Immigration Bill

Baroness Smith of Basildon Excerpts

Wednesday 12th March 2014 Lords Chamber

[Baroness Williams of Crosby (LD)]

My Lords, I share the view of my noble friend Lady Hamwee about the useful contribution made by the noble Lord, Lord Best. Some of us know what a tremendous contribution he has made over the years, both to the whole position of immigrants to this country and, not least, to the position of people seeking to study at our universities.

I want to ask two questions. The first is about the desperate pressures on the housing market, not least in London, which remains a magnet for many overseas students. This was exemplified again to me this morning when in one post I received no fewer than two letters from distinguished estate agents in London begging me kindly to sell my rather humble single-bed flat, in a rather seedy part of Victoria, on the grounds that I would make thousands of pounds of profit if I did so. Such lettings or sales almost certainly do not go to students in any situation. Given that there is a huge pressure of demand on the market, not least from people working in this country, often in a fairly short-term capacity, let alone from the literally thousands of houses in London that are now being let or sold to overseas investors who have no intention of living in them or inhabiting them—as anyone can see who takes a good look at Highgate or some other fashionable areas of London, many of those properties remain empty for several years on end—it really is something of a scandal that that is the way that the housing market has played out. It is becoming close to impossible for many overseas students of modest means to find anywhere to live at all, which is why we see increasing numbers of people packed into overcrowded rooms, flats or basements in a desperate attempt to find somewhere to live.

We have been helped by the noble Lord, Lord Best, and my noble friend Lady Hamwee, who gave specific and concrete suggestions about ways in which this situation might to some extent be eased. In the end, it can be seriously eased only by a deliberate attempt to create more student accommodation, but that is not going to happen in the very short run, and therefore anything that exempts accommodation specifically directed to and planned for students is of great benefit in this desperate situation.

Secondly, I want to draw attention to a group who are not assisted by being specifically registered by their university and helped by student unions and the like. I reiterate what I said in an earlier session of this Committee when I pointed out that no less than 33% of academics currently serving in Russell group universities come from overseas. The figure is about 28% for universities as a whole. These men and women are here because they are outstanding in their line of study or profession. They bring to that study their knowledge of another part of the world and the ways in which in different cultures different answers are found. They do not have the benefit we have given to overseas undergraduate students who are registered at their university. They are mostly out there looking for accommodation for themselves, and many of them have no knowledge of this country or its housing market and are quite easily persuaded to make not very sensible arrangements.

Yet let us be quite clear that, without those academics, the quality of first-class higher education would deeply suffer because it is increasingly a global situation and a global statement about the quality of a university. Anybody who knows the Russell group and some of the outstanding new universities will know that it is that huge input of talent and ability from other countries that makes a university not just a good place but a great place. What the noble Lord, Lord Best, has proposed, not least in his final amendment, could be very helpful to people who are without the kind of expert advice that undergraduates can at least hope to get. It is essential that we recognise the importance of tackling this matter.

The noble Lord, Lord Best, referred to children. Many academics will be married with children and will want to bring their dependants with them. The noble Lord, Lord Best, pointed out the problem of trying to sort out the migrant status of family members who have come with the head of household who is taking up an academic position, particularly children over the age of 18 who still live with their parents, as many do abroad. How big an obstacle are we placing in the way of such men and women unless we adapt and attract the kinds of solutions that he and my noble friend have tried to put forward this afternoon?

I shall not continue at greater length. Members of this House will know of my huge concern about one of the greatest and most effective exports of this country. Incidentally, it is one of its sources of innovation and enterprise with no less than one in seven new firms and 14% of new jobs being created by migrants, and those figures are higher than the proportion for their British-born equivalents. They make such a huge contribution to this country’s ability to maintain and improve its economic position that it takes my breath away that we should have this kind of legislation before us. I shall not pursue that matter, but I hope the Minister, for whom I have great respect, as we all do, will look very seriously at the proposals in this area of the Bill to deal with the dangers that could arise from the insistence on tenants being, effectively, monitored and overseen by landlords with all the rather frightening consequences of that concept.

[Baroness Smith of Basildon (Lab)]

When the noble Lord, Lord Best, with his experience and expertise on housing, speaks on issues such as this, we all do well to listen. I am sure the Minister has taken on board his comments. On the issue he raised about students, the Minister has made clear that the Government will bring forward an amendment to address this issue, and I welcome that. I hope he will listen, take on board and incorporate the comments made by the noble Lord, Lord Best, which are very helpful indeed. I welcome the fact that the Minister has listened and intends to table an amendment. I also welcome this recognition by the Government of how clumsy this provision in the Bill is, and the consequences of that. I will not speak at length today, because I spoke at length on earlier amendments covering the same issues.

The amendments tabled by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Best, address, as the noble Baroness, Lady Hamwee, said, the principle, practicality and workability of the provisions on landlords. Notwithstanding the comments of the noble Baroness, Lady Williams, the provisions do not just affect students, as I know she has acknowledged. These provisions on landlords will impact on many people to the detriment of many UK-born and British citizens and those who have a legal right to be here. I welcome the opportunity to look at some of the practicalities.

I notice that the impact assessment for the Bill comes straight to one of the points made by the noble Lord, Lord Best. Under the heading, “What is the problem under consideration? Why is government intervention necessary?”, the impact assessment comments:

“Housing is a key enabler of illegal migration. … Government intervention is necessary to deter illegal immigration”.

I disagree with that. The problem here—the concerns that have been raised in the amendments—is about whether it is the landlord’s role to take action to deter illegal immigration in the way that the Government suggest.

What I am concerned about is highlighted by the comments of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Best. It is becoming increasingly clear what limitations, pressures, problems and responsibilities these provisions are going to have and what impact they will have on those entitled to live and work in the UK, including UK citizens. The noble Lord, Lord Best, and the amendment of the noble Baroness, Lady Hamwee, have highlighted concerns regarding the impact on landlords.

The Government estimate in their impact assessment that they will take fines of £6.8 million from landlords over the next 10 years. The point has been made to the Minister that that could be seen as, and could well become, a disincentive to those who currently rent out. It would be helpful if the Minister could tell us whether, given that this also includes rooms which have been rented to lodgers, any assessment has been made on the impact of availability of homes or rooms to rent in the private rented sector. The noble Baroness, Lady Williams, mentioned the letters that she has received from estate agents wanting to rent or buy her property. Anybody who has lived in London will have regularly received such letters from companies offering vast amounts of money to rent a room. Can the Minister tell us whether any assessment has been undertaken of the impact that these proposals could have on the availability of properties or rooms to rent?

I will not go through each amendment—I raised a number of questions which I had on Monday—but the amendments would bring some clarity to the issue. If we take the questions raised by these amendments, those that will be raised in the next group of amendments, those that were raised in yesterday’s discussion on whether the clause should stand part of the Bill, and proposals for a pilot—I welcome the Minister’s letter and look forward to discussing the Government’s proposals for a pilot—it is increasingly clear that there is little to commend these clauses. I hope that, in his response today, the Minister is able to address the concerns that have been raised by noble Lords here today and some of those still outstanding from our previous debates.

[Baroness Neville-Rolfe (Con)]

My Lords, I will make two brief points. First, I welcome the broadening of the exemption for students which my noble friend outlined late in the debate on Monday. That seems to be relevant to Amendment 54ZZA, and we all look forward to seeing the new wording on Report, recognising the importance of our student population.

Secondly, I will comment on the idea outlined by the noble Lord, Lord Best, for an approved agency arrangement. This may be a good idea, but it will of course come at a cost. I would prefer a simple system that would allow landlords to do the checking themselves by having proper guidance for small landlords, both through the normal trade associations and guidance and on gov.uk. In that way enforcement can be minimised, fines avoided, and compliance maximised. The trial run that all noble Lords seemed to be agreed on in the earlier discussion in Committee should be used to test the workability of these important proposals.

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)]

I am delighted that we now have another name for the rollout and the trial run; we are accumulating quite a vocabulary of descriptions for this important part of the development of this legislation. I am grateful to all noble Lords who have spoken. We have moved down to some detail, which it is important that we use Committee to tackle. I am grateful in particular to the noble Lord, Lord Best, for tabling his very thoughtful amendments, and to my noble friend Lady Hamwee for hers. They are clearly intended to improve this part of the Bill. I welcome the opportunity I had to meet with the noble Lord, Lord Best, as I explained already, and with a number of interested bodies to discuss these provisions. My door remains open to the noble Lord; some of the suggestions he has made today require further exploration jointly between government and their advocates, so I hope that this will be a beginning.

This group of amendments includes some interesting suggestions, which I will reflect on further, as is right and proper. However, some of them would represent a retrograde step. We can take things in a different direction and further forward than perhaps the amendments aim to take them. I remind noble Lords that the aim of the legislation is to require landlords to conduct immigration checks on all adults who it is intended will occupy the property when the tenancy is created. It does not require all such adults to be named on the tenancy, although that may become common practice in future, and the Bill allows landlords to delegate the task of performing checks to a letting agent. The checking requirement applies only where the property is occupied for rent or lodging as the person’s main or only home.

That is an important measure, and the Government are right to identify housing as one of those facilities which, if controlled by measures as provided for in the Bill, will serve as a deterrent to illegal immigration. I am sure that the noble Baroness will share that view, just as both parties agreed that employers’ checks on people seeking work have been effective in that regard.

The Bill does not require the landlord to monitor who is living at the property once the tenancy has been created. While some landlords already require their tenants to inform them of changes to the composition of the household, some do not, and we recognise that. Where a tenant sublets the property or accepts a lodger without the landlord’s knowledge, that tenant effectively becomes the landlord under the scheme, so to a degree the landlord’s responsibility applies to the person who occupies the house as a principal home.

[Baroness Smith of Basildon]

Can the Minister clarify whether that is the case only if the tenant accepts payment by the lodger? Presumably, if they accept someone to stay in the property as a guest, nobody will be liable to check their immigration status.

--- Later in debate ---

[Lord Taylor of Holbeach]

I am sorry because, as my noble friend Lord Attlee whispered to me, “You’re wrong”. He is so delicate in these matters. But I am wrong. This transfer of responsibility occurs when rent is paid; when no rent is paid, that is not an arrangement under this scheme. I hope that that is understood, and that it helps to clarify the border as to where the reporting happens.

[Baroness Smith of Basildon]

I am grateful to the Minister and thank him for clarifying that—we all make mistakes. Does that not seem some kind of a massive loophole in the law—the landlord will have to undertake all these checks to ensure that the landlord’s tenant is a legal citizen of this country and entitled to stay, but the person who is renting the property could then allow guests to stay permanently, with it as their main home and with no payment? It would be possible for a rogue landlord to charge exorbitant rent to one person and for the others to stay for free. There seem to be complications around that, allowing a significant loophole in this legislation, if I am correct—but I may be wrong.

[Baroness Hamwee]

My Lords, I might add to the complications by pointing to the provision that, although the residential tenancy agreement of rent must provide for payment of rent, it need not be a market rent.

[Lord Taylor of Holbeach]

Yes, a further elaboration of the point is that the restriction applies only when the person is under an agreement, formal or informal, where the tenant pays rent. The immediate landlord is responsible; if the tenant sublets without the superior landlord’s knowledge, the tenant is responsible for the subtenant. This is quite convoluted language, if I may say so, and it might help noble Lords if I wrote to clarify that point. I see the importance of making it clear where the responsibility lies in these matters; I thank the noble Baroness for raising the issue in the first place and my noble friend Lady Hamwee for her comments.

[Baroness Smith of Basildon]

I am grateful—that is very helpful. But perhaps the Minister could address the point made by the noble Baroness, Lady Hamwee, and myself about a loophole. It does not have to be the market rent; it could be an exorbitant rent to one tenant to allow others to stay there for free. If he could address in the letter whether that is a loophole, that would be very helpful.

[Lord Taylor of Holbeach]

Yes, I will do it in the letter. I feel that if I try to do so here today, I might get into even deeper water than I am already swimming in.

Home Office immigration enforcement will enforce the scheme in the normal course of its activities. Where illegal immigrants are detected during illegal working operations, when arrested for criminal offences, or as a result of intelligence, immigration enforcement will investigate where the person is living. This will include establishing whether the new duty on landlords has been breached, who owns or controls access to the property, and who is collecting the rent. That ties up with the consideration that the noble Baroness asked me to look at earlier.

The checking requirement will apply only to adults, and the person’s age as a matter of fact will be apparent from the documents presented. The system of document checks has been adjusted, following consultation with landlords, to reflect closely existing check practice by landlords. Where these simple checks are completed, the Bill makes it clear that the landlord will have an excuse, and therefore will not be culpable under the provisions of the Bill. Only original documents can be accepted in view of the obvious risk of forgeries, as noble Lords will understand.

Earlier in the Committee’s deliberations—I am grateful for the comments of my noble friends Lady Neville-Rolfe and Lady Williams of Crosby—I announced the Government’s intention to bring forward on Report an amendment to broaden the exemption for student accommodation owned, managed or arranged by higher education institutions in all parts of the UK. Obviously, we await the full detail of the amendment, but I think this very much meets the point that noble Lords have made. This is an important area for two reasons: first, because it reinforces the message that I am trying to get over that we want to make it clear that we are supportive of the university sector in this country; and, secondly, because it introduces the concept that there can be no need for double checking in this area given that the university has already satisfied itself that its students are properly entitled to be in this country. I note the suggestion about the engagement of Section 233 in the amendment of the noble Lord, Lord Best, and I have already noted my noble friend’s contribution on the council tax exemption point.

The noble Lord, Lord Best, has raised concerns about people who are in need of support at a time of homelessness or the threat of homelessness. The exemptions in Schedule 3 already deal directly with the work of hostels and refuges and the work of local authorities, where they are providing assistance to comply with their duties, or are providing assistance on a discretionary basis to a person who is homeless or threatened with homelessness. Therefore, we have made this clear in the Bill.

The noble Lord makes a very interesting suggestion in advocating, and elaborating on, a role for a verifying body to support small landlords in performing the required checks. I say, in the modest way that Ministers do, that I undertake to reflect further on the merits of this suggestion. This is an interesting matter for us and the noble Lord to discuss. The Government want these arrangements to be workable in practice. I think my replies have shown that the Government see this as an important aspect of policy but it must be practical and work for landlords and people who want housing. We also want these arrangements to be successful in achieving the policy objective of deterring illegal migration.

I think I have made it plain that I want to engage with noble Lords. I hope that, in the light of the reassurance I have given, and, indeed, my promise to write in detail specifically on the division of responsibility—that is essentially what we are talking about in relation to the definition of a tenancy and landlords’ responsibilities—the noble Lord will withdraw the amendment.

--- Later in debate ---

Finally, Amendment 55S would require the Secretary of State to issue a substantive claim giving the landlord an opportunity to raise the defence before the matter is determined—rather in the way to which I have just alluded, to separate out liability as the first issue from the penalty. I beg to move.

[Baroness Smith of Basildon]

My Lords, these amendments build on the two previous debates that we have had on this issue and highlight its difficulties and complexities. I know that the Minister will give an explanation of these but I ask him to take on board the points that have been raised today, and the other points raised on Monday at Questions, which strike at the heart of what these clauses seek to do.

What worries me is that if landlords are going to rent out their properties and want to abide by the law, they will need to have absolute clarity about what is expected of them. The noble Baroness, Lady Hamwee, thought that she was testing the patience of the Committee. I do not think she was because, for example, Amendment 55Q makes an important point. I worry that the measure outlined in that amendment could be a further deterrent to landlords to rent.

The noble Baroness mentioned the code of practice and the documents available. As I said on Monday, the Government have tried to be helpful by increasing the number of documents available. However, I am not sure how helpful that is because it creates even greater complexities. I had hoped for an explanation of why under List A of acceptable documents, 10f has only a full stop. Presumably there is something missing and there will be another document at some point.

[Lord Taylor of Holbeach]

It is only a draft document. There may well have been other matters under consideration at the time.

[Baroness Smith of Basildon]

So there may be further documents which are acceptable. I appreciate that.

However, clarity for landlords is crucial, particularly if they are expected, according to the impact assessment, to pay £6.8 million-worth of fines, which is the Government’s break-even policy objective. Every time I read the landlords’ guidance it raises more questions than answers and I am sure it will be the same for landlords. If I were a potential landlord I would regard this as a disincentive.

In the previous debate I asked the Minister a question about landlords seeking to play safe and the noble Baroness, Lady Hamwee, has reminded me that I did not receive a response. The worry is that landlords will look at the obligations placed on them and want to choose tenants who most look like, sound like and are easier to identify as, in their eyes, British citizens. Rather than choosing those who may even have permanent leave to remain, they are going to play safe. There is a discriminatory aspect to that. However, the specific question I asked was whether the Government have made any impact assessment of the impact of the legislation on the availability of rooms to rent in the private rented sector. It would be helpful to know if any consideration has been given to that point.

[Lord Taylor of Holbeach]

I am grateful for both the debate and the amendments tabled by my noble friend. They contain constructive suggestions and are designed to make this part of the Bill work, an aim which noble Lords will share. The amendments seek to exclude vulnerable people and students from the provisions of these clauses. I have already referred to the Government’s plans in relation to students. However, I wish to provide some reassurance in relation to those who may be vulnerable.

On the point made by the noble Baroness, Lady Smith, discrimination is a concern. Certainly if it became widespread it would destroy the credibility of these arrangements. That is why there is a code on discrimination running parallel with the code of practice. As noble Lords will know, to breach this code and to act in a discriminatory fashion is against the law in any event, and so it is part and parcel of the package of non-regulatory measures being brought forward to reinforce these particular provisions.

Clause 16 provides discretionary powers for the Secretary of State to authorise a tenant who has no lawful status to rent property. This will include asylum seekers, who will be able to confirm that they have a right to rent with the landlords’ checking service, or a landlord may conduct a check directly with the service. This discretion will be exercised where a failed asylum seeker is unable to return home because of a recognised barrier.

Tenants housed by virtue of children or national assistance duties are also covered in exclusions. Schedule 3 provides that any accommodation provided to a person as a result of a duty on a local authority is excluded—that is, a duty on a local authority in respect of any obligations to vulnerable people. It does not seek to particularise the duties, including the respective Acts and orders relating to children or social care; it is a general obligation which local authorities may have to individuals. Therefore the amendment proposed by my noble friend is not necessary given the wide scope of this exclusion.

The amendments are also intended to provide further protection to landlords. The provisions create a civil penalty scheme which the Government are committed to applying on a light-touch basis. Where a suspected contravention is discovered, the Secretary of State may issue a penalty notice, including where they are not immediately contactable. The landlord is then afforded a right to raise objections. Where these objections show that the landlord has a statutory excuse from a penalty, they will be notified in writing. No further consequences will arise if the objections show that the landlord has a statutory excuse.

The power to increase a penalty is important—it is a kind of parallel power—as it may not be immediately clear whether the landlord has been previously penalised in this way. The landlord may, where it is decided to maintain a penalty, appeal to the courts. That is the right order of events: rather than going immediately to appeal, adjudication can take place informally between the landlord and the Secretary of State.

It is proposed that where a penalty remains unpaid the Secretary of State should be able to pursue recovery through the courts if the penalty were due under a court order in exactly the same way as a civil penalty. In cases where an appeal has been heard by the courts, this avoids the landlord, the Secretary of State and the courts having to return to the same court to hear an application for judgment for an amount the court has already determined should be paid by the landlord.

Turning to Amendments 55A and 55B, to which my noble friend wanted me to pay attention, I remind the House that the proposed sanction is a civil penalty, an administrative scheme; it does not form part of a criminal investigation. Clause 23 places a responsibility on the landlord and/or agent to evidence that they have complied with the prescribed requirements and have maintained an excuse against a penalty where necessary. That does not mean to say that the Secretary of State is not required to establish that there has been a contravention of Clause 17 to justify the issue of a penalty notice, nor that the Secretary of State will not engage with the landlord or agent and give them the opportunity to establish an excuse before a penalty notice is issued. I can confirm that the intention is that landlords and agents will be invited to demonstrate their excuse before a penalty notice is issued. However, in cases where the landlord or agent refuses to co-operate with an investigation, the Government consider that this is a proportionate and practical approach. The landlord or agent can easily prove that they have undertaken the checks by producing copies of the relevant evidence, whereas it would be difficult for the Secretary of State to establish a negative and establish that the prescribed requirements were not complied with.

--- Later in debate ---

I hope that my noble friend will feel able to withdraw her amendment, and if I have failed to satisfy her on any points, I will write to her.

[Baroness Smith of Basildon]

I apologise because I now understand why the noble Lord is inching towards our pilot. However, I have asked him a question in the last two debates: has any assessment been undertaken of the impact of this part of the Bill on the availability of rooms to rent and properties to rent?

[Lord Taylor of Holbeach]

I cannot give the noble Baroness an absolute answer to that question. Of course one of the reasons why the rollout is important is that we need to check to see if there are any adverse implications in this policy.