Private Rented Sector

Andy Slaughter Excerpts

Wednesday 25th June 2014 Commons Chamber

[Mr Andy Slaughter (Hammersmith) (Lab)]

Security of tenure is crucial. Under the coalition Government, which the hon. Member for Colchester (Sir Bob Russell) supports, councils are discharging their responsibilities into the private rented sector, and tenants are regularly being evicted only because they are reliant on housing benefit and because rents are so high—in my constituency, it costs £770 a week for a three-bedroom flat—and according to the Under-Secretary of State for Communities and Local Government, the hon. Member for Keighley (Kris Hopkins), who has responsibility for housing, the fact that they are on benefits is a good reason to evict them.

[Emma Reynolds]

The housing Minister’s comments were absolutely appalling, and it is a shame he is not here so that we can debate them with him. It simply is not acceptable for a private landlord to evict somebody just because they are on benefits, which is why we are proposing to get rid of no-fault eviction.

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[Emma Reynolds]

Such practice is criminal and should not be happening. At the tail end of last year, I saw reports, following some mystery shopping, that letting agents were sometimes instructed by landlords not to take on people from the black and minority ethnic communities and that letting agents were sometimes doing that themselves. That is appalling, and I am sure that there is cross-party agreement on the issue. Such practice is already criminal. This is a matter of enforcement. The law is already in place, which should stop that; but unfortunately, it seems to be happening in the capital.

[Mr Slaughter]

Will my hon. Friend look at the condition of the private rented sector? Double the number of private rented sector properties are unfit compared with housing association properties. When tenants complain, they are often evicted and thrown out on to the streets.

[Emma Reynolds]

Absolutely. That is why we proposed—I regret that the Government got rid of the legislation within weeks of getting into office—a national register of landlords and greater powers and flexibility for local authorities in areas where that is a particular issue. In London and other areas of high demand, it is a big issue. Those local authorities should have greater powers to introduce licensing schemes.

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[Nick Boles]

I agree with the hon. Gentleman in that, as in any industry, this industry will want to drive out the cowboys because they undermine the industry and people’s confidence in it, but we do not do that by imposing blanket controls that apply to both good providers and those few who upset the whole thing for everybody else.

[Mr Slaughter]

Is the Minister’s problem not that he sees this entirely from the landlord’s point of view and does not see the power relationship here? The reality for tenants in my constituency is that they are paying a fortune, often for very substandard properties, and cannot complain because they might be evicted. Is not the game given away by the Minister’s colleague the Housing Minister telling landlords “Well, if somebody’s on benefit, just evict them.”? Does the Minister support that?

[Nick Boles]

I do not accept anything that the hon. Gentleman says, but then I never do. The fact is that the interests of his constituents who are tenants are best served by having more investment coming in, to produce rental property of a higher quality supplied by professional companies that they then will be able to access.

We have to ask ourselves why the hon. Member for Wolverhampton North East has come to the House with this policy today. The first reason is that her boss, the Leader of the Opposition, wants to be seen as the man who will stand up to business and impose his will on the unruly forces of the market. He is not much interested in housing, and, lucky fellow that he is, it is a very long time since he needed to find a flat to rent, so he does not much care if the policy will work; he just wants a policy that will beef up his brand as the scourge of British business, and on that at least he has definitely succeeded.

The other reason lies deep in the DNA of the Labour movement. It is addicted to compulsion and control. From Douglas Jay, who thought that the gentleman in Whitehall knows best, to Nye Bevan, who wanted to know if a bedpan dropped in a ward in Tredegar, to Ed Miliband, who wants to decide how much rent should be charged on every property in the country in three years’ time, the instinct is the same: to make people do the things they want them do in the way they want them to do it. So they ignored the fact that, without Government intervention, average tenancy lengths have increased by 6% to reach an average of more than 21 months—without Government legislation. They block their ears to the majority of young people—still a very important group of tenants—who say that they value the flexibility of existing tenancies and do not want to be bound up in a three-year agreement. They draw a veil over the awkward truth that the Royal Institution of Chartered Surveyors, which the hon. Member for Wolverhampton North East claimed was helping her to devise a benchmark for her rent controls, is doing no such thing and opposes the policy.

Last year, the Communities and Local Government Committee, chaired by the ever-wise hon. Member for Sheffield South East (Mr Betts), who is unfortunately not with us today, conducted a review into the private rented sector. It concluded that it did not

“support rent control which would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest.”

Perhaps the Chair of the Select Committee is not in the House today because he did not want to face the embarrassment of disagreeing so intensely with his own party’s Front Benchers. The approach that the Committee suggests is the right one.

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[Frank Dobson]

My hon. Friend—my good, long-term and hon. Friend—makes an excellent point, as usual.

I recently picked up a brochure advertising new apartments to rent in Bloomsbury. A two-bedroom flat costs £560 a week. That is £26,880 a year. Who can afford that sort of rent? A Russian oligarch, I am sure—even perhaps a Ukrainian oligarch—and perhaps a banker who spends their time advising tax swindlers on how to avoid paying more tax by investing in Luxembourg; and here I do not mention Mr Juncker. However, nobody who is contributing to the local community can afford £26,000 a year—no shopkeeper; no bus driver; no teacher; no research scientist at the shortly to open Francis Crick Institute; no nurse. As I said in my last speech on this issue, no new consultant surgeon at Great Ormond Street hospital or University College hospital can afford that sort of rent. As a new consultant, they get, at most, about £80,000 a year. After taking off their tax and national insurance, that leaves £40,000 a year. So somebody on £40,000 a year would have to pay £26,000 a year for a two-bedroom flat.

It is a ludicrous situation that is bad for tenants, obviously. People come into London, or go to their local hospital, relying on Great Ormond street or University college hospital to get the finest treatment and care in the land, but the people providing it cannot afford to live near those great hospitals. The situation is intolerable. But it is not just bad for the local community and tenants; it is ludicrously bad for taxpayers, because private sector landlords are getting a public subsidy from the taxpayer of between £9 billion and £10 billion every year—that is what is paid out in housing benefit. It does not stay in the handbags and wallets of the tenants; it goes to the landlords. The last time I checked, agriculture was getting a subsidy of only £6 billion a year, but apparently it is okay for the private rented sector to get a £9 billion a year subsidy.

The Mayor of London now says that when he wants an element of “social housing” in a new development, it will count as such if it is going to be asking up to 80% of market rents. Most people cannot afford to pay that, so his programme does nothing for badly off Londoners. What we need to do is build more homes—homes that ordinary people can afford. We have the ludicrous situation where people who are homeless and the responsibility of the local authority cannot be re-housed by the local authority, because it does not have enough flats and homes, and so it places them in the private sector, where they have no security of tenure and pay ludicrously high rents, which are being met largely by the taxpayer. No economic theory can possibly justify anything as daft as that. The worst thing someone can say about something these days is that it is daft, and that situation is extremely daft.

Clearly, we need to put more effort into getting new flats and houses built. I have a madcap scheme to create more land in London by decking over all the deep railway cuttings and either building housing on them or using them as green spaces in order to justify building higher-density housing next to them. That is the only way in which we will create more land in the area, and we need revolutionary ideas such as that. In the end, however, we have to get a grip on house prices and private rents. Unless we do that, we are ruining—

[Mr Slaughter]

Will my right hon. Friend give way?

[Frank Dobson]

I have given way twice and I ought to sit down before my eight minutes are up.