(c) crown copyright
Catalogue Reference:CAB/129/85
Image Reference:0032
-
j
114
( T H I S D O C U M E N T IS T H E P R O P E R T Y O F HER B R I T A N N I C M A J E S T Y ' S G O V E R N M E N T )
SECRET
C . (57) 32
COFY NO.
v o
13th F e b r u a r y , 1 9 5 7 .
CABINET
RENT RESTRICTION
M e m o r a n d u m b y t h e S e c r e t a r y of S t a t e for S c o t l a n d
a n d t h e M i n i s t e r of H o u s i n g a n d L o c a l G o v e r n m e n t
a n d M n i s t e r for W e l s h A f f a i r s
On 2 4 t h O c t o b e r l a s t t h e C a b i n e t a g r e e d t h a t t h e R e n t B i l l
s h o u l d p r o v i d e f o r t h e i m m e d i a t e d e c o n t r o l in one o p e r a t i o n of
a b o u t 8 0 0 , 0 0 0 h o u s e s a n d f l a t s in G r e a t B r i t a i n - 7 5 0 , 0 0 0 of t h e m being
in E n g l a n d a n d W a l e s , i n c l u d i n g a b o u t 2 0 0 , 0 0 0 in G r e a t e r L o n d o n .
( C M . ( 5 6 ) 73rd C o n c l u s i o n s , Minute 3).
A m a j o r f a c t o r in t h i s
d e c i s i o n w a s t h e c o n v i c t i o n t h a t t h e G o v e r n m e n t s h o u l d be o p e n l y
s e e n in t h e B i l l t o b e m a k i n g a p o s i t i v e a n d s u b s t a n t i a l s t a r t on t h e
f r e e i n g of h o u s e s and t h e d i s m a n t l i n g of r e n t c o n t r o l .
2.
Our c o l l e a g u e s w i l l b e w e l l a w a r e t h a t t h i s d e c i s i o n t o c a r r y
t h r o u g h a m e a s u r e of i m m e d i a t e d e c o n t r o l h a s g i v e n r i s e t o c o n s i d e r a b l e
a n x i e t y and c r i t i c i s m in t h o s e p a r t s of t h e c o u n t r y p r i n c i p a l l y a f f e c t e d
(in t h e m a i n , t h e l a r g e c i t i e s a n d t h e i r s u b u r b s ) ; and m u c h of t h e
c r i t i c i s m i s on t h e g r o u n d t h a t t h e G o v e r n m e n t i s h i t t i n g at i t s own
middle-class supporters.
The decontrol provisions a r e indeed,
a t t h e m o m e n t , t h e o n l y m a j o r p o i n t of a t t a c k on t h e w h o l e Bill';
t h e r e a c t i o n a g a i n s t t h e g e n e r a l r e n t i n c r e a s e s of t h e l o w e r - r a t e d
h o u s e s is l i k e l y t o c o m e l a t e r , in O c t o b e r a n d a f t e r , w h e n t h e i n c r e a s e s
t a k e effect.
3.
T h e r e s u l t of d e c o n t r o l i s t o d e p r i v e t h e t e n a n t of a l l t h e
p r o t e c t i o n of t h e R e n t A c t s .
He l o s e s not o n l y t h e e n j o y m e n t of a
c o n t r o l l e d r e n t , but a l s o h i s s e c u r i t y of t e n u r e : a n d , a s t h e B i l l now
s t a n d s , he c o u l d b e d e p r i v e d of p o s s e s s i o n s i x m o n t h s a f t e r t h e B i l l
c o m e s into o p e r a t i o n , i. e . , one m o n t h a f t e r R o y a l A s s e n t .
It i s t h i s
s u d d e n t h r e a t t o s e c u r i t y of p o s s e s s i o n t h a t h a s c a u s e d s o m u c h
d i s q u i e t , a b o v e a l l in L o n d o n w h e r e t h e g e n e r a l s h o r t a g e of h o u s i n g
accommodation is still s e r i o u s .
4.
V a r i o u s s u g g e s t i o n s h a v e b e e n put f o r w a r d f o r s o f t e n i n g
t h e i m p a c t of d e c o n t r o l .
T w o of t h e s e a p p e a r t o h a v e f a i r l y w i d e
b a c k i n g , a n d e a c h is e x a m i n e d in t h e a n n e x t o t h i s p a p e r .
The
d i f f i c u l t y a b o u t t h e m i s t h a t t h e y b o t h a m o u n t i n effect t o a b a n d o n m e n t
of d e c o n t r o l for t h e t i m e being - a d i r e c t n e g a t i o n of t h e C a b i n e f s
d e c i s i o n of l a s t a u t u m n .
5.
T o r e t r e a t now o n t h e p r i n c i p l e of d e c o n t r o l w o u l d , in o u r
view, be a profound m i s t a k e .
F o r the G o v e r n m e n t to have first
c o m m i t t e d i t s e l f t o a m e a s u r e of d e c o n t r o l , a n d t h e n t o go b a c k on i t s
d e c i s i o n a l t h o u g h no n e w f a c t s h a v e e m e r g e d in t h e m e a n t i m e , i s a
c o u r s e of a c t i o n t h a t i s b o u n d t o c a u s e m o r e h a r m t h a n a n y good t h a t
c o u l d p o s s i b l y c o m e of i t .
6.
N o r do w e r e c o m m e n d t h a t a n y t h i n g s h o u l d b e d o n e t o r e d u c e
t h e n u m b e r of h o u s e s and f l a t s to be r e l e a s e d f r o m c o n t r o l .
To accept
t h a t a d v i c e would s i m p l y a g g r a v a t e t h e d i f f i c u l t i e s f o r t e n a n t s , s i n c e
(by and l a r g e ) t h e s m a l l e r t h e f r e e m a r k e t c r e a t e d b y d e c o n t r o l , t h e
g r e a t e r t h e r i s k of d e m a n d so f a r e x c e e d i n g s u p p l y a s t o d r i v e u p
rents unreasonably.
7.
In o u r v i e w , t h e o n l y q u e s t i o n i s w h a t c a n b e s t b e d o n e t o e a s e
the t r a n s i t i o n from c o n t r o l to d e c o n t r o l .
We know t h a t t h e p r e s e n t
M i n i s t e r of D e f e n c e had a l r e a d y b e e n g i v i n g h i s m i n d t o t h i s p r o b l e m ,
a n d had c o m e t o t h e c o n c l u s i o n t h a t t o a l l o w d e c o n t r o l t o t a k e effect
a s s o o n a s s i x m o n t h s a f t e r t h e c o m i n g i n t o o p e r a t i o n of t h e D i l l
w o u l d be t o o a b r u p t .
We a g r e e w i t h h i m .
8.
O u r own s t u d y of t h e m a t t e r h a s l e d us t o t h e c o n c l u s i o n t h a t ,
if t e n a n t s a r e t o be g i v e n r e a s o n a b l e p r o t e c t i o n a g a i n s t t h e r i s k of
s e v e r e h a r d s h i p , two things a r e n e c e s s a r y : ­
(a) M o r e t i m e m u s t b e a l l o w e d d u r i n g w h i c h t h e e f f e c t s of t h e B i l l c a n b e g i n t o b e felt in t h e p r o v i s i o n of m o r e housing a c c o m m o d a t i o n , p a r t i c u l a r l y by the c o n v e r s i o n and a d a p t a t i o n of h o u s e s now u n d e r ­
occupied;
and
(b) g r e a t e r i n c e n t i v e ( a s w e l l a s m o r e t i m e ) m u s t be g i v e n t o l a n d l o r d s and s i t t i n g t e n a n t s t o c o m e t o g e t h e r a n d m a k e n e w t e n a n c y a g r e e m e n t s on reasonable t e r m s . 9.
At t h e s a m e t i m e , we r e g a r d it a s i m p o r t a n t t h a t t h e t r a n s i t i o n
t o d e c o n t r o l s h o u l d not b e t o o long d r a w n o u t .
Among other
d i s a d v a n t a g e s , t h e w h o l e o b j e c t of a l l o w i n g an e x t e n d e d p e r i o d for
a d j u s t m e n t would be l i k e l y t o be d e f e a t e d , b e c a u s e n e g o t i a t i o n s
would tend to hang f i r e , while new a c c o m m o d a t i o n m i g h t be s l o w e r
in b e c o m i n g a v a i l a b l e .
We r e c o m m e n d t h a t t h e c h a n g e - o v e r s h o u l d be
c o m p l e t e d not l a t e r t h a n O c t o b e r , 1 9 5 8 , ( i n s t e a d of J a n u a r y , 1 9 5 8 , t h e
l i k e l y d a t e u n d e r t h e B i l l a s it s t a n d s ) .
19.
With t h e s e c o n s i d e r a t i o n s in m i n d , we p r o p o s e t h a t t h e
t r a n s i t i o n a l a r r a n g e m e n t s t o g o v e r n t h e d e c o n t r o l of h o u s e s a n d f l a t s
a f f e c t e d b y C l a u s e 9(1) of t h e B i l l s h o u l d b e m o d i f i e d a s f o l l o w s : ­
(a) B y i n c r e a s i n g t h e " s t a n d s t i l l ' p e r i o d on r e n t a n d p o s s e s s i o n of t h e h i g h e r - r a t e d h o u s e s f r o m 6 t o 15 m o n t h s ; t h i s w i l l not o n l y g i v e m o r e t i m e for t h e n e g o t i a t i o n of n e w a g r e e m e n t s , but w i l l p r o t e c t t h e t e n a n t f r o m t h e r i s k of h a v i n g t o e n t e r into n e g o t i a t i o n s u n d e r t h r e a t of e a r l y e v i c t i o n ; (b) b y p r o v i d i n g t h a t , if l a n d l o r d a n d t e n a n t m a n a g e t o r e a c h a n e w a g r e e m e n t for a t e r m of not l e s s t h a n 3 y e a r s , it m a y t a k e effect a s s o o n a s it i s c o n c l u d e d . ( T h e t e n a n t w o u l d get r e n e w e d s e c u r i t y for a r e a s o n a b l e p e r i o d , c e r t a i n l y up t o J u l y , 1 9 6 0 : t h e l a n d l o r d c o u l d s e c u r e an i n c r e a s e d r e n t m a n y m o n t h s b e f o r e he o t h e r w i s e w o u l d : t h e c o m b i n e d effect s h o u l d be t o e n c o u r a g e b o t h l a n d l o r d s and t e n a n t s t o r e a c h a g r e e m e n t s on f a i r t e r m s ); (c) b y m a k i n g unlawful t h e r e q u i r e m e n t of a p r e m i u m a s a c o n d i t i o n of a n e w a g r e e m e n t f o r t h e l e t t i n g of a n y d e c o n t r o l l e d d w e l l i n g d u r i n g t h e 3 y e a r s following t h e c o m i n g into o p e r a t i o n of t h e B i l l ; w e t h i n k t h i s i s a v a l u a b l e s a f e g u a r d for s i t t i n g t e n a n t s in c o n n e c t i o n w i t h (b) a b o v e ; i
(d) b y r e t a i n i n g a m i n i m u m p e r i o d of 6 m o n t h s ' n o t i c e t o q u i t , w h i c h c a n n o t h o w e v e r t a k e effect b e f o r e e x p i r y of t h e 15 m o n t h s ' s t a n d s t i l l . 11.
We i n v i t e o u r c o l l e a g u e s t o a p p r o v e t h e s e p r o p o s a l s .
.J.S.M.
H.B.
1 2 t h F e b r u a r y , 1 9 5 7 .
ANNEX
A L T E R N A T I V E S U G G E S T I O N S F O R EASING
" TRANSITION T O D E C O N T R O L
I.
R i g h t t o p o s s e s s i o n for 3 y e a r s , c o u p l e d w i t h a p p e a l t o t h e C o u r t s on r e n t
- (The Marlowe proposal) T h e p r o p o s a l is t h a t , w h e r e a t e n a n t h a s b e e n in o c c u p a t i o n
f o r t h e t w e l v e m o n t h s p r e c e d i n g t h e d e c o n t r o l d a t e , and w h e r e t h e
l a n d l o r d w i l l not g r a n t h i m a l e a s e , t h e t e n a n t s h a l l be e n t i t l e d t o
r e t a i n p o s s e s s i o n for 3 y e a r s ( i . e . till a f t e r t h e next Election):
a n d w h e t h e r o r not t h e l a n d l o r d o f f e r s h i m a l e a s e , failing a g r e e m e n t
on r e n t e i t h e r piarty c a n a p p l y t o t h e C o u r t for a d e t e r m i n a t i o n of a
fair rent.
A p a r t f r o m t h e r e n t , t h e l e a s e i s t o be on t h e s a m e t e r m s
a s t h e old t e n a n c y .
2.
The p r a c t i c a l objections to the M a r l o w e p r o p o s a l a r e , in
our view :­
(a) It m e a n s not d e c o n t r o l , but f o r 3 y e a r s a new
f o r m of c o n t r o l .
(b) T h e C o u r t s w o u l d b e o v e r l o a d e d , t h o u g h no f i r m
e s t i m a t e s of t h e n u m b e r of c a s e s c a n p o s s i b l y
be m a d e .
We h a v e c o n s u l t e d t h e L o r d C h a n c e l l o r
about t h i s .
(c) In the a b s e n c e of a g e n u i n e l y f r e e m a r k e t p r o v i d i n g
e v i d e n c e of f r e e r e n t s , t h e C o u r t s would h a v e l i t t l e
t o go o n in fixing a p p r o p r i a t e r e n t s .
-3­
IT.
E n f o r c e d a g r e e m e n t s for a s p e c i f i c t e r m , a t s p e c i f i e d rent limits
(The R e e s - D a v i e s proposal) T h i s p r o p o s a l gives t h e tenant a right to a s k for an a g r e e m e n t
of five o r s e v e n y e a r s m a x i m u m .
The r e n t will be limited to a
m a x i m u m of 2 ^ - t i m e s g r o s s v a l u e ; p r e m i u m s t o be p r o h i b i t e d .
2.
It i s f u r t h e r p r o p o s e d t h a t t h e l a n d l o r d s h o u l d be a b l e t o
r e f u s e a n a g r e e m e n t and get p o s s e s s i o n on t h e g r o u n d s w h i c h a l a n d ­
l o r d c a n a t p r e s e n t p l e a d u n d e r t h e R e n t A c t s for e v i c t i n g a s t a t u t o r y
tenant - with the additional ground that the p r e m i s e s a r e wanted
for r e c o n s t r u c t i o n , p r o v i d e d t h e C o u r t i s s a t i s f i e d t h a t e v i c t i o n t h e n
w o u l d not b e u n r e a s o n a b l e .
3.
The p r a c t i c a l objections to the R e e s - D a v i e s proposal a r e : ­
(a) T h e p r o p o s a l i s t h e n e g a t i o n of d e c o n t r o l .
The
b o n d a g e of t h e l a n d l o r d to h i s s i t t i n g t e n a n t
w o u l d c o n t i n u e for a n o t h e r five o r s e v e n y e a r s
a s s t r o n g l y a s n o w , if t h e t e n a n t s o w i s h e d .
(b) A s u n d e r t h e M a r l o w e p r o p o s a l , t h e f r e e m a r k e t
c o u l d not b e g i n t o o p e r a t e - t h o u g h t h e M a r l o w e
p r o p o s a l does at least provide s o m e flexibility
t o a d j u s t r e n t s t o w h a t t h e C o u r t h o l d s t o be
reasonable.
The Rees-Davies proposal gives
a r i g i d r e n t l i m i t up t o 1962 o r 1 9 6 4 .
On t h e
o t h e r h a n d , it p l a c e s n o p r e s s u r e on t h e C o u r t s .