Armed Forces Bill
The Chair
We now begin line-by-line consideration of the Bill. First we will first go through the Bill and then we will consider the new clauses that have been tabled. The selection list for today’s sitting is available in the room. It shows how the selected new clauses have been grouped together for debate. New clauses grouped together are generally on the same or similar issues. A Member who has put their name to the lead new clause in a group is called first. Other Members are then free to catch my eye to speak on all or any of the new clauses within that group. A Member may speak more than once in a single debate. At the end of a debate on a group of new clauses I shall call the Member who moved the lead new clause again. Before they finish speaking they will need to indicate whether they wish to withdraw the new clause or seek a decision. If any Member wishes to press any other new clause in the group to a vote, they need to let the Chair know. We will begin with clause 1.
Clauses 1 to 20 ordered to stand part of the Bill.
Schedule agreed to.
New Clause 2
Requirement to publish statistics on sexual assault and rape
‘(1) Each service police force must collect and publish annually anonymised statistics on the number of allegations of sexual assault and rape made by and against members of the armed forces.
(2) The Director of Service Prosecutions must collect and publish annually anonymised statistics on the number of cases involving allegations of sexual assault and rape made by and against members of the armed forces, including but not necessarily limited to—
(a) the number of cases referred from the service police forces;
(b) how many of these cases were prosecuted; and
(c) how many convictions were secured’.—(Mr Kevan Jones.)
Brought up, and read the First time.
Mr Kevan Jones (North Durham) (Lab)
I beg to move, That the clause be read a Second Time.
The Chair
With this it will be convenient to discuss new clause 3—Removal of Commanding Officer’s discretion to investigate allegations of sexual assault—
‘(1) Schedule 2 of the Armed Forces Act 2006 [Schedule 2 offences] is amended as follows.
(2) In sub-paragraph (12)(at), leave out “3, 66, 67 or’.
Mr Jones
New clause 2, as we discussed in the evidence session, requires the service police to collect and keep an annual register of sexual assaults and rapes made against members of our armed forces and to publish the data annually. The register will include the number of cases referred to the service police, how many cases are prosecuted and how many convictions are secured.
People might ask why this is important. It is important because it is a practice that is conducted in civilian police forces. All the evidence we have taken on this Bill, and on the previous Bill that I had the honour of serving on, indicates that the Ministry of Defence’s aim is to get service discipline and operations in line with the civilian police.
The situation in which a member of the armed forces comes under a body of law that is different from the normal criminal and civil law is unique. That is understandable, because of the circumstances in which we ask members of the armed forces to serve. However, we need to go back to the horrendous issues at Deepcut and, unfortunately, some of the recent cases, despite the advances that have been made in all three services to try to address sexual harassment and sexual assault.
I commend General Sir Nick Carter, who has a clear determination not only to change the culture, but to make a difference. The new clause will help in that process by enabling the prevalence of sexual harassment and complaints to be monitored. That is important because we know that people who are convicted of sexual assaults usually have a history of minor misbehaviour in the lead-up to the assault. It is important for the police to have the discretion to look at an individual’s history.
The idea that this is not happening in the armed forces is not the case. The 2015 report on harassment showed that 39% of servicewomen questioned said that they had received unwelcome comments about appearance and sexual activities, compared with 22% of servicemen. Some 33% of servicewomen had received unwelcome attempts to talk about sexual matters, compared with 19% of servicemen. It is concerning that 12% of servicewomen received unwanted attempts to touch them, compared with only 6% of servicemen.
As General Carter said in his evidence, such behaviour is not acceptable. The document he put before us, “The Army Leadership Code: An Introductory Guide”, which is for all new members of the Army, makes it clear that UK criminal law should apply to all soldiers serving abroad and that there is zero tolerance of anyone who steps outside the law. I think that everyone would agree that this is not a party political issue.
Without a central register, we are leaving our armed forces at a disadvantage. I do not understand the resistance to the proposals. This is not a matter of collecting statistics for statistics’ sake; in some cases this could make an important evidential contribution to someone’s conviction. More worrying is the investigation by Her Majesty’s inspectorate of constabulary, which found that no criminal register exists in the service police forces. Civilian police forces can look at the civilian register to see what crimes have been committed, but no such transparency about what is going on exists for the armed forces.
The Vice-Chamberlain of Her Majesty’s Household (Kris Hopkins)
I want to respond to the two new clauses. I acknowledge the sentiment with which the hon. Member for North Durham articulated their content, but we are not convinced of the need to incorporate them, and I want to reassure the hon. Gentleman and the Opposition on that matter.
We do not believe it necessary to put into legislation the publication of data that are set out in new clause 2. Civilian authorities are under no such duty; nevertheless, they publish such information. It may reassure Committee members if I briefly set out the existing requirements within the service justice system for the collection and publication of crime statistics. The Service Police Crime Bureau, which acts in all three services, already records allegations of rape and sexual assault that are made to service police. That information is released regularly in response to parliamentary questions and freedom of information requests. In addition, it is uploaded on to the Ministry of Defence’s online publications scheme, where it can be freely accessed. It therefore gives a good picture of the extent of that type of offending within the services. However, work is ongoing to improve the way that the service police record crime, and a crime register is being established—as mentioned in the supplementary note added by the Ministry of Defence—which will lead to further improvements. Essentially, a register is going to be put together that will build upon the information already out there.
For each year, the service prosecuting authority records the number of cases referred to it, the number of cases referred that involve charges and the number of cases where conviction is secured. In addition, the Military Court Service regularly publishes on the internet details of every case heard at the court martial, including offences, outcomes and punishments. Those data give a strong indication of the proportion of cases referred from the service police to the Service Prosecuting Authority that were prosecuted and the conviction rate in each case.
In conclusion, information about the types of crimes and the prosecution of them is available, and the MOD is actively working to improve the way in which those data are put forward. What came through from last week’s evidence was the leadership being offered in the service to make sure people are transparent. General Carter’s leadership on this demonstrated that people want to be open and to make sure the information is available, and it is appropriate that they are already actively seeking mechanisms to help them be more transparent. I therefore urge the hon. Gentleman to withdraw new clause 2.
New clause 3 is not necessary. The armed forces already have procedures in place to ensure that allegations of offences covered by the new clause, including sexual assault, are handled appropriately, and the commanding officer’s duties in that respect are clear. The starting point is that if a commanding officer becomes aware of an allegation, or of evidence, that would indicate to a reasonable person that a service offence may have been committed by someone under his command, he must ensure that it is investigated appropriately. That is already a specific statutory duty under section 115 of the Armed Forces Act 2006, and the commanding officer must therefore refer the matter to the service police if that would be appropriate.
In so far as allegations of sexual misconduct are concerned, there is a specific requirement in the manual of service law that a commanding officer take legal advice in such cases. In addition, the Army has adopted a belt-and-braces policy, which requires that any complaint or allegation involving a sexual element be passed to the service police for investigation and that legal advice be obtained if there is any doubt.
It is important to note that the service police can and do act on their own initiative, so what happens is not dependent just on the behaviour or activity of the commanding officer. If a witness or victim believes they have not had the commanding officer’s support, or they want to go directly to the civilian police or the service police, they can do that. The service police will actively go in pursuit of a perpetrator they come across, whether they are out patrolling or have been passed information by the civilian police.
It is important for many people out there observing these things to note that the commanding officer does not blindly go into a situation. They are trained and taken to a highly competent level in terms of understanding their obligations, and the requirements on them, as a leader. Given the standard of the training, and the victim’s opportunity to bypass the commanding officer and to go directly to a civilian police officer or a service police officer to gain support, the new clause is not required. I therefore urge the hon. Gentleman not to press it.
Mr Jones
That comes as no surprise—I was a Minister at the Ministry of Defence, and this is my third Armed Forces Bill. What we seem to be getting from the Ministry yet again is the idea that it agrees that there is a case for the two new clauses, but that they will somehow inhibit us in terms of the current position. What we have seen with previous amendments is that the MOD will finally get to our position. We have not had a great deal from the hon. Member for Keighley in terms of arguing why the new clauses are not needed. I will seek the Committee’s leave to withdraw new clause 2, but I give notice that we may return to these amendment on Report. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 4
Civilian investigations and prosecutions relating to murder, sexual assault, and rape
‘(1) The Armed Forces Act 2006 is amended as follows.
(2) After section 118 [Duty of service policeman to notify CO of referral to DSP] insert—
“118A Civilian investigations and prosecutions relating to murder, sexual assault, and rape
(1) Criminal investigations into allegations of murder, sexual assault, and rape by and against members of the Armed Forces shall be undertaken by the relevant civilian police authorities.
(2) Criminal prosecutions of charges involving murder, sexual assault, and rape by and against members of the Armed Forces shall be undertaken by the Crown Prosecution Service.”’— (Mr Kevan Jones.)
Brought up, and read the First time.
Mr Jones
I beg to move, That the clause be read a Second time.
The important issue is whether the service police have the capability to deal with rape and serious sexual assault. There was a time in the UK, which I think many can remember, when civilian police forces dealt with rape in a very unsatisfactory way. All police forces have made great advances and take rape seriously. They have dedicated officers and ensure that the victim is treated with the respect that he or she requires. That includes ensuring that victims are not made to feel guilty about what is an horrendous act.
As to expertise, anyone who has met police officers who deal with victims of rape or serious sexual assault will know that they are highly trained and that they are also vetted to make sure they are the correct individuals to undertake the work. Not too long ago, it seemed quite acceptable in civilian life for male officers to deal with female rape victims. The issue addressed by the new clause is whether, when individuals in the armed forces make accusations of rape or serious sexual assault, the service police have the right expertise—I do not question the officers’ integrity—to investigate allegations at the level that would happen in civilian life.
The figures speak for themselves. In 2013, the three service police forces referred 26 cases involving rape and 56 involving sexual assault to the Service Prosecuting Authority. In London, the case load of an individual officer dealing with sexual assault or rape is between 12 and 31 cases. Not only do civilian police have training and expertise but, given the number of cases they deal with, they clearly see a wider range, which has an effect on their ability to investigate. If records are not kept—as they would be under new clause 2—victims of serious sexual assault or rape need to be confident that it will be properly investigated when they report it. Any doubt about that could lead to a reluctance to come forward.
The Ministry of Defence and the military need to deal with the fact that service police are members of the armed services. There may be a perception by victims—although it may be mistaken—that the military investigates the military. Allowing civilian police to have precedence in investigating these cases would reassure the potential victim that there is a degree of independence. It would be wrong for anything to lead to a victim of sexual assault or rape not to come forward because they felt that in some way their allegations would not be taken seriously or investigated properly.
Given the numbers of cases that the three service police forces deal with, can we really expect them to develop the expertise that we expect in civilian life today? I am not sure we can, not only because of the cost of training individuals, but because of the number of cases that the three service police forces deal with, which is thankfully quite small, in terms of the overall service community.
Kris Hopkins
This is an extremely serious matter, and it is right that we examine it. I hope to give some reassurance to members of the Committee, including the hon. Member for North Durham, that our house and the MOD’s house is in order and that we can address these issues.
I believe the service police and the Service Prosecuting Authority have the necessary expertise and independence to effectively investigate and prosecute offences of murder, rape and sexual assault by and against service personnel. The service justice system has been scrutinised by the UK courts and by Strasbourg, and it has been held to be compliant with the European convention on human rights for both investigations and prosecutions within the UK and abroad, where the civilian police do not have jurisdiction. The service police have been held by the courts to be structurally and in practice independent of the chain of command.
I want to talk about capability. The service police are trained and able to carry out investigations into the most serious offences at home and abroad. Training takes place at the Defence College of Policing and Guarding. All prospective members of the special investigation branch, which investigates serious crimes, must pass a serious crime investigation course before being selected for that unit. Officers receive specialist training on handling sexual offences, investigative techniques, forensic awareness, dealing with witnesses and suspects, the preservation of evidence and interacting with victims. In addition, selected service police attend a range of specialist and advanced detective training courses at the DCPG or externally, at the College of Policing or at training providers accredited by the college.
Prosecutors at the Service Prosecuting Authority must undertake the training necessary to effectively prosecute serious cases. For example, the prosecution of serious sexual offences requires attendance on the Crown Prosecution Service’s rape and serious sexual offences specialist training course, and the SPA ensures that decisions on charging in such cases are only taken by prosecutors who have undertaken that training.
It is important to address the issue of independence raised by the hon. Gentleman. The Director of Service Prosecutions is an independent civilian office holder, exercising statutory powers under the superintendence of the Attorney General.
The Service Prosecuting Authority is created by statute, and the three main elements consist of the creation of the office of Director of Service Prosecutions and his appointment by Her Majesty, with the director appointed on the basis of a fair and open competition; the provision for who may act on his behalf, with the director specifying those lawyers who may act on his behalf; and the necessary statutory powers in relation to prosecutions in service courts being given to the director personally, not the chain of command. The service police and the Service Prosecuting Authority have the necessary expertise and the independence to effectively investigate and prosecute the full range of offences overseas and at home. Therefore, I urge the hon. Gentleman to withdraw the new clause.
Kit Malthouse (North West Hampshire) (Con)
I, too, acknowledge the sentiments in the new clause tabled by the hon. Member for North Durham. I underline the fact that they are important, but it is also important that the armed forces retain the ability and the expertise to investigate these offences when they occur, not least because they may occur overseas from time to time, where civilian police authorities will not be present.
From my history with the police, I know that when an allegation of rape has been made, the first 24 to 48 hours are critical in gathering forensics, preserving evidence and handling the victim. It is critical that that is done correctly. Any delay after an allegation leads to a serious diminution in the possibility of any kind of conviction. If we had been presented with evidence that showed that conviction rates were significantly lower in the military than in the civilian police force, I might have had a bit more sympathy with the new clause, but the truth is that there is no evidence to that effect.
The hon. Gentleman referred to workload. The greater workload among civilian police is a negative, not a positive. I was responsible for prompting a restructure of the Metropolitan police’s rape command, not least because I became aware in my role as deputy mayor for policing that there was a huge backlog of rape cases awaiting investigation. As I have said before, the longer the wait, the less likely a conviction. The fact that a civilian police officer might be handling a caseload of 26 to 35 cases is a bad thing, not a good thing. It means that quite a lot of cases are not getting the attention that they need. I acknowledge the hon. Gentleman’s concern and certainly share it, but, for all those reasons, it is critical that the military police retain the ability, and therefore must have the training and expertise, to deal with these cases.
Mr Jones
I hear what the hon. Members for Keighley and for North West Hampshire said. However, the fact of the matter is that it is wrong for anything to be in place that ensures that victims—even if it is just one case—do not come forward because they think that the service police are part of the military chain of command, although I accept what the hon. Member for Keighley said about the separation of the two. We will look at the matter in more detail.
I also accept what the hon. Member for North West Hampshire said about resources and the pressures on individual police officers dealing with multiple cases, but expertise must be an issue. If someone investigates, for example, one rape or sexual assault allegation only every two or three years, even with the best training in the world, their expertise could be limited compared with someone who does so regularly. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 6
Review of compensation available to veterans suffering from mesothelioma
‘Within 12 months of the passing of this Act, the Secretary of State must commission a review of how former members of the armed forces who have contracted mesothelioma as a result of exposure to asbestos in the course of their military service are compensated, and must lay the report of this review before both Houses of Parliament.’—(Mr Kevan Jones.)
Brought up, and read the First time.
Mr Jones
I beg to move, That the clause be read a Second time.
New clause 6 addresses an issue that has been raised recently on the Floor of the House—the treatment of veterans and service personnel suffering from mesothelioma. Anyone who has met individuals who suffer from this terrible asbestos-related cancer will know that those diagnosed have not only a short lifespan, but a horrible and cruel death. I have experienced this as a former trade union official dealing with asbestos victims in the engineering and shipbuilding industries.
Kris Hopkins
Again, I find myself recognising the sentiment and the importance of this issue. It is important to recognise that the new clause would introduce an obligation on the Defence Secretary to instigate a review of compensation for veterans with this asbestos-related cancer, but our view is that such a step does not require legislation and, in fact, will be overtaken by events.
As the hon. Member for North Durham said, the Under-Secretary of State for Defence, my hon. Friend the Member for Milton Keynes North (Mark Lancaster), responded to an Adjournment debate on 19 November—the day after the last gathering of this Committee—and clearly indicated that he would speak to and report to ex-service organisations in the coming weeks; in fact, December was what he indicated. I completely understand the hon. Gentleman’s point about the long period before this terrible disease manifests itself and the short life expectancy creating an urgency for the Minister to respond, but the fact that he has said that, within the next few weeks, he will meet those service organisations and specifically respond on the issue of lump-sum moneys is very important. This matter is already on the record. Therefore, I urge the hon. Gentleman to withdraw the new clause.
Kirsten Oswald (East Renfrewshire) (SNP)
I am in favour of the new clause that the hon. Member for North Durham has tabled. This is a simple issue of inequity, and I am happy to hear that there seems to be consensus on that. After speaking in the Adjournment debate last week, I received an email from a veteran who is affected by mesothelioma. That very dignified gentleman knows that nothing can be done to help him now, but he urged me to ensure that we do everything we can to try to help others in his position. It is incumbent on us to listen to such individuals and to try to resolve this unfair situation, which causes people very great difficulty at the end of their lives.
I agree with the hon. Member for Keighley that time is an issue. If things are overtaken by events, that is great and to be encouraged—so be it—but we were assured, with all kinds of positive reasons, that these matters would be resolved quickly, and they have not yet been resolved. I am sure that there is a will to resolve them, but I think that supporting the new clause is a sensible and useful way to ensure that we move forward to support these veterans.
Mr Gavin Shuker (Luton South) (Lab/Co-op)
I am grateful to the hon. Member for Keighley, who has clearly laid out the Government’s position that this is under review and, we hope, will get some positive direction. One of the most positive Acts of the previous Parliament, of course, faced up to the scale of mesothelioma concern in the country. This involves a huge number of people. Of course, when someone is diagnosed with mesothelioma, that is an incredibly shocking piece of news, but it is followed by a very short tail. Most sufferers will last for only between 18 and 24 months after diagnosis, so making that time as comfortable as possible is vital and knowing that one’s family will be looked after in the event of one’s passing is hugely significant.
I want to mention the Royal British Legion’s rightful campaign on this subject, in the hope that the Government will respond directly to it. It advocates that every veteran should be offered a choice between receiving a traditional war disablement pension or a lump-sum payment, obviously recognising that there is a huge disparity in the family and financial circumstances of those who suffer. That idea certainly seems to have a logic to it. The Royal British Legion provides the practical example of a 63-year-old civilian sufferer, who can receive about £180,000 in compensation under the Government’s wide-ranging diffuse mesothelioma scheme, whereas a veteran of the same age can receive at present as little as £32,000 if they have no spouse or partner to pass their compensation on to.
In the light of that, I support my hon. Friend’s new clause. I acknowledge that the Government realise that there is a disparity in the current situation. We owe a great debt of gratitude to those who have served in some of the most difficult circumstances, who may survive a conflict only to have the choices made by previous Governments rendered unto them 30 or 40 years hence, so I hope that the Government will give us some positive news on the matter in the near future.
Kit Malthouse
The new clause is close to my heart, not least because Catherine Crawford, the first and last chief executive of the Metropolitan Police Authority, with whom I worked closely and who became a great friend, died of mesothelioma only last year. She had spent her career in government buildings and did not know where she contracted the disease from, but somewhere along the line, she did.
I am, however, with my hon. Friend the Member for Keighley in not supporting the new clause, because it is, quite frankly, a bit vague. Instead of commissioning a review without any notion of independence, where it would be commissioned from or what the timeframe would be—it would have to be commissioned within 12 months, but it could take 10 years after that to complete—I would much rather that other weapons in Parliament’s armoury, such as Adjournment debates, Back-Bench business and all the rest of it, were used to press the Government into swift action, and such action has been promised. I acknowledge that the Government have been a bit slow to deal with this issue, but I am not sure that putting something into legislation adds anything to the urgency. Nothing would necessarily happen post the review; the Government would not be compelled to take any action after the review.
I wonder whether the hon. Member for North Durham would consider withdrawing the new clause in the hope that he might return to the issue on Report. That would give the Government a window to announce what they are actually going to do. If the matter comes before the whole House, he may find that there is more sympathy for his proposal if the Government have not laid out any specific plans.
Mr Jones
I am not in the habit of helping the Government, but I think that the hon. Member for North West Hampshire makes a constructive suggestion. We have debated the new clause today, and when we discuss this issue again on the Floor of the House, we will be interested to see whether the Government have moved forward as the hon. Member for Keighley has suggested that they might. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 7
Homosexual acts no longer to constitute grounds for discharging a member of HM armed forces (No. 2)
‘(1) The Criminal Justice and Public Order Act 1994 is amended as follows.
(2) In section 146(4), omit the words “discharging a member of Her Majesty’s armed forces from the service or” and the words “or, in the case of a member of Her Majesty’s armed forces, where the act occurs in conjunction with other acts or circumstances,”.
(3) In section 147(3), omit the words “discharging a member of Her Majesty’s armed forces from the service or” and the words “or, in the case of a member of Her Majesty’s armed forces, where the act occurs in conjunction with other acts or circumstances,”.’—(Mr Kevan Jones.)
Brought up, and read the First time.
Mr Jones
I beg to move, That the clause be read a Second time.
New clause 7 is a bit of tidying up of legislation, but it is an important one. Reference is still made in law to a homosexual act being deemed to be a criminal offence, but no reference is made to heterosexual acts. It might be useful if I gave the Committee some history to explain how we have got to this position.
Sections 146(4) and 147(3) of the Criminal Justice and Public Order Act 1994 contain provisions relating to a homosexual act constituting grounds for the discharge from service of a member of the armed forces. The 1994 Act repealed provisions relating to male homosexual acts and the armed forces in the Sexual Offences Act 1967. Homosexuality is clearly no longer an instant dismissal offence, and I think that that is broadly supported as a move forward. However, the legislation still contains that reference to a homosexual act, but there is no reference to the fact that heterosexual activity could lead to someone being dismissed from the armed services.
I am not suggesting that anyone who engages in homosexual acts in an inappropriate way while in service could not be dismissed. Likewise, anyone who is involved in heterosexual activity in service in an inappropriate way could also be dismissed. That is not the case at the moment, since reference is only to homosexual activity.
The purpose of sections 146(4) and 147(3) was explained by Viscount Cranborne at Third Reading as,
“to put on the face of the Bill a statement to the effect that the decriminalisation of homosexuality in the services and the Merchant Navy would not affect their ability to discharge homosexuals”—[Official Report, House of Lords, 19 July 1994; Vol. 557, c. 190.]
Since that has now been superseded, quite rightly, there is no need to have it in the current law. Getting rid of this from the statute book would be a way forward, so that we are not, in any way, discriminating against anyone because of their sexuality.
Kris Hopkins
I find myself agreeing with the hon. Member for North Durham again.
Kris Hopkins
I know. It is important to lay out where we are and why we cannot support the new clause, but to provide a solution to the situation as well. Our view is that sections 146(4) and 147(3) of the 1994 Act are redundant. They have no legal effect and their existence is inconsistent with the Department’s policy on homosexuality within Her Majesty’s armed forces, and the Government’s equality and discrimination policies more generally. Although there is no reason to retain these provisions, the wording of both sections 146(4) and 147(3) applies not only to the discharge of members of Her Majesty’s armed forces but to the dismissal of members of the crew of a UK merchant ship. The latter is not restricted to defence purposes. Accordingly, it would appear unfair and inconsistent to amend the provisions in the 1994 Act only on behalf of the armed forces.
We are therefore seeking an appropriate legislative vehicle that would enable sections 146(4) and 147(3) to be repealed in full. One option would be to refer these provisions to the Law Commission, recommending that they give consideration to including them in the next statute law repeals report. On that basis, I urge the hon. Gentleman to withdraw the new clause.
Mr Jones
I hear what the hon. Member for Keighley says. It is a constructive way forward, but it is wrong to have such legislation still on the statute book. I do not want to press this to a vote, but I reserve the right to bring it back later, on Report. If the Government would produce with their agreed position on moving forward, that would be helpful. I do not think there is any disagreement that this needs dealing with, but if we had a suggested route forward, via the Law Commission or by some other method, it would be helpful. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
The Chair
The final question I must put is that I do report the Bill to the House. I thank everybody for their work and their contributions. It has been a pleasure. It has been my first and maybe not my last Bill Committee. I thank the officials for their support, and Anna, in particular, for enabling me to be an effective Chairman.
Bill to be reported, without amendment.
Housing and Planning Bill (Sixth sitting)
The Committee divided: - Ayes: 11 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 5 - Question accordingly agreed to.
The Chair
We will start with the question that clause 6 stand part of the Bill. Members will be aware that we did not debate that at our previous sitting. Since then, the Opposition have tabled an amendment to remove the clause from the Bill, and although it is not selectable, the subject can be debated.
Clause 6
Compliance directions
Question proposed, That the clause stand part of the Bill.
Teresa Pearce (Erith and Thamesmead) (Lab)
It is a pleasure to serve under your chairmanship again, Sir Alan.
The Opposition propose that clause 6 does not stand part of the Bill, for reasons I will outline. Committee members will recall that, the last time we met, we had an interesting discussion, ably led by my hon. Friend the Member for Dulwich and West Norwood, as to why we should remove the clause to make the Bill more palatable.
My hon. Friend made a number of excellent suggestions for amending the Bill. She highlighted the fact that there are many strong arguments, which have been put forward by a number of bodies, as to why there should be local input into decisions about the number of starter homes that are necessary. She mentioned that there is a dramatic variation in housing needs across the country—something shown time and again by various witnesses from local authorities, which had diverse local requirements.
My hon. Friend mentioned the fact that the Secretary of State could distort a local housing market if too many starter homes were put up too quickly. She cited the Home Builders Federation evidence, which observed:
“There is potential for market distortion if the numbers of Starter Homes that ministers are targeting to be built actually come onto the market. The effect is likely to be highly localised and could impact upon the saleability of units on new sites”.
That highly localised effect on the housing market shows again the importance of local consideration of planning and building.
The mix of tenures was also raised. There should be a mix of homes, and that should be determined by what is necessary. That should be done at the discretion of local authorities, which are best suited to appraise local needs.
Although the Minister said in our previous sitting that the Secretary of State would have to give reasons for issuing a compliance directive, we are not sure that there are sufficient safeguards to protect local decision making. Moreover, we do not feel that that is a sufficient safeguard to protect councils from being judged as failing when non-delivery could be outside their control. Councils must work in and for the best interests of local people. They will be the ones that are judged as not having met local need, when in fact matters could be outside their control. As the National Housing Federation points out, local authorities must have
“freedom to plan to meet objectively assessed local housing need in their area, as required by the National Planning Policy Framework. This should include the ability to plan for Starter Homes, shared ownership and rented housing…based on the evidence in their Strategic Housing Market Area Assessment. This would ensure that Starter Homes are built, but that the balance between Starter Homes and other forms of affordable housing would vary according to what best meets the needs of local people”.
That view was echoed by the Local Government Association, which stated:
“Councils need the powers and flexibility to shape the supply of genuinely affordable homes to meet needs of different people in their area, in line with their local plan and the National Planning Policy Framework”.
In the face of repeated expert advice that clearly puts a strong emphasis on the significance of localism and responding to local need, why are the Government moving forward with a clause that undermines those things? The Minister gave us reassurances about the need for clause 6 to remain, but they were not strong enough. That is why we now propose that it does not stand part of the Bill, so that local authorities can determine the mix of tenures and the different forms of affordable housing that are necessary for their areas.
The clause is problematic not only because it takes decision making from local authorities, but because there is a lack of clarity in terms of determining how compliance directives will be necessary. The clause would allow the Secretary of State to issue a compliance directive to local planning departments if they do not adequately carry out their functions in relation to starter homes, but it does not clearly demonstrate how that adequacy will be judged or even what it means. Does it relate to a certain number of starter homes based on population, on those who have registered an interest in the scheme or the area, or on the median incomes of an area and house prices to reflect how many could feasibly afford a starter home? We simply do not know and the ambiguity leaves the decision entirely in the hands of the Secretary of the State, with no formal guidance.
The concern about the lack of clear monitoring rules and guidelines is only made worse by subsection (1)(b), which appears to give the Secretary of State personal powers to issue a compliance directive when he does not like the policies in a local plan. It is extraordinary that the Government are taking away from local decision makers in such a way, apparently basing things entirely on the Secretary of State’s decision.
The explanatory notes make things no clearer:
“If a local authority is failing to comply with its starter homes duties and has a policy contained in a local development document which is incompatible with these duties then the Secretary of State may make a compliance direction directing that the incompatible policy should not be taken into account when certain planning decisions are taken.”
There is no real, tangible explanation of what that vague “incompatible” means.
What is the point of having a local plan based on local needs if in reality the Secretary of State may override it? The clause has the potential to be incredibly damaging to localism and any devolved planning powers. The assurances of the Minister have not been enough to convince us that local decision making has been safeguarded. For those reasons, we are moving that the clause does not stand part of the Bill.
The Minister for Housing and Planning (Brandon Lewis)
It is again a pleasure to serve under your chairmanship, Sir Alan.
I will outline matters briefly, because people want to make progress today. The clause provides for a compliance direction to be issued by the Secretary of State if the local authority is failing adequately to comply with its starter homes duties and if it has a policy contained in a local development document, such as a local plan, that is incompatible with such duties.
Any compliance direction would say that the incompatible policy must not be taken into account when certain planning decisions are taken. It must set out the Secretary of State’s reasons for making the direction and must be published. A copy must be given to the local planning authority and the direction will remain in force until revoked by a further direction given by the Secretary of State, therefore ensuring that local authorities have full understanding, as well as a chance to make their case.
The compliance direction will be used only in limited circumstances. I am happy to put that on the record. It is for when the local planning authority is in breach of its starter homes duties. As outlined a number of times on Thursday, the chapter is very much about creating a new product, recognising the challenges for first-time buyers and the Government’s determination to do what we can to help them reach their aspiration to own their own homes.
The duty to promote starter homes and to grant planning permission in accordance with the starter homes requirement is a statutory requirement. If the local authority does not do that, it will be in breach of the law. The compliance direction mechanism is designed to provide a clear sanction if the duty is breached. The Secretary of State will decide whether to issue the direction based on the information in the monitoring reports that are required to be produced under clause 5.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to the Minister for giving way and I apologise to my hon. Friend the Member for Erith and Thamesmead for not hearing more of her opening remarks. Will the Minister give us a sense of the type of situation in which he or the Secretary of State would feel that a compliance direction was needed? Clearly, one would be if no starter homes had been set in motion, but suppose five had been set in motion? Would that require a compliance direction? Or would the Minister expect 10 or 100 before a direction was issued?
Brandon Lewis
The hon. Gentleman was unable to join us last week, but I suggest that he looks back at Hansard for last Thursday’s debate, where he can see exactly what we outlined on our expectations for starter homes. He may link that to what I have said in the past few minutes.
Starter homes are a national priority to help a generation into home ownership. We therefore need to ensure that all local planning authorities are on board with delivery. The compliance direction will apply to an incompatible policy in a local development document, which does not include neighbourhood plans or the London plan. It will mean that the incompatible policy may not be taken into consideration as part of the determination of planning applications.
Question put, That the clause stand part of the Bill.
Brandon Lewis
Clause 7 sets out the meanings of the terms used in the starter homes clauses. It makes clear what the terms mean in the application of the clauses and will assist with their implementation.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Definitions
Mr Thomas
I beg to move amendment 88, in clause 8, page 5, line 1, at end insert—
“or
community-led housing schemes as defined at Schedule [New Schedule 1: community-led housing schemes]”
It is a pleasure to serve under your chairmanship, Sir Alan. Given your huge experience, you will know the disadvantage that Back-Bench Opposition Members are at in comparison with the massed ranks of the Government with all their civil servants behind them. In saying that, I hope you will protect me from any bullying by Government Members.
In moving amendment 88, I probe whether the definitions in clause 8 are sufficiently tightly drafted to allow the full range of would-be self-builders and custom house builders to benefit, while not creating loopholes for bigger beasts of the housing market to exploit.
It is interesting that the Conservative party, which is so committed to the free market, should be so actively seeking to meddle with the free market in the clause by creating almost a mini-market within the overall housing market. However, it would be a digression to go down that route.
To give the Committee a flavour of my interest in the clause and to amplify my concern, it might be worth imagining a situation where every member of the Committee lives in the same planning authority area—say Harrow, which is probably the best planning authority in the country and certainly the best place to live, with some very high-quality political representation, especially in the western part of the planning authority area. Let us assume we all live in the same planning authority area and have done so for a number of years. We are all living in houses that we do not see as suitable for our needs going forward and so want to be part of building a better home for each of us. We all get along famously, so we decide to work together and support each other’s efforts to get a better home.
If we were to build our homes under the self-build route, they would clearly, by their very nature, be somewhat different. I am a new man at the moment—I appreciate that is a controversial concept and my partner is not necessarily a supporter of it. As a new man, I do not need anywhere to watch the television. I simply do not have the time any longer to do that, because of childcare arrangements.
My property would be, by definition, very different from those of other Committee members who are not new men or do not have childcare responsibilities. The Minister looks like a man who would want a hot tub in his self-build property. Again, his would be a very different property from those that the rest of us want. The hon. Member for South Norfolk is the very definition of the type of Member who would want to create a mini-castle. Certainly, he would want a wide, sweeping drive to accommodate all his cars.
Mr Richard Bacon (South Norfolk) (Con)
It is a great pleasure to serve under your chairmanship, Sir Alan. Although my mother used to worry when, as a small child, I expressed the desire to live in a castle, I do not want my self-build to be a castle, but I do want it to contain a library based on the one in Eastnor castle in Herefordshire, which I recommend that the hon. Gentleman visits.
Mr Thomas
I am grateful to the hon. Gentleman for that kind intervention. I will come to the subject of libraries shortly.
I think I have demonstrated that, if we were to go down the self-build route, each of us would build a different type of property. Nevertheless, we might need to work together to achieve that. We might need the help of my hon. Friend the Member for Leicestershire-ish way, I believe—[Interruption.] I am sorry, I mean my hon. Friend the Member for Bootle. [Interruption.] I am a London MP—bear with me. We might need the help of my hon. Friend, with all his council experience, to approach the local planning authority. He knows how planning authorities work, so he could register our collective self-interest. That is one small way in which we could work together, although we would nevertheless build the properties ourselves.
If we were to go down the custom build route, we might again need my hon. Friend to register our interests with the planning authority. My hon. Friend the Member for Dulwich and West Norwood, who is not in her place, has experience of the planning system and would be useful in helping us to find custom house builders. Again, Government and Opposition Members would probably require different types of custom house builder. I gently suggest that Opposition Members would need larger libraries, because we are much more committed to evidence-based policy. The hon. Member for South Norfolk probably does not need such a big library. That is one difference in the type of specialist custom house builders that we might want.
Given the harmonious relationships that have developed in this Committee under your chairmanship, Sir Alan, we could all come together to form a housing co-operative—let us call it the Toffs and Oiks Housing Co-operative—to build a new series of properties in which to live. However, would that qualify under clause 8? Could we register an interest with the local planning authority to build homes?
Why might we go down the housing co-operative route, as opposed to the traditional self-build route or the traditional custom build route? It might be easier to raise finance if we were acting collectively and sharing risk. That might make us more attractive to a potential financier. We might build the houses ourselves or contract them out and design how the properties look, but it would be hard to describe that as traditional self-build or traditional custom build. I seek to probe the Minister about whether a housing co-operative would qualify under the terms of the Bill. Indeed, many rightly acknowledge that the self-build and custom build parts of the housing development market are niche areas. The Government and, indeed, the Opposition, rightly want to see that part of the housing market becoming less niche and more mainstream. Again, the housing co-operative movement—which shares many parts of the definition that one might use to describe a self-build or custom build property—is regarded as quite niche. It may be covered by the definitions in clause 8, but at the moment it is not clear.
The Chair
Before I call Mr Bacon, let me tell Members that we have the opportunity of going further down this route towards Valhalla, as the hon. Member for Harrow West has pointed out, but I indicated to the hon. Member for Easington a bit earlier that he could take his jacket off, and it was remiss of me not to have made the same announcement to all Members. If they wish to do so, they may.
Mr Bacon
Thank you for that advice, Sir Alan. I feel that on such an important subject I ought to be wearing a dinner jacket, like Lord Reith reading the news.
It was a pleasure to listen to the hon. Member for Harrow West—albeit at such length that the pleasure was alloyed—but I do not think his amendment is necessary. The Bill provides for “associations of individuals”, so the question one has to ask is: what would a court say about a housing co-operative in such a case? Would a court deem a housing co-operative to be an association of individuals? I think it would.
Mr Thomas
Perhaps I should have gone on a little longer and drawn the hon. Gentleman’s attention to clause 8(2) which, referencing his own Private Member’s Bill, talks about omitting,
“bodies corporate that exercise functions on behalf of associations of individuals”.
That is one of the things that initially triggered my concern that housing co-operatives or community-led housing might, inadvertently perhaps, be affected by the definition in proposed new subsection (A1).
Mr Bacon
I would certainly not want to omit housing co-operatives inadvertently. I will listen with interest to what the Minister says about that, but it seems unlikely that they would not be regarded as associations of individuals.
May I say how important housing co-operatives can be? The hon. Gentleman rightly pointed to activities on the continent, such as at Almere in the Netherlands and in Berlin. As the founder of the all-party parliamentary group on self-build, custom and community housebuilding and place-making, I strongly support community activity to increase the number of dwellings, because the system as a whole has failed for 50 years. Volume house builders as a whole have failed to cause supply to rise to meet demand, as have too many of our housing associations, because while some are nimble and innovative, some are bloated. An official recently said to me that trying to contact a person in a large housing association was like sticking a knitting needle into blubber: it went on and on and he could not get a response of any kind.
Mr Thomas
I find myself in agreement with the hon. Gentleman. I have experience of a housing association that is incredibly difficult to get hold of and is not treating some of my constituents as well as it should. He supports co-operatives as one part of the self-build and custom house building world, so does he want the Minister to be clear that they will be covered under the terms of the definition?
Mr Bacon
Yes, I do. In Berlin, people have come together, often led by an architect who has identified the site, people and finance, and worked in co-operation with the local authority, very much in a community-driven way, to produce housing co-operatives that people join. By becoming a member, they are entitled to a dwelling. As the co-operative grows, they can move to a different dwelling that is the right size for them—as they get older or become members of larger families—and they can continue to do that throughout their lives. I therefore support the idea of housing co-operatives.
I will correct the hon. Gentleman on one thing, though. To take the example of Housing People Building Communities in Liverpool, which I visited recently, he described owners as active, albeit collective. Of course it is possible to have co-operative action by communities that results in individual ownership, and that is what has happened in Liverpool. I support the idea of housing co-operatives being covered by the Bill. The difference I have with him is that I think they already are.
Brandon Lewis
As I said on Thursday, I always think it best to start by outlining what we agree on before moving to what we perhaps do not agree on. I agree with the opening comments of the hon. Member for Harrow West. I am sure we agree that he believes that he is the best representation that Harrow could have. I say gently that I hope that his other opening remarks were meant with some tongue in cheek, because otherwise Conservative Members will have found them pretty offensive.
I am sure that all members of the Committee will have spent many hours during mornings, evenings and weekends working through issues behind the Bill to ensure that what we are presenting will be transformational in how we make housing supply and increase home ownership. If the hon. Gentleman looks back at Thursday’s Hansard report—I appreciate that he was not with us on Thursday, as he obviously had other commitments—he will find that amendments were withdrawn and ideas were taken on board from both sides of the Committee in that proper tradition of working together where we can agree in the best interests of all. In that spirit, I hope to give him and my hon. Friend the Member for South Norfolk some words of comfort and reassurance about what the clause seeks to do.
The Government very much support community-led housing schemes, and the hon. Gentleman was right to outline the importance of co-operatives and those schemes. His amendment would add housing built by community-led housing groups for the good of the community to the clause. However, the individuals who first live in such properties would not necessarily have an input in their design, and I argue that that is not self-build or custom house building, nor should it be considered as such.
Where a group of people want to build or commission their own homes next to each other to enable them to live as a community, legislation already allows for that, as my hon. Friend rightly identified. Indeed, supporting such people in the way we see elsewhere around the world, and in Europe in particular, is the reason why “associations of individuals” is included in the definition, as he rightly pointed out. I categorically assure him that groups of people coming together in whatever format—whether loosely and informally or in a more formal organisation—to develop a genuine self or custom build property into whose design and build they have an input is intended to be included in the definition.
Mr Thomas
I am grateful to the Minister for his opening remarks thus far, but I wonder whether I could push him a little further. When he writes to every planning authority—as I have no doubt he will—perhaps he can be clear that housing co-operatives in the format that he has described, using the language that he has used, would be covered under the definition of self-build and custom house building. They would then benefit, crucially, from being able to indicate their interest and from being on the register and would have to be contacted by the planning authority if suitable land became available.
Brandon Lewis
Obviously our words in the House are widely read by people far and wide, and I am sure they will pick up on that. In any communications that we send out following Royal Assent, I will very happily make it clear that any group of people coming together, if they are genuinely looking at custom building and self-building and having an input into the design, where the owner and occupier will have been part of the process, would qualify as custom build and self-build.
I would go a bit further in qualifying that. Traditional community-led housing schemes can include members who are not interested in self-build community house building and therefore would not benefit from joining the register. In those cases, I do not see why individuals within community groups who are interested in self-build and custom house building cannot join together, as individuals or a group, or, if they wish for land close to each other, as an association of individuals, as the qualification outlines.
The overriding rationale of self-build and custom house building is that the person who lives in the finished property has a choice over the design of that property. My hon. Friend the Member for South Norfolk spoke powerfully about this on Second Reading. As he outlined, this is also about moving the housing market. Even where a developer is involved, it is about moving into building property that is focused on the customer’s needs, with the customer being involved in that outline, rather than the traditional build method that we have seen previously in this country.
Mr Bacon
Because I was speaking to the amendment of the hon. Member for Harrow West, I did not deal directly with the point the Minister is now making, about the effect of clause 8(1) on the definition of “wholly or mainly” in proposed new section 1(A2) of the 2015 Act. I would be happy to have your guidance, Sir Alan, on whether now is the appropriate time to intervene on the Minister on this point, or whether I should do so in the clause 8 stand part debate. I have a query for the Minister, although I do not wish to amend anything.
The Chair
There probably will be a stand part debate on this clause, so you could talk about it then.
Brandon Lewis
I look forward to that conversation with my hon. Friend.
Let me finish by saying that although we all see the benefit and goodness of a community group building for unnamed individuals or for the greater good of the community—it is incredibly worthwhile in itself, and I am sure all of us across the House would encourage it—it is not self-build and custom build. For that reason, I hope the hon. Member for Harrow West will withdraw his amendment.
Mr Thomas
I welcome the Minister’s efforts to move at least partly in my direction. There are opportunities for us to discuss the state of the housing co-operative world more generally through other amendments that I have tabled. Let me gently raise again with the Minister my concern about clause 8(2) and the example I gave of the Lewisham initiative, where a local community land trust working with the council is coming together to provide homes at local level. There are members of the land trust who want to live in the community-led housing scheme, but it is effectively a corporate body being set up to do this work. Would it be covered?
Brandon Lewis
To qualify for self-build and custom build, individuals who are going to own and live in the property need to be part of the design and production of that property. If the organisation is commissioning properties for people who are not part of the design panel, they would not by definition be self-build and custom build.
Mr Thomas
I am grateful to the Minister for that. In which case, helpful as his comments have been, it sounds to me as though some housing co-operatives, but not all, could be covered by the clause. Given the forces arrayed against me, I will perhaps accept the Minister’s words of encouragement for one part of the housing co-op sector and return to my concerns about the need to support the wider housing co-op sector later in proceedings on the Bill.
Amendment 88 was very much a probing amendment. I say gently to the Minister that this is a very bad Bill overall, but, in accordance with the spirit of Committee proceedings, we can make it slightly less bad through our debates; I hope my remarks are seen in that spirit. I welcome at least part of the Minister’s remarks, which were helpful. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 84, in clause 8, page 5, line 29, at end insert “and without unreasonable cost”.
This amendment would protect authorities in cases where the provision of access to a public highway, connections for electricity, water and waste water and other services required to ensure a plot of land is fully serviced would entail excessive cost.
It is a pleasure to serve under your chairmanship, Sir Alan. In the same spirit that the Minister and my hon. Friend the Member for Harrow West have made clear, the amendment seeks to improve the legislation on a matter where there is a large degree of consensus. It would ensure that, in strengthening the role of local planning authorities to make plots of land available for self-build and custom build, the Bill did not place disproportionate or unreasonable burdens upon those authorities. It therefore probes the Minister on what measures will ensure that local authorities are not overburdened when it comes to the costs of servicing plots of land.
With your indulgence, Sir Alan, I will briefly set out the Opposition position on self-build and custom build, to aid our debate. Four and a half years ago, the then Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps), heralded a “self-build revolution”; yet now, despite encouraging signs, that revolution has still failed to materialise. According to some industry surveys, over 50% of people in this country would consider building their own home if given the opportunity to do so. An Ipsos MORI survey has suggested that approximately 7 million people would consider doing so within the next 12 months. We therefore know that there is significant unmet demand in this area.
No accurate figures exist, but estimates produced by AMA Market Research suggest that self-build and custom build output remains steady, at between 7% and 10% of the overall number of new homes built each year, with self-build completions still below a peak of around 14,000 units in 2007. As a number of hon. Members have already suggested, in comparison with continental parallels, the UK’s performance in this area remains poor. In Canada, Germany, France, Sweden and Ireland, self-build or custom build often accounts for more than 50% of the market, and in Austria it accounts for more than 80%. Crucially, in those countries building one’s own home is not just the preserve of a privileged few, as there is a strong tradition of self-build and custom build right across the social spectrum. In this country, unfortunately, self-build is still seen as a niche pursuit for intrepid enthusiasts or an elite club that is open to a small minority able to fund the kind of ambitious projects made famous by “Grand Designs” that win awards from the Royal Institute of British Architects. That needs to change, and we hope the Bill will help to achieve that.
The Opposition firmly support the Government’s aim of getting the self-build and custom build sector to scale, in order to progress towards building the homes that our people need. Self-build and custom build can provide a lifeline for those currently shut out of home ownership, as well as an alternative—some of the cases we have heard about have made this clear—for those seeking more collective approaches to meeting housing need. My hon. Friend the Member for Harrow West gave a number of good examples in that regard. A strong custom build sector would open up new opportunities for medium-sized and smaller housebuilders. As the Minister has rightly said, in putting the customer at the heart of the process, the sector can expand choice, support innovation, promote energy efficiency, drive up quality and strengthen communities—we know that people who take this route are more likely to have a longer-term stake in the homes that they shape.
Taken in the round, the sector has the potential to correct some of the systemic flaws in the housing market. For that reason, we supported the Self-build and Custom Housebuilding Act 2015 and are broadly supportive of clauses 8 to 11, which build on that. At this point, it would be remiss of me not to mention and commend the work of the hon. Member for South Norfolk in bringing this issue to the fore in both this and the previous Parliament.
The interplay between the three factors at work for self-build and custom build—land, finance and planning—is complicated. There is general agreement that more needs to be done, especially about the lack of suitable accessible plots of land to build on and about facilitating the assembly of such land to allow for the scale of sites needed—of 100-plus plots—to deliver custom build economically. The Lyons review, which was commissioned by the Labour party, identified that as a significant barrier that would need to be addressed and pointed to the need to take a more innovative approach to the use of land more widely if the sector is to realise its potential.
It remains to be seen whether the measures in the Bill will deliver the 20,000 or more self-build and custom-build units a year that the Government seek to realise. It would be useful if the Minister set out what levels of demand were registered in each of the 11 vanguard authorities set up to trial the full right to build. We on the Opposition Benches suspect that the results may have been mixed, but we believe that the strength of clauses 8 to 11 lie principally in the strong signal they will send to local authorities to make this sector a priority.
We supported the creation of registers in the 2015 Act, but in building upon them, as this Bill does, and inserting new definitions and making related amendments, as clause 8 does, we want to ensure that the Bill does not place unreasonable burdens on already over-burdened local authorities. We know that the Government share that aim, and that is what amendment 84 seeks to do.
Mr Thomas
Before my hon. Friend gets into the substance of the concern about the clause, which he has helpfully set in context, he will remember, having read the Hansard extracts from the debate on the private Member’s Bill introduced by the hon. Member for South Norfolk, that our then housing spokeswoman, my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), raised concerns about access to finance for those wanting to go down the self-build route. Might my hon. Friend encourage the Minister to give us an update on the extent to which finance is genuinely available for self-build and custom house building, and, indeed, the housing co-operative field, which is covered by the self-build and custom house building definitions in the Bill?
Matthew Pennycook
My hon. Friend makes a very good point. Access to finance is a very real issue—it is perhaps less of an issue than land and land assembly, but it is an issue none the less. Amendments 81, 82 and 83 will touch on that area, and I hope we will hear from the Minister in response.
The concern that the Bill might place unreasonable burdens on local authorities was touched on by a number of witnesses in written and oral evidence to the Committee. For example, the chair of the board of the Planning Officers Society, Mike Kiely, raised such concerns in his written submission, in which he stated that the right-to-build provisions could place a considerable additional burden on local authorities. Similarly, the CPRE expressed the concern that the new duty may be too onerous in many areas. If the Bill is to achieve its objective of scaling up the sector, it is vital that local authorities view prospective self-build and custom house builders as partners in helping to meet housing need, not as a burden.
However, we want to make sure that the Bill strikes the right balance between a common national framework for the full right to build and local discretion. There is a danger that few people will join registers, particularly if they are not well publicised by local authorities or if the eligibility criteria are too restricted. Some in the industry have raised that concern directly with me. If we are to see large numbers join local registers, as I hope we will, we need to make sure that local authorities do not face disproportionate or unduly onerous costs or debts as a result of meeting their new duty. Different parts of the country have different housing and land markets, and there will be some, particularly in rural areas, where the costs of servicing plots could be disproportionate or, in some cases, simply impractical. We know that many local authorities can expect to make a profit from the sale of the land at market value in due course, but there will also be increased costs, as the impact assessment accompanying the Bill makes clear.
We appreciate that, in the short term, the Government intend to provide support to cover the costs of developing the register, under the new burdens doctrine. We would appreciate clarification of whether they intend to provide support to cover all the associated costs of developing and implementing the register, including servicing plots of land, and also whether the fees—which, as part of clause 11, can now be recovered in connection with a duty—can be legitimately used to cover the cost of servicing plots of land for the purposes of the duty.
In instances where the local planning authority is not exempt from the duty, as permitted by clause 10, and where full recovery of costs is not possible, our concern is that some LPAs could be hit with unreasonable costs. We believe it is important to ensure that the costs remain proportionate, whether they are for servicing plots of land in the ownership of the authority itself or whether they relate to cases where the granting of suitable development permission opens the authority up to servicing costs on land owned by others. Where they are not, or where servicing is simply impractical, local authorities have a means of avoiding unreasonable costs and debt.
Amendment 84 would achieve that by revising the proposed definition of “serviced plot of land” to cover land that has access to a public highway and connections to electricity, water, waste water and other services, or that can be provided with those things in specified circumstances, or within a specified period, and without unreasonable cost. That would protect local authorities by allowing them to avoid the high upfront servicing costs that might otherwise be involved in fulfilling the full right-to-build duty in some instances.
Brandon Lewis
The hon. Gentleman commented on some of the finance issues, particularly relating to mortgage lenders. I should outline in opening my response to him that the Government have made a £150 million custom build serviced plots loan fund available to enable greater access to serviced plots. I encourage local authorities to work with private or third-party partners to take advantage of that funding to move these issues forward.
Last Friday, I visited one of the custom build areas, in Stoke, which is one of the vanguard areas for the pilots, and met a couple of families and visited one of the homes. I spoke to the chief executive of the mortgage lender—a local building society—who outlined his desire to go further with custom build lending. He said small and local building societies were particularly keen to do that, because it gives them a clear niche in the market, where they can be competitive against the larger companies, which obviously want to work on a more national, organised scale. That gives small local lending companies—we all want small and medium-sized enterprises of all types to grow—a real opportunity and a real niche, and I would encourage people to look at that option.
Mr Thomas
I am always encouraged by references to building societies, and I welcome the Minister’s experience. Just to be clear, would the local authority in Stoke have been able to benefit from the fund, to help make self-build plots available? That is the point the Opposition are trying to probe the Minister on.
Brandon Lewis
Yes. That is what I am saying. I would encourage any local authority, particularly as we go forward beyond the vanguards, to work with private and third sector partners or other vehicles—including, potentially, co-operatives if they qualify for self and custom build—to take advantage of that funding. The pilots have been doing some phenomenal work. On average, we had 80 people coming forward on the register in just the first three months of the scheme, which is an indication of the appetite to take this forward. That backs up the comments by the National Custom and Self Build Association, which we support and want to deliver on, building on the work done by my hon. Friend the Member for South Norfolk in his private Member’s Bill, to see that part of the sector double in size over the next few years.
Matthew Pennycook
Will the Minister clarify one important point, because it is instructive as to how the registers will operate? Over what period did those 80 people come forward? How many people are on the local registers in the 11 vanguard plots now? How many joined in the first few months?
Brandon Lewis
As I said, it was 80 in just the first three months, which is a clear indication of the appetite. We want to make sure that we do what we can—partly through the clause and partly through my hon. Friend’s Bill—to double the number of people who take up this opportunity.
I welcome and understand the intention behind the amendment to protect local authorities from excessive costs, but I would argue that a plot of land that required excessive costs to service would probably not be suitable for self or custom building. People wanting to build or commission their own homes usually want to be able to start building as soon as they have purchased their plot of land. That is why the Bill requires local authority to permission suitable serviced land to ensure that the plots are—I use the definition advisedly—shovel-ready. Land that requires excessive costs to put in the basic services should not count as suitable land, and the local authority should seek alternative sites to permission to comply with its duties. For that reason, I ask the hon. Gentleman to withdraw the amendment.
Matthew Pennycook
Perhaps the Minister could clarify where that is in the Bill. Proposed new section 2A(2) puts a duty on local authorities to
“give suitable development permission in respect of enough serviced plots of land”.
Clause 8 defines what those serviced plots of land are. Nowhere in the Bill can I see that the protection of the kind he has just outlined would be an option for local authorities. For example, if they have a register of 800 people with a mind to build their self-build homes, but have fewer plots than that, they might be forced into bringing impractical or costly serviced plots of land into use. Nothing in the Bill seems to protect local authorities in that way from unreasonable costs.
Brandon Lewis
We do not expect local authorities or developers to make a loss on land, services or on sales for custom building. It is right that the costs incurred for serviced plots should be borne by the custom builders.
Mr Bacon
I wish the hon. Member for Greenwich and Woolwich were wrong, and that there were no protection and nothing in the Bill, and that the overriding duty of local authorities, with no exemptions, were to provide serviced plots at scale, because that would make the biggest difference. In fact, does the Minister agree that the protection sought by the hon. Gentleman is already in clause 10, “Exemption from duty”? There are circumstances—I will ask the Minister about this later—in which the Secretary of State may direct that the local authority is not subject to the duty to provide development permission.
Brandon Lewis
My hon. Friend is absolutely right, which is why I hope the hon. Member for Greenwich and Woolwich withdraws his amendment.
Matthew Pennycook
I have to disagree with the hon. Member for South Norfolk. Clause 10 is about exemption from the duty as a whole, not from the duty to service particular plots of land. He is making a different point. That said, although we might return to the subject, given some of the Minister’s assurances, at this point I am happy to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr Bacon
I will not detain the Committee for too long. Given that the clause is the first in chapter 2 on “Self-build and custom housebuilding”, I want to say how much I welcome the Government taking further the provisions of the Self-build and Custom Housebuilding Act 2015, which was my private Member’s Bill, to establish the right to build and to make it a practical reality that serviced plots are delivered at scale, so that we have in this country what has been a great lack: the building of houses as if customers mattered. In most markets supply rises to meet demand. The reason it does not do so in the housing space is that customers are not at the centre, as the hon. Member for Greenwich and Woolwich has said. Historically, customers have not been at the centre as they need to be.
I want to make one other important point about the role of SMEs, which the Minister mentioned in speaking to the previous amendment. Up and down the country many builders merchants provide timber, plumbing and electrical supplies, and other building materials. The purchase of such supplies locally for a house, whether self-built or built to commission by a local builder, does a great deal to put money into a local economy. The Minister probably knows Brett Amphlett of the Builders Merchants Federation, who helped with my Adjournment debate and my private Member’s Bill, and nor would I be surprised if the Minister had visited a builders merchant to find out the good work that such businesses do to promote local sales to keep money in the local economy.
We need a revolution in the way in which housing is done in this country. We have to create a situation in which the supply of houses rises properly to meet demand. A key part of that will be serviced plots at scale, which is why I agreed with the Minister’s earlier comments.
Mr Thomas
It is always great to have a fellow revolutionary in Committee. Perhaps the hon. Gentleman should drift over to the Opposition Benches, at least for this part of our proceedings. I agree that self-build and custom house building could be part of a housing revolution, but surely in order for that to happen there has to be much greater access to finance to enable self-build and custom house builders to develop. Does he not agree that the decision by the Chancellor of the Exchequer to impose a levy on building societies to take some of their capital away potentially makes it harder for them to make finance available to self-build and custom house builders? Will he be a revolutionary on that as well?
Mr Bacon
The reason I am not on the Opposition side is that they are not revolutionary enough in this space. When I think about the Labour and Co-operative parties I wonder what could have happened in the past 50 years if the Co-operative party had done to housing what John Lewis has done to retail. I am afraid there has been a lot of talk but not enough action over those 50 years.
Mr Bacon
Since the debate is only on stand part, I shall make just one other point—about the nature of the protection in the new subsection (A2) that clause 8 would insert into section 1 of 2015 Act. Under that subsection, the definition of “self-build and custom housebuilding”
“does not include the building of a house on a plot acquired from a person who builds the house wholly or mainly to plans or specifications decided or offered by that person.”
That is sound. The Minister referred to it in commenting on an earlier amendment. It should prevent gaming of the system by those who want to present their product as if it is a custom house-building product without allowing the customer to specify and determine properly what gets built. Custom house building is not about allowing the customer to choose from a small number of pre-baked designs. It is about the customer deciding and specifying what gets built.
The clause is sound and sufficient. By the way, I sought and obtained the support of the Federation of Master Builders for my private Member’s Bill, but could not even get a meeting with the Home Builders Federation. The fact that the Home Builders Federation thinks that the clause goes too far is sufficient reassurance for me that it is good enough as it stands. None the less, I should welcome the Minister’s reassurance.
The Chair
I apologise to the Minister, because I should really have called him to speak first, before the hon. Members for South Norfolk and for Harrow West, informative though their speeches were.
Brandon Lewis
I would not for a moment presume to speak before my hon. Friend the Member for South Norfolk on matters of self-build and custom building. His speech on Second Reading showed the House his passion, knowledge and expertise, not least in the pioneering work that he has done to drive an agenda culminating in his private Member’s Bill.
I was honoured and proud to be a small part of that, as the Minister supporting the Bill in Committee. I have a vague memory that we might even have been in this very room—if I remember correctly, we even finished with mince pies. It was a great experience, with cross-party support, and a good example of the House moving things forward. It is important to drive the agenda to bring about big change.
My hon. Friend made a good point in his closing remarks. The clause would for the first time create a clear definition of self-build and custom house building. The creation of a legal definition will enable us to prevent the gaming of the system for which there is arguably potential. We can agree on my hon. Friend’s core point about the customer deciding and specifying what gets built—they should not simply have a say in a standard template.
I have spoken before about the difference between custom building and walking on to a building site to speak to the developer about buying on plot 5, and being told, “As you have got in early you can choose the colour of the kitchen and maybe the carpet colour in the bedrooms.” That is not self-build or custom building, in which the customer is a part of the design process.
My hon. Friend is also right that the measure helps us to do something—although as the hon. Member for Harrow West pointed out, we are playing just one part—for small builders, particularly on access to finance, including through the builders finance fund and by working with mortgage lenders. He made a fair point about making lending accessible to people who want to enter the field. That is why I stressed the point about people who want to work with small, local societies that have a key part to play, where there are niche opportunities and expertise. That helps small and medium-sized businesses.
If my hon. Friend’s work does anything, it will drive and grow the market, and the larger it gets the more attractive it will become to lenders generally, which is a good and helpful thing. Other parts of the Bill will potentially help with access to finance as well, particularly when we think about planning in principle, which we will get to later on. All these things come together to be part of the work we do to help small and medium-sized builders.
Brandon Lewis
My hon. Friend makes a very good point. I think it does. We will issue guidance that makes it very clear to local authorities and ensures the proposals are driven forward to deliver exactly what we want, which is a clear identifiable ability to get access to land. That is good for small and medium-sized builders. That kind of development will be perfectly suited to a small and medium-sized business. The hon. Gentleman is quite right: I have visited the Builders Merchant Federation’s members and we have benefited from seeing the work they do to support their local communities. Local builders are good for everybody. They drive jobs locally and they tend to build high-quality homes because their reputation relies on it. They build at a good pace, in contrast to the building rate of the larger developers. That is good for all.
Self-build and custom house building includes homes built by people themselves and homes built on behalf of individuals, where professionals are commissioned to do the work by the eventual owner-occupier. The common theme is that the individuals have significant input and choice over their finished home and intend to live in it as their main and sole property.
The second part of the definition is to exclude the sale of off-plan homes, where the developer agrees to minor changes to the property but where the finished home is wholly or mainly the original specification, into which the buyer had no input. That tends to fit the description of most new build properties around the country. However, the definition of self and custom house building includes where someone has bought a shell of a building because they will have significant input into the final internal layout and specification.
Turning to other Members’ points, clause 8 provides the definition of a serviced plot of land. That is land that has access to a public highway and connections for electricity, water and waste, or can be provided with those things in specified circumstances or within a specified period. The clause provides for regulations to amend the definition of “serviced plot of land” by adding further services to the list—I am sure many Members will be thinking about broadband. That allows services such as broadband to be included in the future as and when required.
Grahame M. Morris (Easington) (Lab)
It is a pleasure to serve under your chairmanship, Sir Alan. I want to make a few brief points, because I know time is precious. I have already raised a number of issues that are relevant to my constituency with the Minister in the Adjournment debate. Like my hon. Friends the Members for Harrow West and for Greenwich and Woolwich, we are very keen to join the revolution that has been promoted by the hon. Member for South Norfolk. There is common agreement across the Committee about the benefits of not just the grand design but the ambition for self and custom build for everyman that the Bill espouses. Some 100,000 properties over the lifetime of the Parliament seems incredibly ambitious, but will bring many benefits, not least to the building supply sector, in terms of employment and meeting housing needs.
Will the Minister respond to the points raised by my hon. Friends about the obligations to be placed on local authorities? Notwithstanding the existing or potential demand for custom and self-build, there is a concern related to subsection (4) and the various conditions that are placed on the definition of a serviced plot of land. Subsection (4) would define a serviced plot of land as one that,
“(a) has access to a public highway and has connections for electricity, water and waste water, or
(b) can be provided with those things in specified circumstances or within a specified period”.
Will the definition place any additional burdens on local authorities or service providers to connect properties or serviced plots of land at costs which they cannot meet? My own local authority is facing immense costs as a consequence of budget cuts from central Government. On the eve of the spending review, we are making some difficult decisions.
Matthew Pennycook
My hon. Friend is making a good point. That is what I tried to get at, and we got part of the way there. Does he agree that it would be useful to have, not only a better understanding of what burdens might be placed on local authorities, but an idea of how much money, if any, has been allocated by the Department to cover any new burdens that the Bill will impose on local authorities?
Grahame M. Morris
That is a really good point, which I hope the Minister will address in his closing remarks.
Mr Thomas
A slight alarm bell got set off in my head when the Minister talked about the power to make regulations potentially to include broadband. Harrow is in central London, and one would think it had good access to broadband, but that is not the case at the moment. There is a very mixed performance by BT and other providers. Given that it is Ofcom’s responsibility to direct the provision of broadband, one worries that the Minister might feel gung-ho one day and draft the regulations to include broadband, when it is not the local authority’s responsibility to provide such a crucial facility; it is Ofcom’s or, indeed, the private sector’s responsibility. It would be useful to probe the Minister a little more on his intentions for those future regulations.
Grahame M. Morris
I am grateful to my hon. Friend. Again, the Minister might respond to that point in his concluding remarks.
Finally, I remind the Minister of the Adjournment debate we had at the close of the last Parliament, in which particular problems were highlighted in the former colliery village of Horden in my constituency as a consequence of the withdrawal of the housing association Accent, due to housing market failure. The Minister suggested, on that occasion, that we look at what was termed “homesteading” on a large scale. Sadly, that was not possible, perhaps because of some of the issues raised by the hon. Member for South Norfolk about access to finance, whether the necessary skills and leadership were available at that time and perhaps the lack of a housing co-op with the dynamism to take it forward. I think we will address a little later some of the issues that have arisen since that debate, with rogue landlords and problems as a result of a failure to adequately address that. I would welcome any assurances the Minister can give.
Brandon Lewis
There is obviously a process that the Government go through in agreeing with local government the new burdens that will still apply. With regard to our general position on plots and the cost of servicing them, I refer the hon. Gentleman to the comments I made earlier about our expectations. I am happy to give him further feedback on that over the next few days.
Matthew Pennycook
I would like to press the Minister on the specifics of this. He said that under the new burdens principle, local authorities will be covered. How much has the Department allocated to cover new burdens that might arise as a result of the Bill? That is not in the impact assessment. Has the Department bottomed out that area and allocated actual funds?
Brandon Lewis
I shall be brief, because I know we want to make progress today. If the hon. Gentleman looks at the rest of the clause and, indeed, the comments I made about the previous amendment, he will see that he needs to look at this in the whole, and that will answer his specific question.
Let us look at what we are learning from the vanguards. As I said, I visited Mr and Mrs Sproston in Penkhull in Stoke just last week, and saw the six new homes that have been delivered on that particular site. Under the new administration, the authority wants to deliver the pilot and find a way to make it work for people. It is a really exciting opportunity that both lenders and the residents are getting behind, and I therefore encourage them to go further with it.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Clause 9
Duty to grant planning permission etc
Matthew Pennycook
I beg to move amendment 86, in clause 9, page 5, line 42, after “permission”, insert
“to meet housing need generally including”.
This amendment would ensure that authorities give suitable development permission to housing across all tenures, including but not limited to self-build and custom housebuilding, to meet the demand for housing across all tenures in any given authority area.
As a number of my colleagues, including my hon. Friend the Member for City of Durham, said a number of times in our previous sittings, the Opposition think the Bill is a lost opportunity to secure the housing mix that we desperately need to solve our country’s housing crisis. The amendment simply seeks to explore why the new duty placed on local authorities to grant sufficient development permissions to meet the demand for self-build and custom build has not been extended to ensure that authorities are granting enough permissions to meet the demand for all other housing tenures.
We could descend into another exchange about historical figures and an attempt to apportion blame but, given that we all want to make progress, I hope we can avoid that. Instead, for the purpose of debating this amendment, I hope the Committee can agree that the housing crisis we face is longstanding, that the problem of grossly inadequate housing supply goes back three decades or more, and that addressing it will require a holistic approach.
The scale of the house building shortfall is stark. More than 200,000 new homes a year are required to keep pace with household formation, and at least 40,000 are required in London. Last year, there were just under 118,000 completions, 18,000 of which were in London. Between 1950 and 1980, when annual completion rates were consistently above 200,000, local authorities and central Government carried out substantial planning and building.
The national planning policy framework already requires that local planning authorities plan for local housing based on need. They need to take into account demand for self-build and custom build when preparing their local plans. The Government clearly believe that the existing planning requirements are not sufficient to provide the numbers of self-build and custom build homes needed to meet the housing crisis, and that a new duty is required to boost supply in that area. The amendment simply seeks to clarify why the same logic and the same type of duty do not apply to other housing tenures.
Amendment 86 would require local authorities to give suitable development permission to meet housing need generally, including, but not limited to, self-build and custom build. It would send a clear signal to all those desperate for a decent, affordable home and those who are concerned that the Bill neglects a number of housing tenures, that the Government are genuinely committed to meeting need across all tenures and are happy to put their intent and measures to realise it on the face of the Bill.
Mr Thomas
My hon. Friend will remember our debate on clause 8, when a spirit of consensus about the importance of housing co-operatives almost broke out. Were his amendment accepted, it would provide another opportunity for the hon. Member for South Norfolk to demonstrate his revolutionary zeal in support of housing co-operatives. It would go some way towards plugging the shortage of support for the expansion of housing co-operatives, which at all levels—finance, local authority support and builder support—has historically restricted the growth of that important but, sadly, niche part of the housing market.
Matthew Pennycook
My hon. Friend makes a very good point. The amendment simply seeks to draw the Government to put their intentions on the record. If we are going to meet the housing crisis, we require action across all tenures and a housing mix, and co-operative housing is a large part of that. Our concern—we will no doubt come back to this theme—is that the Bill addresses only specific tenures of housing and does not meet housing needs across all tenures.
Mr Thomas
I support my hon. Friend’s amendment. I want to consider the example of a military veteran who does not want to build his own home, engage with a custom house builder or be part of a housing co-operative, but is on the local authority’s register. In most cases, he is due a very long wait. Were my hon. Friend’s amendment accepted, it might give him some hope that, despite the long waiting list that is the reality for most housing authorities, there is a chance that sufficient homes will be built at a faster rate and that he might be allocated a permanent home, albeit not one of the types of tenure that we have discussed in Committee so far—a starter home, a self-build or a custom build. My hon. Friend has put forward a very helpful amendment, and I am interested to hear from the Minister how it would not help, since I assume he will oppose it. Why would the amendment not be in the interests of that military veteran wanting a permanent home, albeit using another form of tenure, for which the Minister has not demonstrated an enthusiasm?
The Chair
Mr Bacon, I apologise: I should have called you last time, but your svelte figure deceived me.
Mr Bacon
Sir Alan, I have lost so much weight, but have a lot more to go. I am afraid I do not agree that the amendment is helpful. I know we are short of time and I would not have spoken were it not for the phrase “to meet housing need”.
Three years ago I was at a conference at the QEII Centre with local authorities and people from the National Self Build Association. Several local authority leaders of different political parties were asking questions. One of them, a Conservative from a wealthy area in the south-east, was very excited because he had already managed to deliver housing, including the cost of the land, for £140,000 to £150,000 per unit. Another local authority leader, whose party I will leave you to guess, Sir Alan, but he was not a Conservative, sat there with hands folded and said he would have nothing to do with it. I chatted to him afterwards and asked why not. He said, “Because it will not help me meet housing need.”
The reason I got into this area and wrote the Self-build and Custom Housebuilding Act 2015 is because I am sick and tired of people in local authorities saying they know more about housing need than the people who need housing. That is why it has to change. With respect, I do not think the amendment helps that process. When I want advice on how revolutionary I am, I will certainly not go to the hon. Member for Harrow West. None the less, I give way.
Mr Thomas
I thought we had established consensus but now the hon. Gentleman seeks to spoil the positive atmosphere that was developing between us. People in my constituency come to see me about housing issues. I am sure they are supportive of self-build and custom house build, but they also want the local authority, housing associations or private developers to be able to provide decent homes.
The amendment does not seek to exclude self-build or custom house building; my hon. Friend the Member for Greenwich and Woolwich simply seeks to make a range of other tenures available. I counsel the hon. Member for South Norfolk that one failing of revolutionaries in the past has been blinkeredness. I hope the hon. Gentleman will not fall for that weakness on this occasion.
Mr Bacon
What the hon. Gentleman calls blinkeredness, I call focus, and this very good clause would be cluttered up by the amendment. What annoys me is this. We have heard a lot in the Bill and oral evidence about the need for housing need to be taken into account, but there is nothing to stop a local authority that wishes to do so from helping the formation, establishment and growth of a housing co-operative. If local authorities are concerned to protect housing in perpetuity, they can do so by that route, in a way that is exempt from the Bill. There is nothing to stop them doing that.
I have learned two particular things, among several, while studying this area—one about land and one about finance. There is no shortage of land; there is a shortage of accessible land. There is no shortage of finance; there is a shortage of financeable propositions. If local authorities, in conjunction with their local people, were to come forward with good strong business cases for grounding and growing housing co-operatives there would be no shortage of financiers willing to come forward to help finance those propositions. The problem is there has been a shortage—
Brandon Lewis
The amendment is aimed at ensuring that authorities give suitable development permission to housing across all tenures, not just custom build. We heard earlier what that does for a military veteran who is not interested in custom build. I would say a couple of things to that military veteran.
First, they should think about self-build and custom build under these new provisions. I visited a company called Beattie Passive in the constituency of my hon. Friend the Member for South Norfolk, which can develop and help somebody like that learn how to build their own home and deliver it for about £30,000, making it a very affordable proposition.
We come back to the debate we had, in part, on Thursday. Members should read this part of the Bill not as the entire solution to what we want to do to get house building back to where it should be after we inherited an awful legacy, but as part of the work we are doing. The Bill is part of the work and this clause is just part of that. In the same way, starter homes are part of the solution, as is custom build. It builds on the fact that we have exceeded our target for affordable house building over the past four or five years and we are now in the process of the new scheme to deliver 275,000 affordable homes. That is the fastest rate in more than two decades and, of course, in terms of council housing we, as a Conservative-led Government, have a strong record of delivering more in five years than the previous Labour Government did in 13. I am extremely keen that we continue to press ahead with further reforms to the planning system to drive up housing supply.
Through the national planning policy framework and the Localism Act we have put local plans at the heart of the system. Such plans set out a vision and a framework for the future development of the area, including where to locate new housing to meet the needs of the community, but we must be realistic about what can be achieved and when. That applies to the provision of infrastructure, and when sites might come forward for development. Linking this action to the earlier comments, I clarify for hon. Members on both sides of the Committee that we recognise that this is a new burden and, as such, money will be set aside. The process for this and the work of local authorities, not least in the 11 vanguard areas, is not complete, so I will not give specific numbers today, but I assure hon. Members that it will be sufficient to ensure that local authorities are not disadvantaged by the introduction of this policy.
Mr Thomas
The Minister has mentioned the 11 vanguard authorities a number of times and has given the example of his recent visit to Stoke. I would welcome hearing whether any of those vanguard authorities are in London. Given the scale of housing need in London, what has the experience been of the vanguard authority in London, if there is one?
Brandon Lewis
I do not think there is a vanguard authority in London, but if the hon. Gentleman is offering to put Harrow up to take this forward for London, I would be very happy to talk to him about that opportunity.
Local planning authorities are already required to meet the full, objectively assessed needs for the market for affordable housing in their area. Although that includes the demand for custom and self-build housing, many local authorities are still not proactively planning to meet the demand for custom and self-build in their area. As we want this area to double over the next few years and to deliver that through this Parliament, it is important that we drive this forward and have that focus, as my hon. Friend the Member for South Norfolk said. Placing a statutory duty on relevant authorities to commission sufficient serviced plots in line with demand will ensure that pent-up demand is also starting to be addressed. The proposed amendment would set an unrealistic expectation and burden on local planning authorities.
In addition, local planning authorities simply may not have sufficient land available to meet their need, or sufficient landowners willing and able to come forward for development within the allocated time. The proposed requirement in the national planning policy framework to have a five-year supply of deliverable land is a more effective tool. Among the vanguards, it is also interesting to see that areas of natural beauty and national parks were coming forward wanting to play their part. Even in areas where land can be challenging, we have vanguards wanting to do their bit. The Bill is intended to ensure that there is more permissioned serviced land available which is suitable for self-build and custom house building.
As we have heard, the numbers are still low. Custom build still only constitutes around 10% of all housing, and there are considerable benefits in promoting this type of housing further: it will diversify the sector and encourage development on sites which are too small to be of interest to the major house builders and perfectly suited, therefore, to small and medium-sized businesses around the country. It will provide business for the smaller builders and developers who are happy to offer those bespoke properties. Our ambition is to double the figure to 20%. Our proposals seek to embed custom build as a legitimate form of housing supply, as part of the wider housing mix, while still keeping expectations at a manageable scale compared with 100% of housing need. So I ask the hon. Member for Greenwich and Woolwich to withdraw his amendment.
Matthew Pennycook
Aside from the Punch and Judy stuff over the historical record, which I had hoped we could avoid, it was very interesting to hear from the Minister.
Brandon Lewis
I appreciate the point that the hon. Gentleman made. I am very happy to progress on that basis, but when he says that he does not want to play Punch and Judy politics, that does mean that he and the other hon. Members on his side do not quote figures that simply do not give the facts of the housing market that we inherited.
Matthew Pennycook
I simply quoted the figures on how much housing need there is and how much is currently being built and completed, which, as the Minister well knows, falls far short. The hon. Member for South Norfolk raised a very interesting point. He said that powers are already available to local authorities to meet the need for self-build and custom build housing, and that there is the land and the finance.
Mr Bacon
I was not actually talking about self-build and custom build. For the record, I was saying that local authorities which wish to help in the initiation, establishment, grounding, founding and growing of a housing co-operative can do so. There is nothing in law to prevent them from doing that. That is what I was talking about.
Matthew Pennycook
The hon. Gentleman makes my point for me. There is nothing to prevent local authorities from doing this, and yet they are not. That is why the Government feel that there is a need for a stronger duty as part of the Bill. The point I sought to make in the amendment is that this also applies to lots of other tenures and types of housing where there is unmet need, and there could be benefits to promoting that type of housing through other measures. I do not think that this is an area on which we shall agree, and we shall no doubt come back to this. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 81, in clause 9, page 5, line 43, after first “the”, insert “effective”.
The amendment would ensure that the demand for self-build and custom house building arising in an authority’s area accurately reflects the number of persons in that area who are in a position to finance their self-build or custom house building project.
The Chair
With this it will be convenient to discuss the following:
Amendment 82, in clause 9, page 6, line 15, after “entries”, insert “with effective mortgage finance”.
See explanatory statement for amendment 81.
Amendment 83, in clause 11, page 7, line 32, after “eligibility”, insert “including those who have failed to demonstrate that they have obtained effective mortgage finance”.
See explanatory statement for amendment 81.
Matthew Pennycook
Finance and the financing of self-build and custom build has been mentioned a number of times in this morning’s debate. There is consensus that projects of this type can be extremely problematic to finance. Only certain lenders offer self-build mortgages, so the mortgage market in this area is limited. Despite welcome Government support and recent improvements, it is a sector that is still very much feeling the effect of the exit of many of the larger players in the wake of the credit crunch. Moreover, self-build mortgages—or stage payment mortgages as they are technically known—are not like traditional home loans. Typically, funds are released in four to six stages in arrears after each stage is complete and re-inspected, rather than as a lump sum at the beginning of the project. As a result, while a significant proportion of current self-builders do not need mortgage finance to start building because they have the equity in hand from the sale of their existing home, many still struggle with sufficient capital to move beyond the foundation stage.
If we are to see a marked uplift in self-build and custom build, as both sides of the Committee would like, we will need to remove as much risk as possible from the whole process. Opposition Members hope that clauses 8 to 11 will achieve that, if they succeed in delivering the necessary momentum that this sector needs. We also need to get more lenders entering the self-build market, and to make available more specialist finance products. We hope that the Government will continue to explore what can be done to reduce the considerable constraints that still face those interested in securing finance for this type of home.
Mr Thomas
My hon. Friend makes an important point about the need to make finance available. If I may, I will bring him back to my earlier intervention, when I said that the proposed levy on building societies that the Chancellor wants to impose risks limiting the amount of capital that building societies can lend for mortgage finance, and potentially makes it harder for those building societies to offer finance for self-build housing. It would be helpful to hear a little from the Minister about how he will address that particular problem, and whether there are any conversations going on between the Department for Communities and Local Government and the Treasury to try to offset this problem; otherwise, the Minister’s very laudable aim of an expansion of the self-build sector might be curtailed by difficulties in accessing finance.
Matthew Pennycook
My hon. Friend makes a good point. There is a specific weakness in that area, but there is also the wider problem of access to finance for self-build and custom build. To give the Government their due, they have put support in place, but it would be useful to hear what more is currently being done to ensure that more of those who want to take this route can be supported to do so. Alongside efforts to make finance more accessible, the Opposition believe that, given the burdens the Minister recognised that the new, full right-to-build duty places on local planning authorities, there is a case for ensuring that the authorities in any given authority area reflect the effective, rather than notional, demand for self and custom build. By that, we mean the number of people or groups who are in a position to fund their project past foundation stage rather than the sum total of individuals or groups who are vaguely interested in taking that route and may begin the process of exploring whether they can access the necessary finance some years down the line.
Clause 11 already provides for the entering of persons who have failed to meet particular eligibility conditions in a separate part of the register and makes it clear that further refinements to the eligibility criteria may be brought forward in regulations. However, our amendments would make it clear that those on the register who genuinely seek to build or commission their main home and have the finances to do so should be entered in a separate part.
Amendments 81, 82 and 83 would ensure that local authorities are required to provide suitable planning permission on serviced plots of land for those with a reasonable prospect of building their own home in the immediate future. It would not exclude those who are yet to demonstrate that they have obtained effective mortgage finance from the register entirely; they could still be entered in a separate part of the register to which we would expect local authorities to give reduced priority. That would ensure that local authorities, in so far as they must now respond to local demand for self and custom build in a fuller way, will respond to the effective, as opposed to notional, demand in their area for these types of homes.
Brandon Lewis
I am pretty much in complete agreement with the hon. Gentleman. In fact, the only demand on the register should be effective demand. It is important that local authorities are confident that everyone on the register for self-build and custom house building is in a position to finance their project. The amendments, however, are unnecessary because we will achieve our mutual aim of ensuring effective demand through locally set eligibility criteria for the registers. We can build on some of the work done with the 11 vanguards and how locally led is the way to go. We asked all local authorities to submit expressions of interest, so I want to put on record our thanks to the 11 who have worked with us on that over the past few months.
Mr Thomas
I appreciate that the Minister may not be able to say so at this point, but, perhaps later in our proceedings, will he say what lessons can be learnt from the 11 vanguard authorities to deal with the scale of the housing crisis in London? There is potentially quite a bit of interest in self-build and custom house building in London, but the cost of land and other factors driving the housing crisis may make it even harder for those who want to do that. It would be helpful to hear a little more on whether the lessons from the vanguard authorities are helpful in any way for the specific London element of the picture.
Brandon Lewis
Obviously, it would have been good if a London authority had wanted to play a part by being one of the vanguards, as that would have given a direct outcome. However, some of the vanguards cover areas of high value, and the experiences in areas such as Stoke, which may have lower land value but is still a city with the challenges of land in and around it, and even those such as Cherwell—and, although not part of the vanguard, some of the work being done around Bicester to make custom build more viable in specific areas—show recognition that we have put in place a £150 million loan fund to which developers can apply to service plots for self and custom building to help make that more achievable and affordable for people. Hopefully, London local authorities will want to come forward as they start to appreciate that.
Clause 11 provides for regulations that enable relevant authorities to determine their own eligibility criteria and it is intended that one part of the locally determined criteria will be a financial solvency test. I suggest that enabling local authorities to apply such a test before acceptance on the register is a more effective means of achieving effective demand than the amendment, not least because that will enable each authority to specify in detail what reassurance it thinks it needs about the financial position of people seeking to join its register in its area.
The tests will be tailored to the specific requirements of that local area and may take into account the fact that not all self and custom house builders will require mortgage finance. For this reason, I hope the hon. Member for Greenwich and Woolwich will be able to withdraw the amendment.
Mr Thomas
I was briefly provoked by the Minister’s response to my intervention. I say to him gently that it is incumbent on the Minister setting up an initiative—given the scale of the housing crisis in London—to have worked a little harder to try and get a vanguard authority in London. Why, for example, did Bromley, Bexley, Westminster or Richmond not seek to become a vanguard authority? The Minister, with his links into Conservative associations in those areas, surely could have persuaded the leaders to apply to become vanguard authorities, with all the helpful lessons for the housing crisis in London that their self-build experience might have demonstrated.
Matthew Pennycook
Just when I thought consensus had broken down, harmony seems to have reappeared. I am reassured by the Minister’s comments. I think he makes a good case for how financial solvency tests in a local authority area may be more effective than mortgages. We look forward to seeing those in due course and on that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 85, in clause 9, page 6, line 35, at end insert
“except where extant permission can be revived”.
This amendment would ensure that extant planning permissions which are revived after the start of the first base period are taken into account for the purposes of this section.
Given the time, I will be extremely brief and I hope that we can wrap up these clauses this morning. I believe the amendment is self-explanatory and I hope it is relatively uncontroversial. It is a small technical amendment that would clarify what permissions are taken into account for the purposes of clause 9, by including extant permissions that might be revived after the start of the first base period. It is, of course, entirely logical that planning permissions granted before the register has been established in any given area should not be counted as a suitable development permission under the amended Act. We wish to probe the Minister on why planning permissions that replace extant planning permissions, where the applicant is seeking to extend the time period for implementation, should not be brought within the scope of what should be counted as suitable development permission, given the contribution that such authorisations—albeit small in number and declining—could make to increasing the supply of self-build and custom build homes.
Brandon Lewis
First, I would like to reassure the Committee that under the current drafting of the legislation, land which has been granted planning permission prior to the start of the first base period but where that planning permission has now lapsed, can count towards compliance with the duty. That is part of what we are learning from the programme of vanguards. Picking up on the earlier point raised by the hon. Member for Harrow West, I would say that this was widely published at the time but it is disappointing that nobody in London came forward—neither his own authority nor the others he noted. I hope they will also learn from what has been going on. For example, the National Custom and Self Build Association is publishing a comprehensive toolkit on their website on 9 December, and hopefully all authorities, including those in London, can benefit from that.
The reason that these permissions can count towards compliance with the duty is that a person would need to submit a new application in order to extend the time limit on an extant permission in order to implement the existing permission. So an application for an extant planning permission would, if granted, be considered as a new permission, and therefore count against the number of permissions required. I hope that with that explanation the hon. Gentleman will be able to withdraw the amendment.
Matthew Pennycook
I thank the Minister for the clarification that extant applications will be counted as new permissions. A theme that has emerged from this morning that I would like the Minister to take away is that it would be useful to know much more of the detail about the experience of the vanguard authorities. He mentioned earlier that there have been 80 people on the register within the first few months, but that does not tell us the differences between those 11 vanguards, or what the experiences might be in different parts of the country with different factors at work. It would be useful for the Committee to have numbers and to have a better sense of what those vanguard authorities are doing and what the experience has been. On the basis of the Minister’s comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr Thomas
Sir Alan, I have sought a stand part debate to raise the issue of the price of land. It may seem odd, having been broadly in support of clauses 8 and 9, to suggest that we need a debate on the merits of clause 9, but I worry that, on the basis of evidence that the Opposition presented to the Lyons review, the cost of land may be a significant deterrent for many would-be self and custom house builders, and that granting permission in principle may inadvertently drive up the cost of land. That is the issue I want to persuade the Minister to mull over. In its evidence to the Lyons review, the National Custom and Self Build Association said that the cost of acquiring land was the most significant barrier to more self and custom house building, and that 50% of would-be self and custom house builders had a budget of £200,000 or less with which to fund both the construction of their home and site acquisition.
Part of my reason for being interested in whether there had been a vanguard authority in London was the huge cost of land there relative to many other parts of the UK. There may be less scope for self-builders to believe that they could build in London than in the Stokes or the Bicesters, to which the Minister referred. Thinking about the cost of land in Harrow, I struggle to believe that many self-builders could build property for under £200,000 if they have also had to acquire the land.
We know that when planning permission is given for a site, it usually drives up its value and my concern is that if permission in principle is given, even on a plot that has been designated for self-building in future, it would drive up the cost of that land and limit the number of would-be self-builders or custom house builders who might want to build on it. Surely none of us wants to see the number of would-be self-builders restricted, or for them to have to look at areas of the country other than Harrow.
This morning, we have had a pretty good debate about the benefits of self and custom building and there seems to be broad consensus on both sides of the House, and particularly in the Committee, for expansion of such building. The danger is that we have been talking about the emperor’s new clothes, and that lack of finance and professional support—I am thinking of housing co-operatives—might detract from people’s ability to crack on with building their own home or getting involved with a custom house builder. My worry is that the National Custom and Self Build Association is right in saying that the cost of land will continue to be the most significant deterrent to going forward. Are we in danger of creating an additional hurdle to the cost of acquiring land by supporting the granting of permission in principle and therefore, albeit inadvertently, driving up still further the cost of acquiring land?
I worry that we missed an opportunity in clause 8 to make clause 9 even better in terms of housing co-operatives. Our earlier debate made it clear that some would-be housing co-operatives could benefit from clauses 8 and 9. Again, I encourage the Minister to think a little further about the benefits of housing co-operatives, and about what more the Department can do to encourage local authorities to look with enthusiasm at the potential of housing co-operatives to address some of the housing need in their area.
With that in mind, I return to a point that the hon. Member for South Norfolk made almost as an aside. He said that, given the exemption from right to buy, housing co-operatives could flourish as a result of the Bill. Many co-operatives are worried about other parts of the Bill, including the reduction in rental income and what that will mean for their finance and ability to expand further, and the additional administrative costs that might be generated by pay to stay. Will the Minister comment on the impact of those aspects of the Bill on housing co-operatives? That would be helpful. I hope he will focus on whether he thinks that the granting of permission in principle for self-build housing plots will inadvertently drive up the cost of land and therefore make it even more difficult for would-be self-builders and custom house builders.
Mr Bacon
I have one concern about clause 9; I hope the Minister will be able to reassure me. Clause 9(1) will insert new section 2A into the Self-build and Custom Housebuilding Act 2015. Proposed new section 2A(6)(c) says that,
“development permission is ‘suitable’ if it is permission in respect of development that could”—
could—
“include self-build and custom housebuilding.”
I recognise that having a specific percentage in the measure would be unhelpful and impractical, because local circumstances vary so much, but it could have been drafted to say that development permission was suitable if it was permission in respect of development that included self-build and custom house building. That would be practical. I would like to hear the Minister’s thoughts on that. Perhaps he will take the matter away and consider whether we might tweak the clause at a later stage.
Brandon Lewis
I will touch on the comments of the hon. Member for Harrow West before coming to the core of the point on clause 9. We will discuss some of the issues that the hon. Gentleman raised later in our proceedings; he tempted me to touch on points that are not covered by the Bill at all, but I will not test your patience by doing so, Sir Alan. I reiterate my earlier general comments about co-operatives. They have an important part to play as part of the housing mix, but that is separate from the issue of custom house building. If co-operatives are doing self and custom house building the measures will apply to them and, I hope, will be beneficial for them.
On the comments made by my hon. Friend the Member for South Norfolk, the Bill aims to get more permissioned serviced land into the system and ready for development. Although local authorities cannot force landowners to market their plots exclusively to those on the register, guidance will encourage them to keep those on the register aware of any land suitable for self and custom house building that has been permissioned. We do not want to do anything that would hinder land becoming available for much-needed housing more generally; putting planning restrictions on land about the type of housing that may be built on that land could do that. Instead, the clause creates opportunities for those interested in self and custom house building.
I have sympathy for my hon. Friend’s point, however. I know that he is driving towards making sure that the land is put forward. I have met representatives from the National Custom and Self Build Association in the past few weeks to discuss some of the issues. I think we are getting the balance right, but I am sympathetic to his point and will look at it again.
The Self-build and Custom Housebuilding Act 2015, which my hon. Friend championed through Parliament, requires relevant authorities to hold a register of individuals who want to acquire a plot of land to build their own home in an authority’s area, and to have regard to that register when carrying out their housing, planning, regeneration and land disposal functions. Clause 9 inserts new section 2A into the Act; that will require authorities to give development permissions suitable for self and custom house building to enough serviced plots of land to at least match the demand on their register. Regulations will detail how long relevant authorities have to permission sufficient land.
The number of people who join the register in each base period will dictate the number of permissions required. The first base period starts on the day on which local authorities are required to open their register and will end the day before this clause comes into force. Subsequent base periods will run for a period of 12 months beginning immediately from the end of the previous base period. Requiring relevant authorities to permission sufficient serviced plots of land to match demand in their area will make it easier for prospective self-build and custom house builders to find suitable land. It will promote an increase in housing supply generally and provide much-needed work for smaller house builders, who were hardest-hit by the recession and for whom the recovery has been slower. That will go some way, we hope, to deal with the issue of supply and demand raised by the hon. Member for Harrow West—
The Chair
Order. It being 11.25 am, the debate is adjourned until 2 pm. I make an appeal to all Members: when I took over this Committee last week, we were moving from clause 2. We are now just about to get to clause 10. We have 145 clauses and five half sessions to go. Our job is not debate but scrutiny. The sooner we get on with that, the better. Will Members please make future questions concise, to the point and not repetitive?
Housing and Planning Bill (Seventh sitting)
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Chair
In line with this morning’s decision, Members may remove their jackets if they wish to do so. Minister, do you want to continue with your summary, or do you want others to be called?
The Minister for Housing and Planning (Brandon Lewis)
To help move things along, I am happy for the Question to be put.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I triggered this debate in order to ask the Minister to dwell on the concern that if permission is given in principle, even just for self-build designated slots, there is a risk of pushing up the price of that land—the acquisition of land is currently one of the biggest deterrents to broadening the self-build sector. The Minister gave an interesting justification for clause 9 standing part of the Bill, much of which I am sure is perfectly reasonable, but he did not answer the particular concern I raised. I would be grateful if he might dwell on that point and come back to me.
Brandon Lewis
I dealt with that issue in the long conversation we had this morning, and I made a point about the basics of supply and demand. I will go a little further to help the hon. Gentleman by saying that planning permission in principle is on land that is identified on a brownfield register or in a potential neighbourhood or local plan. The land is therefore already potentially designated for housing. The argument that planning in principle has any further effect on the value of the land is completely false.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Exemption from duty
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 10 inserts a new section into the Self-build and Custom Housebuilding Act 2015 enabling relevant authorities to apply to the Secretary of State for an exemption from the duty to grant permission for sufficient land to match demand. There are some areas where the demand for self-build and custom housebuilding may far outstrip land supply. To ensure that we continue to protect the environment and build only in a sustainable way, we must be able to exempt relevant authorities that, with the best will in the world, are simply unable to grant permission for sufficient land to meet demand.
The detail will be set out in regulations, but the intention is that where demand on the register is a significant proportion of the land available for housing, as set out in the five-year land supply, the authority may apply to the Secretary of State for an exemption. Authorities that are exempt from the duty to grant permission for serviced land to match demand must still, of course, have regard to the demands on their registers when carrying out their housing, planning, regeneration and land disposal functions.
Mr Richard Bacon (South Norfolk) (Con)
I will be brief. I fully understand the need to be able to have exemptions in some circumstances. The law will need to take account of very different circumstances in different local authorities with very different levels of land supply and demand. The City of London comes to mind as an obvious example, although there will be other intensely urban areas where this is also an issue. Can the Minister give an assurance that this will be a tight test and that not only will the requirement for authorities to have regard to their obligations still obtain, but it will be within the Secretary of State’s power under the proposed regulations to make the granting of an exemption to a local authority conditional upon it satisfying certain conditions that the Secretary of State might lay down, such as a partnership with another local authority that has more land?
This is a slightly different example, but it is relevant. The City of London sponsors an academy in the London Borough of Southwark. The City, being a very small borough, does not have enough students for a high school of that kind, but it sends some of its students to the high school on land supplied by Southwark. Does the Minister think there is room for that kind of partnership and that conditions could be imposed on local authorities before the Secretary of State agrees to make an exemption?
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I have a brief question for the Minister. Does he have any idea of how many local authorities are likely to be exempt and on what grounds? That would help us to make some sense of the clause.
Brandon Lewis
My hon. Friend the Member for South Norfolk made a good point, and we will ensure that we take his comments forward when drawing up the regulations. When an authority finds itself exempt and the regulations detail an exemption process, we will require it to demonstrate how, if an exemption is granted, it will continue to support those on its register. That could be satisfied by it working in partnership with neighbouring or nearby authorities in the way my hon. Friend outlines.
Obviously, as it is an exemption policy, I would not want to prejudge who might or might not be looking for an exemption. I appreciate that there will be challenges in some areas, as the hon. Lady pointed out, and that places such as London might struggle to meet demand for self-build, as was pointed out by the hon. Member for Harrow West, who is not in his place at the moment. That is why we have included a power for the Secretary of State to make regulations specifying the circumstances in which an authority may apply for an exemption when the time comes.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Further and consequential amendments
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 11 makes further and consequential amendments to the Self-build and Custom Housebuilding Act 2015. In particular, it creates an additional power so that regulations may provide that the relevant authorities can set their own conditions of eligibility. These are expected to be restricted to a local connection test and, as we outlined and discussed, a financial solvency test.
The clause also provides for regulations to enable the register to have two parts. The second part would apply to anyone who had applied to be registered but failed to meet specified conditions of eligibility. We expect this to be used so that anyone who fails a local area connection test when an authority has chosen to apply one must be entered in the second part of the register.
Entries in the second part of the register would not count as demand when determining the number of service plots that a relevant authority must permit. However, authorities would have to have regard to those entries when undertaking their planning, housing, regeneration and land disposal functions, ensuring that, for example, when an authority has introduced a local connection test, people can still join part of the register, allowing someone who currently lives in the area where land for development is limited also to register in nearby areas where land might be more widely available—that touches on the point my hon. Friend the Member for South Norfolk made—even when those areas have their own local connection test.
The clause also enables the Secretary of State to provide in regulations that local authorities can recover fees connected with their duty to provide sufficient suitable development permissions. Regulations may also stipulate the circumstances in which no fee is payable. For example, when making these regulations, we may consider whether it is appropriate to charge those people on the second part of the register. It is expected that these fees will be set at a level that broadly reflects the costs incurred by the authority when undertaking its duties under the 2015 Act.
Mr Bacon
I crave your indulgence, Sir Alan, for just a moment longer. I agree with the Minister. Plainly, there must be some criteria for eligibility and a sensible approach to the recovery of fees. There must indeed be a local area test and it would be sensible if a local authority could exclude people from the operative part of the register if they did not meet the local area test.
However, I seek the Minister’s assurance on a specific point. The test will be applied relatively narrowly so as not to exclude people. I referred in the oral evidence session to the Community Self Build Agency website, and I will quote from it now because it is totally relevant. It states:
“I was encouraged by the local council to apply for the CSBA Scheme, I rang them and said: ‘I am disabled, unemployed, on benefits and I know nothing of building.’ They said: ‘You fit all the criteria!’ I have never looked back.”
I would not want this exclusion and the ability to be placed on the second part of the register to exclude people who, unaided and not as part of a scheme, might not be eligible or might not meet the financial conditions but who, if they were part of a sponsored scheme, might indeed meet the conditions of eligibility.
It has been proved that the most dispossessed and downtrodden, who are told that they cannot have any hand in their own future and cannot help themselves, can do so with a bit of help, and they should not be excluded from the operative part of the register. What assurance can the Minister offer that the eligibility criteria will not be used in a way that reduces opportunity to take part in schemes where jointly the eligibility criteria could be met?
Brandon Lewis
Areas that are more generally exempt must still have regard in the register that has been carried out to general housing, planning and local disposal issues.
My hon. Friend makes a more focused point, with which I have sympathy. As we go forward and develop the regulations, local authorities will be encouraged to notify people on both parts of the register of opportunities to purchase sites suitable for self-build and custom build. That will be set out in guidance. There will be opportunities through regulation and guidance to ensure that we cover all those opportunities.
We want to ensure that custom and self-build land is available for everybody who is eligible and potentially could develop their home in that way. I will take my hon. Friend’s points on board as we go through the regulations and guidance. I hope that reassures him that we will do everything we can to ensure that everybody has the chance to take forward the revolution that he has inspired in self-build and custom house building.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Introduction to this Part
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I beg to move amendment 2, in clause 12, page 8, line 17, leave out “letting” and insert “property”.
Part 2 of the Bill contains various references to rogue landlords and letting agents. NC8 has the effect of extending the Part to property managers, whether or not they are landlords or letting agents. As a result the references to rogue landlords and letting agents need to be changed to refer to rogue landlords and “property agents”, a term that is defined by amendment 48 to mean letting agents and property managers.
The Chair
With this it will be convenient to discuss the following:
Government amendments 3, 4, 9, 12, 19, 22 and 45 to 49
Government new clause 8—Meaning of “property manager” and related expressions.
Mr Jones
It is a pleasure to serve under your chairmanship, Sir Alan, and to take the baton from my hon. Friend the Minister for Housing and Planning.
The Government value the private rented sector; it is an important part of the housing market, housing 4.4 million households in England. We want to support good landlords and agents who provide decent, well-maintained homes and avoid unnecessary further regulation on them.
Good landlords respect their tenants’ rights and comply with all the appropriate obligations and legal requirements. Good landlords will benefit from what we are doing. Standards and compliance with the law across the sector will be set on a level playing field, and good landlords will no longer face unfair competition from the rogues who ignore the law and their obligations.
A small number of landlords and agents do not properly manage their lettings or properties. They exploit their tenants and the public purse through housing benefit. They rent out substandard, overcrowded and dangerous accommodation. Those landlords and agents do not respond to legitimate complaints made by tenants. They ignore their obligations and some are prepared to accept prosecution and a fine rather than maintain properties in acceptable conditions.
As clause 12 explains, the objectives of part 2 of the Bill are threefold. It introduces new financial sanctions against rogues who break the law, by extending the rent repayment order provisions introduced by the Housing Act 2004. It also enables local authorities to identify rogues operating in the private sector in their area and place them on a database, which other local authorities in England will have access to. Finally, it provides a regime for removing the worst offenders from the sector through banning orders.
The amendments tabled by my hon. Friend the Minister for Housing and Planning are intended to make it clear that the provisions in part 2 relating to the database and banning orders apply to persons engaged in the business of property management, irrespective of whether they are also letting agents. New clause 8 explains what property management work is. Amendments 45 to 47 and 49 disengage property management from letting agency work, so that both are defined as separate and distinct activities.
Amendment 48 provides a new overarching definition of property agent, which covers both letting agents and property managers, as a person could act in the capacity of either or both. Amendments 2, 3, 4, 9, 19 and 22 are consequential on amendment 48, each replacing references in part 2 to “letting agents” with “property agents”.
Amendment 2 agreed to.
The Chair
With this it will be convenient to discuss the following:
Government amendments 13, 15, 16, 50 to 55, 34 to 39 and 42 to 44.
Government new clause 3—Offence of Breach of Banning Order.
Government new clause 4—Offences by Bodies Corporate.
Mr Jones
Continuing to rent out property in breach of a tribunal order prohibiting a person from doing so is a serious matter, which is why measures are in place in the Bill for such a breach to attract a financial civil penalty. It is also why provisions are included to enable tenants, or local authorities where housing benefit has been paid, to apply for a rent repayment order against the landlord for up to a year. We consider breaching a banning order to be serious not only because an order of the tribunal is being flouted, but because the landlord is profiting from it. Given that banning orders are made against only the worst landlords, their continuing to rent out property could put tenants’ health and safety at risk.
The Minister for Housing and Planning, my hon. Friend the Member for Great Yarmouth, has therefore tabled new clause 3, which provides that the breach of a banning order is a criminal offence and enables the prosecution of a landlord in the magistrates court. A local authority may instead impose a civil financial penalty, provided for in clause 17 as amended by amendments 15 and 16. Tenants and local authorities will still be able to apply for rent repayment orders when a landlord has committed the offence of breaching a banning order. However, new clause 3 provides that the court can impose a fine, which is not subject to a limit, on a person who is convicted of such a breach. Alternatively, or in addition, the court can sentence the person to a term of up to six months. The fact that a person can be sent to prison for letting out properties in breach of a banning order should deter anyone from doing so, and it marks a commitment shared across the House to tackle rogue landlords.
New clause 4 is intended to prevent persons escaping personal liability if the company they operate breaches a banning order. The clause provides that if the offence was committed with the consent or connivance of an officer of a company, or because of that person’s negligence, the officer can be prosecuted and punished as well as the company. An officer of a company is defined as a director or a company secretary, or someone acting in a similar capacity.
Amendments 34 to 39 and 42 to 44 make changes to the rent repayment order scheme set out in chapter 4 of part 2 because breaching a banning order is to be a criminal offence. That will mean that clauses 35 and 36, which set out special rules for repayment orders following a breach of a banning order, are no longer required. Amendments 5, 13 and 50 to 55 are all consequential on making breaching a banning order a criminal offence.
Amendment 5 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Clause 12 summarises the provisions in part 2 of the Bill. It explains that this part is about tackling rogue landlords and letting agents. The Government value the private rented sector. As I have said, it is an important part of our housing market, housing 4.4 million households in England. We want to support good landlords who provide decent, well maintained homes for people, and avoid unnecessary further regulation on them. Most private landlords provide a decent service to their tenants, but we know that there are a small number of landlords and letting agents who do not manage their lettings or properties properly, sometimes exploiting their tenants—and the public purse, through housing benefit—by renting out substandard, overcrowded and dangerous accommodation.
These landlords and letting agents often do not respond to legitimate complaints made by tenants. These are the rogues that this part applies to. We want to ensure that such rogues can be placed on a national database, so that local housing authorities in whose area they operate can identify them and their behaviours and standards can be properly monitored. We also want to ensure that the worst rogue offenders can be removed from the rental market altogether, through banning orders. Rogues who let out unsafe or unhealthy properties or engage in illegal practices such as violent entry, harassment or unlawful eviction of tenants will no longer be able to financially benefit from such activities. Part 2 extends the rent repayment order regime so that, in appropriate cases, tenants—and former tenants—can reclaim rent, and local authorities can reclaim housing benefit payments, from landlords who have engaged in those types of unacceptable activities.
The majority, good landlords, will not be affected by this part. However, they will benefit from it, since standards and compliance with the law across the sector will be set on a level playing field and good landlords who work hard for their tenants and comply with the law will cease to face unfair competition from the rogue landlords, who ignore the law and their obligations.
Teresa Pearce (Erith and Thamesmead) (Lab)
We welcome this initiative on rogue landlords. I would like to ask the Minister a question. The impact assessment talks a lot about the very small number of rogue landlords. Although they are in the minority, do we have any information about how big that small number may be? It is easy to send out surveys to landlords and get them to send them back, but it is the good landlords who complete those surveys, and the rogue or criminal landlords do not engage at all. Further, given that the private rented sector is increasing, especially in cities, do we have any information about whether the increasing amount of private rented accommodation is increasing the number of rogue landlords? As the sector increases, does it get better, or do we have no evidence on that?
Mr Jones
I thank the hon. Lady for her questions. First, she mentions the number of rogue landlords and the impact assessment. We have looked at that very carefully and consider that about 10,500 rogue landlords may be operating. This Government is firmly on the side of good landlords and tenants and we want to drive those rogue landlords out of the system. That is what the proposed clauses in this part do.
On banning orders, which I shall come to in clause 13, we expect that about 600 will be applied for to the tribunal as a result of the measures that this Bill brings.
Question put and agreed to.
Clause 12, as amended, accordingly ordered to stand part of the Bill.
Clause 13
“Banning order” and “banning order offence”
Question proposed, That clause 13 stand part of the Bill.
Mr Jones
Clause 13 explains that a banning order made by the first-tier tribunal property chamber can ban a person from being a landlord or being involved in residential letting agency or property management for two or more of those things. In relation to properties in England the reference to “person” in this part of the Bill includes a company as well as an individual. As explained in clause 15, a person can only be subject to a banning order if they have been convicted of a banning order offence. Subsection (2) provides that the Secretary of State may define banning order offences by regulation. We have not included specific offences in the Bill because we want the flexibility to add further, or remove existing offences as the new law beds in and beyond, to ensure that the offences are relevant and up to date. However, subsection (3) explains what matters may be taken into consideration when setting out in regulations what are banning order offences.
The banning order offences will all be existing offences which already have serious consequences for those who are convicted. It is envisaged that a banning order offence will include repeated offences involving breaches of health and safety requirements under the Housing Act 2004, such as a failure to comply with an improvement or overcrowding notice. It is also envisaged that a banning order offence will include unlawful eviction of tenants or violence or harassment towards them by the landlord or letting agent. A banning order may also be sought where a person has been convicted in the Crown court of a serious offence involving fraud, drugs or sexual assault that is committed in or in relation to a property that is owned or managed by the offender or which involves or was perpetrated against persons occupying such a property.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Application and notice of intended proceedings
Mr Jones
I beg to move amendment 6, in clause 14, page 9, line 12, at end insert—
“(1A) If a local housing authority in England applies for a banning order against a body corporate that has been convicted of a banning order offence, it must also apply for a banning order against any officer who has been convicted of the same offence in respect of the same conduct.”
This amendment ensures that where a local authority applies for a banning order against a company that has been convicted of an offence, it must also apply for a banning order against any officer who has been convicted of the same offence (for example, under section 251 of the Housing Act 2004).
The Chair
With this it will be convenient to discuss Government amendments 7, 8, 10, 11, 17 and 18
Mr Jones
I thank the hon. Gentleman for his question. I will come to that during my comments on these amendments.
Amendment 8 provides that the local housing authority must tell a person how long it will ask the tribunal to make a banning order for. The minimum period is six months but there is no maximum term. This will enable the person to make representations about the length of the order. The authority must take account of such representations before making an application to the tribunal.
Amendment 6 provides that where a local housing authority intends to apply for a banning order against a company, it must also apply for an order against any officer of that company who has been convicted of the same banning order offence as the company. This would prevent such individuals continuing to trade in a personal capacity in activities from which the company is barred. Because the local housing authority is required to apply for an order in those circumstances, amendment 7 provides that no notice of intended proceedings need be given to the officer. However, such notice must be given to the company. Nor does this mean that an order is automatically made against the convicted officer. It is for the tribunal to decide, in all circumstances, whether a banning order ought to be made against the individual.
Amendments 10 and 11 are related to amendment 6. They provide that a banning order can be made against the officer of the company, notwithstanding that the officer was not a residential landlord or property agent when they committed the offence. Amendment 18 closes a potential loophole in clause 21 so as to prevent a company subject to a banning order transferring property to another company where both companies have officers in common. Such a transfer would need approval from the first-tier tribunal. The measure prevents the officers of a banned landlord company from setting up another company to take over ownership of the banned company’s portfolio and continue trading under another name.
Mr Thomas
I do not understand. Why should not the tenant be able to do so as well? I get the logic of saying that the housing authority should have the prime responsibility for doing so, but why should not a tenant who is feeling particularly victimised be able to make their own approach directly? We on Opposition side of the Committee are often accused of being in favour of the big state or the nanny state. I ask the Minister gently whether he is not in danger of being accused of the same thing by not being willing to empower tenants to take their own route to seeking justice.
Mr Jones
The hon. Gentleman must understand that this Government have done an awful lot to pass power into the hands of the individual, but ultimately, in this case, there is an issue of public law protection and of ensuring that rogue landlords are held to account. We feel that the best body to do so is the local authority, which will be able to take on rogue landlords to the benefit of the tenants wronged as a result.
Amendment 6 agreed to.
Amendments made: 7, in clause 14, page 9, line 13, after “order” insert “under subsection (1)”
This amendment removes the need for a notice of intended proceedings in cases where a local housing authority is obliged to apply for a banning order because of amendment 6. It would not make sense to invite a person to make representations in a case where the authority is obliged to make an application.
8, in clause 14, page 9, line 16, after “why,” insert—
“( ) stating the length of each proposed ban,”—(Mr. Marcus Jones.)
This amendment requires the length of each proposed ban to be stated in the notice of intended proceedings that a local housing authority has to give a person before applying for a banning order.
Teresa Pearce
I beg to move amendment 104, in clause 14, page 9, line 20, at end insert
“and must make all reasonable effort to consult with any affected tenant of the person the authority is intending to proceed against.”
This amendment would require local housing authorities to consult directly with any tenants of a landlord or a letting agent when making a banning order.
We want local housing authorities to make reasonable efforts to consult tenants directly, because we understand that there may be times when for some reason they cannot contact affected tenants. We are largely supportive of the measures to tackle rogue landlords in order to ensure safety and security for tenants in the sector and to penalise criminal landlords. In its written evidence, the charity Crisis said of banning orders:
“We believe that these could help drive up standards and protect vulnerable tenants.”
For banning orders to work, they must penalise and target the criminal landlords, who bring down the name of the private rented sector and the reputation of all landlords. The Residential Landlords Association said in its written evidence that
“landlords who wilfully breach their legal obligations should face the consequences.”
We must not lose sight of the reasons for applying a banning order—to protect existing and prospective tenants from the criminality of rogue landlords. Some tenants may have been on the receiving end of the original offence and will have plenty of information on someone’s fitness to remain a landlord. Some tenants will bring the local housing authority’s attention to a landlord and will have input through their representations. Tenants should have a voice. Without one, they are just bystanders to the process. As the proposals stand, local authorities do not have to seek the views of tenants.
Mr Stewart Jackson (Peterborough) (Con)
What estimate has the hon. Lady made of the indicative costs of the proposal? As she knows, when local authorities proceed properly with selective licensing consultations under the Housing Act 2004, the cost can be prohibitive. In areas such as mine, which has a lot of people who do not speak English as their first language and a lot of transitory people domiciled in the private sector—[Interruption.] Will the hon. Member for Harrow West let me finish? In that situation, the costs were quite substantial. Has the hon. Lady given that some thought?
Teresa Pearce
I have given thought to that, which is why I talked about “reasonable effort”. The original amendment said that the local authority “must” consult. It now asks for a “reasonable effort”, which is open to interpretation. Of course, there are costs in doing things properly, but we are trying to rid the private rented sector of rogue landlords who commit criminal offences by keeping people in properties that are unfit and unsafe. There is a cost, but the cost of not doing something could be far higher for the local authority.
Are banning orders only a way to punish criminal landlords or are they a way to improve standards in the sector by working with landlords and tenants to drive out rogue landlords? It will be fundamental to the success of banning orders for tenants to be brought in on the process. Not all tenants will want to play a part in the process and that is fine. The aim behind the amendment is for local housing authorities to consult affected tenants, ensuring they have the opportunity to have their say. If tenants have been subject to wrongdoing by a landlord, they will be able to provide further and wider evidence to the local housing authority. The landlord may have been prosecuted for one offence but could have demonstrated a consistent disregard for the tenant’s security and safety. That could be factored in by the local housing authority in the first-tier tribunal. It works both ways. The local housing authority and the first-tier tribunal could factor in positive experiences from tenants, although I suspect that those cases will be few and far between. In all cases, it will allow for the local housing authority and the first-tier tribunal to build up a more coherent case for or against a banning order.
I hope the Minister looks favourably on the suggestion because it would make this section of the Bill work better. For those reasons, we are moving that the clause be amended to include a requirement for the local housing authority to consult directly with any tenants of the rogue landlord or letting agent against whom it is hoping to make a banning order.
Mr Thomas
I rise to support the amendment and to add one or two brief thoughts. What would my hon. Friend, who spoke to the amendment in a very consensual style, think about a local authority that has not rushed into taking action against landlords because, for ideological reasons, it does not think it should or because the burden of other legislation in this time of significant cutbacks is too much for it to prioritise taking action against rogue landlords? The amendment would create that additional bit of pressure to ensure that local housing authorities always think of the need to consult tenants on an annual basis about whether rogue landlords are in action and whether the authority should act on that.
Let us take South Norfolk Council as an example. Presumably whenever the hon. Member for South Norfolk sees housing authority staff, he sits down and talks with them at some length about self-build and custom house building. Presumably, given his importance and the esteem in which he is held, it requires a considerable effort by those staff to deal with his inquiries. What my hon. Friend’s amendment will do is gently rebalance perhaps the enthusiasm within South Norfolk housing authority to focus on the needs of tenants, as well as dealing with his concerns. As I alluded to, there might be an authority—a Bexley or Bromley, perhaps, in London—that is so pro-landlord that it cannot envisage rogue landlords operating in its space.
Given that the Minister is determined—it seems to me, at least—to adopt the nanny state approach and not allow tenants themselves to go to the first-tier tribunal, my hon. Friend’s amendment would at least force local authorities to consider whether there is a need to take action. In that sense, it would be a useful annual prod to get local authorities to do a bit more in this area.
Mr Jackson
The Committee will know that in his previous glittering political career the hon. Member for Harrow West did not get a chance to speak to the House that often, because he was the Opposition spokesman on international development, and he is certainly making up for it today.
We are trying to get a consensus. What we should realise is that good local housing authorities have a good network, and checks and balances, to know who the rogue landlords are. In the normal course of events, they have good relationships and good communication with tenant groups, community groups, local councillors and others, so I am reluctant to support a measure that is not permissive but overly prescriptive. I speak as someone who has a local authority currently going through selective licensing, which is absolutely exhaustive and first class—it is happening under the auspices of Peterborough City Council—and I also represent a seat that has a significant number of rather challenging tenants using the private sector lettings field. Therefore, I see at first hand that good housing enforcement officers are already getting out there, talking to tenants, identifying the rogue landlords and going after them. Making an overly prescriptive amendment to this clause is essentially superfluous and will not add to its effectiveness.
Mr Thomas
I have never associated the hon. Gentleman with the nanny state tendency in his party, so I wonder whether I might divert him from what is an interesting point to suggest that, as well as there being good housing enforcement agents in his own authority, there must surely be tenants who on occasion might have the capacity or the desire to go to the tribunal themselves and seek action against bad landlords. Why does he not support those tenants having the right to do so?
Mr Jackson
Not everyone would agree that I am part of the nanny state, but I am a social conservative rather than a social liberal.
Mr Jackson
It means that there are opportunities, under the Environmental Protection Act 1990, the Housing Act 2004 and now this legislation, for people to go through the proper procedures, which will stand up in a court of law or a tribunal, to identify, deal with and ameliorate the issues caused by rogue landlords. To conclude, I have to tell the hon. Gentleman that I do not think the amendment will add anything to the efficacy of the Bill. I support the Government’s clause as it stands.
Mr Jones
The Government agree wholeheartedly that the impact on the tenant is a key consideration when it comes to a banning order. Clause 15(3)(d) provides that, in deciding whether to make a banning order, the tribunal must consider
“the likely effect of the banning order on the person and anyone else who may be affected by the order.”
Clearly, that would include the tenant.
Clause 20 introduces schedule 3, which provides that a management order may be made in cases where a banning order has been made. That will allow the local authority to take over management of a property and could allow a tenant to continue living in a property while a banning order is in place. The local authority may, for example, wish to use that power in situations where there is a vulnerable tenant whom it does not wish to see displaced. That further protects the tenant in the event of a banning order being made and ensures that they do not suffer for further offences committed by their landlord. It is also worth noting that the tribunal can include exceptions when making a banning order, such as to allow time for a tenant to find alternative accommodation.
Teresa Pearce
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Clause 14 explains that before a local housing authority applies to the first-tier tribunal for a banning order, it must give the person against whom it proposes to make the application a notice of intended proceedings. That notice must explain that the authority proposes to make the application and why. It must invite the person to make representations about the proposal and not less than 28 days must be given for doing so. The authority must consider any representations received in deciding whether to proceed with the application. The authority cannot make the application until the notice period has expired and it has considered the representations it has received, if any.
Subsection (5) places a time limit on making an application by providing that the notice of intended proceedings cannot be given any later than six months after the person’s conviction for the banning order offence to which the notice relates.
Question put and agreed to.
Clause 14, as amended, accordingly ordered to stand part of the Bill.
Clause 15
Making a banning order
Amendments made: 9, in clause 15, page 9, line 29, leave out “letting” and insert “property”
See Member’s explanatory statement for amendment 2.
Amendment 10, in clause 15, page 9, line 30, at end insert “(but see subsection (2A))”
See Member’s explanatory statement for amendment 11.
Amendment 11, in clause 15, page 9, line 32, at end insert—
‘(2A) Where an application is made under section 14(1A) against an officer of a body corporate, the First-tier Tribunal may make a banning order against the officer even if the condition in subsection (1)(b) is not met.”
This ensures that where a body corporate commits a banning order offence and an officer commits the same offence, an order can be made against the officer even though he or she was not a residential landlord etc at the time the offence was committed (i.e. because it was the company that was the landlord etc). The amendment is related to amendment 6.
Amendment 12, in clause 15, page 9, line 39, leave out “letting” and insert “property”—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 2.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Clause 15 sets out the matters that the first-tier tribunal must have regard to in deciding whether to make to make a banning order against a person. Subsection (1) provides that the tribunal may make the order if the person has been convicted of a banning order offence and if the person was a residential landlord or letting agent at the time the offence was committed.
Subsection (2) provides that the tribunal can make the order only if the local authority has served a notice of intended proceedings on that person and considered their representations before making the application under clause 14. If the tribunal is satisfied that the preliminary requirements are met, it must then decide whether to make a banning order and, if so, what order to make. Subsection (3) sets out the matters that the tribunal must consider when reaching those decisions. It must consider the seriousness of the banning order offence of which the person has been convicted, and whether that person has any other convictions for banning order offences. The tribunal must also consider whether the person is, or has been in the past, entered on to the database of rogue landlords and letting agents. Finally, the tribunal must take account of the likely effect that such an order would have on the person who would be subject to it and anybody else who might be affected, such as the tenant.
In addition, where making the order, the tribunal may make exceptions, as I shall explain when we come to the next clause. Under clauses 16 and 20, a local housing authority can make a management order when a banning order is enforced. These measures will ensure that tenancies do not necessarily need to be brought to an end on the making of a banning order. In certain circumstances it may be appropriate for these tenancies to remain in force and to be managed effectively by the local authority.
A banning order is an extremely strong tool and its impact is far-reaching. It can prevent a landlord or letting agent from continuing to trade, and its effect would remove much-needed rental stock from the market. On the other hand, it is a necessary tool to combat those rogues who have committed serious offences and who, despite being given a chance to improve, continue to operate and to profit by providing poor quality accommodation and following bad management practices, and who put the health, safety and welfare of their tenants at risk. The Government estimate that around 600 applications for banning orders a year will be made to the first-tier tribunal. It will be for that tribunal to take into account the matters to which I have referred in subsection (3), and to decide from the circumstances of the case whether making the order is appropriate and, if so, what form the banning order should take.
Mr Thomas
I am grateful for the opportunity to come in here. After the touching and moving tribute that the hon. Member for Peterborough paid me, I feel duty-bound to intervene on this clause too. I draw the Minister’s specific focus and attention to subsection (2), which is the requirement that the banning order be made on application by a local housing authority only. I do not want to dwell on whether or not a tenant should have been allowed to do that, but perhaps I might ask the Minister to reflect on whether certain organisations other than the planning authority might have been allowed—or might still be allowed—to bring forward an argument to the tribunal for a banning order against a person. In this case a housing advice charity or a major charity such as Shelter would perhaps get access to information about very poor landlords who the local housing authority might not know about.
I am minded in moving this point to draw the Minister’s attention to a parallel situation in consumer law. Individual consumers cannot go to court when there is an allegation of price fixing of consumer products, but organisations such as Which? can do so on their behalf. I wonder whether there is a parallel here that the Minister might want to contemplate. Perhaps in a certain, narrow number of cases a designated organisation—clearly one of good repute, with expertise and experience of going to the first-tier tribunal, so that it is not clogged up with poorly thought-through cases—might be able to bring forward an argument on behalf of a group of tenants to make the case for a banning order. Perhaps individual housing authorities might not want to bring a case where a rogue landlord is operating across a series of housing authorities, whereas an organisation with a London-wide remit or a national remit might be more willing to spend the resource to gather evidence to go to the first-tier tribunal.
I absolutely see the argument that the housing authority should have the prime responsibility, but perhaps the Minister could reflect on whether a small number of additional organisations could be designated by the Secretary of State to take forward cases where there is not an obvious fit to an individual authority area and where they clearly have particular expertise.
Mr Jones
I hear what the hon. Gentleman says. The organisations that he refers to are powerful organisations in the sector and are generally listened to by the Government, local authorities and other organisations. These organisations are powerful in their own right and can make representations to local housing authorities in relation to cases that they may come across or wider issues. The organisation that he refers to can also make representations to the first-tier tribunal when it makes its deliberations. There is therefore the opportunity for those organisations to support both their members and the people whose lives they are designed and set up to make better.
Mr Thomas
What the Minister says is absolutely true. I would encourage him to dwell on this and perhaps return to the point on Report. Why will he not allow a Shelter, or the Harrow Law Centre, for example, to bring forward their own argument on occasion? They work with housing authorities on cases that the local authorities bring forward; why can they not initiate action themselves? I am bringing the Minister specifically to the cross-borough point. Why is he not willing to consider Shelter, for example?
Mr Jones
Again, I hear what the hon. Gentleman says. He is bringing me back to the point that we discussed earlier when I set out quite clearly why the Government think that local authorities are the best placed to deal with this issue.
In London there may be numerous issues across different boroughs. We have a situation where those local authorities will be able to access the database of rogue landlords and therefore be able to get the information that goes across borough. It is incumbent on those local authorities not just to work in the best interests of people renting in the private sector in their borough, but to work with adjoining boroughs and pick up on the issues that also affect tenants in the borough in question, because landlords do not just operate on administrative boundaries; they operate on a wider basis. While I hear what the hon. Gentleman says, I think that the Bill is in a good place in this regard.
Question put and agreed to.
Clause 15, as amended, accordingly ordered to stand part of the Bill.
Clause 16
Duration and effect of banning order
Teresa Pearce
I beg to move amendment 112, in clause 16, page 10, line 3, leave out “6” and insert “12”
This amendment would ensure that a banning order lasts at least 12 months.
The Chair
With this it will be convenient to discuss amendment 105, in clause 16, page 10, line 3, at end insert—
“(2A) A landlord or letting agent subject to a banning order must undertake accredited training, as approved by the local housing authority, before they are able to let a property again.”
This amendment would equip banned landlords and letting agents with the knowledge and skill to properly manage a property.
Teresa Pearce
We want to amend clause 16 in two ways. First, we want to ensure that a banning order lasts at least 12 months rather than six. Secondly, the amendment seeks to equip banned landlords with the knowledge and skill to go back into the property market once the banning order has expired.
A similar vein runs through both amendments. They are both intended to strengthen banning orders, which is a measure that we support. In their written and oral evidence, many organisations, such as the Residential Landlords Association and Crisis, discussed the need to strengthen banning orders and provide further consequences for landlords who wilfully breach their legal obligations. That is why, with amendment 112, we are seeking to amend clause 16 to ensure that a banning order lasts at least 12 months, rather than six.
Mr Jones
Amendment 105 would require landlords and letting agents who are subject to a banning order to undertake local authority-approved training before a ban is lifted. This morning, Labour Members talked at length about clauses in the Bill placing new burdens on local authorities, but we will put aside the logistical issues for the moment.
The amendment focuses on the training of landlords and property agents. I am sure that the hon. Member for Erith and Thamesmead knows that a banning order is a serious step. A local authority will not seek a banning order, and the tribunal certainly will not grant one, if the landlord or property agent was simply ill-informed about their responsibilities. An order will be granted only after considering, as set out in clause 15(3),
“the seriousness of the offence of which the person has been convicted”
and any previous convictions for a banning order offence. The problem is not that the landlord is not aware of their responsibilities, but that they have already failed to meet them. I do not believe that accredited training will help with that.
The hon. Lady asked about training. A number of organisations, including the National Landlords Association and the Association of Residential Letting Agents, provide significant training for their members. I looked on the Association of Residential Letting Agents’ website earlier and it had clear advice and guidance on how to be a good and responsible landlord.
On amendment 112, clause 16 sets out a minimum term of six months for a banning order. Banning someone from acting as a landlord or property agent is a serious step. It is right that the tribunal have considerable discretion when making a banning order including over the length of the order, so as to take into account all of the relevant circumstances. The amendment would extend that minimum period to 12 months, removing the discretion of the tribunal to make a banning order for a shorter period. This chapter on banning orders seeks to impose stronger penalties on the worst offenders. I have heard the hon. Lady’s strength of feeling and I think that is shared by many members of the Committee.
Teresa Pearce
The legislation states a minimum of six months. Is a maximum period envisaged? Would the Minister consider that in certain circumstances it would be right for the court to give a much longer banning period than six months?
Mr Jones
I hear what the hon. Lady says and I hope that she takes my comments on the minimum period in the spirit of consensus intended. I reassure her that we will look at this very carefully on Report. On her point about the maximum time for the banning order, there is no maximum; actually, the ban could be for life. I hope that reassures the hon. Lady and that she is reassured about the minimum period of a banning order. On that basis and in the spirit of the good-natured debate we have had, I hope she will consider withdrawing the amendment.
Teresa Pearce
I am pleased to hear that the banning order is a minimum period and that it could be for life. We will have to examine it as it progresses to the courts to see how effective this is. Clearly we all want the same thing, which is to improve standards and rid the sector of the people who are exploiting tenants and often exploiting housing benefit as well.
To return to amendment 105 about accredited training, the Residential Landlords Association offers accredited training to its members, but the people we are considering here would not be part of that training. They would not be interested in that training; they are just interested in taking the money. So I understand what the Minister says but we are looking at clause 16, about duration and effect of banning order—what we want for the effect of banning order is not just to take people out of the sector for a while but for them to be changed characters if they are to come back. Some training or proof that they have improved their standards would be beneficial. However, given the reassurances from the Minister, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Teresa Pearce
I beg to move amendment 103, in clause 16, page 10, line 9, at end insert—
“(5) The court may issue a rent repayment order as provided in Chapter 4 of this Part during prosecution of a landlord or letting agent for a banning order offence.
(6) The court may issue a rent repayment order as provided in Chapter 4 once prosecution of a landlord or letting agent for a housing related offence has commenced and before proceedings have concluded.”
This amendment would allow the court to issue a rent repayment order whilst prosecution for a banning order or housing related offence is underway.
The amendment would allow the court to issue a rent repayment order at the same time as prosecuting for a banning order or housing related offence. We are no doubt all aware of the pressures on court services in this country and the pressures on time and resource. Accessing court services costs money whether you are a tenant or a local housing authority and court fees and legal representation can be an unnecessary burden.
I hope the Minister will be able to outline what conversations he has had with the Secretary of State for Justice about the further pressures that will be placed on court services. Most banning orders will follow a criminal conviction, and this will provide a perfect opportunity to kill two birds with one stone. During the court procedure it could be appropriate for the court to make a decision on a rent repayment order. The current alternative, as proposed in the Bill, will be for one court case for a criminal conviction and then for the local housing authority to—[Interruption.]
The Chair
Order. Mr Thomas, it is a discourtesy to be speaking. Will you calm down? You move amendments, you speak to the debate, you raise questions and you debate a number of issues. Please calm down. I call Teresa Pearce.
Teresa Pearce
Thank you, Sir Alan. The current alternative, as proposed in the Bill, will be for one court case for the criminal conviction and then for the local housing authority to apply for a rent repayment order, requiring a whole new court case. That would lead to greater pressure not only on court time but on the time of local authorities that would have to complete the processes necessary to bring it to court. The court could have the power to provide for a rent repayment order when prosecuting a landlord or letting agent for a banning order offence and a housing-related offence.
In addition, that alternative would put further pressure on tenants, many of whom would be unable to seek redress for a rent repayment order through the financial hurdles they need to cross. In written evidence Crisis and the Housing Law Practitioners Association showed support for amendments that would give judges the power to issue a rent repayment order. Crisis noted the lack of claims made for rent repayment orders elsewhere in the sector and noted:
“Currently very few claims are made for RROs, largely because prosecutions are very low and tenants find it difficult to apply to the First Tier Tribunal to do so. Crisis would be supportive of amendments that would give judges the power to issue a RRO when they prosecute a landlord. This would help reduce costs/burdens to local authorities and tenants, who would have to make a claim to the First Tier Tribunal for a RRO following a successful prosecution.”
The Housing Law Practitioners Association suggested in written evidence that, in addition, courts
“should be given power to make a ‘banning order on conviction’. Civil restrictions flowing from criminal convictions are now a very common aspect of our law…It would provide a quick and simple route for those ‘clear’ cases where it is obvious that the landlord/agent should be banned, e.g. a conviction for unlawful eviction, violence against a tenant, fraud against the housing benefit authorities…It will also help to ensure that the residents of any local authority which is reluctant to exercise the new powers (perhaps because of budgetary constraints) receive some protection against rogue landlords”.
It is clear to Opposition Members that it would be beneficial for an amendment to allow courts to provide a rent repayment order when prosecuting for a banning order or housing-related offence. For those reasons, we would like the Minister to consider allowing courts to issue a rent repayment order at the same time as they are prosecuting.
Mr Jones
The amendment would insert a subsection that would enable the courts to make a rent repayment order against a landlord or property agent while a prosecution for a banning order offence is under way but prior to conviction.
Giving courts those powers presupposes guilt and undermines the presumption of innocence required for a fair trial. The amendment’s proposals also pose logistical challenges, in particular in the involvement of two distinct sentencing bodies. Rent repayment orders are civil sanctions issued by the first-tier tribunal and are issued on application by a local authority or the tenant. Magistrates courts deal with housing offences that are criminal. Since the magistrates courts do not deal with civil sanctions against rogue landlords and property agents, the amendment would burden them with a new and unnecessary responsibility. If the magistrates court did not convict, the court would also have wasted its time.
Mr Thomas
I understand the concern about civil and criminal law and the first-tier tribunal as opposed to the magistrates court, but if a landlord were taken to the magistrates court and convicted of poor practice towards a tenant, why could the magistrates court not refer the case to the first-tier tribunal to consider the rent repayment order? At least in that way, it would achieve the spirit of what the amendment tabled by my hon. Friend the Member for Erith and Thamesmead seeks to tease out.
Mr Jones
I hear what the hon. Gentleman says. In that regard, as he knows, the magistrates court can hear the case. If the court decides that the person who has breached the banning order is guilty, it can impose a criminal sanction against the individual or individuals involved through a fine or, as I mentioned earlier in my comments, a prison sentence. We must draw a distinction between that and a civil penalty that can be applied for in the county court. At that point, as he knows, local authorities can bring the civil action to trial and obtain a rent repayment order.
The hon. Gentleman’s point is interesting and requires further consideration. I am thinking through the matter on my feet, but it requires more careful consideration, and I am certainly willing to listen to his comments and take them away from the Committee.
Teresa Pearce
This is more of a probing amendment, so I am happy to withdraw it, but I ask the Minister to keep a close eye on the issue. We do not want the fact that some people find it difficult to access the courts to mean that they do not get the justice that they deserve. For instance, a couple of my local courts are overcrowded with cases at the moment, and people are having to wait a very long time for an inefficient service. I would not want that to get in the way of what we are trying to achieve in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider Government new clause 2—Revocation or variation of banning orders.
Mr Jones
Clause 16 provides that a banning order must specify the length of time for which the person is banned from the activity specified in the order. As we discussed earlier, the minimum term is six months. It also provides that the banning order can contain exceptions, which can be time-limited or for the duration of the order. The exceptions may apply in cases, for example, where a landlord needs time to bring existing tenancies to an end, or where a letting agent needs a grace period to wind down its activities.
New clause 2 ensures that in appropriate cases, the person subject to the banning order can have it revoked or varied where the convictions relied on to obtain the banning order have been overturned. The tribunal must revoke the banning order. If some but not all of the convictions have been overturned, or if the convictions have become spent, the tribunal may revoke the order. The tribunal will also be able to vary an order, for example to reduce the length of the banning order or make exceptions to it.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Financial penalty for breach of banning order
Amendment made: Amendment 13, in clause 17, page 10, line 13, leave out
“person has breached a banning order”
and insert
“person’s conduct amounts to an offence under section (Offence of breach of banning order)”.—(Mr Marcus Jones.)
This amendment is consequential on NC.
Mr Jones
I beg to move amendment 14, in clause 17, page 10, line 15, leave out
“that applied for the banning order”
and insert
“for the area in which the housing to which the conduct relates is situated”
This amendment changes which local housing authority may impose a financial penalty where a person breaches a banning order. At the moment the authority that originally applied for the banning order is responsible for imposing a penalty; the amendment will make the authority where the breach occurs responsible.
Amendment 14 allows a local housing authority in whose area a person is acting in breach of a banning order to apply for a civil financial penalty against the person. New clause 3 makes the breach of a banning order a criminal offence, so the imposition of a financial penalty is an alternative to prosecution, but the local authority cannot impose a civil penalty unless it is satisfied that the offence is being or has been committed.
A local housing authority cannot impose a civil penalty when the person has been convicted in court of a breach of a banning order or where a prosecution has begun in relation to the same conduct; and the prosecution may not be brought against the person who has had a civil penalty imposed against them in respect of the same conduct. Subject to a right of appeal, the financial penalty that can be imposed for a breach is at the discretion of the local housing authority subject to a maximum of £5,000.
Local housing authorities will be able to retain fines they receive as income. Under subsection (7), the Secretary of State may make regulations specifying how financial penalties recovered under the clause are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions, but we will discuss the details of how the income is to be applied with key interested bodies before making those regulations.
Schedule 1 sets out the procedures for imposing a financial penalty. The authority must serve a notice of intent on the person whom it intends to charge the penalty to. That notice must be served within six months of the authority having sufficient evidence of the breach, or, in the case of an ongoing breach, within the period of six months from when the breach last occurs.
The notice must specify the amount of penalty the authority proposes to charge, the reason for imposing the penalty, and that there is a right to make representations within 28 days. After the period for making representations has expired, the local housing authority must decide whether to impose the financial penalty and, if so, the amount. If it decides to impose a penalty, the authority must serve a final notice specifying the amount of penalty, the reason for imposing it, how it is to be paid, and by when. The final notice must also provide information about the right to appeal and the consequences of failing to pay. Payment must be made within 28 days of the service of the final notice unless there is an appeal against it.
Paragraph 10 of schedule 1 deals with appeals against a final notice. An appeal is to the first-tier tribunal and can be made against a decision to impose the penalty or against the amount and must be made within 28 days of the service of the final notice. If an appeal is made, the final notice is suspended until the tribunal makes a decision or the appeal is withdrawn. The tribunal may confirm, vary or cancel the final notice. Paragraph 11 provides that if a person fails to pay the penalty, the local authority can recover it through proceedings in the county court.
Finally, clause 17(9) enables the Secretary of State to issue guidance that local housing authorities must have regard to when imposing financial penalties for breaching banning orders.
Amendment 14 agreed to.
Amendments made: 15, in clause 17, page 10, line 17, leave out from “same” to end of line 20 and insert “conduct”
This amendment is consequential on NC3.
Teresa Pearce
I beg to move amendment 101, in clause 17, page 10, line 22, leave out
“, but must not be more than £5,000.”
This amendment would allow for an unlimited financial penalty for a breach of a banning order.
The Chair
With this it will be convenient to discuss amendment 102, in clause 17, page 10, line 22, leave out “£5,000” and insert “£20,000”
This amendment would increase the financial penalty imposed for breach of a banning order from a maximum of £5,000 to a maximum of £20,000.
Teresa Pearce
Amendments 101 and 102 go together. Clause 17 sets out the financial penalty for breach of a banning order and we are seeking, first, to remove the limit for the breach of a banning order, and, secondly, to change the maximum fine from £5,000 to £20,000. As was said earlier, we support the measures to tackle rogue landlords, to ensure security and safety for tenants and to penalise criminal landlords. We believe that banning orders should help drive up standards and protect tenants, but for banning orders to work they must penalise and target the few criminal landlords who bring down the name of the private rented sector. Those who breach a banning order deserve to be penalised appropriately.
For a criminal landlord, who may have committed a crime such as violently securing entry or harassing their occupiers, to be given a banning order and to breach it and only to face a fine of £5,000 is wrong. It is not in keeping with the spirit of this part of the Bill to tackle such rogue landlords. If a landlord has committed such an offence and gets caught letting a property in breach of that banning order, he will be fined less than he would if he got caught speeding on his way home. If a rogue landlord owns multiple properties, particularly in London, where market rates are obviously much higher, he could raise the funds to pay that fine in just a few weeks, so I believe there is no deterrent. Why was £5,000 thought to be an appropriate maximum financial penalty? By removing the upper limit, the Bill would provide a greater deterrent to those considering breaching banning orders. It would penalise further and recover extra moneys from criminal landlords, which would help drive up standards by ensuring that criminal landlords do not return to the sector.
Secondly, we are proposing to change the maximum to £20,000 from £5,000. That will create a further deterrent to criminal landlords considering breaching a banning order and will penalise those who do. As I said, if a rogue landlord owns multiple properties, particularly in London, where the market rates are high, it would not take very long at all for them to raise the money to pay £5,000. We believe that £20,000 is much more of a deterrent. The figure of £20,000 was drawn from the financial penalty for letting a licensed house in multiple occupation to more than the maximum number permitted. Therefore, we believe that there is a precedent for that level of fine. I would like to hear from the Minister why £5,000 was considered to be appropriate and what his view would be on a higher figure.
Mr Thomas
I support my hon. Friend’s amendment and I shall quote a number of examples which have received coverage. They are examples of rogue landlords and how they have been dealt with by the courts.
I draw attention to an article in the Conservative party’s newspaper of choice, The Guardian. According to that article, figures released last summer through a freedom of information case against the Ministry of Justice reveal that there were just over 2,000 convictions of rogue landlords between 2006 and 2014—that is, nicely, the last four years of a great Government and the first four years of a dismal Government for us to look at. The resulting fines in those 2,000 cases were just £3 million—less than £1,500 per conviction. One of those convicted was a man called Andreas Stavrou Antoniades, a landlord who converted a north London terrace into nine flats. He was given the maximum fine at the time, some £20,000—the equivalent of little more than two month’s rent from one property. The article goes on to say that the campaign group Generation Rent has suggested that criminal landlords rake in some £5 billion in rent a year.
The Minister has said that there are, in his estimate, some 10,500 rogue landlords. Clearly, if there is consensus on the Committee that we want action against those rogue landlords, we need housing authorities to move quickly. If they are going to take action quickly against rogue landlords, inevitably there will be a desire within housing authorities to know that the sanctions imposed on those landlords have real and significant teeth that will be a real deterrent to the often very rich individuals who benefit from very poor behaviour, and get them to change their behaviour.
At the moment, particularly in London, where rents are so expensive, we run the risk of fines just being written off as a business expense. I encourage the Minister to look with favour on my hon. Friend’s amendment, to send a much stronger and stiffer signal to stop criminal and other bad behaviour.
Mr Jones
I hear what the hon. Member for Erith and Thamesmead has said. In the spirit of co-operation, as was the case earlier, I also hear what the hon. Member for Harrow West has said, albeit he said it in a fashion that was not as subtle and conciliatory as that of the hon. Member for Erith and Thamesmead, who is on the Opposition Front Bench.
These amendments would increase the financial penalty for a breach of a banning order, either by making it unlimited or by raising the upper limit to £20,000. It is right that the breach of a banning order carries a strong penalty. This Committee has already considered Government amendments to make the breach of a banning order a criminal offence and, as we discussed earlier, a banning order—if taken to its ultimate conclusion—can end in a ban for life against a rogue landlord. However, these amendments would mean that a breach of a banning order could still result in a civil penalty as an alternative alongside the option of the criminal prosecution, which I mentioned earlier and which we discussed at greater length earlier.
I have certainly heard the strength of feeling from the Opposition Front Bench and from the hon. Member for Harrow West. We are considering this issue carefully. Obviously, we want penalties that are set high enough to ensure that they make a real difference and have the desired effect on rogue landlords. So, we hear the arguments that a limit of £5,000 may not be sufficient, and on the basis that we are willing to look at what the hon. Lady has put forward and consider it on Report, I hope Opposition Members will agree to withdraw the amendment and enable the Government to consider these points further, and the level of the penalty, before the Bill comes back on Report.
Teresa Pearce
Given what the Minister has said—I am taking him at his word—it seems that we may have some agreement here, and given that he seems to have intimated to the Committee that the Government will look at the level of the penalty and perhaps increase it, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 16, in clause 17, page 10, line 22, at end insert—
“( ) The responsible local housing authority may not impose a financial penalty in respect of any conduct amounting to an offence under section (Offence of breach of banning order) if—
(a) the person has been convicted of an offence under that section in respect of the conduct, or
(b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded.”
This amendment ensures that a person does not end up with a financial penalty as well as a conviction for the criminal offence created by NC3.—(Mr Marcus Jones.)
Mr Thomas
I beg to move amendment 94, in clause 17, page 10, line 27, leave out subsection (7).
This amendment would ensure local housing authorities would be able to retain any financial penalties recovered under Clause 17.
I hope that the Minister continues to feel in a sufficiently good mood to consider this amendment with enthusiasm. If he wanted to intervene on me very early on and say that it is indeed his intention that local housing authorities will be able to retain any financial penalties recovered under this clause, clearly I would not need to dwell any further on the case for the amendment. As he has stayed firmly in his seat, focusing on his notes, let me make the case a little further. Quite rightly, the Minister alluded to the fact that, as a result of this legislation, it would be incumbent on housing authorities to take action whenever they see a rogue landlord in action and can gather evidence of malpractice. I suggest to him and to the Committee that we have to live in the real world. In a case of declining budgets and cuts, local authorities on occasion have to make tough choices, and it may be that other parts of a housing authority’s responsibilities have to take precedent. Although some prosecutions may take place, there may be other prosecutions that might not go ahead, if additional resources are not available.
My amendment seeks to ensure that the resources that are recovered as a result of clause 17 go to the housing authority, so that they can be invested in action against rogue landlords, and so that there can be confidence that we will see progress in getting the Minister’s figure of 10,500 rogue landlords down to a better limit, more quickly. It cannot be that any of us would want to have such a large figure of rogue landlords operating, feeling that they can do so willy-nilly and that if they get taken to task by the courts, that will almost be by accident. I think the Minister said that he expected just 600 cases a year as a result of the new legislation. That suggests that it will take us a very long time before we can eliminate the full list of rogue landlords.
I give credit to the Government for wanting to bring forward legislation to deal with the issue, but I gently suggest that we need to make sure that those we are going to vest with legislative power to do more against rogue landlords have the resources available to them, so that they have the means to take action and use these powers. My humble amendment perhaps offers a small glint of light to hard-pressed housing authorities that there will be some additional resource that they might get as a result of their efforts to bring bad landlords to justice, which they can use to reinvest in taking further measures against other rogue landlords.
Mr Jones
The amendment, as drafted, would have the effect of removing the power to make regulations specifying how local authorities are to deal with fines received under this clause. I have looked at the clause put forward by the hon. Gentleman and I think there is a little confusion. He refers to “fines” within his clause, but I think he may mean civil penalties. That said, local housing authorities will be able to retain the penalties that they receive as income. Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under clause 17 are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with an authority’s private housing sector function, but we will discuss the details of how the income is to be applied with the key interested bodies before we make those regulations.
Teresa Pearce
Is the Minister saying that those penalties would be ring-fenced for the specific purpose of bringing the private rented sector up to a reasonable standard? Is that what he is intimating?
Mr Jones
We are saying that those penalties should go to the local authority. We want to consult with interested bodies, particularly the local authorities, in relation to how we make these regulations and how they work; whether we ring-fence or not and whether the money is put toward the private rented sector housing function of an authority or not.
As I have made clear, our intention is that the money that is recovered should be used. This is the basis on which we shall discuss this with interested parties: it should be used for the private rented sector housing function within the particular authority in question.
Mr Thomas
In the spirit of the Minister’s response, I see no reason to press the amendment to a vote. Consultation is a wonderful thing, but I struggle to see why the Minister needs to consult. Why can he not write it clearly into the legislation that the money recovered will go to the local authority? However, I recognise that is the Government’s intention and I welcome the clarification. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Clause 17 provides that the local housing authority that made the application for a banning order may impose a financial penalty against the person for whom it was made, if that person is in breach of the order. Subject to the right of appeal, the financial penalty that can be imposed for a breach is at the discretion of the local housing authority. As I said previously, that is subject to a maximum of £5,000. However, under subsection (4), if that breach continues for more than six months, a further penalty can be imposed in respect of each additional six-month period. This would mean, for example, that if a landlord had been granted an exception for six months, as referred to in clause 16(4), to bring existing tenancies to an end, but at the end of that period had not done so, the landlord would be subject to the first financial penalty. However, if six months later he had still not brought the tenancy to an end, he would be subject to a second financial penalty.
Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under the clause are to be dealt with, as we discussed in the debate on amendment 94. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions.
Question put and agreed to.
Clause 17, as amended, accordingly ordered to stand part of the Bill.
Schedule 1
Financial penalty for breach of banning order
Amendments made: 50, in schedule 1, page 70, line 5, leave out “for breaching a banning order” and insert “under section17”
This amendment is consequential on NC3.
Amendment 51, in schedule 1, page 70, line 10, leave out “person’s breach of the banning order” and insert “conduct to which the financial penalty relates”
This amendment is consequential on NC3.
Amendment 52, in schedule 1, page 70, line 11, leave out “in breach of the banning order” and insert “continuing to engage in the conduct”
This amendment is consequential on NC3.
Amendment 53, in schedule 1, page 70, line 11, leave out the second “breach” and insert “conduct”
This amendment is consequential on NC3.
Amendment 54, in schedule 1, page 70, line 13, leave out “breach” and insert “conduct”
This amendment is consequential on NC3.
Amendment 55, in schedule 1, page 70, line 15, leave out “breach” and insert “conduct”—(Mr Marcus Jones.)
This amendment is consequential on NC3.
Question proposed, that the schedule, as amended, be the First schedule to the Bill.
Mr Jones
Schedule 1 sets out the procedures for imposing a financial penalty. The authority must serve a notice of intent on the person to whom it intends to charge the penalty, but notice must be served within six months of the authority having sufficient evidence of the breach or, in the case of an ongoing breach, within a period of six months from when the breach last occurred.
The notice must specify the amount of the penalty the authority proposes to charge; the reason for imposing the penalty; and that there is a right to make representations within 28 days. After the period for making representations has expired, the local housing authority must decide whether to impose the financial penalty and, if so, the amount. If it decides to impose the penalty, the authority must serve a final notice specifying the amount of the penalty, the reason for imposing it, how it is to be paid and by when.
Mr Jones
The purpose of clause 21 is to prohibit a landlord who is subject to a banning order from selling, gifting, assigning or leasing residential property to a prohibited person. Subsection (1) therefore provides that no unauthorised transfer to a prohibited person of an interest or an estate in land is permitted. Subsection (3) provides that a transaction is unauthorised unless it has been approved by the first-tier tribunal. Where an unauthorised transfer has taken place, the contract would be void and unenforceable under subsection (2).
Subsections (4) and (5) explain who “prohibited persons” are. They include persons associated with the landlord, such as: a relative; a business partner of the landlord; a person associated with such a partner; or the business partner of a person associated with the landlord. “Prohibited persons” also includes a company of which the landlord or an associated person is an officer, or any other company in which the landlord or an associated person is a shareholder or has a financial interest, or, where a landlord is a body corporate, any body corporate that has an officer in common with the landlord.
As the header of this part of the Bill states, the measure is about “Anti-avoidance”. The clause is designed to prevent landlords subject to banning orders from continuing to control or influence the management of a residential property through companies or people with whom they are closely associated, but who are not themselves subject to banning orders. The legislation is not intended to prevent the person from ever being able to transfer property to a prohibited person, but they would need to satisfy the tribunal that the transfer was genuine and that there was no intention to let the property. A parent could therefore gift a house to a son or daughter who intended to occupy the property.
The Chair
What the Minister has said is slightly wrong. We are currently considering amendments 56, 57 and 58 to schedule 3.
Mr Jones
Sir Alan, I apologise to you and to the Committee.
Amendment 58 is concerned with an appeal against the second management order, where a final management order would otherwise run out before the appeal is decided. The amendment provides for the final management order to continue in force until the appeal is decided. Amendments 56 and 57 are related drafting amendments.
It may be helpful if I briefly mention what schedule 3 does. It applies in a modified form the management order provisions in part 4 of the Housing Act 2004 to properties that are subject to a banning order. Although a local authority has the power to make this new type of management order, it is not required to do so and the banned landlord and certain other interested parties, such as a joint owner and mortgagee, can appeal to the first-tier tribunal against an order.
Management orders can be used, for example, to secure that tenants whose landlords have been banned from letting property are protected during the continuance of their contractual tenancies. The orders can secure that vulnerable tenants do not need to be rehoused because their landlord has been barred from being involved in the management of the property. They also ensure that properties need not sit empty because they are subject to a banning order against the legal owner but can continue to be rented out.
There are two types of orders: interim management orders and final management orders. No local housing authority should incur additional costs because it has made a management order. Any surplus income can be retained by the authority and used for purposes that will be specified in the regulations made by the Secretary of State. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions, as the Committee has discussed.
Amendment 56 agreed to.
Amendments made: 57, in schedule 3, page 76, line 22, after “orders)” insert “is amended as follows.
‘( ) ”
This is consequential on amendment 58.
Amendment 58, in schedule 3, page 76, line 29, at end insert—
‘( ) In subsection (5), for “and” substitute “to”.
( ) After subsection (6) insert—
(6A) If—
(a) the existing order was made under section 113(3A) or (6A), and
(b) the date on which the new order comes into force in relation to the house (or part of it) following the disposal of the appeal is later than the date on which the existing order would cease to have effect apart from this subsection,
the existing order continues in force until that later date.”—(Mr Marcus Jones.)
This is designed to preserve a final management order in cases where a replacement order has been made but is in the process of being appealed.
Schedule 3, as amended, agreed to.
Clause 21
Prohibition on certain disposals
Amendments made: 17, in clause 21, page 11, line 21, leave out “a director, secretary or other” and insert “an”
This amendment leaves out unnecessary words. “Officer” is defined by clause 48 to include directors and secretaries so there is no need to mention them specifically.
Amendment 18, in clause 21, page 11, line 23, at end insert “, or
( ) in a case where the landlord is a body corporate, any body corporate that has an officer in common with the landlord.”—(Mr Marcus Jones.)
This amendment is designed to ensure that a landlord that is a company cannot transfer property to another company that has an officer in common. “Officer” is given a broad definition by clause 48.
Clause 21, as amended, ordered to stand part of the Bill.
Clause 22
Database of rogue landlords and letting agents
Amendment made: 19, in clause 22, page 11, line 34, leave out “letting” and insert “property”.—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 2.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
The clause requires the Secretary of State to create and operate a national database of rogue landlords and property agents in England. The purpose of such a database is to enable local housing authorities to identify persons who are banned from being a landlord or from being involved in residential letting agency property management for work. It can also be used to identify other landlords and property agents who have been convicted of a banning order offence but who are not currently subject to a banning order. This will enable local housing authorities to identify rogues operating in their areas so that they can monitor them and target enforcement action against them when necessary. Subsection (2) provides that local housing authorities are responsible for populating and maintaining the database. Subsection (3) requires that, in connection with that, the Secretary of State must ensure that the database can be updated and edited.
Question put and agreed to.
Clause 22, as amended, accordingly ordered to stand part of the Bill.
Clause 23
Duty to include person with banning order
Mr Jones
I beg to move amendment 20, in clause 23, page 12, line 5, leave out from “must” to end of line 6 and insert
“make an entry in the database in respect of a person if—
(a) a banning order has been made against the person following an application by the authority, and
(b) no entry was made under section 24, before the banning order was made, on the basis of a conviction for the offence to which the banning order relates.”
This amendment ensures that where a person is included in the database of rogue landlords and letting agents under clause 24, there is no conflict with the requirement to make an entry in the database if a banning order is made in respect of the same offence.
The Chair
With this it will be convenient to discuss the following:
Government amendments 21 and 23 to 33.
Government new clause 6—Removal or variation of entries made under section 24.
Government new clause 7—Requests for exercise of powers under section (Removal or variation of entries made under section 24) and appeals.
Mr Jones
Clause 23 makes it mandatory that a person against whom a banning order has been made must be entered on to the database. It is the duty of the local housing authority that made the successful application for the banning order to make the entry. Amendment 20 clarifies that a person may not be entered on to the database under this clause if they are already on it in relation to the same offence under clause 24. The effect of amendment 21 is to clarify that more than one entry in the database can be made in respect of one person, in order to deal with situations in which a person is entered on to the database for one offence but subsequently commits further offences. Once a person is entered on to the database for the first banning order offence, the details of any subsequent banning order offence can be added to the database.
Amendments 23 and 26 to 33 are consequential on amendment 21. New clause 6 sets up a process whereby a person may in certain circumstances have the entry against them removed from the database or the length of it reduced. A person’s entry must be removed if all the convictions for which they are entered on the database are overturned. The entry may be removed if some but not all of the convictions have been overturned, or if the offences have become spent. In those circumstances the local housing authority may also reduce the length of time the entry is to be maintained on the database.
New clause 7 provides that a person whose details have been entered on to the database may apply in writing to the local housing authority that made the entry for it to be removed. The person can also ask for the length of the entry to be reduced. If the local authority decides not to comply with the request in the application, it must notify the applicant in writing of the reasons for its decision and give details of how to appeal. An appeal against the local housing authority’s decision not to comply with the request goes to the first-tier tribunal, and the applicant has 21 days from receiving the decision notice to appeal, unless the tribunal exercises its discretion to allow a late appeal. The tribunal may order the local housing authority to remove or reduce the length of the period of the entry.
Amendment 20 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
The clause makes it mandatory that a person against whom a banning order has been made must be entered on to the database. It is the duty of the local housing authority that made the successful application for the banning order to make the entry. The entry must be maintained for the duration of the ban and must be removed when the person ceases to be banned.
Question put and agreed to.
Clause 23, as amended, accordingly ordered to stand part of the Bill.
Clause 24
Power to include person convicted of banning order offence
Amendments made: 21, in clause 24, page 12, line 10, leave out
“enter a person in the database”
and insert
“make an entry in the database in respect of a person”.
This amendment clarifies the drafting to ensure that it is possible to make more than one entry in the database in respect of the same person. This might occur if a person is convicted of a new banning order offence after he or she has been included in the database in respect of an earlier banning order offence. A person may have several concurrent entries although for anyone searching the database they may in practice be displayed as a single entry.
Amendment 22, in clause 24, page 12, line 13, leave out “letting” and insert “property”.
See Member’s explanatory statement for amendment 2.
Amendment 23, in clause 24, page 12, line 14, leave out
“a person may be entered”
and insert
“an entry may be made”.
This amendment is consequential on amendment 21.
Amendment 24, in clause 24, page 12, line 18, after “made” insert
“(or that period as reduced in accordance with section (Removal or variation of entries made under section 24)”
This is consequential on NC6.
Amendment 25, in clause 24, page 12, line 19, at end insert—
‘( ) Subsection (3)(a) does not prevent an entry being removed early in accordance under section (Removal or variation of entries made under section 24)”.
This is consequential on NC6.
Amendment 26, in clause 24, page 12, line 22, leave out “include a person” and insert “make an entry” —(Mr Marcus Jones.)
This amendment is consequential on amendment 21.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
The clause enables a local housing authority to make an entry in the database in respect of a person who has been convicted of a banning order offence, but only if the person was a residential landlord or property agent at the time the offence was committed. The proviso is to ensure that a person who is convicted of an offence that is in its nature a banning order offence but who was not acting as a landlord or property agent when the offence was committed cannot be placed on the database. The entry in the database must be for a fixed term and must be removed after that term has expired.
Mr Jones
The clause sets out the procedure that a local housing authority must follow before it can make an entry on the database in respect of a person under its powers to do so in clause 24. The authority must give a person whose details are proposed to be entered on the database notice of that decision, which must state the period for which it is intended that the details will be held on it. In accordance with subsection (2)(b), that cannot be less than two years.
The notice period must not be less than 21 days from when the decision notice is given. Only after that period has expired can a local authority make an entry on the database, provided that no appeal is brought against the decision. The notice itself must explain that the person has the right to appeal. If an appeal is made before the end of the notice period, the local housing authority cannot make the entry until the appeal has been decided or withdrawn.
Subsection (6) provides that no notice to make an entry on the database in respect of a person can be given later than six months after the person’s conviction for the banning order offence to which the notice relates. I commend the clause to the Committee.
Question put and agreed to.
Clause 25, as amended, accordingly ordered to stand part of the Bill.
Clause 26
Appeals
Amendment made: 31, in clause 26, page 13, line 7, leave out
“include the person in the database”
and insert
“make the entry in the database in respect of the person”.—(Mr Marcus Jones.)
This amendment is consequential on amendment 21.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
The clause is concerned with a person’s right to appeal against the local housing authority’s decision to make an entry in the database in respect of the person or in relation to the length of time for which the entry is to be maintained. Any such appeal must be brought before the end of the notice period in the decision notice in clause 25(2). However, under clause 26(3), the first-tier tribunal may allow longer to appeal if it is satisfied that there is a good reason for the delay.
Subsection (4) provides that a tribunal may confirm, vary or cancel the decision notice regarding entering the person on the database. If it decides to vary the decision notice, that variation will be to the length of time of the inclusion of the person on the database. I commend the clause to the Committee.
Question put and agreed to.
Clause 26, as amended, accordingly ordered to stand part of the Bill.
Clauses 27 and 28 ordered to stand part of the Bill.
The Chair
Order. A Division is taking place in the House. Members will want to go and vote, so I will suspend the Committee. I would like the break to be for 20 minutes rather than the usual 15, because I want the Opposition and Government Whips to come back in 15 minutes, and for the Front Benchers to stand by in case they are needed to liaise. I hope that is agreeable.
Mr Jones
The clause provides that a local housing authority can ask a person to provide certain information in order to decide whether to make an entry in the database in respect of that person. That information may include details of previous convictions for banning order offences committed by that person, or any banning orders that have previously been made against the person.
The clause also provides that the authority can ask for information to make and keep the entry up to date. That may include details of the properties owned, managed and let by the person, subject to the entry, and requiring information to be provided about matters such as changes of address of the person entered on to the database, their trading name or their portfolio of properties.
Mr Thomas
I welcome the clause but wonder whether it goes far enough. For example, will the power to require information to be provided for the purpose of entering somebody on the database be extended to HMRC—is it already having to provide information to make a judgment? Where a housing authority is not sure whether someone else is part of an organisation that is acting as a rogue landlord, will it be able to be subject to the same power to require information as someone who is clearly the main focus for this particular power? Will it just have to be directed at one person, or can other people be covered by it; and are a series of other public bodies going to be covered by the power to require information as well?
Mr Jones
I thank the hon. Gentleman for his questions. Before I conclude my remarks on clause 29, I will respond to them.
Subsections (3) to (5) provide that it is an offence not to comply with a request for information or to provide false or misleading information in respect of such a request. If convicted of an offence, the person is liable to be fined. The hon. Gentleman has tried to broaden this out a number of times—earlier he asked for other organisations to have involvement in this process. As I said earlier, however, this is a power for local authorities only. It is not a matter for the tax authorities and therefore HMRC would not have the information.
Mr Thomas
I understand the Minister’s point. If the housing authority has suspicions that an individual may be a rogue landlord, they might be able to make a better judgment about where a person’s income is coming from, how extensive their assets are, and so on if they could access information from HMRC. Under this clause, could the planning authority make a request of HMRC and expect HMRC to have to respond to provide that information?
Mr Jones
As I said before, the power that the hon. Gentleman refers to is only vested in local authorities; but I am aware that housing authorities can speak to organisations such as HMRC and request information, if that information enables them to further a case that they may have against a person, persons or company.
Grahame M. Morris (Easington) (Lab)
Will the Minister clarify whether it is the Government’s intention to make this information on the database available only to local authorities, or will it be available to members of the public, too?
Mr Jones
Let me put it this way: the actual banning orders made by the lower-tier tribunal will be public information, but because of data protection laws, the register of rogue landlords will only be available to local authorities on the nationwide database that I mentioned earlier. The information will also be available to the Secretary of State, but that will only be available for statistical and research purposes. The Committee will be covering this matter in more detail when we discuss a later amendment.
Mr Thomas
I am grateful to have the opportunity to speak on the stand part debate. I would not want to give the impression, Sir Alan, to you or to Conservative Members, that I oppose the clause. I think it is a worthwhile additional power. It prompts the question, though, whether housing authorities will be able to have enough access to potential sources of information about possible rogue landlords. I used the example of HMRC, but perhaps the example of the banks might be an appropriate one to offer up. The potential rogue landlord must have a bank account somewhere, so could Harrow council, wanting to exercise its powers here to crack down on any rogue landlords operating in Harrow, use this clause to go to HSBC or Lloyds Bank and say, “We have real concerns about individual X being a rogue landlord, but we need to check out what their level of income is and where that income appears to be coming from. Could you provide the following information to us?” I would have thought that that is a reasonable request from a housing authority wanting to get a grip on these 10,500 rogue landlords the Minister spoke about, some of whom, presumably, must be in each of our local authority areas. If we are really going to crack down on this and take it seriously, as I know the Minister wants to do, we have to make sure that housing authorities have all the powers they need.
If the clause does not cover the potential for a housing authority to make a reasonable request and expect that body to provide information back, the Minister might want to reflect before Report on whether the scope of the clause needs to be broadened. I think of constituents of mine who have got in touch with HMRC and have struggled to get a coherent answer back. Of course, the local housing authority can put in a request now, without any additional powers, but there is no guarantee that HMRC would reply in good time for that housing authority to make a judgment as to whether a rogue landlord is operating in their vicinity. I ask the Minister to reflect. We would expect a rogue landlord to have had some dealings with HMRC. We would certainly expect a rogue landlord to have bank accounts or to have had some history of dealing with the big banks. Why should the housing authority not be able to engage with those bodies and expect sensible, serious answers to their requests for help about named individuals?
Mr Jones
I thank the hon. Gentleman for his remarks. I do not think it is an unreasonable request that I consider his comments, particularly in relation to data sharing and HMRC. However, much of the data sharing and much of the evidence he talks about would, of course, have been obtained and presented to the first-tier tribunal when the original banning order was made. Obviously, this register is to convey that information, but I will certainly reflect on what the hon. Gentleman says before Report.
Question put and agreed to.
Clause 29, as amended, accordingly ordered to stand part of the Bill.
Clause 30
Access to database
Stephen Hammond (Wimbledon) (Con)
I beg to move amendment 79, in clause 30, page 14, line 8, after “England”, insert “and the Greater London Authority”
The amendment will allow the Mayor of London access to the database to inform and strengthen the Mayor’s London Rental Standard.
The Chair
With this it will be convenient to discuss the following:
Amendment 80, in clause 31, page 14, line 22, at end insert—
‘(3) The Greater London Authority may use information in the database for statistical or research purposes.”
See explanatory statement for amendment 79.
Government new clause 5—Power to require information.
Stephen Hammond
I shall not detain the Committee long, but these are significant and helpful amendments for the Mayor of London, in particular, and the Greater London Authority. I listened carefully to the Minister’s response to the hon. Member for Harrow West when he said that the proposals were very much for local authorities to have access to the database. These two amendments work together. I take his point that the powers are for local authorities, but I hope he will accept that in London the Greater London Authority has a strategic role, if not a direct role, in housing, in assessing the overall housing demand, and in planning. It obviously generates some of the housing supply in London, so I hope that he will consider that there is a strategic role, but more importantly, access to the database would allow the Mayor’s London rental standard to be better informed.
These two small amendments seek to do two things: to put on to the face of the Bill that the Greater London Authority should have access to the database, and to limit its powers regarding the use of that information to exactly those of the Secretary of State, which are to use it for statistical or research purposes.
Stephen Hammond
I have had various discussions about a number of amendments with the Mayor and his housing adviser, and they have indicated that they would regard these amendments as perhaps not essential but helpful, purely on the basis of better informing the London rental standard.
Mr Thomas
I rise to speak in support of the hon. Gentleman. I hesitate to destroy his career by doing so, but if it offers him any help, I will now champion his future career, so that his Whips are hopefully unable to spread doom and gloom about it.
This point about the London rental standard is important, because, good thing though it is, it does not seem to be having a huge impact. The brutal truth is that the Mayor had hoped to have 100,000 landlords registered by the end of next year. At the end of last year, as I understand it, about 15,000 were registered, at best. That does not suggest that the Mayor is on course to succeed in his aim of having 100,000 landlords or letting agents signed up, which, given the scale of the housing crisis and the importance of the private rented sector in London, is a real concern.
It is worth pointing out some statistics from Shelter, which reports that 25% of Londoners rent privately and that figure is expected to rise by 2020, when the next Labour Government will be elected, to one in three, which is all the more reason urgently to seek to drive up standards in the private rented sector. Although clause 30 is merely about access to a database, I encourage the Minister, when reflecting on the debate we have just had on clause 29, to ask his officials and organisations such as Shelter whether there might be merit in requiring other statutory bodies to support the database and to provide information to it.
Mr Thomas
I might do that on Report, now that the hon. Gentleman has encouraged me. However, hopefully in the interventions that I have made, I might have encouraged the more reasonable of the two Ministers to fight the fight within the Department and strengthen the teeth that are available to housing authorities to fight this problem. I do not know whether the hon. Member for South Norfolk, when he meets housing officials in South Norfolk Council, talks about these issues. I know that he talks to them a lot about self-build and custom build—that is excellent news—but does he go into detail about the powers that they will have under the Bill in other areas? I hope that he does, and if he has not up till now, I hope that he will in future.
I apologise to you, Sir Alan, as I think I have been led astray by the hon. Member. We are, after all, talking about London and whether the London rental standard might benefit from the amendments moved by the hon. Member for Wimbledon. I simply urge the Minister to embrace with enthusiasm the concerns expressed by colleagues on the Conservative Benches about the database.
Mr Jones
I thank my hon. Friend for Wimbledon for the amendment and for his comments. In my years in this House, I never thought it likely that my hon. Friend the Member for Wimbledon could be a comrade of the hon. Member for Harrow West, but the hon. Member seems to think that they may be compatible. I am sure my hon. Friend has his own views on that point.
Mr Jones
Let me make some progress. Amendment 79 would allow the Greater London Authority access to the database on rogue landlords. We would be happy to grant the GLA access to the data for statistical and research purposes, however we would need to ensure that access was on an anonymised basis given that the database contains information about the relevant offences of which persons have been convicted, as well as details of properties owned. The data fall within the definition of “sensitive personal data” as set out in the Data Protection Act 1998 and may only be shared with organisations where strictly necessary and where at least one of the conditions set out in schedules 2 and 3 to the Act is met.
I would like to reassure my hon. Friend—and taking into account the comments made by the hon. Member for Harrow West—that we are taking on board the points that have been made today. We will give the matter further thought and I hope on that basis my hon. Friend will withdraw the amendment.
Mr Thomas
I am grateful for the opportunity to speak again. I do not understand why the Mayor of London should be such a controversial figure for the Minister not to want to share information. I appreciate there needs to be a bit of thought, and I appreciate that the Minister of State has been a bit grumpy today and that may be precluding the Parliamentary Under-Secretary’s room for manoeuvre. However, I hope the hon. Member for Wimbledon will be sufficiently robust in his attitude to the Minister’s answer to fight the cause for London and say that we need to make a decision now to strengthen the London rental stake.
Stephen Hammond
I think the hon. Member for Harrow West and I must have heard a different answer from my hon. Friend the Minister. I heard him say that if I could work with his officials to ensure that access to the database would be on an anonymised basis, he would bring forward on Report broadly the amendments I am proposing, but with the caveat that he wants anonymisation of the database. That would fulfil the Mayor’s purpose, because the Mayor wants access to the data for statistical and research purposes.
I am pleased to hear that the Minister has accepted the concept of the amendments. I am sure that he and I will be able to work together to bring forward some wording on Report—I am afraid I heard a slightly different conversation from the hon. Member for Harrow West. On that basis, given the Minister’s warm welcome for the concept and his warm words of reassurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Teresa Pearce
I beg to move amendment 106, in clause 30, page 14, line 9, at end insert—
‘(2) Tenants and prospective tenants may establish whether an individual is listed on the database through their local housing authority.”
This amendment gives tenants and prospective tenants the ability to check with their local housing authority whether their current or prospective landlord or letting agent is listed.
We seek to amend clause 30 to give tenants and prospective tenants the ability to check with the local housing authority whether their current or prospective landlord or letting agent is listed on the database of rogue landlords or letting agents. We believe this simple amendment will fundamentally strengthen the measures in the Bill to tackle rogue landlords and will help to safeguard tenants from criminal landlords.
The amendment would allow tenants and prospective tenants to protect themselves from the select few landlords who breach their obligations towards tenants. At present, there is no scope in the proposals for tenants or prospective tenants to establish whether their landlord is on the database. There is no protection for tenants and no way for them to identify whether the landlord is subject to a banning order or not. The amendment seeks to enable tenants and prospective tenants to make an inquiry with their local housing authority, which could be answered with a simple no. If it were established that the landlord was indeed on the database, the local authority would be aware that a criminal landlord was operating in breach of their banning order.
Grahame M. Morris
That is a very important principle. Is there not an inconsistency in the Government’s approach? For example, they publish lists of employers who pay below the minimum wage—naming and shaming them— and Ofsted reports on school performance. That information is available. Is not the problem of rogue landlords in many ways a more serious matter and should the information not be more widely available?
Teresa Pearce
I agree that the more open and transparent the database is, the better it can ensure that standards are upheld. However, I have been contacted by a number of people who wish to see the database placed online, where it can be accessible to the public. Although I understand that and support their motives, a fully open database could lead to confusion. There could be landlords with similar names, they could be wrongly targeted or avoided by tenants, and any landlords who wish to reform following a conviction may be unable to find business. We are asking not for a fully open database, but tenants should be able to approach the local authority and ask whether someone they are about to rent a property from is on that database. The answer could be a no or a yes, in which case the local authority would know that that person was breaching their banning order.
A measure such as this has been met with support in the written evidence. Crisis noted its support for amendments that would allow local authorities to “share information”, which it believed would strengthen enforcement work. It noted the difficulty in targeting rogue landlords who move their business from one area to another. By allowing for a check, the database would become a greater deterrent. What deterrent is there for rogue landlords to be listed on a hidden database? They could take advantage of tenants, who would have no idea whether they had previously been convicted of a housing offence and no way of checking. With such checks, the database will provide for greater punishment of rogue landlords who engage in criminal activity, as they will know that that will be recorded and potentially made available to the public. At present, only local housing authorities can make those checks.
With such a check, standards will increase, as rogue and criminal landlords, following conviction of a housing offence, will be less likely to return to the sector and, even if they do, they will be found out faster. Tenants will therefore have greater power against rogue landlords and, with the local housing authority, will be able to root out the worst offenders. The database will also be of greater use to local housing authorities in enforcement work.
Grahame M. Morris
It is a pleasure to serve under your chairmanship, Sir Alan. I rise in support of my hon. Friend. We welcome the creation of a database of rogue landlords that will allow local authorities to share information, but will the Minister clarify why it will not be more broadly accessible? As my hon. Friend said, the Opposition do not believe that the database should be freely available, but a prospective tenant should be able to check whether their potential landlord is a rogue landlord with criminal convictions.
There are precedents and consistency issues to consider. We are used to seeing Ofsted reports, and while concerns were raised about whether they added value, it is now generally accepted that they are a valuable tool for parents and society more broadly. The Care Quality Commission’s reports about care homes and GP services are shared not just with their commissioners. Indeed, these days even hygiene ratings in takeaways and restaurants are available for the public’s inspection. All that is available to help the public to make informed choices and question the quality of the services they receive. Therefore, there is certainly merit in allowing prospective tenants to check whether a prospective landlord or letting agent is or has been on the register, because that would help them to make an informed choice and secure decent housing. I hope the Minister will consider that.
My hon. Friend the Member for Harrow West referred to Shelter’s report, “Safe and Decent Homes”, and that organisation gave evidence to the Committee. This is a huge problem. The hon. Member for Peterborough said that only a relatively small number of landlords are rogue and criminal in their conduct.
Mr Thomas
I do not want to be seen as in any way chastising my hon. Friend, but while the hon. Member for Peterborough was indeed right to say that, proportionately, a relatively small number of landlords are rogue, the Minister alluded to a figure of, potentially, 10,500. That is by no definition a small number and suggests that there is a serious problem, although it nevertheless involves a small percentage of landlords.
Grahame M. Morris
I thank my hon. Friend for that intervention. I would not wish to argue with him, but the scale of the problem is considerable.
May I remind the Committee of Shelter’s written evidence, which indicates the scale of the problem? A third of privately rented homes do not meet the Government’s own decent homes standards and almost a fifth contain a hazard posing a serious danger to the health and safety of renters. More than six in 10 renters—61%—have experienced at least one of the following problems in their homes over the previous 12 months: damp and mould, which are hazardous to health; leaking roofs and windows; electrical hazards, which are dangerous for any renter, but in particular young children or elderly people; animal and insect infestations; and gas leaks.
The introduction of banning orders for rogue landlords is therefore important, and we should not underplay that importance. Having gone to the trouble of identifying them and their unsuitability, surely the next step is to make the information available and to ensure access to it for prospective tenants and not only local authorities, although I accept that it is possible to introduce some safeguards. Sharing the information would help to drive up standards and would benefit the majority of decent private landlords by helping them to maintain their properties. Those decent landlords need never appear on the database.
The provisions are of great importance to my constituents. I elicited no response from the Minister, but earlier I mentioned the problems we are having in east Durham in the village of Horden. Housing provider Accent recently withdrew from my constituency, and warnings were issued about the consequences at the time. Partially as a result of years of underinvestment, Accent began a process of leaving its properties empty as tenants left. We now have multiple properties, even entire streets—colliery rows such as you might be familiar with from your own area, Sir Alan—that are empty and boarded up, which itself generates huge problems. The worst fears of the community, which I raised in parliamentary questions and in a Westminster Hall debate, were of a fire sale and an influx of absentee private landlords. That is precisely what happened.
I am concerned that unless we take stronger measures and put something in the Bill, the problem that we have seen manifest in Horden in my constituency will spread to other villages, such as Blackhall, Easington Colliery and Dawdon, with similar numbers of former colliery housing. We have an opportunity to address that problem. My community put in its best efforts to establish a housing co-op—an initiative, which I support, advocated with great vigour and enthusiasm by the hon. Member for South Norfolk—but we have seen a lack of any meaningful activity, funding and support by the Homes and Communities Agency, although to be fair the Minister facilitated a meeting.
Subsequently, the properties were auctioned off on the open market and the worst fears of the community were realised. I was hoping that the Bill would offer some comfort and protection from rogue landlords to future tenants and to communities such as the one in Horden. Will the Minister go further and support the amendment of my hon. Friend the Member for Erith and Thamesmead? Even if not directly, it would allow the public access to the database, in effect naming and shaming bad landlords—in my case absentee ones—in a way that is similar to the practice for businesses that flout the minimum wage regulations.
Dr Blackman-Woods
I, too, strongly support the amendment that my hon. Friends the Members for Erith and Thamesmead and for Easington have spoken to. I want to ask the Minister some additional questions. I find it very curious that the Government have not sought to give our constituents access to the database so that they do not run the risk of taking a tenancy offered by a rogue landlord.
The Government have put forward a helpful measure. It is not the only measure needed to regulate the private rented sector, but at least it is something. Some effort will be made to create a database of rogue landlords, and that will be welcome. However, it is extraordinary that the only people with access to the database will be the local authority, because the local authority will not be the one taking on tenancies
Mr Thomas
Is the Government’s approach not indicative of the Conservative party’s nanny state tendency? Nanny knows best, so tenants should not have access to the information, but the housing authority should. It seems a classic example of the worst form of the nanny state in action.
Dr Blackman-Woods
I agree: it is a breakdown in the desire to provide people with the information they need to decide whether they are being offered a tenancy from a bona fide source. The only justification that Ministers have given is, “We cannot open this up for public scrutiny because it will breach our data protection laws,” but that is not good enough. I want to know how it would breach the Data Protection Act 1998 and why the Government have not thought of ways to get round that and give our constituents access to information that is necessary to them.
I will give another example from my constituency to point out the limitations of clause 30. Durham County Council might carry out an investigation and decide to put a landlord in West Rainton on to the database of rogue landlords, perhaps while working up a case for a banning order. Meanwhile, the said rogue landlord could cross the road from West Rainton into East Rainton, moving from the Durham County Council area to the Sunderland City Council area. Without giving tenants an opportunity to ask Sunderland whether the landlord was on the database, it might never check. It might not be aware that Durham County Council was about to put out a banning order.
In the meantime, my constituents would not be protected at all, despite the fact that the information would be available to the local authority, while my hon. Friend the Member for Sunderland Central (Julie Elliott) would not be aware of a lurking constituency problem with a rogue landlord either. Indeed, her constituents could not know there was a problem. That seems to be a major weakness of clause 30, which is why the amendment is so important.
Mr Thomas
Would not another benefit of the amendment be that Members of Parliament and their researchers and caseworkers would be able to access the information? I suspect that all members of the Committee—certainly Opposition Members—hold regular surgeries and have large numbers of people coming to them who are concerned about the private rented sector. If our staff could access information on the database, Members might be able to provide even better advice to constituents on whether to approach a housing authority to take action against a landlord or to have a direct conversation with a landlord about how a problem with a property might be sorted out.
Dr Blackman-Woods
My hon. Friend makes an excellent point. When the Minister responds, will he explain to the Committee how making this information available to Members of Parliament would be a breach of data protection, especially if we used that information very carefully and limited its use to advising potential tenants that they might be about to take on board a tenancy provided by a rogue landlord?
What the amendment is asking for—protection for our constituents and for possible tenants—seems to me a really reasonable thing. It would show the public that the Government were serious about addressing the issue of rogue landlords. I am sure that none of us would dream of accusing the Government of not being reasonable in trying to do something about the significant problem of rogue landlords, but this clause perhaps suggests that the public are not being given all the information they could have.
Without a better rationale than the one we have heard, Opposition Members will have to think carefully about whether we will agree to clause 30 standing part of the Bill. It is interesting that protecting tenants or future tenants is not on the long list in clause 31 of all the things the information is supposed to do. That is extraordinary. Why would that be left off the list of uses of information in the database? On that basis, we need to hear more from the Minister.
Mr Thomas
Were the Government not to accept the amendment, is there not a further potential problem, related to freedom of information legislation? Presumably, freedom of information legislation would cover submissions to the relevant official in the housing authority who was drawing up or was responsible for putting information into the database, so a dedicated and disciplined Member of Parliament could put in FOI requests and get access to the information anyway. Why not save us all the trouble and accept the amendment in the first place?
Dr Blackman-Woods
My hon. Friend makes another excellent suggestion. It is interesting that the Government have not thought to exempt that information from the Freedom of Information Act—at least, there is nothing in the Bill that suggests they are thinking of ensuring that information cannot be released about the database through an FOI request. That could lead to an even worse situation than the one we have outlined, where some tenants or advocates working on behalf of tenants get access to the database because they have made freedom of information requests, while other tenants or future tenants find it difficult, if not impossible, to get such access. We seem to be dealing with a situation that is not only extraordinary, but totally unfair as well.
Mr Jackson
I am interested in probing the hon. Lady’s argument. Perhaps this is a supposition, but is she saying that if, for instance, housing associations were reclassified by the Office for National Statistics as public bodies, she would therefore support the extension of the Freedom of Information Act 2000 to tenants vis-à-vis housing associations? Is that Labour party policy?
Dr Blackman-Woods
The hon. Gentleman makes an interesting point, as always. We were making a slightly different point, which was that the Government and Ministers do not seem to have made it very clear that the information on the database may not be available through a freedom of information request. Unless that is made absolutely clear, we run the risk of some tenants, future tenants, possible tenants or their advocates getting access to the database, whereas other people who do not go down the route of making a freedom of information request will not have access. To us, that seems to be rather a ridiculous and unfair situation.
We need to hear very clearly from Ministers why access to the database is being restricted to local authorities. What is it specifically in the Data Protection Act that would prevent Members of Parliament or other approved agencies—I am sure we could all come up with list of them—from having access to that information in the database? What are the reasons? Potential use of that information could be prescribed to a large extent by Ministers. During our consideration of the Bill, the Committee has heard a lot about how much information will be put into regulations. I am sure it would be possible for Ministers to come up with regulations that set out who could have access to the database and in what circumstances, what the information could be used for, how it could be passed on to third parties and what caveats would be attached to it. If the information were to be used only in prescribed circumstances, that would protect the people it concerned under data protection law.
Grahame M. Morris
Does my hon. Friend agree that the hon. Member for Peterborough has launched a bit of a red herring, or perhaps a blue one? A straightforward question deserves a straightforward answer. Is there not a basic principle, supported by the Public Accounts Committee, that we should follow the public pound? When we are talking about housing benefit in particular, is it not right that information about rogue and criminal landlords should be available?
Dr Blackman-Woods
The point my hon. Friend made in that excellent intervention is that the information should be available as quickly as possible in order to give maximum protection to potential tenants. As it stands, the Opposition are not convinced that tenants are being given that maximum protection. Our argument is a reasonable one. I can see how Ministers might be concerned about the Data Protection Act, but it would be possible to address any concerns by prescribing who can access the information, in what circumstances, and what it can be used for, with some caveats. I therefore look forward to hearing the Minister’s response to the very specific points we have raised.
Mr Thomas
I am grateful to have caught your eye, Sir Alan. I welcome the intervention by the hon. Member for Peterborough and hope we might hear a little more from him about his concerns about freedom of information and housing associations. In answer to his question, I must confess that I have not yet made my mind up, but I am tempted to say yes when I wake up in the morning and think about the activities of A2Dominion. That organisation is a housing association in my constituency that has been very slow to sort out the problems at Bannister House, where a number of its tenants and leaseholders have been suffering over the past eight years from a consistent pattern of leaks. I have written to the chief executive seeking clarity on the association’s intentions but have yet to receive a coherent answer or have the courtesy of a meeting with the relevant decision maker.
If the hon. Gentleman was proposing that, now that housing associations are part of Government for the purposes of ONS stats, freedom of information legislation should apply to them, I would be tempted by that argument. He will, I am sure, be grateful to me for tabling amendment 99, which we will come to later in our considerations. It might provide a useful opportunity to have that discussion and a chance for him to set out his views one way or t’other.
The crucial point of amendment 106 is that if, as I suspect, hon. Members on both sides of the Committee have the capacity, through their experienced staff, to apply under FOI legislation to see which people are covered by the database—albeit it is intended to be used only for research—it would surely be better for the Minister to save housing authorities some time and simply accept the amendment. I could envisage a situation in a year’s time, when the Bill has gone through, in which my hon. Friend the Member for Greenwich and Woolwich is approached one Friday in his surgery by a constituent who is worried about the quality of accommodation that he is seeking to access. My hon. Friend might be tempted to put in a freedom of information request to see whether the landlord of that accommodation had in any way come to the notice of the Greenwich housing authority.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
My hon. Friend is making a good speech. I hope the Minister will address this point, which has been made by my hon. Friends: barely a month ago the Government made great show of 113 employers. They were named and shamed—the names and addresses of their companies were listed—to highlight the enforcement action the Government were taking in that regard, and to drive behavioural change by frightening off other employers from making the same mistake. All were thoroughly investigated, as rogue landlords will be under the Bill, according to the Minister. Does my hon. Friend agree that we are struggling, and my constituents would struggle, to understand why the Data Protection Act allowed those employers to be named and shamed, but will not allow my constituents to take a look at landlords they should avoid?
Mr Thomas
That was an extremely good intervention and a further powerful point that I hope the Minister will take into account.
I can imagine the hon. Member for Peterborough seeing constituents turn up at his surgery in 2020. The next Labour Government will be introducing new housing legislation. The hon. Member for South Norfolk will have been drafted in on the housing Bill Committee for the new Opposition and he may be tempted to make a speech about self-build and custom house building. I am always excited to hear him speak, but the hon. Member for Peterborough may not be and he may use the opportunity, if he has been approached by a constituent who is worried about their landlord, to put in a request under the freedom of information legislation to see whether that landlord had in some way come to the notice of the housing authority and was therefore included in the database.
Mr Bacon
The hon. Gentleman tempts me to intervene. Under my revolutionary approach, there would not be any of this faffing around the edges. If landlords were misbehaving, the tenants would have the power to take their destiny into their own hands, remove the property from the bad landlord and form a housing co-operative. The hon. Gentleman might like to know that buildforlife.org.uk—the start of the revolution—was launched this afternoon.
Mr Thomas
I am very happy to have been the vehicle for the revelation that the hon. Gentleman has just provided. His intervention reminds me that I have not yet sent to him the membership form for the Co-op party. Perhaps I should also send him a Labour party membership form, although I do not want to fall out of order.
We were discussing whether the hon. Member for Peterborough, during one of the speeches by the hon. Member for South Norfolk, might put in a freedom of information request, and I was about to appeal to the Minister to prevent the hon. Member for Peterborough from being tempted to do so. Allow us to see that information as Members of Parliament. Allow us to help our constituents. I think of the caseworkers in my office. They are extremely experienced and effective. If they are concerned that a rogue landlord is operating in my constituency and there might be a way of teasing out confirmation of that fact through an FOI request to the local planning authority, they would be at me straightaway to suggest that I put that FOI request in. I suspect that that would be the case for all Opposition Members and even, I suspect, for one or two Government Members. I therefore say to the Minister: let us try to avoid that situation by accepting the amendment moved by my hon. Friend the Member for Erith and Thamesmead.
Dr Blackman-Woods
My hon. Friend is making a very powerful point. Does he agree that an extraordinary thing is being asked of local authorities? They would have information on their database about a rogue landlord—someone who might inflict quite a lot of damage on a tenant—yet they would be prevented by the clause from passing that information to a potential tenant, even if the potential tenant asked specific questions about the landlord. Surely that cannot be right.
Mr Thomas
As my hon. Friend the Member for Easington said, surely this is, perhaps inadvertently, an opportunity to continue to name and shame rogue landlords who are guilty of poor practice. For prospective tenants who are looking for a new home to move into, looking at a register and being able to judge whether the person who owns the place that they are about to move into is a rogue landlord is a basic defence. The hon. Member for Peterborough, I believe, wanted to hear more about the rogue landlord Andreas Stavrou Antoniades. As I said, he illegally converted a house near Finsbury Park—
Chris Philp (Croydon South) (Con)
That is the third time the hon. Gentleman has mentioned that.
Mr Thomas
The hon. Gentleman is enthusiastically welcoming me drawing the Committee’s attention in this context to why it would be relevant to the amendment. I understand that Finsbury Park is near Islington. Why should prospective tenants in Islington not be able to see whether a property they might be moving into is owned by Mr Antoniades? A further example of a rogue landlord is Leonardo Ippolito in Ayr, western Scotland, who was accused by his local council and successfully prosecuted for operating houses of horror, choosing to put profit above everything else. South Ayrshire Council banned him from operating as a landlord.
The next name will be of interest to the Minister of State. At Great Yarmouth magistrates court, Stanley John Rodgers was convicted of manslaughter and jailed for five years after two of his tenants, both teenagers, died from carbon monoxide poisoning. He was able to continue operating as a landlord, but if the Government accept my hon. Friend’s amendment, prospective tenants will be able to see whether the property they are moving into might be owned by this rogue landlord and make a judgment on whether to move in.
Zuo Jun He made more than £26,000 a year by squeezing 12 tenants into a flat above a Chinese restaurant in Watford. He was fined £30,000 plus almost £6,000 in costs after pleading guilty to overcrowding. Again, why should his name not be put on the database and, crucially and more importantly in the context of the amendment, why should prospective tenants in Watford not have the opportunity to see this gentleman’s name on the database and decide whether to take the risk of moving in?
I am sure the hon. Member for Peterborough will be delighted that I intend to mention Andrew Panayi for a second time. He is a controversial landlord who lets out 180 properties on the Caledonia Road near King’s Cross, which is definitely in the Islington area. He was ordered to pay £70,000 under the Proceeds of Crime Act 2002. Again, why should prospective tenants not be able to look at the database that is being established under clauses 30 and 31 and see, as a result of my hon. Friend’s amendment, whether they are likely to be moving into a property owned by someone judged to be a rogue landlord?
My hon. Friend’s amendment is extremely sensible and I urge the Government to accept it. If Government Members have not got the point, perhaps I should mention one more rogue landlord, or perhaps two. Katia Goremsandu was described as the UK’s worst landlord when it emerged in July that she had been convicted seven times for housing offences. Again, why should prospective tenants not have access to the information on the database to see whether they would be at risk of moving into one of her properties?
Last week, according to Reading Borough Council, Ishaq Hussein rented out a house that had no working fire alarm, no firefighting equipment or emergency lighting and inadequate fire escapes, placing tenants at risk of serious injury or death. Why should the information it holds on the database not be available to prospective tenants in Reading so that they can see whether there might be a risk of them moving into a property owned by Mr Ishak Hussein? My hon. Friend has tabled a sensible amendment and I urge the Minister to accept it.
Mr Jones
For more than three hours and in debating more than 20 clauses, the Committee has worked in a spirit of consensus, recognising that the Bill will make a significant difference to the 3.2% of people renting out property to tenants in the private rented sector whom we know as rogue landlords. Members on both sides have acknowledged the serious approach the Government have taken in the provisions. It is slightly disappointing that, in the amendment, Opposition Members seem to have cited the most extreme cases that they can find on this very important issue as reasons that the amendment should stand. As I said earlier, in the most extreme circumstances, the person or persons renting out property and being the worst type of rogue landlords will be subject to lifetime banning orders. The instances that Opposition Members mention will not come to pass because many of those people will be banned for life.
In terms of data protection, which I will come to in more depth in a moment, Opposition Members have suggested that the register of rogue landlords should be made available to Members of this House. As all Members know, we are subject to the provisions of the Data Protection Act 1998—passed into law by the Labour party—and on that basis we are not allowed to pass the personal details of our constituents to a local authority without their consent. I find it difficult to understand where they are coming from on that point. Perhaps we need to consider further the point about freedom of information made by the hon. Member for Harrow West. There are exemptions for releasing personal information in the freedom of information regime.
Mr Jones
I will make some progress first. The amendment would allow tenants and prospective tenants to access the database of rogue landlords and agents via their local authority. While this access is mediated by the local authority there are data protection issues which would have to be carefully considered before allowing such access. The database is not a list of banned landlords and agents, instead it is an enforcement tool for local authorities, enabling them to share information across boundaries efficiently and target enforcement activity. The offences that could lead to inclusion on the database vary considerably in their seriousness and in some cases may be spent before the minimum two-year period on the database has ended.
Inclusion on the database should mean that local authorities keep a close eye on a landlord’s activities, but it is not intended as a ban, and opening access to the database in that way might prevent a landlord included on the database from operating their landlord business. That would be a ban in practical terms, but without proper scrutiny provided by the tribunal, which will consider all the facts and take a decision on whether to issue a banning order. It is right that banned landlords are unable to operate a landlord business, but it is not right that anyone included on the database should be prevented from operating their business. On that basis, I hope that the hon. Lady will agree to withdraw her amendment.
The Chair
Order. The matter is debated. Mr Pennycook, you can indicate that you want to speak by standing.
Mr Thomas
On a point of order, Sir Alan. I was seeking to intervene on the Minister, and it is a courtesy for the Minister to give way to Opposition Members. I hope that through the usual channels, Sir Alan, you might gently remind the Minister of his responsibilities in that respect.
The Chair
As a Minister of long standing, albeit in the Department for International Development and others, the hon. Gentleman will know that that is a matter for the Minister himself, not the Chair. We will move on.
Teresa Pearce
Thank you, Sir Alan. The Minister misunderstands what the amendment is meant to do. We are trying to establish a way for tenants and prospective tenants—someone who is about to enter into a legal lease—to check with the local authority whether the person offering the lease is a fit and proper person. Someone could call up their local housing authority and say, “This person has offered me a lease. Are they fit and proper, or are they a banned landlord?” If the answer is no, and the landlord is not on the list, the person could proceed, or remain silent if the landlord is on the list. The only other way of giving individual tenants such protection would be to give some sort of kitemark to all landlords except those who are not fit and proper, which would be onerous.
The amendment is quite simple, but I thought long and hard before tabling it. Many people contacted me to say they wanted a public database, which I think would be a step too far, because there could be misunderstandings if there are people with similar names. That would not be right.
Matthew Pennycook
I appreciate that the Minister did not want to take an intervention, but it is important the Committee gets some clarity on this. What is different in data protection terms about the rogue employers that are named, shamed and listed by the Government? Why can the deviation or derogation from the Data Protection Act in that respect not apply in this respect, to empower tenants?
Teresa Pearce
I completely agree. We should be protecting people from engaging in a legal lease with someone who the local authority knows should not be offering that because they have been banned. We would therefore like to press the amendment to a vote.
Question put, That the amendment be made.
The Chair
Before we proceed to the stand part debate, Dr Roberta Blackman-Woods would like to raise a point of order.
Dr Blackman-Woods
On a point of order, Sir Alan. This is on the programme motion. When we had the meeting of the Programming Sub-Committee, a draft timetable was presented to us in advance of that meeting. It was firmly agreed at that Committee that it was simply advisory and that the Government were not signalling an intention to put knives into the process, and yet we are now being presented with—[Interruption.] Sorry, may I continue with my point of order? We are now being presented with a timetable that the Government are insisting that we stick to, regardless of whether that brings about good scrutiny of this legislation or not. I wish to seek clarification from you, Sir Alan, as to what status that document has, because we were led to believe that we were doing one thing, and if the Government are seeking to put knives into the process, they have to be very clear that that is what they are doing.
The Chair
That is not really a matter for the Chair. I can tell the hon. Lady that such a programme agreement, which is entered into by all parties subject to the membership of the Committee, is advisory, because ultimately, how the Committee operates is a matter for the Committee. However, when there is conflict with the rules of laying motions and amendments related to other matters that need to be heard, it gives you the opportunity to make a direct appeal elsewhere, beyond this Committee, via the normal channels, which you are aware of, to the Chairman of Ways and Means. It is not actually a matter for the Chair. The Chairman of Ways and Means may consider whether it is a valid request, whether extra time should be found, and whether the time should be amended accordingly.
Can we move on?
Brandon Lewis
Further to that point of order, Sir Alan. It is important to respond to the hon. Lady’s point of order, because it does not give a clear picture. We need to be very clear about this: we are very happy, and I am very keen, to see proper debate and scrutiny of the Bill, which is why we are happy to take the time to go through this properly. There are no knives, and, as far as I understand it, we even gave flexibility and moved on from the original agreement, as we did on Thursday—when we spent a whole session of an hour and a half discussing one line with no votes, if I remember it correctly—and I even suggested to the hon. Lady then that we would be willing to accept late amendments in order to facilitate helping the Opposition. So I think the hon. Lady is being very disingenuous, to be blunt, in making that point. It is important that we keep a good pace to make sure that we are able to stick, with flexibility, to what was agreed some time ago, bearing in mind that what was agreed was that we would work towards getting to clause 48. We are, indeed, still just on clause 30.
Dr Blackman-Woods
Further to that point of order, Sir Alan. The Minister has just emphasised my need to make a point of order. That timetable was not discussed at the Programming Sub-Committee, and nor was it agreed to. In fact, we said the opposite: we asked for it to be very clear that we were not agreeing to the timetable set out by the Government Whip. My hon. Friend the Member for Easington asked for clarification of its status, and we were told that it is advisory. We also made it very clear that we did not agree to it and we did not consider it a formal part of the business of the Programming Sub-Committee. The Government responded by saying that they were not putting down knives, which we now seem to have before us. The reason for my point of order has been clarified.
The Chair
May I confirm for clarity that it is not for the Chair but the Chairman of Ways and Means or the usual channels to determine these matters? However, if it interferes with the due process of tabling amendments, which may not be tabled in adequate time to qualify—I appreciate that the Minister made some helpful suggestions—I have a helpful suggestion. I know that, a little later in the programme, there are two or three clauses that the Government want to change. Could we get to that point and then possibly have a review? It was proposed to me in the previous break that there are difficulties with the Opposition’s seeking decisions today that might determine that amendments may need to be tabled for Thursday and beyond for discussion the following Tuesday. It might be found to be reasonable to give them time to do that, although I am not the one who makes such a decision. I do not want people outside this Committee to make decisions about it one way or the other. I suggest that we move on to the changes that the Government want to progress with, and thereafter have a review to see whether we can move forward on this issue. Does that make sense? We have to think about it while we debate clause stand part.
Clause 30 ordered to stand part of the Bill.
Clause 31
Use of information in database
Question proposed, That the clause stand part of the Bill.
Mr Thomas
I am grateful for the opportunity to speak to clause 31. Again, I want to probe the Minister’s intentions, rather than suggest that the clause should be deleted. Following the decision on clause 30, the database applies only to housing authorities in England. I want to ask two questions. First, if housing authorities in Wales, Scotland or Northern Ireland have suspicions that rogue landlords operating in their area are active in a part of England, will they be able to provide or seek information under clause 31 to help them make a judgment about the use or otherwise of their own legislation to crack down on rogue landlords in those other nations?
My second question relates to the information on the database and whether it might be used by bodies other than housing authorities. This is almost the reverse of the point I was making earlier about banks and HMRC. If a rogue landlord is operating, it is possible that their behaviour will have come to the attention of HMRC, which might want to gather information for a prosecution. Under clause 31, would any information from particular housing authorities that is on the database be available for use by HMRC and other public authorities?
Similarly, would the information be available to private sector bodies that fulfil a purpose of benefit to the community? Perhaps oddly, I mention the example of banks: would rogue banks that want to prosecute an individual, or that are worried that a rogue landlord is perpetuating a fraud against them, be able to access information in the database? I come back to a point I made earlier about freedom of information: would banks or other private sector bodies be able to use freedom of information requests to access data on the database? Under certain circumstances, I would instinctively be comfortable with other public bodies being able to access such information, particularly if they were trying to ensure that proper levels of tax were paid. In some cases, I might be comfortable with banks being able to access some of the information in certain circumstances, but in other cases I would not.
It would be helpful if the Minister could spend a little time dwelling on those two issues. Will housing authorities in the other nations of the United Kingdom be able to access information in the database in any way? There is probably merit in trying to ensure that information about our rogue landlords, who presumably operate across borders in the UK, could be shared with housing authorities in Northern Ireland, Scotland and Wales. Will other public bodies and certain private sector bodies be able to access the information in the database? I look forward to the Minister’s response.
Mr Jones
Clause 31 sets out the purposes for which the information in the database can be used. It provides that the Secretary of State may use it only for statistical and research purposes. For example, that might include using the information to help to monitor the effectiveness of the legislation and to develop Government policy for the private rented sector.
Local housing authorities may use the information only for specified purposes, including for carrying out their functions under the Housing Act 2004—for example, to identify whether a property should be licensed under that Act. The information can also be used to promote compliance with the law by persons entered on the database—for example, by providing advice or training on the law and/or best practice. It may also be used to investigate whether there is any contravention of the law by a person on the database. That could include, for example, an investigation into whether a person has breached a banning order or carried out an unlawful eviction. Such information may also be used for the purpose of taking proceedings against persons on the database for banning order offences or other contraventions of housing or landlord and tenant law. The information may also be used by local authorities for statistical or research purposes.
In response to the hon. Member for Harrow West, housing, as he knows, is a devolved issue in Scotland, Wales and Northern Ireland, but I understand where he is coming from. It is something that we could consider, but I heavily caveat that on the basis that this part of the Bill relates to England only. I will certainly take that point away with me from today’s debate.
Mr Thomas
I am grateful to the Minister. I simply give him the example of a rogue landlord operating in Gloucester, for example. Newport is not far away, so why should the landlord not operate there, too? I recognise, however, that this part of the Bill covers England only and that the EVEL provisions in our Standing Orders complicate things. I am grateful to the Minister for his response and strongly encourage him to mull over whether there is some way of providing the other nations with access to the database held by English housing authorities.
Mr Jones
I thank the hon. Gentleman for his comments. I refer him back to my comments before his intervention and will carefully consider the issue.
The hon. Gentleman mentioned examples relating to tax compliance. HMRC has its own powers to investigate when it thinks that a person has not complied with tax law, so I do not deem it necessary to take up his suggestion.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
Introduction and key definitions
Amendment made: 34, in clause 32, page 15, line 14, at end insert—
‘7 | This Act | section (Offence of breach of banning order) | breach of banning order’ |
.—(Brandon Lewis.)
In the Bill as introduced a rent repayment order is available where a person commits an offence to which Chapter 4 of Part 2 applies or breaches a banning order. NC3 makes breach of a banning order a criminal offence so it is now possible to treat it in the same way as other offences to which Chapter 4 applies. That is the purpose of this amendment and various other amendments to Chapter 4.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
Clause 32 and chapter 4 of part 2 of the Bill relate to rent repayment orders and the first-tier tribunal’s power to make such an order in certain cases. The new provisions apply in England only. A rent repayment order requires a landlord to repay money paid as rent. It is currently available in situations in which a landlord has failed to obtain a licence for housing that ought to be licensed under the Housing Act 2004. The order is obtained by application to the first-tier tribunal, which has the power to make a rent repayment order for an amount equivalent to any rent received during the period of the offence up to a maximum of 12 months’ rent.
The clause provides that a rent repayment order may be made if a landlord commits an offence to which this chapter applies, which includes the following offences: the control and management of a house in multiple occupation that is subject to licensing but is unlicensed, and the control and management of a house that is subject to selective licensing, but is unlicensed. That consolidates the existing provision under the 2004 Act and that a rent repayment order may be made in respect of offences of using violence to obtain entry to a dwelling under the Criminal Law Act 1977, illegal eviction or harassment of occupiers of a dwelling under the Protection from Eviction Act 1977, failure to comply with an improvement notice or a prohibition order issued for a dwelling under the 2004 Act, or breach of the new banning order introduced in chapter 2 of this part of the Bill.
Mr Thomas
It is delightful to have the Minister back. I hope he is feeling less grumpy than he was this morning and that he will adopt the same, more measured tone of the Under-Secretary when good and sensible points are made by Opposition Members and agree to go away and reflect on them with a view to coming back on Report with sensible amendments.
Clause 32 reads well, but I rise to make one particular point. Assuming that a housing authority goes to the first-tier tribunal to take action against a rogue landlord, a tenant may well want a rent repayment order to be issued as part of the package of action taken against that landlord. Does the Minister envisage that legal aid will be available to tenants so that they can access quality legal advice and make robust representations at the first-tier tribunal rather than rely on the good will or not of the housing authority bringing the action?
The clause could be helpful for the tenants of the 10,500 rogue landlords, but we need to ensure that tenants are properly represented and have the means to benefit from it. It would be helpful to hear from the Minister whether any discussions have taken place with the Ministry of Justice about whether tenants in such a position who want a rent repayment order to be issued might be able to secure legal aid for quality representation at the first-tier tribunal. I look forward to his response.
Brandon Lewis
We published a document in August seeking comments on a range of issues in relation to tackling rogue landlords and these clauses came out of the responses to that. Of those who responded, 88% said that we should introduce rent repayment orders when a landlord has failed to comply with the statutory notice and 85% said that we should introduce rent repayment orders for situations in which a tenant has been illegally evicted. This measure is therefore very much driven by the people who responded, including tenants,
I take on board the points that the hon. Gentleman made, though I ignored some of his remarks that do his own good humour no justice. I will have a look at those points and come back to him in the next few days.
Question put and agreed to.
Clause 32, as amended, accordingly ordered to stand part of the Bill.
Clause 33
Application for rent repayment order
Amendments made: 35, in clause 33, page 15, leave out line 24.
See Member’s explanatory statement for amendment 34.
Amendment 36, in clause 33, page 15, line 27, leave out first “breach or”.
See Member’s explanatory statement for amendment 34.
Amendment 37, in clause 33, page 15, line 27, leave out second “breach or”.
See Member’s explanatory statement for amendment 34.
Amendment 38, in clause 33, page 15, line 29, leave out “the breach occurred or”.
See Member’s explanatory statement for amendment 34.
Amendment 39, in clause 33, page 15, line 32, leave out “breach or”.—(Brandon Lewis.)
See Member’s explanatory statement for amendment 34.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
The clause enables a tenant or local housing authority to apply for a rent repayment order against a landlord who has committed an offence listed in clause 32.
Question put and agreed to.
Clause 33, as amended, accordingly ordered to stand part of the Bill.
Clause 34
Notice of intended proceedings
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
The clause specifies that, before a local housing authority applies for a rent repayment order, it must give the landlord notice of intended proceedings. That notice must inform the landlord that the local housing authority proposes to apply for a rent repayment order and explain why. It must also state the amount it seeks to recover and invite the landlord to make representations, giving them not less than 28 days’ notice.
The local housing authority must consider any representations received before deciding whether to proceed with the application. The local housing authority must wait until after the notice period has expired before applying for a rent repayment order. The notice of intended proceedings must be given within 12 months beginning on the day that the landlord breached the banning order.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clause 35
Order following breach of banning order
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 35 should not stand part of the Bill.
Question put and negatived.
Clause 35 accordingly disagreed to.
Clause 36
Amount of order under section 35
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 36 should not stand part of the Bill because, as with clause 35, the breach of a banning order is now a criminal offence, so the clause is no longer required.
Question put and negatived.
Clause 36 accordingly disagreed to.
Clause 37
Order following offence
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 37 enables a rent repayment order to be made if the first-tier tribunal is satisfied beyond reasonable doubt that a landlord has committed an offence and an application has been made under clause 33. The offences that are covered by this clause are where a landlord has not complied with an improvement notice, a prohibition notice or the licensing requirement as set out in the Housing Act 2004; and where a landlord has been found guilty of violent entry into a property or where they have unlawfully evicted a tenant. The amount of rent to be repaid will be determined in accordance with clause 38 if a tenant makes the application, with clause 39 if the application is made by the local housing authority, or with clause 40 if the landlord has been convicted.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Amount of order under section 37: tenants
Amendment made: 42, in clause 38, page 17, line 23, leave out “or 6” and insert “, 6 or 7”—(Brandon Lewis.)
See Member’s explanatory statement for amendment 34.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
Clause 38 specifies the amount of rent to be repaid following a decision by the first-tier tribunal to make a rent repayment order in favour of the tenant. Where the grounds for the order are that a landlord has effected a violent entry to a property or has illegally evicted or harassed the tenant, the amount must relate to rent paid by the tenant in respect of the period of 12 months ending with the date of the offence. Where a landlord has not complied with an improvement notice, a prohibition notice or licensing requirements, or where they have breached a banning order, the amount must relate to a period not exceeding 12 months during which the landlord was committing the offence.
The amount of rent that the landlord may be required to repay must not exceed the rent paid in respect of that period, less any relevant award of universal credit or housing benefit paid in respect of rent under the tenancy during that period. In determining the amount to be repaid, the tribunal must, in particular, take into account the conduct of the landlord—and, indeed, of the tenant—the financial circumstances of the landlord and whether they have, at any time, been convicted of an offence to which this chapter applies.
Question put and agreed to.
Clause 38, as amended, accordingly ordered to stand part of the Bill.
Clause 39
Amount of order under section 37: local housing authorities
Amendment made: 43, in clause 39, page 18, line 8, leave out “or 6” and insert “, 6 or 7”—(Brandon Lewis.)
See Member’s explanatory statement for amendment 34.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
Clause 39 specifies the amount of rent to be repaid following a decision of the first-tier tribunal to make a rent repayment order in favour of a local housing authority. The grounds I outlined in clause 38 apply all the way through.
Question put and agreed to.
Clause 39, as amended, accordingly ordered to stand part of the Bill.
Clause 40
Amount of order following conviction
Amendment made: 44, in clause 40, page 18, line 30, leave out “or 4” and insert “, 4 or 7” —(Brandon Lewis.)
See Member’s explanatory statement for amendment 34.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
The clause specifies that the amount to be repaid to a tenant or local housing authority is to be the maximum that the first-tier tribunal has power to order in certain circumstances. Those circumstances are, first, that the order is made against a landlord who has been convicted by a court of an offence to which the chapter applies, or who has received a civil penalty in respect of the offence, and that the period of appeal against the penalty has expired or any appeal has been finally determined or withdrawn.
Secondly, the maximum will be payable when the order is made in favour of a local housing authority in respect of any offences to which the chapter applies. Where the order is made in favour of a tenant, however, the maximum will be obligatory only in respect of the new grounds of commission of an offence of violent entry, or of unlawful eviction or harassment, failure to comply with an improvement notice or breach of a banning order, but not in respect of a licensing offence. When the first-tier tribunal considers repayment of the full amount unreasonable because of exceptional circumstances it might not be required.
Question put and agreed to.
Clause 40, as amended, accordingly ordered to stand part of the Bill.
Clause 41
Enforcement of rent repayment orders
Teresa Pearce
I beg to move amendment 111, in clause 41, page 19, line 10, at end insert—
“, and about what extra charges the local housing authority may levy to fund investigation, enforcement, and other matters related to the operation of rent repayment orders.”
This amendment would ensure that local housing authorities are able to levy a landlord who is ordered to pay a rent repayment order, in order to fund their related activities.
The amendment is probing, so we only want some clarity from the Minister. It would enable a levy by local housing authorities to fund investigation, enforcement and other matters relating to the operation of rent repayment orders. The Bill allows the orders to be covered by the local housing authority in cases of universal credit or housing benefit, or by tenants. We welcome the provision, which seeks to ensure that tenants are not at a loss financially after their landlord commits a housing offence or if they let from a landlord in breach of a banning order. Local housing authorities, however, might have no incentive to investigate allegations.
Clauses 42 and 43 mandate authorities to consider applying for a rent repayment order and to assist tenants in applying for one, but under clause 41 the powers rest with the Secretary of State to make provision by regulation for how local housing authorities are to deal with amounts recovered under rent repayment orders. We do not know what the secondary legislation will be, so the amendment would ensure that the local housing authorities are able to levy additional moneys from a landlord who is ordered to pay a rent repayment order to fund their investigations and enforcement actions.
If rent repayment orders are to be successful operationally, local authorities need to be able to fund their work. The amendment seeks to introduce a measure that would allow them to do so. Will the Minister outline his view of how local housing authorities should use the amounts recovered and whether they are to receive a proportion of receipts to compensate them for their investigatory work? Local authorities will be expected to do a great deal, whether assisting a tenant or acting on their own behalf. There will be pressures on council staff time and resources and, should the matter go to the first-tier tribunal, there will undoubtedly be more legal costs or costs for legal advice.
Grahame M. Morris
My hon. Friend is making an important point and I am interested to hear the Minister’s response. I am thinking, once again, about some of the acute problems we have in east Durham with absentee landlords. Many of them have bought up large blocks of properties and there is difficulty in identifying who actually owns them. Given the pressures that local authorities are under, it would be useful if they were in a position to recover some of the costs.
Teresa Pearce
That is what we are probing, and I hope to hear the Minister’s view on that. Without such compensation, local authorities could be unmotivated to act. When local government finance is squeezed, it is incredibly important for local authorities to be able to undertake fully any additional work that we expect of them. We must ensure that they may take on their responsibilities.
Helen Hayes (Dulwich and West Norwood) (Lab)
Does my hon. Friend agree that if the Government do not accept the amendment it will be yet another example of their determination to ensure that their regulatory framework for rogue landlords lacks teeth? We have just heard the Government refuse to allow tenants the opportunity to use the database of rogue landlords to inform their consumer choices about whether to rent a property. By refusing to allow local authorities the ability to levy charges to cover the additional burdens associated with rent repayment orders, this will inevitably hamper their ability to undertake effective investigation and enforcement. The Government are introducing regulations that will effectively have no teeth in practice.
Teresa Pearce
I completely agree. Some local authorities will be able to do this, but some local authorities simply will not be able to do it because they do not have the funds. We have moved this probing amendment to ask the Minister whether that has been considered and how the Government intend to make the measure work if a local authority does not have the resources to carry out the work set out in the Bill.
Brandon Lewis
I am slightly surprised by some of the comments made by the hon. Member for Dulwich and West Norwood. Bear in mind that, as I think those on both sides of the Committee have agreed—it has certainly been agreed outside—there will be a fairly stringent set of measures to do what we can to crack down on rogue landlords. The hon. Member for Harrow West mentioned a situation in my constituency that I think I mentioned on Second Reading, and those are exactly the sorts of landlords we need to drive out of the system. I absolutely support anything we can do to do that. It is disappointing that Labour did not do those things in 13 years and it has taken a full Conservative Government to get to grips with the issue.
The hon. Member for Dulwich and West Norwood might also want to look back at the comments made by the Under-Secretary of State on what we will consider in order to ensure that the list is properly used and well used, allowing for the Data Protection Act issues and the fact that sometimes these are organisations that have a legitimate right to run their business. Criminal prosecutions and banning orders are still part of the process; I think the hon. Lady has forgotten some of what was debated earlier.
In response to the hon. Member for Erith and Thamesmead, other measures proposed in the Bill will allow local authorities to retain civil penalties and to receive moneys from rent repayment orders where the rent has been paid from housing benefit or universal credit. Local authorities can also recover their costs from prosecutions; we have to get the balance right so that we do not make the system disproportionate by imposing a levy on top of those other financial penalties that can be levied and held by a local authority. With that explanation, and although I have great sympathy for her ethos, I hope she will be able to withdraw her amendment.
Teresa Pearce
My concern is that different local authorities operate in very different ways. Some are resourced and some are not, and I would not want tenants in one local authority not to have the same protection as tenants in another local authority, but I accept what the Minister says. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 41 provides that an amount payable under a rent repayment order is recoverable as a debt. It further provides that such an amount payable to a local housing authority does not, when recovered by the authority, constitute an amount of housing benefit or universal credit recovered by the authority. The clause also provides that the Secretary of State may make regulations on how local authorities are to deal with the amounts so recovered, which consolidates existing provision under the Housing Act 2004 under which regulations have been made providing that recovered amounts are to be applied for purposes under the Act and that any amount remaining is to be paid to the Consolidated Fund.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clauses 42 to 46 ordered to stand part of the Bill.
Clause 47
Meaning of “letting agent” and related expressions
Amendments made: 45, in clause 47, page 21, line 1, leave out subsection (5)
See Member’s explanatory statement for NC8.
Amendment 46, in clause 47, page 21, leave out lines 11 and 12—(Brandon Lewis.)
See Member’s explanatory statement for NC8.
Question proposed, That the clause, as amended, stand part of the Bill.
Brandon Lewis
Briefly, clause 47 provides a definition of a letting agent and what letting agency work includes for the purpose of part 2 of the Bill.
Question put and agreed to.
Clause 47, as amended, accordingly ordered to stand part of the Bill.
Clause 48
General interpretation of Part
Amendments made: 47, in clause 48, page 21, line 21, leave out “47” and insert
“(Meaning of “property manager” and related expressions)”
See Member’s explanatory statement for NC8.
Amendment 48, in clause 48, page 21, line 36, at end insert—
““property agent” means a letting agent or property manager;
“property manager” has the meaning given by section (Meaning of “property manager” and related expressions);”
See Member’s explanatory statement for NC8.
Amendment 49, in clause 48, page 21, leave out line 37—(Brandon Lewis.)
See Member’s explanatory statement to NC8.
Ordered, That further consideration be now adjourned.—(Julian Smith.)