Mrs. Margaret Thatcher (Finchley)
After having heard a speech made by R. Freesonthe Minister for Housing and Construction I am always tempted to abandon my own speech and start a debating battle with him on some of his contentions. The hon. Gentleman tried to rebut the evidence in the Francis Report for the simple reason that it is extremely powerful evidence and is accepted by most people. [column 1034]
The hon. Gentleman's analysis of what happened after 1957 is totally wrong. I remember it vividly. I was a rent-controlled protected tenant and had for years enjoyed the privilege of paying low rent with total protection. When the 1957 Act took effect my husband and I decided—thank goodness—to go in for owner-occupation. The reason why a substantial number of properties went out of the privately rented sector at that time was that since 1915 the landlords had had a raw deal with controlled rents. The moment those properties came out of control for the first time—and some out of security of tenure—the landlords could sell them. Naturally, landlords who had received a very reduced rent for a great many years took advantage of the decontrol to turn their property to good account. That is why the hon. Gentleman's analysis is totally wrong.
The hon. Gentleman well knows why there has been a vast reduction in the privately rented sector. If the Opposition try to restore the privately rented sector, as did my hon. Friend the Member for Kensington (Sir B. Rhys Williams) recently by an amendment, every time we do so the Labour Party, sometimes in government, and sometimes, mercifully, in opposition, say that they will bring back control by security of tenure. That is why houses continually go out of the privately rented sector. We have now reached the stage when the right hon. Gentleman Anthony Croslandthe Secretary of State says that he wants to end the privately rented sector. With all due respect, that has been obvious from his actions for years, but only now has he admitted it.
We are embarking upon the debate under considerable difficulty. There are no printed copies of the Bill and there are no Hansard reports of what happened in the other place. We are having to make do with these voluminous, unmarshalled Hansard reports of what happened in the other place, of which there is one copy in the Library. I managed to get one copy of the proceedings of their Lordships' House which is an uncorrected manuscript.
The Minister referred to various schedules. Has he looked at the condition of those schedules as they are presented to the House? Schedule 2 has five manuscript amendments on the first [column 1035]page, the next page has insertions and the following page has some deletions and some insertions. It is impossible to know exactly what is in the Bill with which we are presented. Yet the hon. Gentleman, by his own choice, brings it before the House without making sure that we have Hansard reports from the other place. When I was in government my own private office always ensured that all the documents required for the debate were in the Vote Office. Last week the 1968 Act was not in the Vote Office and I could obtain it only by filling in a separate form. In my time in government, Departments always automatically ensured that all the necessary documents were in the Vote Office. They are not now, and if the Government cannot administer that, they cannot administer anything.
Until a few weeks ago many of us had the impression that furnished flats did not carry full security of tenure. True, the landlord had to go to a tribunal, and possibly to the court, to secure possession, but if the landlord persisted we thought that he could ultimately regain possession of a flat that was full of furniture. The hon. Gentleman made only a passing reference to case law being important in drawing the line between an unfurnished and a furnished tenancy. He knows, or should know, that even without the Bill a few weeks ago a major change in the law was brought about by a decision of the Court of Appeal—on 24th April 1974—in the case of Woodward v. Docherty. That decision, in effect, gave security of tenure to probably the majority of tenancies which previously counted as furnished tenancies but which by virtue of that decision became unfurnished tenancies. I was amazed that the hon. Gentleman made no reference to that case.
Mr. George Cunningham (Islington, South and Finsbury)
He did.
Mrs. Thatcher
The Minister made no detailed reference to it—I apologise. The Court of Appeal decision was extremely far reaching. It was a case in which a basement flat, fully furnished and let for £10 a week, was held not to be a protected tenancy within the meaning of Section 2 of the Rent Act 1968. Admittedly, it was fully furnished, and [column 1036]I quote from the judgment in the Court of Appeal:
“The flat was let fully furnished, the judge of first instance finding that ‘the flat contained almost everything that Mr. and Mrs. Docherty would require’, though some items were not of the standard they would like and did not work as well as they might have expected.”
Later, the Court of Appeal said of the judge of first instance:
“I think the judge attached too much importance to the fact that the flat was fully furnished” .
I mention the case because it fundamentally changed the law in regard to what was or was not a protected tenancy. If those who had thought they were furnished tenants had gone to the county court or the tribunal and cited that case, many tenancies previously thought of as furnished would have been adjudged unfurnished under the new criterion. The new criterion was the interpretation of what is a substantial proportion of the rent attributable to the use of the furniture. Unless a substantial part of the whole rent is attributable to the use of the furniture, the tenancy is not a furnished tenancy.
In that case the test used for deciding whether a substantial part of the rent was attributable to furniture was an interesting and unusual one. The court decided that the market value of the furniture at the date of the letting should be taken. The furniture having been there for 12 years, the market value was comparatively low. I must confess that if some of my furniture went to a sale room it would not fetch much either. It was decided that the market value of what the furniture would fetch at the time was about £100. Therefore, although the flat was fully furnished, a substantial proportion of the £10 rent was not attributable to that furniture.
The same doctrine applies to attendance. There must be flats which are technically furnished flats but which in reality are not, where certain services are available. The same reasoning applies. Unless a substantial proportion of the rent is attributable to attendance, that attendance will not prevent it from being a protected tenancy.
I come to my own approach, in my constituency, to landlord and tenant cases. I think that the approach of most hon. Members is the same. [column 1037]There is a general sympathy for and desire to help whichever person—either landlord or tenant—appears to have had a raw deal in the circumstances of a particular case. Most of us know that sometimes tenants and at other times landlords have a raw deal. I wish that in some ways the landlord and tenant law were drawn on a basis of equity, but over the years this has not been so. If it had been, I believe that the housing problem would be different from what it is at present.
I have known cases where, in equity, the landlord clearly has been in the right. I had one case involving a spinster of 79 who had two properties with controlled tenancies, and those properties were about to move into a fair rent situation. That has now been stopped by the Minister, but it is a case where the tenants are better off than the landlord and where all repairs are carried out by her. The equity is on the side of the landlord but the law is on the side of the tenants.
There have been other cases involving landlord and tenant, one of which involved a widow who turned her house into two self-contained flats. This sort of conversion is often the only means of providing an income that a widow can obtain. When the widow wanted to sell the whole house she could not do so, although she was nearly 80, because she could not get the tenants out. Again, in that case the tenants were well off.
Another case involved a lady owner-occupier who wanted to let rooms in her house. They were fully furnished rooms; the tenant was provided with no service or food, but shared a kitchen and bathroom. The tenant harassed the landlady. Many hon. Members know that such harassment of a landlord or landlady is not unknown. Although this involved a furnished letting, the owner-occupier had to go to the rent tribunal to get possession. The rent tribunal can suspend for six months, then suspend again for a further six months, and so on. Eventually, the owner moved out of her own house until the tenant could be got out.
In that case the owner-occupier had to pay extensive solicitors' fees, and received no rent because the tenant vanished without paying, and the owner-occupier had to repair the damage to [column 1038]furniture. Again in that instance the equity was very much on the side of the landlord. The Francis Report, on page 111, points to cases in which individual landlords, for example, elderly ladies, are harassed by tenants. I cite these cases as showing that this House, under successive Governments, seems to have made no attempt to be fair to the landlords.
There are other cases in which the equity is all on the side of the tenants. I have known cases in which landlords have harassed tenants with noise, rudeness, ridicule and frightening incidents to get those tenants out of the dwellings. There have been other cases in which the landlord has paid little attention to repairs, or has refused to take measures to fight damp, and so on, and cases where the landlord, for no good reason, has given the tenant notice to quit. I knew of one case in which a tenant refused to pay rent because of the behaviour of the landlord. This behaviour caused the tenant to get into trouble with the tribunal.
In all those cases the equity is on the side of the tenant. We do not seem to have approached landlord and tenant law on any basis other than the expediency of the moment. We should try an approach on the basis of fairness between landlord and tenant. We have done much to help the deserving tenant but comparatively little to help the deserving landlord, or to encourage him to let empty houses or vacant rooms.
The Minister may claim that under Schedule 2 to the Rent Bill there is one improvement for landlords, namely, that new unfurnished tenancies with a resident landlord do not carry security of tenure for the first letting, which may be for an unlimited number of years provided that the number is specified. The two-year limitation was struck out in the other place. Therefore, the first new unfurnished letting on the part of a resident landlord for a fixed number of years is the only one which escapes security of tenure at the end of that term of years. This is an improvement, and on that basis is to be welcomed, but, on the other hand, the Minister has extended the period for suspension of notice to quit from six months to 12 months, and there can be a renewal of the 12-months period. That of itself will not encourage the maximum amount of new accommodation to come on to the market. [column 1039]
I wish to turn to a number of other aspects of the Bill. On the main point in respect of protection, the real danger as we see it is that the supply of new lettings will be severely affected and may even cease. The situation will be similar to that in regard to unfurnished controlled tenancies. In the old days if a person occupied an unfurnished controlled dwelling he was sitting pretty; otherwise he had no chance of obtaining such accommodation. In other words, the situation assisted those who were controlled tenants but acted in a damaging way in respect of all those who sought accommodation and found the supply was reduced.
There are many empty rooms, cottages and flats which could be made available by owner-occupiers, but these people are afraid to take such a step. They feel that they have little chance of obtaining possession when they need it even though reasonable notice is given, and they fear the position which may arise if the present or any future Government give extra security of tenure where it does not now exist. I suspect that during the passage of the Bill we shall have many demands for extra security of tenure affecting resident landlords, or those cases where board is provided. The second reason why landlords are afraid to take this step is that the amount of rent described as “fair or reasonable” is often neither fair nor reasonable, considering the outlay and the risks involved. I know a case where the owner-occupier of a large house borrowed money to have his house converted properly into several flatlets with the aid of an improvement grant, only to discover that the fair rent awarded by the rent officer did not begin to cover the interest on the outstanding loan, let alone cover any prospect of return on capital. In those circumstances if the fair rent were increased the tenant could get the extra rent allowance under legislation passed by the Conservative Government.
Mr. George Cunningham
Does the right hon. Lady agree that the price paid by the owner for his property should have reflected the level of fair rent that he though the would obtain? Should not the price have been lower than the sum he paid for it?
Mrs. Thatcher
I think the hon. Gentleman has misunderstood me. I was [column 1040]referring to the person's own house. The man in question had lived in it for some time. The argument involved the cost of converting the rooms into proper flatlets. It was a good conversion, and the fair rent was not enough to service the loan. The owner wrote to me and asked what he should do. The answer may well be that before one embarks upon such a scheme one should ask what the fair rent would be, but having found the answer the person concerned may well decide not to do the conversion and therefore the new accommodation would not come on to the market. That is another reason for taking the view that fewer lettings are likely to come on to the market.
The Minister will no doubt claim that a fair rent is a fair rent is a fair rent, or is a reasonable rent, but as far as I can see there are five different bases of valuation affecting hereditaments in the rent and rating Acts. First, in the 1968 Act there are three different bases of valuation. There is the fair rent under Section 46(2) which, in effect, is a market rent minus the scarcity factor. Then there is a different basis of valuation for the Part VI furnished letting, as set out in Section 73(1)(b). There, the tribunals have power to reduce the rent to such sum as is reasonable. The reasonable rent there is a different basis from the fair rent basis of Section 46. Then there is a third basis of valuation under Section 2(2) as it applies to furnished tenancies, when trying to discover the proportion of the rent attributable to the furniture. That is based upon the market value of the furniture at the time of the letting. But the rest of the rent is not based upon the market value of the flat with vacant possession at the time of the letting. So there we have one rent in one section with two separate, different bases of valuation for that single flat.
There are two other bases of valuation. The first is the one which the Minister is proposing to reintroduce under his circular under the Housing Finance Act, where he goes back to reasonable rents under the Housing Act 1957 for council properties, which must reflect a reasonable balance between tenants and rate payers. That is a different “reasonable” from the “reasonable” in this Act.
The fifth basis of valuation is that for rating, which is open market rental value. [column 1041]
It is quite absurd to have five different bases of valuation. But the Minister is introducing extra bases of valuation. He is having the one in his circular. He could take advantage of this Bill to alter all those in the 1968 Act, because the whole Bill is drafted by reference to the 1968 Act and, mercifully, the Long Title that he has given to this Bill would enable almost any amendments to be made to the 1968 Act. That, no doubt, will give the hon. Gentleman food for thought before this Bill completes its Committee stage.
On valuation, the state of the 1968 and other Acts is in a great muddle. What the hon. Gentleman is doing in this Bill will also put the administration of the law into a great muddle. As far as I can see, having looked at it, in the case of a landlord who is never resident, the rent of an unfurnished flat goes through the rent officer and the rent assessment panel system. Therefore, that landlord applies to the rent officer and to a rent assessment panel. The ruling is that the rent assessment panel must give an answer with reasons about the rent which it decides is the proper fair rent. In that way, we have a process for comparison between all the cases which it decides under that branch of the law.
Under the new Part VI cases in this Bill, in the case of a resident landlord, a new unfurnished letting will go not through the rent officer and the rent assessment panel but to the rent tribunal system which I gather gives oral judgments and does not have to give reasons for its judgments unless specifically requested and which does not have to put its answers in writing. Furthermore, there is no system of cross-checking between one rent and another decided by that rent tribunal, and no system of appeal from that rent tribunal.
For unfurnished lettings, therefore, the whole administration goes up two different arms of the law. As far as I can see, not only is the valuation in a muddle; the legal administration will be in a muddle, too.
I want now to say a few words about the position of students. If the Minister takes out the amendment which was put in in another place and does nothing to change the Bill from the original Bill before the beginning of next term, there [column 1042]will be considerable difficulties in the university towns. I know that in a town where there is a university, a polytechnic, a couple of colleges of education and a college which is doing advanced work, there will be a large additional influx of students each year because of the expansion. There was always a crisis of accommodation at the beginning of the year. If, as a result of this Bill, or the Wood-ward v. Docherty case, security of tenure is given where none exists at the moment, there will be a serious shortage of accommodation this September and very little way of getting over it.
Ultimately, under this Bill there will be a shortage, unless the Government are prepared to cut substantially the number of students, especially in those towns which have several institutions of higher education. I can see for the first time a genuine crisis of accommodation for students as a result of what the Minister said he proposed to do, unless we can persuade him to do something different. Alternatively, the students will not have to go to their chosen colleges. They will not all have decided yet, because they will not know their A-level results. Many will have to choose colleges near their homes. But there are not suitable courses for everyone near home. It is clear that the Minister will have very great difficulty with accommodation for students if he attempts to leave the Bill in its present form.
I noticed what the hon. Gentleman said about the position of those buying homes for their retirement. Thanks to the efforts of my noble Friend, the Baroness Young, the Bill contains an amendment which protects those who buy homes for retirement but do not live in them until retirement. That amendment was put in in Committee at her insistence and at her persistence against the will of the Government. I have looked through what purports to be the relevant Hansard and I notice the resistance with which the amendment was met originally. I congratulate the Minister on his conversion.
Clearly, we must give protection to those who during their working lives live in tied houses, whether they be Ministers, headmasters or principals of colleges of education, and who know that if they leave it until retirement to purchase a home they will not be able to afford it [column 1043]and, accordingly, attempt to buy long before retirement, not to occupy those houses but with the intention of letting them either as furnished or as unfurnished tenancies—probably furnished—to help pay the mortgages. These are people who want to help themselves and who are used to doing so. We must make it clear in this Bill that they are fully protected, and can get possession when they want to.
I notice that the present amendment is not fully effective for that purpose because it is hinged to the clause dealing with holiday lettings, which is possibly the only one to which it could be attached.
Mr. Rees-Davies
May I draw my right hon. Friend's attention to the fact that present Ministers of the Crown have a number of houses which they let, and that they may find themselves in difficulty after the General Election when they lose office and are unable to get back their houses?
Mrs. Thatcher
I spent some time over the weekend puzzling out whether the tenants of a furnished house would be deemed to be unfurnished tenants by virtue of the Woodward v. Docherty case. I could not make up my mind. I tried to decide it on the basis of a case in Highgate, taking the value of the furniture at so much and the rent at so much. It is possible that some of those may have Woodward v. Docherty protection, but they may not.
That brings me to another point mentioned by the Minister. Owner-occupiers who have let their houses furnished and are away or in other accommodation will now have to give notice within six months if they are to regain possession when they return. I hope that Ministers of the Crown are not so busy within their Departments that they do not observe the legislation passing through this House. Some people who are abroad and have let their homes will not know that they have to give notice within six months if they are to regain possession of their houses. We must pay attention to that point in Committee.
I have been through the Bill, with the 1968 Act alongside it, and found innumerable points which require to be clarified, a large number of which will need amending. Every subsection seems [column 1044]to require something because circumstances will arise which are not properly catered for.
I am not happy that the Minister has adequately provided for holiday lettings. The holiday accommodation would need to have been let in the previous year. There may be cases where people have had a year off because of illness or other circumstances. Those cases are not properly covered by the Bill.
As yet, people cannot be forced to let empty accommodation; they can only be persuaded. If I were asked to advise a resident landlord whether to let, having read the Bill I should advise him that the risks were too great, because he may not be able to regain possession. More legislation may be passed. A landlord may not be certain of getting a fair rent. I always look at legislation in terms of what I would do. If I were asked to give advice to a member of my family or to others I should have to tell them that if they wanted to regain possession and get a good return they ought not to let their accommodation. One's home is too precious to risk the amount of disruption that could occur.
The substance of the Bill has in some measure been pre-empted by the case to which I have frequently referred—Woodward v. Docherty. I hope that it is clear that I do not like the structure of the Bill, or its detail. It is legislation by reference. The Bill is a poor professional job. That is not the fault of the draftsmen. It is due to the inadequate instructions given to the draftsmen. The Bill is difficult to interpret within the framework of existing legislation.
I hope that my hon. Friend the Member for Hornsey (Mr. Rossi) will be selected to serve on the Committee. He is far more expert than I am in landlord and tenant law. I hope that in Committee he will call attention to the many matters which even I foresee will give rise to difficulty.
I fear that the Bill will lead to less, not more, accommodation being available. The Minister thinks that he can cope with the situation by continually pouring more ratepayers' and taxpayers' money—that is what it is—into the public sector. He cannot, because the sums are so enormous that ratepayers and taxpayers will not pay them both for their own and [column 1045]other people's accommodation, unless those other people cannot afford it. However, that is a different matter. [Interruption.] Rebellions that we have never seen before? The reason is that the combination of taxes which people are having to pay is too great for them to bear. The Minister will have to rely on the private sector if enough accommodation is to be found. Therefore, he would be well advised to heed the amendments which we shall put down in Committee if he is to get the Bill through.
Mr. Bruce Douglas-Mann (Mitcham and Morden)
I am tempted to abandon what I intended to say and to start by answering some of the points made by the right hon. Member for Finchley (Mrs. Thatcher) and particularly to correct the errors that she has expounded.
Before coming to such detailed points, I should like to give an immense welcome to the Bill. It has been my major political objective for many years to achieve legislation with this aim. Indeed, at the Labour Party Conference in 1969 I had the privilege of moving the resolution which resulted in the Bill becoming Labour Party policy. Therefore, I am delighted to see it being proposed in this House now, but I am alarmed to hear from the Opposition of a possible filibuster in Committee which may endanger the Bill.
I have lived in North Kensington for 16 years and for nearly four years I represented the constituency in Parliament. A housing survey of that area in 1968 found that 68 per cent. of households were occupying so-called furnished accommodation. I say “so-called” because the right hon. Lady suggested that Woodward v. Docherty changed the law. On the contrary, in 1948 the House of Lords in its decision in Palser v. Grinling and Property Company v. Mischoff held exactly as the Court of Appeal affirmed in Woodward v. Docherty.
Mr. Hugh Rossi (Hornsey)
rose——
Mr. Douglas-Mann
The hon. Gentleman will no doubt speak later and he can then correct me if he wishes. The House of Lords held effectively what the Court of Appeal upheld in Woodward v. Docherty. [column 1046]
In every case that came to me, as a lawyer acting for tenants, I raised the question whether a furnished tenancy or so-called furnished tenancy was a furnished tenancy. I have challenged that point in court in every case and only in about 5 per cent. of cases where the issue was raised did the court hold that the so-called furnished tenancy satisfied the test contained in the Rent Act.
I was glad that the right hon. Lady drew attention to this matter. I sincerely trust that the Bill will not be delayed. I should like to emphasise that, as she said, there are few genuinely furnished tenancies. Anybody who is threatened with eviction should not only go to the rent tribunal but should wait until a country court has declared his tenancy to be a genuinely furnished tenancy, and should argue the point vigorously before the court.
Mrs. Thatcher
Why is the Bill necessary.
Mr. Douglas-Mann
It is necessary because it is essential in every case, before a so-called “furnished” tenant gains security of tenure, for him to get legal aid, and a lawyer, to get evidence from surveyors or valuers and to be utterly determined. On average, it takes a day or a day and a half—and in many cases it takes two or three days—for the county court to conclude, as almost invariably it does, that, notwithstanding that a letting is described as a furnished tenancy, it does not fulfil the necessary requirements which have existed in the law for many years.
Even if the Bill should be delayed, almost every tenant has protection in the law, provided he knows how to go about getting it. Unfortunately, the machinery to enable a tenant to get the legal protection to which he is entitled is so complex and difficult to operate that only a Bill which puts the distinction at the right point, abolishing this wholly artificial and irrelevant distinction whether a tenant has furniture forced upon him which he does not want, will help him. The Francis Committee found that a high proportion of all furnished tenants would have preferred to have unfurnished tenancies. They did not want furniture forced upon them. The distinction whether a tenant has unwanted furniture should cease to be the [column 1047]test of his security. The relevant test should be whether the landlord regards the premises as his home, not simply as an investment.
The right hon. Lady said that from 1915 to 1957 landlords had had a poor deal. That may be so—it depends upon what one means by a poor deal—but surely she does not imagine that somebody who bought property in 1915 waited until 1957 for Conservative justice. The value of the property must have been very low at the time it was acquired, and it is scarcely likely that an individual who bought property in 1914 would still be holding on to it 43 years later.
In practice, people who bought cheap tenanted property received a windfall under the 1957 Conservative Government. I was a protected tenant in 1957, and I found that at the same time as I lost my security the value of property shot up so fast that it was impossible for me to stay in the area where I had lived for many years. I had to move. Many people who were in a less advantageous economic situation than I was were forced not only out of their homes but out of London. They were forced away from their jobs, their families and their friends. The Bill is directed at doing away with that kind of insecurity, and it will achieve that aim.
In welcoming the Bill I have in mind a number of specific cases in what used to be my constituency of North Kensington. I am thinking particularly of some elderly spinsters. I have in mind three nurses who are waiting for the Bill to become law. I shall not name the property in which one elderly person is living, because the landlord is still hovering around like a wolf at the door trying to hound her out of her property and gain possession before the Bill comes into force.
In one instance, a qualified nurse in her late 50s has lived at the house in question for 14 years. She is caring for an unfurnished tenant in her early 80s who lives on the ground floor. The landlord has accepted that he has to rehouse the unfurnished tenant, but he is trying to evict the furnished tenant on whom she depends.
Another case is that of a retired nurse in her early 70s who has lived in her [column 1048]accommodation for 17 years. She has no hope whatsoever of finding any other accommodation in that part of London at a rent that she can begin to afford. This is the only area in which she has friends and contacts, having lived there since the end of the war. She, too, will be evicted unless the Bill goes through in good time to prevent that from happening.
These are exceptional cases in which the landlords have been alerted to the dangers that Woodward v. Docherty illustrated and realised that the Rent Act gave a landlord freedom to evict only if the value of the furnishing was high in relation to the rent. After buying premises, they took care to offer existing tenants a newly furnished room on a different floor so that the ratio of rent to price was such that there would not be adequate protection.
From my experience in local government and as a Member of Parliament I could cite many tragic examples of people having lost their homes because it has been impossible to obtain protection under the law. I constantly come across cases in which it is too late to do anything. The tenancy has been forfeited, notwithstanding the fact that the Rent Act gives only a small minority of landlords freedom to evict.
The right hon. Lady predictably made a lot out of the argument that the number of lettings will decline as a consequence of the Bill becoming law. It would be less than frank not to accept that there is likely to some reduction, but the decline has been continuing at a great rate since 1957, and there will be a very much faster decline if the Bill does not become law. Whether it is a good or a bad thing is perhaps arguable, but the effect of announcing that one is to legislate in this way is to speed up the rate at which the speculative landlord—that is, one who has bought solely for profit—will seek to turn out his tenants. If he does turn out his tenants, he will find that under the Bill he will not readily be able to make the killing that he is expecting.
Francis reported landlords as saying that if security were extended to furnished tenants they would prefer to sell rather than to let. I accept that that may be the view of most individual landlords, but there are about 750,000 furnished lettings, and in practice it would not be possible [column 1049]for all those properties to be sold. As Miss Lyndal Evans pointed out in her minority report.
“The only parts of the furnished sector which would be readily saleable for owner occupation are purpose-built flats and whole houses let furnished … Accommodation in flats in converted houses accounts for 42 per cent. of all furnished accommodation … Accommodation let as rooms accounts for 46 per cent. of all furnished accommodation.”
That being so, only a small proportion of accommodation would be available for selling, because it would not be possible to sell the unsatisfactory conversions which form the great majority of the total. They are unsaleable, and even if landlords attempt to turn out their tenants and sell the property they will find that it is not practicable to do so. But even if, regrettably, landlords were to take that course, the rate of decline would probably be very much slower than the decline that will inevitably occur if the Bill does not become law.
Mr. Peter Emery (Honiton)
Does the hon. Gentleman accept that if the Government want to increase the number of rented tenancies coming on to the market the best way to do it is to announce that they have no intention of ever again extending rent control into this area? It is only if that statement is made that anybody will be reassured enough to provide this type of rented property. At the moment, as my right hon. Friend the Member for Finchley (Mrs. Thatcher) said, people are scared of letting property because they do not know what further steps will be taken by the Government. If the Government want to encourage this sector of housing, they must take action contrary to what the hon. Gentleman is suggesting.
Mr. Douglas-Mann
That would be one way of getting accommodation, but at a price. The hon. Gentleman knows what value property has reached in certain areas, and he knows, too, who is benefiting therefrom. The Government deplore it, but it is a fact that the cost of providing any kind of self-contained accommodation is extremely high. Without controls over the level of rents, the amount of accommodation for letting would be small and at a price which nobody employed even in a skilled manual job or an ordinary clerical job would have the slightest chance of being [column 1050]able to afford. There would be an upper-and middle-class London, Birmingham, and so on, and there would be no working-class residents in those cities.
The hon. Member for Honiton (Mr. Emery) can see what is happening in such places as Berlin and Bonn. There is no rent control, and the centres of those cities are occupied by middle-class people and foreigners. Working-class families are housed in vast estates outside the city areas. The social and community life in the centre of the city has been destroyed in the interests of property developers. That is what the hon. Gentleman is advocating. Yes, it would provide accommodation to rent at a price, but at a price which is totally socially unacceptable and which would destroy the existing communities of London.
There are still substantial communities in London, but they will not survive if the action which the hon. Gentleman advocates is followed. The only way to preserve communities is by providing security of tenure and by ensuring alternative sources of supply of rented accommodation. The Bill will achieve this to some extent. We shall now be having the right distinction when it comes to the provision of accommodation. Where an owner-occupier is letting part of his home, he will be able to let in the knowledge that the tenant will not have security of tenure.
The right hon. Lady the Member for Finchley said inadvertently—I think I am correct—that the exemption of the owner-occupier's letting is not confined to a fixed term of letting. The owner-occupier letting part of his home, whether furnished or unfurnished, will be able to recover possession and it will be treated as a Part VI contract.
The Under-Secretary of State for the Environment (Mr. Gerald Kaufman)
indicated assent.
Mr. Douglas-Mann
I am glad to see that my hon. Friend confirms this. It would be unfortunate if there were some misunderstanding about this. I share the hope that owner-occupiers will in future be prepared to make rooms available in their houses for subletting. It may not be a satisfactory way of providing homes, but it is a much more satisfactory way to cater for the minority who [column 1051]want accommodation for relatively short periods than the situation which exists at present, such as in Notting Hill, stocked with houses, managed by Lawrence——
Mrs. Thatcher
I am sorry to interrupt the hon. Gentleman, but in the first print of the Bill the two years period was included. With this manuscript amendment, the two years are not included. Am I therefore right in thinking that the resident owner-occupier can let unfurnished under a Part VI letting for an indefinite period and can always recover possession through the rent tribunal procedure?
Mr. Douglas-Mann
That is my understanding of the Bill. Incidentally, I found that it was much easier to follow this Bill having read it when it was first presented in the House of Lords. I found it helpful, when rereading it after it had emerged from the other place, to find that the amendments appeared in another form of type.
Mr. Kaufman
Perhaps it will be convenient if I intervene in my hon. Friend's speech at this point and make the situation clear to the right hon. Lady who astonishingly was so much in error. I was devastated that the right hon. Lady could actually make an error.
May I make it clear, for the benefit of the House, that under our Bill any periodic tenancies will be exempted from full protection. The first fixed-term contract granted to any particular tenant, and additionally to periodic tenancies, will be exempted from full protection. Of course, a fixed-term contract could be followed by a periodic tenancy. But I should like to make it clear that it is not only an extended fixed-term tenancy which is exempted from protection. Under our Bill any periodic tenancy will be exempted from protection. It is only the second of two fixed-term contracts granted in succession which will qualify for full protection.
Mrs. Thatcher
That is rather closer to what I said than to what the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) said. Could the Under-Secretary point out the words upon which he relies for that interpretation? With five manuscript amendments, one page of printed amendments and a second page [column 1052]of deletions and amendments, it is impossible to get that meaning out of this muddle. The hon. Gentleman is now talking not about an unlimited periodic tenancy but a fixed term followed by something else or not followed by something else.
Several Hon. Members
rose——
Mr. Deputy Speaker (Mr. Oscar Murton)
Order. I have been slightly indulgent on this occasion, but I think the hon. Gentleman should be allowed to continue speaking for some little time before he is interrupted again.
Mr. Douglas-Mann
I thought that was a useful series of interventions, even if they were not strictly within order As I understand it, the second point made by my hon. Friend is to clear up the anomaly of the avoidance of control by the presence of letting on fixed-term tenancies, letting for four weeks or six months at a time, thereby attempting to evade the protection which the rent tribunals can give. That will, no doubt, be cleared up by my hon. Friend.
My alarm is considerable when I hear the right hon. Lady talking about the attitude which the Opposition are likely to adopt to this Bill. The co-operation of the House will be needed to ensure that the Bill becomes law. If it fails, the wolves will be not just at the door; they will have broken through the last barriers. I know only too well how the Rachmans in North Kensington are striving to get rid of the furnished tenants before the Bill becomes law. If the Opposition decide to protect them, the Opposition will have a very heavy burden on their conscience.
They say, with Francis, that the purpose should be to encourage private landlords to let. If private landlords are only willing to let on a basis where they can turn their tenants out when it suits their convenience, the accommodation, if provided, cannot be regarded as a home. If a tenant knows that he can be turned out of the house the moment it suits the landlord's convenience, when somebody richer than the tenant comes along or when the landlord wants to sell the house to make a capital profit, the tenant has no feeling that where he is living is his home. He is living in accommodation that is cluttered with furniture that he does not want and he is [column 1053]living in a situation which he can never enjoy the sense of security which everyone in this House regards as automatic. If that security is not provided because of filibustering on the benches opposite, the Opposition will have a heavy burden on their consciences.