Online Archive  
Issue 4 - April 1972
Unfair Deal
One of the basic rights of man is to have a place to shelter, which he can call his home. This society upholds this right in principle but, as in so many other things, not in practice. Many families are either homeless - forced to live in hostels which charge excessive fees for poor, overcrowded living conditions - or are forced, because of the unavailability of acceptable accommodation or lack of income, to live in defeating slums or substandard housing. Having to pay for the privilege of living in a house is expensive. One has the choice of having to spend many hundreds of pounds in order to buy one, or many thousands of pounds in order to rent one.

But now, the government has decided that the rents we're being charged just aren't enough. Tenants, it says, should pay a higher price for the dubious benefit of living on a sprawling, repetitive, friendless housing estate, for the rents have been kept too low by an unrealistic housing policy and the Fair Rents (sic) Bill has been introduced to 'right' this 'wrong'. But not only have the rents of public sector housing been too low, but also, apparently, the rents of controlled and regulated tenancies in the private sector have needed raising for they too come under the Bill. Altogether Fair Rents will affect 5,500,000 public tenancies and over 1,500,000 private tenancies.

Previous to the implementation of Fair Rents each local authority set the rents for the houses in its area. These local authorities received housing subsidies from the Exchequer and the rates t help towards the costs incurred in maintaining and replacing these houses.

The private sector fell into two main categories - furnished and unfurnished. Furnished tenancies could, at the insistence of either the landlord or tenants, have their rents decided by the Rent Tribunal; unfurnished tenancies were of three main kinds - unregulated, regulated and controlled - the last of which had their rents controlled at a certain level.

Under the Fair Rents Bill, regulated and controlled tenancies will be affected.

The Government's stated reason for introducing the Fair Rents Bill was to stop the practice of giving subsidies indiscriminately to all council houses and instead help only the tenants who needed it. They plan to do this by the concept of fair rents.

But what are Fair Rents? The Bill defines them as the rent a landlord would charge in an area where rented property was not scarce - i.e. where supply met demand. A fair rent would take in such considerations as location, character and amenities.

The general principle behind this is to enable a profit (probably about 10%) to be made out of renting out houses. Rents will have to be increased substantially to do this. Civil Service leaks have revealed that while the average council rent in the North of England is now £2.38p, by 1976 it will be £4.38p plus £2.00p rates - a lot of money to have to pay out each week for the privilege of living in a council house.

In the public sector the local authority is supposed to assess the fair rents in its area, with the advice of the Rent Officer. Once assessed, the proposed rents are then examined by a special committee drawn from the ranks of the Rent Assessment Panel, who, if it disagrees with the authority's decision, has the power to determine what the fair rents should be. This means that a local authority couldn't keep rents down even if it wanted to.

Once the fair rents have been assessed, the current rent will be increased by £26 a year until the fair rents have been reached. Fair Rents will be reassessed every three years.

In the private sector, regulated or controlled tenancies will have their rents assessed by the Rent Officer or decided on by a contract between the landlord and tenant. The latter is far more to the advantage of the landlord than to the tenant as he can force the tenant to agree to a rent by threatening him with eviction at the first possible opportunity if he does not accept his decision, or asks the Rent Officer to assess it for him.

Although the Bill realises the necessity of increasing the maximum penalties for harassment and illegal eviction, it is often impossible to prove that one has been harassed. The fact that tenants in furnished property make such little use of the Rent Tribunal is proof that such bodies cannot stop landlords making fat profits out of their tenants - and all landlords, whether private or public, are out to make lots of money.

Most private tenants living in previously regulated or controlled tenancies will find their rents doubled or trebled.

In order to help tenants meet the increase in their rents the government have proposed a rent rebate scheme for local authority tenants and rent allowance schemes for private tenants. These, they claim, will offset the increased cost of rent for tenants with low incomes or large commitments and, in some cases, lower the amount of money actually being paid as rent. In fact, the scheme seems designed to pay out as little money as possible.

In the public sector the tenant is forced to submit a comprehensive means-test to qualify for rent rebates. This means-test forces the tenant to disclose all sources of income, and threatens him with prosecution under the Theft Act if he leaves any income undisclosed. This means-test has to be repeated every six months. Clearly the government hopes and expects that after a while people just won't bother with the rebate scheme because of all the form filling it involves, and because of the indignity of a means-test. They know that only one in six of the 19,000 families eligible for Family Income Supplement apply for it and know that this is a good return average to work on. This is happening - in Chester-le-Street, only 1,000 out of 7,000 council house families have returned their means-test forms.

Moreover the rebate is calculated on gross income rather than net income and the maximum rebate possible is only £6.50p a week. Under the scheme, the highest wage earner will become the tenant - even if he is only a lodger, and the rebate will be reduced by £1.50p a week for every non-dependant of 18 years and over not undergoing full-time education or training, £1.00p for every non-dependant of pensionable age not receiving Supplementary Benefit, and 65p for every non-dependant receiving Supplementary Benefit (although the person receiving SB should be able to claim this off the Social Security).

What this, in fact, means is that a family would be financially better off to ask a working son or daughter to leave, especially if one of them earns more than the tenant. This leaves a lot of families with the inhuman choice of either breaking up their families and achieving a bearable standard of living or keeping them under one roof and falling deep into debt.

Although Fair Rents will be reassessed every three years, and therefore will presumably continue to rise indefinitely, there is no mention in the Bill of reassessing the rebate scheme, which even as it stands now, means that the vast majority of tenants will be paying far more than they're paying now.

In the long run, the effect of the rebate scheme will be to create ghetto situations on estates, for tenants will be given houses whose rents they can afford. This will happen because it is an effective way of making money - both by not having to pay large rebates to the poorer families and also by getting the full rents from more financially fortunate families. So poor tenants will get poor houses with little chance of them getting better and every chance of them getting worse as even the cheaper accommodation will, sooner or later, become too expensive for them as 'fair' rents continue to rise.

The effect of the Bill on private tenants in regulated and controlled tenancies is similar, although instead of receiving a rent rebate they will receive a rent allowance (a cash payment provided by the local authority) to enable them to pay the full rent. This allowance is assessed in the same way as rebates, although the progression of rent increases will differ slightly.

The only good provision in the Bill is to make it legally essential for a local authority to obtain a court order before it can evict a tenant. This, at least, will stop the summary evictions practised by so many authorities.

Who profits?
It is obvious that the Fair Rents Bill is going to take more and more of the tenants' money. But where is this money going to? Basically, private landlords, local authorities, and most of all the government will make substantial profits. The LAs and the government will be splitting a lot of the profits made from council tenants 50-50. The fact that many tenants eligible for rebates won't apply will only increase the profits.

An article on Fair Rents in Mole Express (number 19) assessed this aspect of the Bill very well when it said: "The Tories cover up too much of what they are doing with accusations that Council housing is subsidised too much. But this year (1971), while subsidies to Council housing averaged about £39 per house or flat, subsidies to owner occupiers in tax relief on mortgages averaged about £60 per house.

All the present subsidies to Council housing are to be stopped and eight new ones to be introduced, most payable only if a local authority sustains a loss on its Housing Revenue Account. There will be losses in the first year or two but once the scheme is operating fully, the profit on housing revenue accounts throughout the country, according to the Rating and Valuation Association, will amount to more than £250,000,000."

A large part of the reason why Council rents are as high as they are at the moment is that Councils borrow money to build houses and repay it over a long period of time. For example, to pay for a £5,000 house the Council must pay out nearly £30,000 over 60 years at present interest rates of almost 10%. If councils want t make a profit could they not wipe out these debts rather than continue to subsidise money lenders at the expense of the tenant and rate payer?

Reaction to the Bill is mounting in the North-East. Rent strikes have been planned by tenants in Spennymoor, Durham City, Bishop Auckland, Gateshead and Newcastle, as well as some smaller towns. However only Durham City Council has decided to make the 50p rent increases this month, so Durham is the only city in the area to have a rent strike before October. The strike is organised by Durham Tenants Association, and altogether about 200 tenants on the Sherburn Road Estate are refusing to pay the increases. These will be collected by members and kept in case of threats of eviction for non-payment.

On the 10th April (print day I'm afraid for us, so no coverage) they will be demonstrating outside (hopefully inside) the Housing Committee meeting in the Town Hall in protest against the Bill. Already some council members have threatened these tenants with eviction if they strike.

It is obvious that Durham tenants face a long hard struggle, which has importance far outside the City Council's area, as the strike is one of the first in the country. The LA can be expected to use all weapons possible to end the strike. Thus Local Authorities not increasing their rents until October will have the examples of their April predecessors - and their mistakes - to follow in dealing with the rent strikes of their own tenants. Tenants striking from October will find themselves faced with a local authority drawing on a large number of tactics to fight tenants with. Law and Order raises its blighted head again - this time against the main body of the population and not just against its active minorities.

In an attempt to mobilise effective forces for October, and to try to help Durham Tenants Association till then, tenants associations throughout the North-East agreed at a meeting held in Newcastle recently to form an action committee of tenants in the area to oppose the Bill and make rent strikes more effective. This action is very welcome and extremely necessary as a united struggle will be far more effective than isolated ones.

Also ...
The Bill is going to encourage people to buy their own houses. If a tenant is paying as much or more rent as he would be a mortgage it is obvious that he is going to say he might as well buy the bloody thing, even though he doesn't like it, the location or the area in which it is situated. The fact that families will not be able to afford a mortgage and will therefore fall into debt will not deter them, for they can't afford to pay the fair rents either. Once they start buying the houses off the LA they will then be liable to pay out costs of repairs and maintenance instead of the Council. So we will end up with thousands of families paying for houses turning into slums through not being able to afford to keep its standards up while the LAs, the banks and industry in general make vast profits from mortgage interest and loans.

What can be done about the Bill? The Labour Party at national and local level has condemned it in the loudest possible terms, saying that they'll fight it tooth and nail. Yet it would be pointless to put our trust in the 'democratic' processes of this country. The Labour Party in Parliament is powerless, and local Councils can be overruled from Whitehall. Moreover members of Councils who refuse to implement the Bill can be fined up to £400 each.

That is to assume that Councils are really determined to oppose the Bill effectively. For word has come through from Transport House telling them to oppose the Bill verbally and in the Press, but not to interfere with the implementation. They must just stand to one side when the Rent Assessment Panel decides what the Fair Rents should be, and then silently scoop in the profits. In this way councillors will keep both their political reputations and their jobs.

It is obvious that the only possible action against the Bill must come from the tenants themselves - from tenants associations supported by Trade Union rank and file. Their most effective weapon is the rent strike - either total or partial.

When the Fair Rents Bill becomes operational it will be greeted by a whole series of rent strikes - mostly partial - throughout the country. The government must have been expecting this, for they have given Local Authorities a choice of when to increase their rents, thus making it difficult to achieve solidarity.

For, although Councils have to increase rents by £26 by next April, this figure can be obtained in two different ways. Rents can be put up 50p a week from this April, or £1 in October. Thus plans for united rent strikes over a large area covering several different Local Authorities have been dangerously hindered by the LAs raising their rents at different times from their neighbours. Some tenants will be going on strike this April, while others will wait until the increase in October.

It is worth considering a different type of local rent strike. The Housing Ideas Centre published a pamphlet recently putting forward new ideas:

"What if the money withheld during a strike was put into a common fund and spent on something useful? Even the threat of such action would terrify most councils.

"Think of all the repairs that haven't been carried out and the vast areas that, with a bit of money, could be converted into playgrounds for the kids. WHY NOT WITHHOLD THE RENT MONEY IN PROTEST AT INCREASES AND SPEND IT ON SOME PROJECT CHOSEN AND MANAGED BY THE COMMUNITY?"

All that there's left to say really is POWER TO THE PEOPLE.

Mike and Ian