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Points of Order
3.31 pm
Mr. Nicholas Winterton (Macclesfield): On a point of order, Madam Speaker. At about 2.50 pm today, I tried to gain access to the House through the St. Stephen's entrance. Because of the large number of representatives of sub-postmasters and sub-postmistresses complaining about the change of policy on the payment of social benefits, it took me and my two guests more than five minutes to gain access. The Metropolitan police had lost complete control over access to the House. Will you make representations to the Commissioner of Police of the Metropolis, Madam Speaker, to ensure that Members of Parliament can gain ready and immediate access to the House whenever necessary?
Madam Speaker: I shall certainly draw the comments made by the hon. Gentleman and the delay that he experienced in gaining access to the House to the attention of the Serjeant-at-Arms and seek a report from him.
Mr. Michael Jack (Fylde): On a point of order, Madam Speaker. On 13 April, the hon. Member for Hampstead and Highgate (Ms Jackson), speaking as a Minister, made a statement commenting on--[Interruption.]
Madam Speaker: Order. To which year is the right hon. Gentleman referring?
Mr. Jack: This year, Madam Speaker--[Interruption.] I apologise, Madam Speaker; it was last year.
Madam Speaker: I should like to know the year because my memory is not all that good.
Mr. Jack: Clearly, there may be deficiencies in mine, Madam Speaker.
At column 13 of Hansard, on 13 April 1999, the hon. Member for Hampstead and Highgate, speaking as a Minister, commented on remarks made by the Opposition. She said that our policies would have caused a third of the London underground to be closed down. While she was still in office, I pursued the reasons behind that statement through correspondence with her Department.
I received no reply, but continued to pursue the matter by correspondence. Yesterday, I received a reply from the office of the current Minister, signed by a private secretary. The substance of that letter was that, because the item that I queried had come from a Labour party briefing, it was not possible for the Department to comment on it, and that the matter was being referred back to the hon. Member for Hampstead and Highgate for her personal comment.
I had thought that when Ministers spoke from the Dispatch Box, they spoke on behalf of the Government, and that they should be able to justify their statements. Is it in order for such business to be sub-contracted back for answer from a Back-Bench Member?
Madam Speaker: The matter that the right hon. Gentleman raises is certainly a matter for argument; however, it is a matter for the Government and I hope that he will pursue it with them.
Registered Fair Rents
3.34 pm
Mr. Adrian Sanders (Torbay): I beg to move,
- That leave be given to bring in a Bill to amend the Rent Act 1977 to limit the maximum fair rent registrable in respect of regulated tenancies.
Most private tenancies entered into before January 1989 are regulated under the Rent Act 1977. Tenants have long-term security of tenure and both landlord and tenant have the right to have a fair rent determined by an independent rent officer. Both have the right to appeal to a rent assessment committee if they are not satisfied with the rent officer's decision. Rents are set every two years and become effective two years from the previous registration, or on the day of the rent assessment hearing.
Fair rents, as laid down by the 1977 Act, are decided by, first, the age, character, locality and state of repair of the building, and, secondly, the rent that could be achieved in the open market if the supply and demand for accommodation are balanced, which is usually referred to as "scarcity". Therefore, until 1988, fair rents were decided by comparisons with previous fair-rent decisions based on those two factors.
The system did not seem to be unfair to landlords, who continued to buy property in which protected tenants lived. They were able to buy property cheaply because the protected tenants were there. They received a reasonable, secure and unfailing return on the money that they had invested, and they were certain of capital gains when the tenant died or moved on.
The Housing Act 1988 had two main effects: it introduced assured and shorthold assured tenancies at open market rents, so now comparable market rents were available; and it prevented the emergence of future generations of regulated tenants by allowing tenancies to be inherited by spouses only. As a result of the latter effect, those affected by the Court of Appeal judgment are mainly pensioners or coming up to pension age.
Since the 1988 Act came into force, a number of developments--some of which were consequential on the Act--have had the effect of raising rents. The sale of council houses sanctioned by the 1988 Act added to the shortage of homes available at lower rents, and increased prices generally. The increased use of the rent assessment committee by landlords resulted in rent rises in 80 per cent. of cases heard, and in half of all cases the rent was increased by an average of 18 per cent.
In 1997, the case of London Rate Assessment Panel v. Curtis determined that market rent comparables should be used in all cases. That placed tenants at a disadvantage in obtaining reliable information on market rents actually paid, as opposed to those asked for. Landlords, on the other hand, usually have their own properties with which to compare, and were placed in a more powerful position.
A Department of the Environment, Transport and the Regions consultation paper, published in 1998 and sent to tenants and landlords, offered tenants some hope. Its tone was sympathetic to statutory tenants and it suggested that
rent increases should be capped at 10 per cent. plus inflation. Following representations by tenants, that was altered to 7.5 per cent. plus inflation, and the Government drafted a statutory instrument known as the Rent Acts (Maximum Fair Rent) Order.What is galling for the statutory tenants, given that the judgment appears to result from a legal technicality, is the fact that the order was delayed because it had to be checked by the lawyers of the Law Officers' Department, but, on 11 January 1999, the statutory instrument became the Rent Acts (Maximum Fair Rent) Order 1999. It came into force on 1 February.
Spath Holme Limited, a Manchester-based landlord, took the matter to judicial review and the Court of Appeal found that the order was ultra vires vis-a-vis the Landlord and Tenant Act 1985.
It is important for the House to realise that the Court of Appeal did not rule on the principle of capping regulated fair rent increases, or on the level of the limits set in the order; it ruled merely that it was outside the powers conferred on Ministers by the parent legislation to set limits by regulations.
As a result of that judgment, thousands of tenants now face the prospect of rent increases similar to those that were common before the order came into force. This morning, I met a tenant of Lamont Properties, whose rent has increased from £135 to £255 a week; another tenant, of Clapham Properties, whose rent has increased from £4,000 a year to £9,000 a year; and a tenant of the Wellcome Trust, supposedly a charity, whose rent has increased from £3,100 to £8,500 since the Court of Appeal judgment.
The situation for tenants is actually more difficult than it was before the order was introduced. Through no fault of their own, they have been made responsible for the
difference between the capped rent and the uncapped rent, backdated for at least 28 days. DETR issued guidance to the Rent Service Agency to advise landlords that, if the difference between the capped and uncapped rent is large, it will be open to them to seek a county court order to obtain arrears for up to six months. Bearing in mind the fact that most statutory tenants are pensioners, not only will they have to pay retrospective arrears, but they may be forced to appear in the county court--an indignity that will horrify them and that they have done nothing to deserve.Although initially refused leave by the Court of Appeal, the Government have indicated that they will petition the House of Lords to appeal. Although the ruling raises an important constitutional principle about the scope of ministerial discretion, it could be several months before an appeal is heard and there is no guarantee that it will be successful.
I present my Bill in the hope that the Government will consider another way to restore the limits on registered fair rent increases and to prevent vulnerable tenants from receiving unaffordable rent increases that may force many of them from their homes. Emergency legislation is required and there is not a day to lose.
Bill ordered to be brought in by Mr. Adrian Sanders, Ms Karen Buck, Mr. Simon Hughes, Mr. Michael Portillo, Mr. Paul Burstow, Mr. Tom Brake, Mr. Andrew Love, Dr. Jenny Tonge and Dr. Vincent Cable.
Registered Fair Rents
Mr. Adrian Sanders accordingly presented a Bill to amend the Rent Act 1977 to limit the maximum fair rent registrable in respect of regulated tenancies: And the same was read the First time; and ordered to be read a Second time on Friday 14 April, and to be printed [Bill 111].
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