Public Health (Coronavirus) (Protection from Eviction) (England) (No. 2) Regulations 2021
(3 years, 9 months ago)
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Lord Wolfson of Tredegar
That the Regulations laid before the House on 19 February be approved.
Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Wolfson of Tredegar) (Con)
My Lords, the instrument before us prevents enforcement agents—bailiffs—attending residential premises in England to execute a writ or warrant of possession, except in the most serious circumstances. The House will be familiar with the structure and content of the instrument. Although I will deal with the content of the instrument in due course, I want to begin with its duration, because that matter was raised by several noble Lords in the debate we had on 2 February about this SI’s predecessor.
This instrument applies to enforcement action in England and will be in force until 31 March this year. It extends restrictions on the enforcement of evictions that have been in place since mid-November. The current SI expires on 22 February. On 2 February, when we debated the previous statutory instrument, a number of noble Lords raised concerns that the ban was not in place for long enough and that both landlords and tenants would benefit from greater clarity about how long the restrictions would be in force. We have had to balance that need for clarity against an ongoing and changing pandemic, but we have listened to the views expressed by noble Lords. On 10 March, the Government announced that we intend to extend these protections until 31 May, and we will lay legislation to do so shortly. So although the formal position is that this SI takes us up to 31 March, the legislation we will bring forward, as we have already announced, will give people clarity and assurance until 31 May.
That 31 May date is broadly in line with the roadmap out of lockdown. Noble Lords will need no reminding from me that step 3 of the roadmap will be taken no earlier than 17 May, following a review of the data as it appears at the time. Step 3 sees a number of restrictions lifted, including the ban on domestic overnight stays, which is relevant in this context. Noble Lords might ask why the proposed date is 31 May and not linked to step 4, which is scheduled for no earlier than 21 June. The short answer is that we have to remember, when looking at 31 May, that in most cases, bailiffs are now required to give 14 days’ notice of an eviction. In practice, protection from enforcement of evictions will be afforded, in most cases, until mid-June. We believe that that strikes the right balance in the circumstances.
The substantive provisions of the instrument are the same as in the one we debated on 2 February, apart from the duration, which I have already addressed. As I set out on 2 February, the Government have put in place unprecedented financial support to protect renters directly through measures such as these regulations and increasing the local housing allowance rate to the 30th percentile of local market rates in each area. We have made £180 million available to local authorities in discretionary housing payments. Of course, there is also the furlough scheme, support for the self-employed and bounceback loans.
While I will not go through the detail of that again, let me highlight two provisions in the Budget that are relevant in this context. First, as noble Lords will be aware, the furlough scheme was extended until the end of September. Secondly, the support for the self-employed was extended in scope—600,000 people who were not previously entitled are now entitled—and duration, to the end of September. We continue to provide limited exemptions from the ban on enforcement. They are, as previously set out, broadly as follows: where the claim is against trespassers who are persons unknown; where the order for possession was made wholly or partly on the grounds of antisocial behaviour, nuisance, false statements, domestic abuse in social tenancies or substantial rent arrears equivalent to six months’ rent; and where the order for possession was made wholly or partly on the grounds of the death of the tenant, and the enforcement agent is satisfied that the property is unoccupied. Those exemptions are applied by the court on a case-by-case basis.
The critical point is that given that broad sweep of financial support, we consider it unlikely that a full six months of arrears would have accumulated solely because of the effects of Covid-19. Rather, where that exemption applies, it will likely involve significant levels of rent arrears that predate the pandemic, where landlords may now have been waiting for over a year without rent being paid.
In addition, where the court applies an exemption, bailiffs have to give tenants at least 14 days’ notice of an eviction in most circumstances and have been asked not to enforce evictions where a tenant has symptoms of Covid-19 or is self-isolating. In addition, we have introduced a requirement in the Coronavirus Act that landlords in all but the most serious circumstances must provide tenants with six months’ notice before beginning formal possession proceedings in court.
Previously, in Section 21 cases, two months’ notice was needed, and other grounds required as little as two weeks’ notice. The requirement for longer notice was to apply until 31 March, but the Housing Minister laid an SI last week to extend that period also to 31 May. Extending the notice period obviously gives additional protection to tenants. Taking this in the round, that requirement to provide six months’ notice in the majority of cases means that most renters now served notice by a landlord can stay in their homes until September 2021. Our statistics show that the number of possession cases has fallen significantly. In the last quarter of 2020, they were down 67% compared to the same quarter the previous year.
In the limited time I have, I want to take a moment to express my gratitude to the Civil Procedure Rule Committee for addressing the challenges the coronavirus pandemic has caused the justice system and for the considerable work done at some pace by both that committee and the working party under the chairmanship of Sir Robin Knowles. Since I mentioned the judiciary, I extend my respectful welcome to the noble and learned Lord, Lord Etherton, a former chancellor of the High Court and, more recently, Master of the Rolls. Like all noble Lords, I look forward to his maiden speech later in this debate.
So far as the courts are concerned, temporary arrangements remain in place to ensure appropriate support. We have introduced new review stages and a requirement that cases have to be reactivated, and we are piloting a new, free mediation service until August this year. We are conscious that we also have to think about landlords. We consider that the best way to protect landlords is to provide the financial help we have been providing to help renters pay their rent. We are grateful to landlords for their forbearance during this unprecedented time, and we encourage all renters not only to pay their rent but to have an early conversation with their landlord if they are in difficulties.
This instrument provides tenants with protection from eviction up to 31 March. We have announced that we will bring forward legislation to extend that to 31 May. We are trying to strike an appropriate balance during an unprecedented public health crisis to avoid placing additional burdens on the NHS and local authorities. For those reasons, I commend these regulations to the House.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, I should have added that there is time in this debate for the maiden speaker to have a whole extra minute and the welcomer a whole extra 90 seconds if they wish to be so indulgent.
Lord Hain (Lab) [V]
My Lords, I thank the noble Lord, Lord Wolfson of Tredegar, Nye Bevan’s home village, for his cogent, clear summary of this extension of the ban on bailiff-enforced evictions in England during the Covid-19 pandemic. I look forward to the maiden speech of the noble and learned Lord, Lord Etherton.
The regulations are welcome, but I am afraid that other Covid-19 regulations have morphed to create police state-type restrictions on legitimate, peaceful protests. The police’s dreadful handling of Saturday night’s Sarah Everard Clapham Common vigil was because of the Government’s coronavirus regulations, argued Assistant Commissioner Helen Ball. Of course, social distancing must be maintained, including in public protests, though it is worth noting that last year’s Black Lives Matter protests in some 300 US cities did not cause a spike in cases, according to the US’s National Bureau of Economic Research, partly because the outdoor air helped dispel any threat of the virus.
Protest is the lifeblood of a healthy democracy. Everyone should have the right to stand up to those in power and make their voices heard. Coronavirus-safe, socially distanced, peaceful demonstrations, with participants wearing masks, are perfectly feasible, and the police should have a duty to facilitate, not to block, them. It is a real indictment of the Government’s harsh curbs on protest in other regulations that the organisers of the Sarah Everard vigil last Saturday, who engaged openly in negotiations with the police, were unable to proceed with the peaceful, socially distanced vigil they intended. Tragically, coronavirus has precipitated a fundamental erosion of the right to protest in Britain, and I hope the Minister will respond to that point.
Lord Shipley (LD) [V]
My Lords, I too very much look forward to hearing the maiden speech of the noble and learned Lord, Lord Etherton, this afternoon.
A further extension to the ban on bailiff enforcement is right, given the long duration of the pandemic, but the previous debate on private rented sector evictions was only a few weeks ago, which makes me ask why the Government keep coming back with short extensions. It would be better to draw up a policy now for addressing the underlying crisis, which is not going to go away, which is the huge level of debt of many tenants who will continue to be dependent on the private rented sector. At its heart, this is an issue of low incomes and job insecurity caused by the pandemic. So, are the Government going to keep their promise, made by the Secretary of State, Robert Jenrick, a year ago, that
“no renter who has lost income due to coronavirus will be forced out of their home”?
Why are tenants with more than six months’ rent arrears not covered by the ban on eviction, when the pandemic has now lasted for just over a year? The Government should increase the budget for discretionary housing payments and local housing allowance and reassess the housing benefit cap. There is then a need for a Covid rent debt fund—a level of £300 million has been suggested—to compensate landlords, as proposed by both the National Residential Landlords Association and Generation Rent. The problem is that without this policy change, debt levels will continue to rise. The Government should look at the subsidies they give for owner occupation and compare those to the subsidies they give to the rented sectors. There is an imbalance which the Government will have to address.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Shipley, who always has something of value to say—indeed, I agree with much of what he said today. I thank my noble friend Lord Wolfson of Tredegar for setting out these regulations. I declare my interests as set out in the register. Like other noble Lords, I look forward very much to the maiden speech of the noble and learned Lord, Lord Etherton, a fellow member of Gray’s Inn.
These regulations are familiar; they repeat earlier, similar restrictions. I predicted last time that we would be here again—no great insight, I admit. It is clear that we will be here again. I asked last time why we could not look at this on a longer timeframe; the problem will not disappear. Of course, I do not oppose the regulations, but the Explanatory Memorandum states, somewhat misleadingly:
“This is a temporary measure lasting less than 12 months”.
Well, yes and no, Minister. It keeps being renewed in very similar terms and, as I say, I am sure we will be here again. When will the Government look at a medium to long-term solution for tenants who cannot pay and landlords who are not being paid? We are kicking the can down the road; the debt remains. These regulations do not stop the debt accruing. The tenant still owes the money; the landlord has still not been paid. The tenant is developing a poor credit rating and their ability to re-enter the housing market will be shot. As I say, I do not oppose the regulations, but they do not provide a long-term solution. The Government need to consider something along the lines of tenant hardship loans or grants. Sooner or later, this problem will need dealing with. I suggest that it should be sooner.
Lord Etherton (CB) (Maiden Speech)
My Lords, it is a great honour to make my maiden speech in this debate and I thank the Minister and other noble Lords for their warm welcome today. That I am in position to make my maiden speech today is due to the support and kindness of many people. Time constraints mean that I can mention only a few by name. I thank, in particular, my supporters, the noble and learned Lord, Lord Woolf, and the noble and learned Baroness, Lady Hallett; the Lord Convenor and his private secretary, Kate Long, and executive assistant, Daisy Christy; the noble and learned Lord, Lord Thomas of Cwmgiedd, and Donna Davidson. My thanks go also to the Clerk of the Parliaments, Black Rod and all the staff who have been so helpful to me.
I do not wish to comment directly on the merits of the statutory instrument, as that might be considered to be raising a controversial issue, but as Master of the Rolls and Head of Civil Justice until the beginning of this year, I would like briefly to remind the House of what the judges were doing in relation to residential possession proceedings from the first lockdown in March last year. In that month, I issued a direction requiring a stay of possession proceedings for 90 days. The object was initially to consider how possession actions could proceed appropriately in the pandemic and the lockdown. There were extensions of the stay until September 2020, the final one to enable the courts to consider, once the stay ended, how best to determine the anticipated thousands of residential possession actions that had to be heard. I asked Mr Justice Knowles to chair a unique cross-sector working group to advise on new court procedures in light of the extraordinary conditions. It advised me on a new procedural framework which would, in particular, support vulnerable tenants in the litigation process and encourage compromise and restraint on the part of social landlords, in particular.
Following the ending of the procedural stay, the Government in November 2020 secured the implementation of the first of their three successive statutory instruments restricting the carrying out of evictions by bailiffs. I pay tribute to those judges, overwhelmingly district judges and deputy district judges in the county courts, effectively the civil justice front line, and the members of Sir Robin Knowles’s working group, who have worked and continue to work so hard in seeking to make residential possession proceedings as appropriate as possible in the present, difficult circumstances.
Lord Best (CB) [V]
My Lords, I am delighted to follow the noble and learned Lord, Lord Etherton, and congratulate him on an important maiden speech. As Master of the Rolls and Head of Civil Justice, he has been no stranger to controversy, and I suspect has many admirers among your Lordships for the line he has taken on several high-profile issues. In December, the Lord Chief Justice’s valedictory speech for the noble and learned Lord, Lord Etherton, noted that he had been a great champion of access to justice and of support for vulnerable people in the civil courts, not least during the months of the pandemic. We have heard his wise comments from that perspective today. In recounting the noble and learned Lord’s treatment at the hands of the Daily Mail following the two famous Miller judgments, the Lord Chief Justice quoted JK Rowling’s comment on that “Enemies of the People” article:
“If the worst they can say about you is you’re an openly gay excellent Olympic fencer top judge, you’ve basically won at life.”
We are indeed fortunate to have such a distinguished addition to your Lordships’ House and hugely look forward to further contributions from the noble and learned Lord.
I declare my housing interests as on the register, and I want to address the underlying cause of the problems which these regulations seek to mitigate. The arrears and eviction situation resulting from the pandemic has shown up the fundamental fragility of the private rented sector. The PRS has doubled in size in less than 20 years to around 20% of our homes, with over 2 million landlords. Now many landlords, as well as tenants, are facing difficulties coping with the consequences of Covid-19. Meanwhile, the social housing sector—housing association and council housing—has halved in size, from some 32% to 17% of the nation’s homes, yet the pandemic has underlined the need for this sector to provide far more decent, secure and affordable housing.
Does the Minister now see merit in last year’s proposal from the Affordable Housing Commission—I declare my interest as its chair—for a national housing conversion fund, which would enable private landlords wishing to exit the market to sell to social housing landlords who are equipped to withstand financial difficulties and provide permanent homes that are affordable to those on modest incomes?
Lord Cormack (Con)
My Lords, I am delighted to follow the noble Lord, Lord Best, and to echo his tributes to the noble and learned Lord, Lord Etherton, for a very modest but model maiden speech. He even did it within the extended time limit. He will bring lustre to our Benches, as well as experience and expertise, and he is most welcome.
I also congratulate my noble friend the Minister for the clarity and precision with which he introduced this order. It was admirable and exemplary. I am sure he will understand, however, that I share a certain dissatisfaction with the way in which Parliament has been consistently marginalised when we have had to deal with coronavirus regulations. I fully understand the terrible problems under which the Government have had to operate, but Parliament must not be marginalised, and we have to do something about retrospective legislation. This order, introduced and laid a month ago and debated today, was due to expire in a fortnight—although I was glad to hear of the extension to 31 May.
I have a brief suggestion to make to your Lordships’ House. I know that we cannot vote in Grand Committee. It is important that we have the facility to vote on these orders—even though I would never vote against this one or, indeed, most of the others—but I suggest that it would be a good idea, in the new Session of Parliament at the latest, to have a special Grand Committee for coronavirus regulations which can vote. Therefore, the regulations could be dealt with more expeditiously, and we would not have so much retrospective legislation which, I am sure, cannot commend itself to our new colleague, the noble and learned Lord, Lord Etherton.
Baroness Tyler of Enfield (LD) [V]
My Lords, I refer to my interests in the register. While I welcome this short extension, it is only kicking the can down the road. As we have heard, private renters have been hit particularly hard by the pandemic. Research has found that twice as many private renters—who often have little or no savings—have suffered job losses compared with homeowners since coronavirus restrictions began.
As a Londoner, I note with real concern that one in seven London renters are in arrears, and women are twice as likely as men to have lost their job in the first lockdown. I am greatly concerned that women will be hardest hit by the end to the eviction ban. Before the pandemic, average rents took up 43% of women’s median earnings, compared with 28% of men’s, which reveals an invidious gender divide.
Simply suspending repossessions does nothing to address the underlying rent debt problem in the sector. It is vital that the Government develop an urgent financial package to help all those renters affected to pay off arrears, otherwise many tenants will have debts that are unsustainable, as we have heard. If they cannot pay them off, they will have to move home and face significant damage to their credit score, making it more difficult for them to access housing in the future.
The cost of rent debt is estimated to be around the £300 million mark, which is frankly relatively modest compared with the £1.6 billion that has been wiped off stamp duty for homeowners. Up to £3.8 million of funding was announced in the Budget to pilot no-interest loan schemes to help vulnerable consumers who will benefit from affordable short-term credit to meet unexpected costs, something I very much support. While we are still waiting to hear the details of this scheme, surely it would be possible for a scaled-up version of it to form the basis of a model for renters.
Lord McCrea of Magherafelt and Cookstown (DUP) [V]
My Lords, evictions should be viewed as a last resort, only after all other avenues have been exhausted, and even more so at this time when the global pandemic is having a serious adverse impact on household incomes and employment.
Affording sufficient breathing space to tenants who have found themselves in financial difficulties through no fault of their own during Covid-19 is, therefore, a constructive and compassionate gesture. This reflects separate measures taken across the UK to suspend insolvency proceedings and protect commercial tenants from eviction where their circumstances have been directly influenced by Covid-19.
It is appropriate that we encourage landlords not to issue any new notices to evict or quit at this time unless absolutely unavoidable. Collectively, landlords, tenants, local authorities and departments should be able to examine what steps can be taken, short of eviction, where a tenant is in arrears due to financial difficulties arising from Covid-19. Having that early, joined-up conversation can help to prevent situations escalating and chart a better way forward.
However, it is absolutely right for us to recognise that continuing enforcement of eviction or repossession will be entirely justified in some cases. This includes cases of anti-social behaviour and domestic abuse or where rent arrears are at such an advanced stage to pose a disproportionate burden on a landlord. The Government are right to highlight the need for practical discretions in these situations.
The pandemic will ultimately have a negative and long-lasting impact on jobs and prosperity right across the province, and therefore I believe that these regulations are appropriate.
Baroness Greengross (CB) [V]
My Lords, I welcome and support this regulation, laid before the House on 19 February, which further extends the eviction ban during the Covid-19 restrictions. I do so, however, with some trepidation about the long-term implications of this crisis for renters and landlords in this country.
Figures from Generation Rent show that one in three private renters have lost income because of the Covid-19 pandemic, and half a million of these people are currently behind on rental payments. We know that increasing numbers of young people are in private rental accommodation, but so, too, are many older people—there are more than 750,000 private renters over 60 years of age in the UK. The extension of the current eviction ban through this regulation does not apply to tenants who are six months or more in arrears. We know that many of these people will be in dire financial situations or at a very high risk of becoming homeless.
At the start of the pandemic, the Government managed to house all the homeless people in London in temporary accommodation, meaning that, for the first time in decades, there was a significant reduction in the number of rough sleepers in the city. But more recently, the number of people sleeping on the city streets has increased again. Given the number of empty office buildings in the city—many of which may remain empty even after restrictions lift due to increased levels of remote working—we now need to look at how buildings can be repurposed to house the homeless. Also, how can we support businesses to facilitate this change where appropriate?
This is not an easy issue and the Government have done the right thing in stopping evictions at this time —but other measures are going to be needed to ensure that there is no explosion of rough sleeping and homelessness, once this eviction ban ends.
Lord Lilley (Con)
My Lords, I congratulate the noble and learned Lord, Lord Etherton, on a quality maiden speech, which has whetted our appetites for his future contributions.
It is a disgrace that the Government have consistently failed to give Parliament time to debate regulations such as these before they come into effect; it is a disgrace that Parliament has acquiesced in this; and it is a disgrace that both the Government and Parliament have agreed on measures to curtail freedoms way beyond those needed to tackle the pandemic and for which there is no scientific evidence. The ban on outlawed demonstrations, for example, lacks any evidential justification. Not one of the Black Lives Matter demonstrations throughout the world resulted in a detectable spread of infections. We saw at the weekend how such ill-thought-out legislation put the police in an intolerable dilemma.
The measures in these regulations are desirable and necessary, but the justification for stopping evictions is economic and social, not medical. It is to prevent the evictions of people who are unable to pay their rent because they have been prevented from working. Yet the legislation pretends that it is necessary to stop evictions simply to avoid the spread of the virus. That is palpable nonsense. Because of lockdown, we would have wanted to prevent evictions even if we had absolute certainty that they would not result in the spread of infections—just to prevent hardship.
I take it that the assertion by the Minister in the preamble to the legislation that it is necessary purely for medical reasons is to justify bringing this measure under the Public Health (Control of Disease) Act 1984. This provides further evidence that we should be operating under the Civil Contingencies Act, not under the control of disease Act. If we were, Parliament would have had far greater control of these matters and the measures would have been carried out on a cross-United Kingdom basis.
Lord Greaves (LD)
My Lords, these debates are interesting because I find myself agreeing so much with Members with whom I often do not agree, including the noble Lord, Lord Lilley. I agree with everything that he has just said. I also agree with the comments of the noble Lord, Lord Hain, regarding bans on protests. That does not relate to this particular statutory instrument but nevertheless needs to be stated. I also agree with the comments of my noble friends Lord Shipley and Lady Tyler, who said many of the things that I might have said.
My noble friend Lady Tyler said that this is kicking the can down the road. A better metaphor would be that it is shunting the issue further along the track—and the track is actually a siding, so sooner or later it will hit the buffers. When that happens, there will be a major problem.
The debt advice organisation StepChange says 150,000 private sector tenants are at risk of being evicted within 12 months. Then, of course, there are all the children, dependants and other members of those families. Do the Government have a figure on the number of people they think are seriously at risk of eviction when this particular truck finally hits the buffers and the Government stop shunting it down the track because there is no track left?
The Minister referred to the road map out of lockdown, but the question for so many of those people is: what is the road map out of debt? Many of them cannot see one at all.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Greaves. His metaphor is tragically apt.
I join others in welcoming the noble and learned Lord, Lord Etherton, to the House. Given the Government’s now regular practice of playing fast and loose with the law and destroying long-cherished freedoms, we certainly need the legal reinforcement.
We debate the details of this SI while facing an epidemic of homelessness. The noble Lord, Lord Shipley, has already detailed how the Government are breaking their promise of ensuring that no-one becomes homeless as a result of the Covid-19 pandemic. However, I want to look forward. The Minister referred to the support that the Government have supplied through furlough schemes and to the self- employed. However, millions have missed out on the latter and the former will come to an end, leaving many facing a deeply uncertain future, even while 80% of their salary has not been enough to keep many afloat.
A survey two months ago by the National Residential Landlords Association warned of a “rent debt crisis”. Among renters, those aged between 18 and 24 are particularly likely to be in trouble, as are a significant number of the self-employed—unsurprisingly, given the gaping holes in the Government’s support for that group. So I have a simple question for the Minister. Can he confirm that the Government are at least considering a fund to deliver grants to those who cannot, and will in no way be able to, pay rent arrears?
We have a huge problem with our housing sector, as noble Lord, Lord Best, outlined. Individual tenants are victims of a system that has treated houses primarily as financial assets, and which has privatised public assets at huge cost to the common good through right to buy. This is a problem caused by policies of successive Governments over decades. It requires government action to assist the victims and, in the longer term, a major shift in policy to stop treating homes as assets to be sweated for maximum profit.
Lord Carrington (CB) [V]
My Lords, I declare my interests as set out in the register. I also congratulate the noble and learned Lord, Lord Etherton, on his thoughtful maiden speech.
Every coin has two sides but, in respect of this measure, one side has been ignored and the other not properly thought through. Clearly, private renters have been hard hit, but this measure ignores the likely build-up of arrears by renters, giving rise to eventual court cases and repossessions. This will result in serious damage to their credit score and ability to access housing. It also does not consider the position of those renters who can afford to pay but hide behind these measures and decide not to pay their landlords.
The National Residential Landlords Association, representing landlords who account for 20% of UK households, reports that 60% of its members have lost rental income. We are talking about a sector in which 94% of the properties are owned by individuals who, in the main, own only one property and regard it as their pension. This is not about the Cadogan or Grosvenor estates, and these landlords continue to have financial obligations regarding their properties. This is not healthy for either side, but to regard landlords as bankers to their tenants is totally inappropriate.
One solution to avoid that situation is for the Government to provide tenant hardship loans along the lines of the schemes in Scotland and Wales, supported by a range of bodies such as the charity StepChange, Citizens Advice and the Resolution Foundation. Loans would be interest free, government guaranteed and paid directly to the landlord, with repayment due as the affected tenant recovers. It would enable the orderly recovery of the renter and would protect his credit rating. The landlord would be able to continue to invest in his property and the courts would be free from a deluge of cases leading to hardship for all concerned.
Lord Balfe (Con)
I join in the congratulations to the noble and learned Lord, Lord Etherton. The more decent lawyers we have in this place to call the Government to account, the better.
The Explanatory Memorandum to this SI beggars belief. It states:
“The purpose of this instrument is to protect public health and reduce the public health risks posed by”,
Covid-19. This is a complete and utter nonsense. Perhaps I may mention that the point made by my noble friend Lord Cormack is very sound. We need a proper committee to look at these SIs before they come into force, not when they are almost at the date of expiry.
Most of all, we need to get back to normal. The way in which this House has functioned in the past year has, frankly, been sub-optimal—to put it mildly.
We are now asked to endorse this measure. It provides for limited occasions when people can go to court to get possession. However, what it does not say is that the whole court system is in chaos and meltdown, and it is almost impossible to get a date in a court. Can the Minister tell us what is being done to free up the courts for landlords?
There is a small amount in the budget—£3.8 million—and, we reckon, something like a hundred times that much is needed. How will that gap be covered? Finally, is this system being played by people who just do not want to pay their rent? Have the Government made any estimates, and if so, what are they?
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I congratulate the noble and learned Lord, Lord Etherton, on his maiden speech, and I thank the Minister for his explanation of these regulations.
I believe that the Government should strengthen and extend the ban on evictions and repossessions until the restrictions are over; extend the mortgage holiday; raise the local housing allowance to cover median market rents; reform housing law to end automatic evictions through the courts; reduce the waiting period for mortgage interest payments support; make the £20 uplift to universal credit permanent and end the five-week wait; and suspend the benefits cap. That would help enormously the many people who are trying to exist in very difficult circumstances and facing eviction.
There is also a need to address the rent debt problem in the social housing sector, particularly for private renters. What steps will the Minister and his colleagues take to develop an urgent financial package to help all those affected renters pay off arrears built up since the pandemic began? We have to be able to assist people and not encourage the perpetuation of debt, which is detrimental to them later. If this does not happen there is a concern that many tenants will have debts that are unsustainable for themselves, their families and their children—and for the landlords.
Lord Bilimoria (CB) [V]
My Lords, it is so good to see my university friend the noble Lord, Lord Wolfson of Tredegar, at the Dispatch Box. I also congratulate my noble and learned friend Lord Etherton.
When these regulations were debated before, in February, it was the noble Lord, Lord Kennedy of Southwark, I think, who pointed out that Citizens Advice had estimated that close to 500,000 renters were in arrears and at risk of Covid-19-related eviction. Already, more than 174,000 private tenants have been threatened with eviction by their landlords or letting agents. Even at the start of the pandemic, a year ago, two-thirds of private tenants had no savings, and 45% of private renters have lost income since March.
The Government are right to say that nobody will lose their home because of coronavirus. We understand that the majority of residential evictions are on hold until 31 May. It is right to continue supporting renters with the cost of living and to align ourselves with the timelines of the Prime Minister’s road map, particularly as tenants may continue to be on furlough, or working in sectors that cannot reopen, for some weeks yet. With around 49% of hospitality workers and 36% of retail workers currently renting, the new measures will protect jobs as businesses reopen and many more renters can return to work. The hospitality industry has been decimated over the past year.
Landlords may be asking how, in some cases, the growing rental debt will be managed after the protection ends. The issue cannot be addressed if the parties fall out with each other the moment the protection ends. Does the Minister agree that the Government should seek to avoid a cliff-edge in June for residents and landlords, and, where possible, help them to work together to secure fair tenancy agreements as we move forward? That should be the priority.
Does the Minister also agree that the Government have promised mediation support for resolving disputes, and that that must be available to all who need it? We could reduce a heavy caseload for mediation if the Government published guidance for tenants and landlords. It would help negotiations to be conducted fairly and transparently and in good time, ahead of the end of May deadline.
As President of the CBI I know that the Government have provided huge support—£400 billion over the past year—and that in the Budget two weeks ago the Chancellor rightly extended that support into the summer, with measures that included extending the furlough, business rates relief and a reduction in VAT to 5%. This will give businesses the chance to bounce back and emerge from the pandemic. It will save jobs and businesses.
Baroness Altmann (Con)
My Lords, I thank my noble friend Lord Wolfson of Tredegar for introducing this SI so clearly. I also express my appreciation for the Government’s efforts to strike the difficult but important balance between the essential need to protect tenants during this pandemic, when many may have lost jobs and businesses, and enabling property-owners to exercise their rights to the properties that they own. An individual has a legitimate expectation of being able to protect their rights and income, with many pensioners, for example, having relied on a property, such as a buy-to-let, to support their retirement. I declare my interests as set out in the register.
I congratulate the noble and learned Lord, Lord Etherton, on his masterful maiden speech. I am also pleased to welcome exemptions to this ban for squatters, anti-social or abusive tenants, and those with severe rent arrears. Will the Minister, however, consider another exemption: one for the rising number of landlords who need to move into their own home, which they had rented out before 2019? They may have lost an overseas job, or need to move near to loved ones, and are unable to move into their house or apartment.
It is, of course, important to help tenants pay their rent, and tenants need to feel secure during their tenancies. The help available, however, is perhaps in need of improvement, given that these measures are going on for much longer than had previously been expected. The National Residential Landlords Association and Generation Rent are calling for more support. Landlords have worked hard to help tenants wherever possible. Can my noble friend comment on the mediation pilot that is in progress for possession cases, which seeks to achieve compromise rather than court proceedings? That could be a very welcome step, given the situation in the courts.
Lord Bhatia (Non-Afl) [V]
My Lords, this SI has been prepared by the Ministry of Justice with the purpose of protecting public health in England and reducing the risks posed by the spread of the severe acute respiratory syndrome that causes Covid-19. This instrument prevents the enforcement of evictions, including the serving of notices of eviction, against residential tenants, other than in the most serious circumstances, until 31 March 2021.
By restricting the enforcement of evictions at a time when pressure on public services is acute and the risk of virus transmission is very high, this measure will help control the spread of infection, prevent any additional burden falling on the NHS and avoid overburdening local authorities in their work of providing housing support and protecting public health.
This instrument was made on 17 February 2021 and came into force on 22 February, at the same time as the previous regulations expired. Having been made under the emergency procedure, it will automatically cease to have effect at the end of 28 days, beginning with the day on which it was made, unless during that period it is renewed by a resolution of each House of Parliament. It applies only to England. It is a temporary measure that lasts less than 12 months, and because it is a part of the Government’s coronavirus emergency response, requirements for a formal regulatory impact assessment do not apply.
I believe that this is a good and proper instrument and will protect not only tenants and local authorities but also the NHS.
Baroness McIntosh of Pickering (Con)
My Lords, I warmly welcome the noble and learned Lord, Lord Etherton. I thank him for his maiden speech and congratulate him on his work in his former role on easing repossessions, which helped to ease a difficult situation. I also welcome my noble friend to the Dispatch Box yet again. I look forward to his robust defence of the statutory instrument, the main thrust of which I support.
In the catalogue of support that my noble friend outlined, I do not think that there is any cover for directors who have been caught in the trap of taking a low salary and relying on dividends. I do not know whether there is any evidence that they will be caught by the thrust of this statutory instrument; I would be interested to hear whether there is any support in the pipeline for them. Like my noble friend Lady Altmann, I am quite excited about the new free mediation service that is being piloted; it is very welcome. What does my noble friend the Minister expect to happen at the end of the pilot? Does his department plan to roll that out more widely from August? What will the legal situation be after 31 March? If this order is extended until 31 March but the Minister is not expecting to bring forward the replacement until the middle of May, will there be a legal vacuum? Can he clarify what the situation is in those circumstances?
I join noble Lords, particularly my noble friend Lord Bourne, in raising the issue that has been brought to the Floor by Generation Rent. We do not appear, as a Government, to be tackling the underlying problem of rent debt. Does my noble friend the Minister have a long-term solution? Finally, does he share my concern about the non-payment of council tax? Will this jeopardise the future payment of rent arrears as well?
Baroness Uddin (Non-Afl) [V]
My Lords, I welcome and congratulate the noble and learned Lord, Lord Etherton.
I echo the wise words and advocacy of the noble Lords, Lord Hain and Lord Lilley. I send my heartfelt respect to the family of Sarah Everard. I agree and am in solidarity with all those families whose children have been lost, and the peaceful protestors. It was an appalling application of lockdown policies and strategies.
The CAB helps someone every two minutes regarding privately rented housing, and half a million renters are in arrears and facing eviction. While I acknowledge the Government’s promised extension of support, is the Minister aware of the research by Generation Rent, the Resolution Foundation and StepChange? It indicates that the debt crisis is compounding the health of our most vulnerable communities, which are often charged high rents for appalling housing conditions; this leads to the considerable deterioration of their health and mental well-being, particularly among women-led households.
We all agree that no one should lose their home or be evicted during this pandemic. What are we to say to the more than 200,000 families that have sought council assistance over the threat of homelessness in the last six months? Generation Rent says that we may not know the true extent of the harm caused, particularly to those who are most vulnerable. Does the Minister agree that these stop-and-start, ad-hoc outbursts, have been inconsistent? Uncertainty regarding packages places immense burdens and pressures on families. The only solution is to eradicate the debt incurred during the pandemic.
I hope that the Minister will heed the call of all parliamentarians.
Baroness Grender (LD)
My Lords, I thank the Minister for his explanation of the welcome extension of the ban on bailiff enforcement until 31 May, and I thank all noble Lords for participating in this debate. I also thank the Minister for his letter to me, dated 10 February, following the previous SI debate on 2 February.
As the noble Lord, Lord Bourne, and my noble friends Lord Shipley and Lord Greaves have said, it is regrettable that we continue to have this piecemeal approach. For us, it is regrettable, but for thousands of tenants teetering on the brink of eviction that often ends in homelessness, this piecemeal approach can be devastating—and for the children involved, it can be life-defining.
Perhaps the Minister looks to the devolved nations with a little envy as he goes through this Groundhog Day experience once more. The Northern Ireland Executive, for example, have just announced an extension of eviction protections to the end of September, providing tenants with greater stability. Can he consider the feasibility of an extension of that nature? In possible anticipation of the response, I recall the Government’s argument against ending the unfairness of tenant fees—already introduced in Scotland—which was that it was a different marketplace. In the end, it was not a different marketplace, and they did introduce that change. Can the Minister share with us what evidence he has that landlords are applying this only in the most egregious of cases? Does he acknowledge that, over the winter lockdown, 500 households were evicted from their homes?
In his letter to me, the Minister makes the case that the policies are working because only 7% of tenants are affected. However, as the noble Lord, Lord Best, described, the astonishing growth in the PRS over the past decade alone means that this 7% are the 460,000 tenancies that have fallen behind on their rent, as StepChange reported only this week. Indeed, 150,000 private sector tenants face the risk of eviction in the next 12 months. Given that one of the main causes of homelessness is the end of a private tenancy, and given that the Government are committed to ending rough sleeping, prevention in this area is fundamental.
The noble Lord, Lord Bilimoria, said that evictions are on hold. That is not the case. This SI stops bailiffs at the final stage of an eviction, but your landlord still may serve an eviction notice and you still may have to go to a hearing. Often, when a Section 21 notice is served, it finds no resistance because it is a fait accompli. Therefore, they are often not measured or known about. Can the Minister undertake to re-examine the issue of allowing judges to have discretion to prevent an eviction if rent arrears are due to the Covid pandemic, thereby fulfilling Robert Jenrick’s promise, referred to earlier? The discretion on such issues of judges such as the noble and learned Lord, Lord Etherton, would be most welcome, as evidenced by his considered and eloquent maiden speech. I look forward to hearing many more speeches from him, hopefully with more generous time slots.
The noble Lord, Lord Carrington, and the noble Baroness, Lady Altmann, made the case that the majority of landlords are not businesses, but the Government’s English private landlord survey shows that over half of all tenancies now are with landlords who own five or more properties—and that number is growing. The same research shows that the main reasons why people become landlords are a preference for investing in property over other investments, and as a pension contribution. Only 4% became a landlord to let property and rely on that income as a full-time business.
I thank Generation Rent and the NRLA for their briefings. Landlords and charities are united in their calls for the 800,000 renters in arrears to get urgent help with their debt crisis, which is damaging their credit scores and will make it even harder for them to access housing in future. Generation Rent goes on to propose, as the noble Baroness, Lady Bennett, described, a Covid rent debt fund. It would cost £288 million, clear rent arrears and compensate landlords for up to 80% of the rent owed. However, these must be grants, not loans, because so many renters started this pandemic without any savings, as the noble Baroness, Lady Tyler, described. They were already spending a third of their income on rent. Citizens Advice tells us that the tenants who use its services would take seven years to pay off their current arrears.
The Minister has already told us about the unprecedented package of financial support, but £180 million for discretionary housing payments was at the start of this pandemic; it has not been increased to recognise the significant increase in universal credit claims. The local housing allowance is now frozen, and that is for only the bottom 30%. This level of spend pales into insignificance when compared to the stamp duty holiday that cost the Government £1.5 billion, whereas Generation Rent’s proposed scheme to help tenants would cost £288 million. The shocking disparity in subsidies to home owners in comparison speaks volumes about the attitude of this Government. What we need is a similar level of subsidy and support for those who rent.
Lord Ponsonby of Shulbrede (Lab) [V]
My Lords, I open by congratulating the noble and learned Lord, Lord Etherton, on his maiden speech. The noble Lord, Lord Cormack, described it as a modest maiden speech. I assure the noble and learned Lord that that was a compliment. I thought that it was a very good maiden speech, as well as a modest one.
There have been various themes to today’s debate. As the noble Baroness, Lady Grender, said, it is a bit like Groundhog Day. We have had a number of statutory instrument debates on this subject; we have also had a regret Motion. The themes have been similar—not surprisingly —but the numbers are growing, and that is not surprising either.
Before I come to that, I want to pick up a point made by the noble Lords, Lord Balfe and Lord Cormack, about possible procedural changes so that we are not in the position we are in now where we are debating measures that have already come into place and which will expire fairly shortly. I was interested in the proposal made by the noble Lord, Lord Cormack, that some sort of Grand Committee should be set up where these matters could possibly be debated and voted on in good time.
The themes of this debate have focused on urging the Government to come up with some sort of long-term plan to get round this mounting debt problem. We have all received the same briefings from Generation Rent, Citizens Advice and the National Landlords Association. The figures have been quoted by a number of noble Lords. The central point, which all noble Lords have made, is the need for a plan to get out of this problem, whether by low-interest loans or giving people who are in debt money. There are different solutions, and I understand that there are pros and cons to each solution. What I would like to hear from the Minister is the plan. How are the Government trying to address this issue so that there is a solution and so that, as landlords and tenants emerge from the pandemic, they are not lumbered with a lifetime of debt, which they will find very difficult to get out of? If they have court orders against them, that will make it even more difficult for them.
I do not want to repeat all the numbers that have been quoted, but the central point—on which I hope we will hear something from the Minister—is whether the Government are looking at solutions that have been adopted in other countries in the United Kingdom and whether they are looking at a long-term solution so that we will not come back here again wondering how to find a way out of this massive and mounting debt crisis.
Lord Wolfson of Tredegar (Con)
My Lords, I fear that the somewhat innocuous title of these regulations ought to have a health warning below it along the lines of “Light blue touchpaper and stand well back” because some of the speeches have taken us far and wide.
Let me start with some of the central points. The noble Lord, Lord Hain, said that we live in a police state. We do not. We live in a state with police. I assure the noble Lord and the House that, as I have said on a number of occasions, the rule of law runs through me like “Blackpool” runs through a stick of Blackpool rock. I acknowledge the importance of protest; we will debate that issue in other Bills. I assure the noble Lord and other speakers that that is not an issue so far as I am concerned.
As I have mentioned the rule of law, I want to take a moment again to welcome the noble and learned Lord, Lord Etherton. I regret that he had such limited time for his maiden speech, although at least he got to the Chamber—I was stuck in Grand Committee. He made two points in the short time he had. First, he used the word “unique”. We are indeed living in unique times and must have unique responses. Secondly, he talked about a cross-sector working group. Indeed, a number of the points made by noble Lords in this debate show that what we are talking about is not just a Ministry of Justice issue; it is really an MHCLG issue, and a number of the issues will have been heard by that department. I will personally make sure that they are passed on because, although the Ministry of Justice is responsible for courts and procedures, underlying housing policy, which a lot of contributions have gone to, is not the responsibility of my department. However, the noble and learned Lord, Lord Etherton, is right that, in this area, as in so many areas of government—in my short time here, I have realised this—the acronym OGD, standing for “other government departments”, is about the most important acronym there is. In fact, it seems that all acronyms in the Civil Service are three letters. It loves its three-letter acronyms. I might start calling them the TLAs.
My noble friend Lord Cormack and other noble Lords made another broad point about the way we deal with coronavirus business in this House. I say with great respect that that is well above my pay grade, not least because my pay grade is an unpaid pay grade. I am sure that that point will have been heard by the relevant authorities, but I hope that my noble friend Lord Cormack and others will forgive me if I do not respond to them particularly.
My noble friend Lord Lilley made a broad point about the pandemic measures. In so far as I was included in his charge of palpable nonsense, I respectfully but firmly disagree. What we are seeking to do here is within the public health regulations. We are seeking to provide a balance between the undoubted needs of renters and the undoubted demands of landlords.
Turning to some of the points that are more relevant to this SI, the noble Lord, Lord Shipley, asked about short extensions. That is why I indicated to the House—clearly, I hope—that we will extend this to 31 May. I assure my noble friend Lady McIntosh of Pickering that there will not be a gap. We will ensure that the regulations are seamless.
Why do we not want to put a loan system in place? It is because we do not think that adding more debt is the way out here. We prefer to proceed as the Chancellor has proceeded by giving non-repayable finance to renters and enabling landlords to benefit from such things as mortgage payment holidays, which are available until July.
My noble friend Lord Bourne of Aberystwyth— I am also a former tenant of Gray’s Inn, though I should make it clear I was not evicted—asked whether we are putting something in place for the long term. That is, as I have said, a matter for the Ministry of Housing, Communities and Local Government, but I assure my noble friend and the House that, while it is always a pleasure to speak from this Dispatch Box, I do not want to have to come back time and again with Groundhog Day regulations either. That is why I have done my best to ensure that everybody now has visibility until the end of May.
I will pass on to my colleagues at MHCLG the proposal from the noble Lord, Lord Best, that housing could be sold to social housing landlords.
The noble Baroness, Lady Tyler of Enfield, said that stamp duty helps homeowners; it helps homebuyers, and the reasons for the stamp duty holiday were set out in the Budget. We are trying to maintain a fair balance here between renters on the one hand and landlords on the other. In that context, the point made by the noble Lord, Lord McCrea of Magherafelt and Cookstown, is absolutely right. Evictions are the last resort, which is why we have structured the exemptions in the way we have. The exemptions list is designed to ensure that evictions take place only in cases where they are really required.
One exemption, as the noble Baroness, Lady Greengross, said, is the six months of arrears. As I said in opening this debate, those arrears must be looked at in the context of the unprecedented financial support that this Government have provided to renters.
The noble Baroness, Lady Bennett of Manor Castle, said that we are playing fast and loose with the law. I assure her that that is the last thing I would allow to happen. She may disagree with my views on legal matters, but I can assure her that respect for the rule of law is, as I have said, part of my very being.
Ultimately, as a number of noble Lords mentioned, including the noble Lord, Lord Carrington, we have a balance between renters and landlords. He was right to highlight small landlords. Although I take the point made by the noble Baroness, Lady Grender, that some landlords own a number of properties, there are vast numbers of landlords who own only one or two properties and look to the income from them to pay their outgoings and, for a number of people, their pension income. Although I heard with respect the passionate speech of the noble Baroness, Lady Ritchie of Downpatrick, she looked at it only—I say respectfully—from the point of view of renters.
Our measures have had significant results. The noble Baroness, Lady Grender, said there were over 500 eviction orders in the last quarter of 2020, but that must be compared with the last quarter of 2019—a normal quarter—when there were 22,444. These measures have had a very significant impact. As this debate has shown, I am assailed on the one hand by renters for not doing enough and on the other by landlords for not considering their position. In response to my noble friend Lady Altmann, I am afraid we do not see overseas landlords coming home as a special case; their right to possession will have to be found in the regulations as they are set out.
I conclude the time I have available on a more positive note. A number of speakers mentioned the mediation scheme. Mediation is quite new to our system of law but, in the time that we have had it, it has proved its worth time and again. This is only one area where I am confident that mediation schemes can in many cases achieve far more than a formal court process, and I am proud that we have started the pilot. I confirm that we will look at its results very carefully to see whether we can roll out mediation not only in these cases but across civil justice much more broadly. My experience from my previous incarnation as a practising lawyer and the materials I have read as a Minister show that, in many cases, mediation enables people to resolve their disputes and vindicate their legal rights in a better way than a formal court process can.
In the short time still available, I will respond to a couple of points which I have not yet referred to. When at university, the noble Lord, Lord Bilimoria, squeezed a five-hour essay into two hours’ preparation; today he squeezed a five-minute speech into the two minutes he was allotted. He highlighted the balance we are seeking to draw, and that is the response I give, with respect, to the two Front-Bench speakers, the noble Baroness, Lady Grender, and the noble Lord, Lord Ponsonby of Shulbrede. We will look at what other parts of the country do; I am a great fan of Scots law and will impress on my MHCLG colleagues that they should look at Scotland and other parts of our United Kingdom for answers on this as well.
I assure the noble Lord, Lord Ponsonby, that there is work on what he calls a long-term plan. It is not for me—a mere humble Ministry of Justice Minister—to reveal on a Thursday afternoon the details of that plan, but I am conscious that it is being worked on. Of course we do not want a cliff edge. We need to work out what the response will be from 31 May onwards.
Given the time, I hope that the House will permit me to respond in writing to the points I have not been able to deal with orally. I apologise to those speakers to whom I have not been able to respond personally. I acknowledge the strength of feeling across the House which goes beyond these regulations but, if I may ask the House to focus for a moment on these regulations, I commend them to the House and beg to move.