SPEECH (preceded by interventions on another MP)
Jeremy Corbyn:I am listening to the hon. Gentleman’s speech with interest. I intend to follow much the same theme when I speak later. Does he agree that one of the many problems associated with the private rented sector is the six-month assured shorthold tenancy? It gives the landlord no incentive to respond to a tenant’s demands and, because the tenant has no security of tenure after the six months, they are unlikely to complain. Also, the tenant has no incentive to do anything in the community because their prospects of remaining in the area are so limited.
Jeremy Corbyn: The hon. Gentleman is making an important contribution. Does he agree that it would be a good idea to have much better co-ordination between London boroughs, perhaps through the Mayor’s office, on chasing down rogue landlords and, as the Select Committee recommended, to have a much simpler form of harmonisation for all the regulations so that landlords and tenants know their rights within the existing law, never mind those that might be introduced in future?
MAIN SPEECH BEGINS HERE: I am pleased to be able to contribute to this debate. Sadly, I start with a complaint. Although I welcome the opportunity of a Christmas Adjournment debate and the fact that a Member can raise any issue they want, the system that we have had in other times when there have been themed debates with a Minister replying is a far more satisfactory way of dealing with parliamentary business. I do not doubt that the Deputy Leader of the House will report in great detail to each Minister concerned and ensure that we get an answer, but the whole point of the House of Commons is to hold the Government and Ministers to account rather than using it as a sounding-board Chamber where anyone can raise anything they like and it then disappears into the ether.
I strongly compliment the staff here—as I am sure does everyone else—for their work, loyalty, and sympathy to both Members and the public. They often do a difficult job, and I admire them enormously and want to put on record my thanks to them. As a Parliament, we should value them a lot more. As my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, the treatment of the staff in the Tea Room, their change of contracts and deteriorating working conditions are simply not good enough. We should be much better employers and we should value the service and the loyalty that those staff give us. We need to remember that we should provide a good example of employment practices and not work on the basis of gross exploitation of people. Indeed, we should not be losing our very good and experienced staff. We should reflect on that. None the less, in the same spirit as everyone else, I wish all the staff here a good Christmas and new year and thank them for the work that they do.
Like the hon. Member for Harrow East (Bob Blackman), whom I compliment on his contribution, I want to raise the issue of housing in London. I represent an inner-city constituency, which has somewhat different characteristics from those of Harrow. Nevertheless housing is a huge issue. Roughly speaking, my borough divides 40:30:30—council and housing association houses and social rented accommodation make up about 40% of the borough’s housing; private rented houses about 30% and owner-occupied houses 30%. The owner-occupation rate is well below the national average, and falling very fast. The private rented sector is well above the national average and rising very fast. The social ownership section is increasing a bit through the work of the housing associations and the council’s commendable building programme to try to provide homes for people who desperately need them.
The problem we have is an enormous housing list of people in often desperate housing need. The chances of them being housed in a council-owned house or a housing association place are very limited, so the council fulfils its obligations to them in the only way it can, which is by placing them in the private rented sector. Many of those private flats are not in the borough; they are some distance away. That in itself creates a problem. The applicants accept the accommodation because they have no choice. They aspire to return to the borough, so the large numbers of families who are placed outside the borough make very long journeys to ensure that their children maintain a place at the same school, which is important from the point of view of the continuity of education for primary school-aged children.
The other issue is that the benefit level cap on housing expenditure, the housing allowance, is way below the average rent in the private sector. The transitional money the Government approved on the introduction of the cap is drying up and disappearing. Frankly, what we are going through is nothing more than a process of social cleansing from inner London, as families on benefit—sometimes in work, and sometimes not in work, as it affects people almost equally—can no longer remain in the borough and must therefore be accommodated elsewhere. That exacerbates the whole problem.
We have a high degree of housing stress among those families. I meet families all the time and I am very worried about the impact of such a degree of housing insecurity on a whole generation of children as they grow up. Members of this House all earn a good salary, have reasonable accommodation to live in and do not feel a sense of housing insecurity. We should try and put ourselves in the mindset of young parents trying to bring up children in the private rented sector knowing that they have no security of tenure and could lose their flat within six months. If they complain, they are likely to find that their tenancy is terminated. The effect on the parents is extreme stress, but the effect on the children is great uncertainty about their place in life and the ability of their parents to provide for them. We are damaging a whole generation of people through the housing policies that are being adopted in this country.
I am not making a partisan point, because my party, when in government, certainly did not do enough to build the necessary new housing. It certainly did not do enough to bring in much tougher regulation of the private rented sector any more than this Government have. I applaud what my council is trying to do by developing new council properties of a good and high standard and what it has achieved through the decent homes standard. The estates are in a much better condition than they ever used to be. Nevertheless, we live in an area where property prices are rising fast. I think I am right to say that more than 80% of the borough does not earn enough money to be able to buy a property within Islington, so the only option for those people is the private rented sector.
There are areas in which the sector must be reformed, and quickly. I have with me a copy of the report by the Communities and Local Government Committee on the regulation of the private rented sector, which is an interesting, well-written document that calls for the simplification of the regulation of the private rented sector and better education of both landlords and tenants. I agree with all that. Sometimes, the report’s proposals are a bit too timid but I agree with the general thrust of what it is trying to say.
We must be a little bolder. I introduced a ten-minute rule Bill on the subject, and I want to see fundamental change in three areas of the private rented sector. The first is the role of the letting agents. At the moment, there is almost no regulation of letting agents. Anyone can set up a letting agency, there are no checks on them whatsoever and anybody can claim to be a letting agent and start renting out properties. I think they should all be regulated so we know who is working where, so that they have to provide proper information to all prospective tenants, and so that they are not allowed to introduce arbitrary and often totally unfair charges such as search fees, which are always non-returnable and often expensive. There should also be much clearer explanation for prospective tenants of what they are getting into.
Agents are also often deeply discriminatory. A sign in a window that reads, “No DSS” shows first of all that they are deeply out of date with the structure of the social security system in this country—it is now the Department of Work and Pensions and it is a housing allowance, not DSS as it was about 20 years ago—and also fundamentally discriminates against somebody who is perfectly legally claiming what they are entitled to from the DWP. Why should they not be allowed to rent because they are claiming? The investigation by “Panorama” showed the race discrimination and racial profiling by the agencies, which are a scar on our society that deeply disfigures people’s lives and life chances. Discrimination is wrong in any aspect, whether it be financial in respect of benefit claimants or racial discrimination as operated by some agents. We must have proper regulation of these agencies.
A number of London boroughs are actively considering setting up their own letting agency to manage the number of people they place within in the private rented sector and offering the service to landlords and tenants alike. I think that would be a wholly good thing—it would be properly run, properly managed and probably a lot cheaper for everyone concerned than the present system.
The second area relates to points raised by the hon. Member for Harrow East about the condition and maintenance of private sector properties. Yesterday, I met an interesting gentleman from the Electrical Safety Council, who told me his concerns—they were held by the fire service and many others, too—about the lack of regular electrical checks in the private rented sector. It can often be an extremely dangerous place to be. There are supposed to be gas checks and all kinds of checks, but they are often never carried out.
I have had experience of tenants in the private rented sector making wholly legitimate complaints about the condition of their flat—the lack of insulation, the poor quality windows, the high energy bills they incur because of all that and infestation by vermin. They usually find that nothing is done about that, and if they contact the environmental health service, they might find their tenancy terminated at the first possible opportunity by the landlord. It is scandalous that if tenants try to exercise their rights, they lose their property. Although that might mean that environmental health can enforce better conditions for the next tenant, it is not much help for the tenant who has been evicted for having the temerity to try to exercise their rights.
The third area is probably the most controversial—the question of the rent levels charged. If I look across the whole country, I realise that the rent levels charged in the private rented sector vary enormously, often over quite short distances. The rent levels in central London are massive; if we move a short distance towards the outer London boroughs, the rent levels are a bit less; if we move a bit further out of London, they become much less; if we move to other regions in the country, the rent levels might not be the main problem, but there could be other areas of regulation.
My private Member’s Bill—I have no notion of whether it will ever become law; certainly not in this Parliament, although I hope the idea will become law at some point—is not only about empowering local authorities to set up letting offices and agencies, but about requiring simplified advice to be given to landlords and tenants about how the properties will be operated. Authorities will also have the power to impose a level of regulation on the rent levels charged in the private sector.
In that respect, a number of formulae could be adopted. One would be simply to take a figure and declare it to be a reasonable rent for the area. Rent levels could be based on the capital value of the property and the cost of maintaining its value if money has been borrowed to purchase it. Alternatively, because the structure of the private rented sector is changing fast, we could require large private sector landlords—there are some of them around nowadays—to provide at least 50% of their properties for rent at an affordable level, as we would require for any new large housing development.
If we do not regulate the private rented sector, we are condemning, in the case of my borough, a third of the population to a life of insecurity—and the numbers of private rented properties are likely to rise considerably over the next few years. All the predictions are that while it is around 17% nationally now, it will probably be 25%, if not more, by the end of this decade. Other countries manage to have a pretty fully regulated private rented sector. The hon. Member for Harrow East referred to the Select Committee visit to Germany, which has a very regulated private rented sector—often, interestingly, with much larger landlords, who often manage the properties a lot better.
One of the problems in my constituency is that it contains a large number of very small landlords who only ever think of the headline return in the form of the rent. They never think of the cost of maintenance, the cost of repairs, or the cost of simply managing a property. We need to devise a much better system. The Select Committee report was a good start, but the Government’s response was more than disappointing. No doubt we shall return to the issue in the future.
Let me end with this thought. We all want to enjoy a nice Christmas—who doesn’t?—but we also want to enjoy a degree of security in our lives, and I think that we should consider for a moment the very large number of people who live in the private rented sector. Not all landlords are bad; some are good, decent, generous people who look after their tenants in the way in which we would all want to be looked after ourselves; but, unfortunately, not all of them are like that. There are some terrible rogue landlords, and some terrible practices. We used to say awful things about Rachman and what he did in winkling secure tenants out of north Kensington all those decades ago, but there are very few secure tenancies now. Landlords no longer need to winkle people out. They can end assured shorthold tenancies after six months, move another tenant in, and charge the new tenant a higher rent—and so the whole situation continues.
If we are to maintain the social and cultural diversity of London, and indeed other cities, we must maintain the diversity of housing, and of housing options and opportunities. Like all Members, I visit hospitals, Royal Mail sorting offices, police stations and fire stations. I always ask people where they live, and I find that fewer and fewer of them can afford to live in central London. They are commuting for longer and longer distances, at greater and greater cost to themselves.
We must address the housing issue. Yes, we can do that by building more houses and providing greater security and better conditions, but what is crucially and urgently needed is proper regulation of the private rented sector, so that we can provide the sense of security that we would all want for ourselves.