The effects of inflation on historic legal provisions
Friday is the scheduled Second Reading for Karen Buck MP’s Homes (Fitness for Human Habitation) Bill, which is seeking to amend existing legislation (the Landlord and Tenant Act 1985) that has, according to the Law Commission, been allowed to “wither on the vine”.
The 1985 Act consolidated many existing legal provisions and it requires landlords to maintain a property as “fit for human habitation” where tenants pay less than a set amount of rent. However, this amount has not been uprated from the level set out in the Rent Act 1957. As a result, today the provisions in the Act only apply to those paying less than £80 annual rent in London, or £52 elsewhere.
The lowest rental price currently advertised on Zoopla in London is a parking garage in Sutton for £50 per month, 7.5 times the rent level set out in legislation (or, outside of London, £30 per month for a garage in Hull – 7 times too expensive to be covered).
How common are these ‘withered’ provisions?
The Law Commission regularly reviews obsolete legislation which is still in force – such as laws related to the former East India Company – but there is less information on laws made effectively obsolete by inflation.
The accusation of allowing a policy enshrined in law to wither on the vine is certainly a popular one by political opponents. Paul Flynn accused the Thatcher Government of allowing Child Benefit to wither on the vine, whilst Justine Greening accused the last Labour Government of doing the same with the Right to Buy. In 2004, Kevin Brennan referred to former Conservative MP Nigel Waterson as “the hon. Member for Wither-on-the-Vine” in response to a proposal to freeze Pension Credit.
The fixing of an amount in legislation, without providing an annual uprating mechanism, can give the perception of allowing a policy to wither away. The Christmas Bonus, for example, has been fixed at £10 since its introduction in 1972. If it had kept pace with the Retail Prices Index (RPI), last year’s bonus would have been £115 for every eligible recipient. Similarly, the £5,000 inheritance tax exemption for wedding gifts to children, if it matched the RPI increases since its introduction in 1974, would stand currently at £50,000.
Why do Governments allow payments (and other financially-determined policies) to continue well below their originally intended level?
First of all, it can be a way around the potential bad publicity of scrapping a popular or totemic policy. In June, Lord Fowler argued that the Christmas Bonus cost more to administer than to pay out, but any suggestion of abolishing it whilst he was Secretary of State for Social Services was met with a cry of “No, no, no”.
Additionally, it allows for a flexibility in policy making. It is arguably much easier to raise or lower the rate of an existing benefit, compared to scrapping it and later reintroducing it.
However, choosing withering over abolition is not without cost. 15.8 million bonuses were paid out last Christmas. In comparison to the Landlord and Tenant Act’s coverage of approximately zero landlords, the reduction in value of the bonus can hardly be seen as withering to the same extent. Other examples of similarly withered legislation are difficult to come by.
So is there any benefit to leaving these provisions on the statute book? Is it political expediency, avoiding bad publicity from axing popular legislation? Or is it the need to prioritise Parliamentary time on current, ‘live’ issues?
On the other hand, are these legislative remnants in the same obsolete category as laws on the East India Company or agricultural training programmes for demobilised WW2 soldiers? Is it untidy governance to leave these provisions in force?
Although ‘withered’ legislation can often appear anachronistic, its continued presence on the statute book can make for easier reform in future.
For Karen Buck’s Bill, the ambition of extending the fitness for human habitation obligation to all landlords, regardless of the amount of rent they charge, is arguably more achievable than introducing a similar obligation from scratch. How achievable will be known on Friday, when the Bill is debated in the Commons.