been echoed by hon. Members opposite, that they would accept that this is a rotten thing to do. It is being done and not enough cognisance is being taken of it by the rent assessment committees.
I want to underline what was said by my hon. Friends the Members for Barons Court (Mr. Richard) and Holborn and St. Pancras, South (Mrs. Lena Jeger). They put forward a good suggestion which I hope will be implemented as quickly as possible by the Government. It was that the rent officer should be present when an appeal comes up. But I would go a little further.
Ministers are sometimes rather keen to accept the advice of their advisers. I can imagine some of the advice that may be given in this case—"We cannot do this because it is impractical and rent officers have too much to do". I want to do something extra, nevertheless. In the event of the rent officer being unavailable or unable to be present at an appeal, we should place the onus of responsibility for supplying someone to protect the interests of the tenant on the local authorities. I am certain that progressive local authorities in London would be prepared to accept that proposition.
If there is one commodity that sends up the cost of living more than anything else it is rent. I warn my hon. Friend the Parliamentary Secretary that this debate should have impressed upon all concerned the strong feeling of the House about this Measure. I go further. Many of us have come here today because of the feeling that exists about this matter outside the House, particularly in some trade union branches. I warn my hon. Friend that if something practical is not done about this Measure, the prices and incomes policy of my right hon. Friend the First Secretary will be very seriously affected.
This is bound to happen when trade union officials are confronted by their members saying that, even after the assessment procedure, many of their rents have gone up by £2 or £3 and that the only way to abide by the decision of the local rent assessment committees is to ask the union to put in a claim for substantial wage increases. This is precisely the argument that is being used today in certain trade union branches.
We are now in the worst possible situation because not only is the Act not working in the way people anticipated that it would work—they were expecting to obtain justice under it—but, in addition, people are afraid to use the Measure because rather than get justice they think that, as has happened in certain instances, they will get even deeper and further into the quicksands of injustice. The quicker something is done to remedy this situation the better, not only for Parliament and the Act but for people generally, because unless something constructive is done, and quickly, great frustration will be caused throughout the nation and this could have serious repercussions.
I cannot help noticing the contrast between the action of hon. Gentlemen opposite last night in keeping the House sitting till a very late hour on behalf of their landowning friends and their absence today. Apart from one brief intervention, not one hon. Gentleman opposite has spoken in this debate. If the Rent Act machinery had been working as well as it should be, we might have had hon. Gentlemen opposite complaining about the rents being fixed.
The fact that Labour hon. Members are raising this issue—and my hon. Friend the Member for Salford, East (Mr. Frank Allaun) has done a great service in initiating this debate—shows the concern that is felt over some of the assessments that have been made by rent officers and rent assessment committees.
I hope to make a balanced speech and, to do this, I must consider why the Act was passed. I agree with my hon. Friend the Member for Willesden, East (Mr. Freeson) that the 1965 Act was a great asset to the nation. Whatever may be our feelings about some of the findings of the rent assessment committees, we cannot get away from the fact that the restoring of security of tenure was a great achievement. It did away with the terrible evils for which hon. Gentlemen opposite were responsible in 1957. I say without apology that the 1957 Act was one of the most shameful and wicked pieces of legislation ever passed by Parliament. Thus, to a large extent, we have got away from the evils of insecurity.
I support much of what has been said about the findings of the rent assessment committees. Some of their verdicts have been completely cockeyed. Some of the rents fixed as a result of the 1957 Act are becoming accepted—and this is my main reason for intervening—not by rent officers, but by many rent assessment committees. There seems to be a feeling that tenants should pay what is known as a market rent, but it is my view that these market rents are completely unjustified and that there is a strong case for far more drastic reductions in rents than have taken place in recent months.
Though I recognise, as do other hon. Members, that rent officers are on the whole doing a very fine job, some of the members of the rent assessment committees—and I do not particularly make any rude remarks about them—are out of contact with the lives of ordinary people. In the main, they tend to be professional middle-class people, who are apt to look at rents rather differently from ordinary working-class people, who try to get a fair assessment from the rent assessment committees.
When the Rent Act machinery was being discussed, I was one of those in the Labour Party who suggested that we should go back to fixing rents according to the old-type rateable value. I made that point at the Labour Party conference in 1964, and trying to catch the eye of the chairman of the Labour Party conference is nearly as difficult as trying to catch Mr. Speaker's eye. Ministers, and the Government generally, argued that that was not possible; that there was need for flexible machinery. They may well have been right, but when he winds up this afternoon my hon. Friend should recognise that some of the findings, particularly those of rent assessment committees, are unfair, unjustified and way out of tune with the feelings of the Labour Party which demanded the repeal of the 1957 Act.
The Rent Act machinery is on probation. This debate has come about because many of us are very dissatisfied with some of the decisions. If the Rent Act machinery cannot be made to work as it should, and as, I am sure, the Government would like to see it work—I suggest that we should restore the pre-1957 position, and fix rents according to rateable value. I know that there are certain difficulties in doing that, but if it is found impossible for this type of flexible machinery to work in practice, it is the only alternative.
I cannot, in an Adjournment debate, follow the hon. Member for Croydon, South (Mr. Winnick) into the realms of altering the law, so I start by declaring an interest similar to that declared by another solicitor in the House. I, too, am of that profession, and I suppose that I have an interest when I plead, with him, that there should be legal aid in cases before the rent assessment committees. These cases should be conducted in the way that is best known for extracting and marshalling facts, and that is the way of normal court procedure. If a person gets involved in that procedure, he needs the assistance of those experienced in it. He therefore needs legal aid.
All of us who have been interested in the workings of the Rent Act and in the procedure adopted by the rent officers and the assessment committees have had varying reports of the conduct and decisions of rent officers. Some reports have been very critical; I think that the majority have praised their work. But, as the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) has said there is a great variation between the decisions of rent officers in various parts of the country. Generally speaking, parties coming before them have been well satisfied with the thorough and conscientious way in which their cases have been treated. Of course, we have all heard the complaint, "The rent officer did not listen to what I was saying", but we get that sort of complaint everywhere, before any judge or arbitrator, and I do not attach very great weight to it.
I think that the unevenness of the decisions of the present rent officers has justified the case put by the Opposition in the debates on the Rent Bill in 1965 that rent officers ought to have been qualified valuers. That that would have been better has, I think, been proved by the results. Those debates forced an appreciation of the need to obtain men of experience and high calibre for this work, and I think that on the whole the Minister and the town clerks have discovered such men.
Nevertheless, that their valuations are frequently incorrect was shown by at least the first half dozen or so of decisions made by the London Rent Assessment Committee. The figures have not all been quoted. In every one of the first seven cases the committee increased the figure determined by the rent officer—except in one, when the committee said that it would have made such a small increase—namely, "five bob" a week—that it would leave the rent as the rent officer had decided it.
I have agreed with much of what the hon. Member has said up to now, but surely he must recognise that the whole tenor of this debate has not been that the recommendations of the rent officers were wrong, but precisely the opposite, that in those seven cases it was the decision of the rent assessment committees which was wrong.
I quite appreciate that the hon. Member is setting himself up as a court of appeal from the rent assessment committees. This has been the whole tenor of the debate. I shall try to justify the decisions of those committees.
I was pointing out that in all these earlier cases the rent assessment committee had decided to increase the figure determined by the rent officer. As cases have proceeded to come before the committee, the rent officer and the committee have come more in line. This surely was the idea behind the setting up of the committees, that they should set precedents—hon. Members opposite say they are wrong precedents—by which rent officers could guide themselves.
Of the other complaints I have heard about rent officers, one quite substantial one has been about the procedure adopted when an owner applies for a certificate of fair rent. As hon. Members will know, the position of the parties to a tenancy agreement is that the landlord cannot have second thoughts about the rent fixed by the agreement, but the tenant can. The tenant can go to the rent officer and ask for the agreed rent to be reduced. It is, therefore, important to the landlord—and, I think, to the tenant so that one can get agreement and some reasonable relationship between landlord and tenant—to have the prospective rent settled by the rent officer.
But in some cases I find that the rent officer is giving applications by sitting tenants priority over applications for certificates of fair rent. He is pushing applications for certificates for fair rent down his list and dealing first with applications from sitting tenants. I should have thought he should deal with applications strictly in the order in which he receives them.
Coming to the rent assessment committees themselves, it was most regrettable that a personal attack was made on the president, and to some extent on the vice-president, of the Greater London panel. I think that the hon. Lady the Member for Holborn and St. Pancras, South set herself up, rather arrogantly, as a judge in a case at which she had not been present to hear the facts and had not heard the evidence. She was applying her own rather biased view of fairness and scarcity. I do not think it justifiable, on that basis, to criticise the panel, or particularly the president, by a personal attack on him when he and his panel are doing a very difficult job. They are doing a job which has never been done before. They have no precedent or tradition to work on, and, obviously, in the first 23 cases they had to work as best they could.
It would be a matter of great regret to me if my attack were construed as having been a personal one. My attack was purely on what seemed to me to be the dangerous principle which had been enunciated by the chairman, which seemed to me to be in conflict with the Minister. I raised this because I was seeking guidance. If there is any implication of a personal attack, I should be the first to regret it.
I am very glad that by my suggestion that there was a personal attack I have given the hon. Lady the opportunity of refuting it. I think that some of her hon. Friends were carried away by what she said and demanded that this president ought not to be there and that he should be removed. On the whole, I think that the panel is doing its job well. I should very much regret any Ministerial directions to a panel of this type. Even though some of its decisions are a little puzzling, I would hope that we shall leave them as judicial decisions and not interfere by any Ministerial directions.
Having said that some of the panel's decisions may seem a little puzzling, perhaps I may return to the point on which I interrupted the hon. Member for Brixton (Mr. Lipton) when he was talking about the capital value and the return on capital value. In the early cases decided by the Greater London Rent Assessment Committee it comes out fairly clearly that the panel has tried to ascertain a capital—value the price at which the property would sell—that it has then discounted the scarcity value on that capital figure, and has then taken a return of 10 per cent. on that as being a fair rent.
This does not tally with what is recognised in another part of the Act as being a fair return on expenditure—the 12½ per cent. on the cost of improvements. If the committee is taking any percentage in that way, I should have thought that it should be 12½ per cent. and not 10 per cent. However, I am not sure that I agree that the Act allows that basis of valuation—on capital value. I recollect the Minister saying, during the course of the debates on the Rent Bill, that he was not having any truck with that. I had an Amendment down on this basis. The Minister said that he would not consider capital value as a basis of fair rent. I mention this because the hon. Member for Brixton raised the question of capital value.
I do not think that the rent assessment committees are sitting frequently enough. The Greater London Committee certainly is not. It is dealing with two or three cases a day of sitting. So far, the committee has got through only 23 cases. According to an Answer given on 25th April, 2,606 cases had been decided by 16th April; in 1,470 the rents were reduced: in 342 they were unchanged; in 397 they were increased; and in another 397 the cases were referred to the rent assessment committee.
The Greater London Committee has dealt with 23 cases. Thus it has 374 still to deal with. There are 5,982 outstanding applications. If, on a percentage basis, as many references will be produced from those 5,982 outstanding cases, the committee has to face another 900 cases. With nearly 400 already referred and another 900 to come, I am not sure how the committee will get through all its work if it deals with only 23 cases in two months. There will be very considerable and serious delays.
Having dealt with the points of procedure, I come to the two major points which I want to mention on
the most recent working of the Rent Act 1965".
to use the words of the notice of this Adjournment debate given by the hon. Member for Salford, East (Mr. Frank Allaun).
The House will recollect that the two chief purposes of that Rent Act were the basic protection and the regulation of rents. We have dealt mainly today with the question of regulation of rents, but I wish to touch on the question of basic protection. By that, I mean the protection to occupying ex-tenants, and that the landlord should not be able to take possession from them without obtaining a possession order.
During the debates on the Bill the Opposition pressed for expedited procedure on possession summonses. We put down several Amendments in various forms so that we could debate this subject. At first, the complaints about delay in the hearing of possession summonses were rather brushed aside, but later we were given promises that something would be done about it, that if a landlord was obliged to take proceedings against an ex-tenant who was obviously remaining in the premises without any justification, some rapid procedure would be devised to bring the case before the court.
Nothing has been done. It is true that there is, and there always has been, the right of a litigant to apply for an expedited hearing, or to be heard by the registrar of the county court instead of the judge, or to be heard in another court on that same judge's circuit. There has always been this form of application, but this is, and again it always has been, an exceptional procedure which the courts are reluctant to grant without proof of a strong case and without additional applications.
There is still serious delay in a possession summons coming on in court for hearing, and these cases affect mainly those where there has been accumulation of arrears of rent or where the letting of furnished property for a fixed term has expired. This is unnecessary protection to the unscrupulous tenants, and there are many of them, who deliberately take advantage of this delay in the proceedings. It causes considerable hardship to the private landlord, and by that I mean the individual; I am not talking about the property companies.
The property companies can employ their solicitors who will press and make the proper applications for expedited hearing. I am talking about the plaintiff who, acting in person, suffers from the two or three months' delay in the hearing of a possession case while the arrears of rent are accumulating and there is very little chance of recovering those arrears. I hope that the Parliamentary Secretary can tell us that this is recognised, that the promises given to us in the course of the debates on the Bill will come true and that we shall get some expedition of the hearing of these summonses.
Now for my second main point. The rents of controlled properties are still frozen. They are still tied to a gross rateable value of the 1930s. I ask the hon. Member for Salford, East: has it not been proved by the application of his own Government's fair rent Clause that controlled rents are no longer fair rents? He will recollect that under Section 11 of the 1965 Act the Minister has power by Regulation to convert controlled property into regulated property.
The Minister gave us assurances that he would carry out that conversion as soon as possible. That it should be done now is shown by the facts which are emerging from this procedure before the rent officers and rent assessment committees and which the hon. Member for Salford, East has put before the House so ably. The hon. Gentleman gave us the figures for Manchester, where the regulated rents are at least 50 per cent. above the comparable controlled rents. He has told us that in London the regulated rents are three times what they would have been as controlled rents.
The Act defines a fair rent. Rent officers can deal quite efficiently now, I think, with scarcity value. We debated all this at great length in the course of our proceedings on the Bill, and, had it been fair, as so many hon. Members opposite are now suggesting, that we should have controlled all rents and made them all controlled at that time, there would have been no point in the Rent Act, 1965. But a procedure of regulated rents was devised for the very purpose of achieving fairness between landlord and tenant.
I do not know whether the hon. Member for Salford, East and his hon. Friends set themselves up as judges of what is fair in rent. I do not think that he puts so much importance on himself. I understand his case to be that, if tenants are paying anything more than a controlled rent, then the rent is not fair. This is nonsense. Here is the definition of fair rent in the Act which the rent officers and rent assessment committees are now trying to operate. Controlled tenants, it has been shown by this operation, are not paying fair rents. They are paying less than fair rents. Fair is meant to be fair to both tenant and landlord.
The Minister should bring controlled property into regulation at the earliest possible moment. Even if it is brought into regulation at the present moment, it will take a very long time in London, for example, to come up to three times the controlled rent because it can rise by only 15 per cent. a year. I cannot mentally calculate 15 per cent. on 15 per cent. over a period, but I imagine that to bring it up to three times what it is now will take about ten years.
Will not the hon. Gentleman agree, nevertheless, that the Government expressed their priorities in the Act in relation to the rent assessment committees, saying that it was necessary for decontrolled property to be dealt with first and, once that had been sorted out, so to speak, and proper conclusions arrived at, controlled property could then be dealt with? The hon. Gentleman has just given us, as he sees them, the facts regarding the work of the officers and rent assessment committees, saying that they are overworked. If there is a burden on them now, would it not put an over-large burden to bring in the whole mass of controlled property? Secondly, taking the other half of his argument, that applications should be dealt with in strict order, would there not be a lot of landlords of controlled property jumping the queue over the others?
That is only a measure of the unfairness of the present situation. If it has been so clearly proved that there is great unfairness in the rent of controlled property, unfairness to the landlord, the machinery should be improved and enlarged so as to deal with it. That is no justification for continuing what has proved to be such an unfair situation for the landlord of controlled properties.
We have complete proof now that controlled rents are not fair. They are one-third of the fair rents in London and one-half of the fair rents in most other parts of the country. To answer an intervention by the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), the Scottish Development Department in February last stated that the average decontrolled rent in Scotland was 12s. a week and the average controlled rent was 6s. So there again the fair rent would be twice as much as the controlled rent.
This has been a quite extraordinary debate. All hon. Members opposite have criticised their own Government's Act, which they went into the Lobby to support in the last Parliament. I hope that the Parliamentary Secretary will not be rushed into giving directions to rent assessment committees or rent officers as a result of this debate. I hope that the result will be that the Minister himself makes a regulation extending process of ascertaining regulated rents to controlled properties.
One of a series of, I thought, extremely unfair interjections during the debate which my hon. Friend the Member for Willesden, East (Mr. Freeson) made was to say that I must not regard this as an inconveniently prolonged Adjournment debate. I can assure the House that nothing has pleased me more than the fact that we have had this debate and that we have had the opportunity to look at some of the problems that arise out of the Act. I assure the House that I regard the Act as a great success and a great triumph, and I am fully prepared, on behalf of my right hon. Friend, to accept responsibility for it, and glad to do it.
Perhaps I might just dispose of two other points made by my hon. Friend the Member for Willesden, East, which I rather regretted. One was the attack on the president of the panel for having started this absolutely unique operation—it has never taken place before—of trying to get some standards of rent over this appalling cesspool of horror which the Milner Holland Committee exposed. The president started by saying, in consultation with his colleagues—they are not all lawyers and valuers: they include Professor Donnison, a distinguished sociologist—"Let us begin by having a preliminary run as a team to enable the new panels which come into the picture to see roughly how it should work and how we should conduct our proceedings."
My hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) made an attack on a particular decision which was taken, and quoted the chairman—he was not, in fact, a vice-president but was a chairman. It was a little unfortunate that my hon. Friend the Member for Willesden, East should then have challenged me to give the date when they started sitting. My hon. Friend the Member for Holborn and St. Pancras, South had given the date, if he had only troubled to listen.
Another point that I should like to dispose of quickly is the suggestion that the president of the panel had indulged in a rather sinister conspiracy to allow landlords to appeal out of time from decisions of rent officers. That is a point which was discussed exhaustively in the House when the Bill was going through. I myself moved an Amendment—at any rate, I supported an Amendment after discussion in Committee—extending the power of discretion in the president to allow appeals out of time precisely for this reason. At the beginning one could not be sure of any uniformity of rent and, therefore, one had to have facilities for looking at the mistakes that had been made earlier on, in particular in the early stages of the proceedings.
I want to look at some of the points from which I think one ought to start in making an assessment of the operations and effect of the Act. I will start with what my hon. Friend the Member for Salford, East (Mr. Frank Allaun) said in the course of his speech, pleading with tenants to have no hesitation in going to the rent officers and rent assessment committees, because they should not be haunted by the lurking fear of eviction. My hon. Friend and I agree that one of the great things that we have seen since the Act came into force has been the removal from whole sections of the community of that lurking and hideous fear which had existed since 1957.
I have made some inquiries. We have had a prosecution for unlawful eviction in Yorkshire, which shows that justice and law are operating north of the Trent as well as south of it. There has also been a prosecution for harassment in Lambeth, which will be a source of satisfaction to my hon. Friend the Member for Brixton (Mr. Lipton). I am not saying that the number of prosecutions or the nature of the penalties inflicted is a measure of the success. It is not. It is a measure of giving people a feeling of security. In spite of what has been said by some of my hon. Friends, I think there is evidence that the nature of the relations between landlord and tenant is already very greatly improving. This is the object of the Act.
Perhaps I might give an illustration for what it is worth. My colleague the Joint Parliamentary Secretary, the hon. Member for Bermondsey (Mr. Mellish) went to the constituency of my hon. Friend the Member for Brixton earlier this week for a teach-in on housing. He was accompanied by the right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph). My hon. Friend told me that is was a very full meeting—not a political occasion—run by the local churches, and that he was peppered with questions on housing. There was not a single question about the landlord and tenant problem, not a single question about unfair eviction, not a single query about a rent. I agree that one cannot prove a negative and that one cannot prove that, because this happened at this meeting, that is the position everywhere. But when I talked in Paddington before the election I had no questions about anything else. My right hon. Friend can therefore feel a certain amount of satisfaction that we are beginning to break out of the battle of partisan hostility in the very difficult problem of landlord and tenant which has bedevilled—
The reason why no questions were asked at the teach-in about the operation of the Rent Act was that it was held in part of the constituency where the rent officers have not yet begun to operate. The cases which I quoted earlier were from another part of the division, some distance from the teach-in.
My hon. Friend is wrong. Rent Officers are operating throughout the Borough of Lambeth. He cannot get away with saying that, and I am surprised that he should want to do so. I shall deal later with the point which he raised.
Rent officers may make decisons which are wrong, and part of the whole machinery of the Act, as we have repeated again and again, is that it is the job of the rent assessment committees to correct mistakes which might, understandably be made in the early decisions. There have not yet been any appeals heard in the Borough of Lambeth. No doubt when there are, individual mistakes of that sort can be rectified.
We are making progress. Part II, which is the basis of the machinery of the rent assessment committees, is in operation in all but two of the assessment areas. The machinery is beginning to work, in spite of taunts made only a few months ago that we should never be able to do it and that the whole thing would break down.
May I come to some of the points in the debate? My hon. Friend the Member for Salford, East, with that irresistible charm which he always has on these occasions, is a man made for the game of cops and robbers. Previously the good tenants were the cops and the bad landlords the robbers—and that is something which we have all used in argument in our day. Now he goes on to say that the rent officers are the cops and the rent assessment committees are the robbers. He is determined to see everything in black and white in this way. What my right hon. Friend said in the debate previously—and I repeat it now—is that it is too early to come to a conclusion one way or another about it.
Just as my hon. Friend was too optimistic in February, when he thought that all the rent officers were the cops and that everything was wonderful and my right hon. Friend warned that we should be careful and that those were early days and that we were bound to get square pegs in round holes and bad decisions and that we had to be cautious. So I now say to my hon. Friend that on these first few decisions of the rent assessment committee he cannot make any kind of final appraisal of the position. Now that he adds a further stage in the operation and goes back half way again to February, saying that he regards the later decisions as rather better, I still say that it is too early to get a picture of what is happening.
I assure him, as he generously said, that these people have the unenviable task of taking part in this unique business, and I think that they will operate better if they do not have my right hon. Friend breathing down their necks. I am bound to say that they will operate better if they do not have my hon. Friend breathing down their necks, because if my hon. Friend breathes down their necks, the hon. Member for Crosby (Mr. Graham Page) has the same right to breathe down their necks, and the wretched people trying to Jo a decent and fair job are pushed in different ways.
There is a good deal of truth in what my hon. Friend says, but when he speaks of fairness, what is fair to the tenant is unfair to the landlord. If we on this side of the House regard low rents as fair, hon. Members opposite regard high rents as fair. We have to take a decision. We cannot be absolutely impartial, because there is a conflict of interest between the landlord and tenant.
Thank goodness, my hon. Friend is not paid to be fair. He is paid to be a great lover of humanity and an expounder of causes, but the people on the committees are paid to be fair and it is their job to look at both sides of the case and to come to a decision. That is the difference. What we have done in this Act is to take the gamble of taking rent fixing out of the hurly burly of party warfare and having it done calmly and dispassionately in a partnership between the rent officers and the rent assessment committees.
It was suggested by some hon. Members that the members of the London committee were all a lot of counter revolutionary Fascists. I should like to give idea of the background of the 38 lay members. Six of them are local government councillors or aldermen, mostly with experience of housing problems, in other words, people used to the working of the democratic machine and to housing problems. Eight are housing managers, active or retired, with first-hand intimate professional connections with these problems, but not one of profit. Four are academics whose interests and researches are in the social sciences. Thirteen are social and welfare workers, many of them voluntary and including four members of the coloured community. Five are trade unionists, active or retired, and of the two regarded as miscellaneous one is an ex-borough treasurer and one an ex-employee of a trade union. I think that it can be said that my right hon. Friend has gone out of his way to get lay members of the committee who will not be pushed about by the professional experts, but who at the same time have intimate and practical knowledge of the problems.
My hon. Friend the Member for Salford, East considered some specific decisions of the rent assessment committees. I do not think that it is right that I should take it upon myself to discuss whether a particular decision is right or wrong. It is not my job and it is not the job of my right hon. Friend. My hon. Friend quoted a particular case and said that a rent of £9 was being charged. He asked if we could really justify such a rent. Against the hon. Member for Crosby we said that one had to bring high rateable value limits into the Act. He said, "do not bring them in", but we thought that we had to have them in. As a result of that, some of the rents which are fixed are going to be the rents of extremely good, expensive property. In that particular case the rent is only 1·36 of the gross value. That does not indicate that it is outrageously out of phasing with the level of rents.
This is behind some of the criticisms that have been made. It is important to remember that the problems arising in Kensington and Chelsea are very different from the problems arising in some of the poorer areas of London. One is bound to have a very wide scatter. These are cases of high rents for very good property, mostly in a very good state of repair. There is no evidence that where property is bad the rent assessment committees are not going to be very firm indeed in cutting down the rents.
My hon. Friend also quoted what was happening in Manchester and the North. He suggested that this was a warning to London that it should not get too extravagant. My hon. Friend the Member for Holborn and St. Pancras was, I thought, a little unfair. I would have used stronger words earlier, but I have cooled down a little now. Having rebuked my hon. Friend the Member for Islington, South-West for not knowing the facts of cases in his own constituency, she then quoted what my right hon. Friend had said in Committee, that rents in Sowerby were subject to a free market, and went on to imply that my right hon. Friend had said that rents in Sowerby might be appropriate to London. I should like to quote what my right hon. Friend said, not because I want to score a point off my hon. Friend, but because I think that this goes to a very important point about fair rents. My right hon. Friend said:
He asked whether this would mean that a house in Chelsea and a house in Stepney would attract the same rent if they were identical. The answer is that they would not, because the locality is carefully mentioned and we have also to consider amenity as one of the objective factors. If there were two identical houses, one in Sowerby and one in London, the good assessor would assume … just as there is something extra on a wage for working in London … There will be a calculation for London and for parts of London. Hon. Members know this type of calculation is recognised in assessing gross rateable values. This difference will be taken into account as part of the objective study of the value of the house and rents for similar houses they would not be the same over the whole country."—[OFFICIAL REPORT, Standing Committee F, 26th May, 1965; c. 672.]
I am now coming to scarcity. I have no right to lay down the law to tribunals or committees as to what is the proper interpretation of the word scarcity. It is a matter for the courts to decide if there is a fundamental misinterpretation of Section 27(2) of the Act. I will give my opinion, for what it is worth, and that is not perhaps very much—
He does not get legal aid if he goes to the rent assessment committee. But if he goes to the High Court there is, as far as I know, no reason why he should not get legal aid, and I am fortified that the hon. Member for Crosby, as a practising solicitor, can say that with more firmness than I can.
I do not think that the phrase "not substantial", which is the test of the demand, requires or permits the assumption of at least some amount, although not a substantial amount, of excess of demand with at least some consequential element of scarcity value to be added to an otherwise appropriate rent. The phrase "not substantially" means, in my view, "not in substance" or as might be said alternatively, "not significantly". And in the context I would think that any excess of persons seeking accommoderation over the houses available would be of substance or significant as soon as it created a true scarcity of accommodation in the locality such as to inflate the level of a rent by any amount on that account. In short, my view is that the subsection has the effect which it was presented in Parliament as having, namely, the exclusion of all such scarcity value from a fair rent.
That was a little unkind of my hon. Friend. I have been asked to give my interpretation of what is meant by "scarcity"—I am not a judge in a court of appeal; it is not my job to do that—and then I am rebuked for not making it clear. If my hon. Friend does me the credit of reading my remarks in HANSARD tomorrow morning at breakfast, he will find the matter tolerably clear.
Is my hon. Friend aware that there are rent officers who are completely confused and at a loss to understand what is going on in the interpretation of this Section by the rent assessment committee?
If my hon. Friend had done me the courtesy of being here when I started my speech, he would have known that I dealt with that point.
I come to Section 11. I have been pushed by the hon. Member for Crosby and my hon. Friend the Member for Islington, South-West (Mr. Albert Evans), on the one hand, to say that we should cut the Gordian knot and bring old controlled property in. On the other hand, the view has been expressed by most of my hon. Friends that we should not. My right hon. Friend has said that he will introduce an Order under Section 11 when the work on the committee and the rent officers is such that they can carry it. It is clear from what has been said in the debate and from all my knowledge that that moment is not here in London and will not be here for a very long time. There is a tremendous lot of work still to be done.
I want to say something on the question of free legal aid. I am not being facetious, but this reminds me of a very old Punch joke about an old lag who was asked by the judge whether he wanted a dock brief and a barrister to speak for him. Having had experience of dock briefs, he said, "No. I would rather have a good witness". That is the point about these cases. It is not the problem of presentation which is so difficult. It is not the problem of having legal advice which is so urgent. The difficulty arises—and this I recognize—when high-powered valuers are doing work and providing information for one side and there is no balancing force on the other. That is what I mean by saying that one wants a good witness.
May I point out that legal aid provides the cost of professional witnesses? That is one of the reasons why legal aid should be granted. It is not only for legal representation, but so that a person may get the good witnesses.
But it may be a long and protracted business to get the machinery of legal aid working. I am the last person to decry the value of legal aid, but it is difficult to know quite the best way of helping. What my right hon. Friend wants to look at is how to redress the balance, not so much in the case of a very old property where it is obvious to any normal person what the quality is without being a valuer, nor in the very expensive property where most people can afford to go to a surveyor and get advice, but in the case of middle-class accommodation where it is not so obvious and where it is important to have it looked at. That is the kind of case that requires examination.
I am sorry. I would give way to my hon. Friend, but I want to deal with what has been a very long debate, and there is not much time left.
A point was raised about the presence of the rent officer, and I should like to say that that is not a matter of law but one of practice. The view taken is that the rent officer is not a party to the proceedings. He is what might be called a previous stage in the operation, and it is not desirable that he should be brought into the later proceedings to express his opinion and argue in defence of his own decision. If he took part in them, he would be open to cross-examination, and long arguments would ensue in which he would be subject to a good deal of pressure. He is not there as an expert witness, but to make his judgment and recommendation to the rent assessment committee. It is then for the rent assessment committee to look at the position. However, there is nothing to prevent the rent assessment committees working it the other way; it is a matter for them.
I want now to say something about the problem of rents. Listening to the debate, I came to the conclusion that there are only two things to be done. One can either try to get a rent which is uniform, by which I mean not one that never changes, but, as my hon. Friend the Member for Holborn and St. Pancras wanted, one where it is possible to see the same sort of house in the same sort of area and know what its rent is. That would mean getting away from historical rents and looking at rents on some test of fairness.
The alternative is to take personal rents. As my hon. Friend the Member for Salford, East said, one must get away from any objective test which would be unfair to a particular tenant who, because of his low earnings or because he has to live near to his job, has to live in a particular area. Once one gets on to personal rents, one gets away from objective rents.
That was the dilemma which faced us. We came down on the side of objective rents and got through the House the definition of what we thought was to be a fair rent. We have left to the rent officers and the rent assessment committees the job of interpreting that.
It would be foolish of me to say that they never make mistakes. They have to learn the hard way, by experience. Having given the instructions to the rent assessment committees and rent officers, all our evidence shows that they have buckled down to the task in a fine way and are getting on with the job of launching this tremendous new experiment in relations between landlord and tenant.
My answer to the hon. Member for Crosby about expedited hearings is that a circular has been sent to the registrars of county courts, and we have no evidence that it is not working. Just as I cannot help my hon. Friend the Member for Salford, East further—