Renters’ Rights Bill

Debate between Earl of Kinnoull and Lord Hunt of Wirral

Tuesday 6th May 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to Amendments 153, 201, 217 and 241, in the name of the noble and learned Lord, Lord Etherton, who cannot attend the Committee today. I know the whole Committee will join me in wishing him well. These amendments seek to limit the financial penalty that local authorities can impose for offences under these clauses. In the absence of the noble and learned Lord, Lord Etherton, I will briefly set out my reasons for supporting his amendments in this group.

I should declare an interest that, as a practising solicitor for over 50 years, I am always concerned about penalties that are outside the judicial process, but my concern increases when the level of financial penalty is as high as is proposed. I agree with the noble and learned Lord, Lord Etherton, that the level of financial penalty set by the Bill is extremely high. A financial penalty of £40,000 would be ruinous for most landlords. According to the Government’s own Property Rental Income Statistics: 2024, the

“average income from UK property remained relatively stable at around £17,000 between 2018 to 2019 and 2022 to 2023”.

Therefore, a £40,000 penalty would, in effect, represent more than double the rental income of an average property.

In certain egregious cases, a penalty of that severity may seem appropriate, but those cases can be dealt with by the courts. We must ask ourselves what effect this new level of financial penalty that can be imposed by local authorities will have on landlords today. We have serious concerns that the risk of a large financial penalty being imposed may encourage existing landlords to leave the sector and discourage new landlords from entering it. A more reasonable level of financial penalty would prevent that chilling effect.

I have carefully heard the words of my noble friend Lord Jamieson on the Front Bench, and I know that my noble friend Lady Scott of Bybrook, also on the Front Bench, will surely agree with the noble and learned Lord, Lord Etherton, on this and consider the warning that we have given. Of course we accept that the Government will have their Bill, which should be effective in delivering its objectives, but we are seriously concerned and worried about the impact that these excessive financial penalties will have on the rental market.

[The Earl of Kinnoull (CB)]

My Lords, I am deeply grateful to the noble Lord, Lord Hunt, for introducing the amendments of the noble and learned Lord, Lord Etherton, so well. I spoke to the noble and learned Lord about these amendments before his illness, and I was going to pass on only two or three comments that I recall he made to me.

The £40,000 is a life-changing amount of money—I think that was the way he put it. The reason I have my iPad here is that he referred to the civil penalties under the Housing and Planning Act 2016, on which the MHCLG has issued a very helpful note. It is so complex that local authorities needed a 20-page note to tell them how to implement this. The maximum under that Act is £30,000, and I do not see why we have suddenly gone to a £40,000 world. The £30,000 was reserved for a relatively small number of offences, and each involved knowingly doing something truly evil and wrong. I feel that that, as a principle, is conceded, as it were, even though £30,000 is a bit rich. Therefore, I agree on the £40,000; I do not understand why we have had to go up from £30,000. With the next group, we will come to the issue of knowing and recklessness, which is deeply serious as well.

I will pause briefly on some of the amendments. Amendment 153 refers to a schedule. This is one of the ones where it is up to £40,000 currently. It refers to a very complex schedule—yet there is a recklessness trigger for a fine of up to £40,000. It seemed to me that that was not as serious as some of the things that are a £30,000 offence under the Housing and Planning Act 2016. So I was dubious about whether that was truly worthy of a £30,000 lump. I therefore agree very much with the £7,000, which is where the noble and learned Lord, Lord Etherton, had come to.

On Amendment 241, there are a couple of things here that trigger the £40,000. Again, recklessness is for mistakes made in giving data to the new database. When people give data to databases, it is inevitably quite boring, and things can go wrong. Recklessness is an incredibly difficult thing to cope with, as we will discuss next, no doubt. So I felt, again, that this was very different from the £30,000 triggers under the Housing and Planning Act 2016. I felt that there was a strong case for moving the maximum down to £7,000. I am going to stop there in the analysis, because it was better done by the noble Lord, Lord Hunt, but that line of thinking—bringing it down to £7,000 from £40,000—was intended to improve standards of justice because, if people have been truly evil and truly wrong, the courts are there for that. They are made for that, and they can be a lot heavier with people. But, for local authorities, roughly £7,000 per offence—it could be multiple offences, of course—or 50% of an average year’s rental income, would be proportionate.

Civil Liability Bill [HL]

Debate between Earl of Kinnoull and Lord Hunt of Wirral

Report stage (Hansard - continued): House of Lords
Tuesday 12th June 2018 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, it is very hard to follow such a clear speech and say anything. I congratulate the noble Lord, Lord Sharkey, on such a clear presentation. I will only observe mathematically that the latest NHS Resolution annual report states very clearly that the change from 2.5% to minus 0.75% would cost the NHS an additional £1.2 billion per year. Making the change from minus 0.75% to 1%, which appears to be what the industry in general expects, works back mathematically to suggest that speed is worth around £2 million per day to the NHS. So the amendments have great merit in that they would have a direct positive effect on the front-line availability of NHS funds. Accordingly, I commend them.

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interests as set out in the register and congratulate the noble Lord, Lord Sharkey, and the noble Earl, Lord Kinnoull, on Amendment 65, in particular, and the consequential amendments. More than anything else, the simplification of the process for the first review of the discount rate will allow the Lord Chancellor to proceed with the speed that everyone in this House has urged. I very much hope that my noble friend the Minister will confirm that the Government are prepared to accept Amendment 65 and the consequential amendments. I look forward to her acceptance.

Financial Guidance and Claims Bill [HL]

Debate between Earl of Kinnoull and Lord Hunt of Wirral

Report: 2nd sitting (Hansard): House of Lords
Tuesday 31st October 2017 Lords Chamber

[Lord Hunt of Wirral]

My Lords, I am very grateful to the noble Earl, Lord Kinnoull. I completely understand his reference to Meccano; I suppose it is easy to pretend that we have moved on, as the noble Lord, Lord Deben, said—advised, no doubt, by his grandchildren. I understand the point that there needs to be a structure; it is that about which I was hoping to persuade the Minister.

I am also very grateful to my noble friends Lord Flight and Lord Deben for their support. I sensed a feeling around the House that something needs to be done. Does the Minister understand that I have been gnawing away at this particular problem for over 10 years? I think it was the noble Baroness, Lady Ashton, who took through a Bill some considerable time ago that recognised the need to regulate claims management companies. Many examples were given then, many years ago, of how that represented a growing market. Looking around us today, particularly at holiday sickness claims, you suddenly realise that a new breed of companies are exploiting the admitted rights of individuals to compensation, but in return are demanding a share of that compensation. That has become the lifeblood of these claims management companies; and they keep changing. One moment, you impose a different form of regulation, then the next, you see that the companies have completely escaped any form of regulation.

It may well be that the Minister is right to look to the future with confidence, knowing that the Financial Conduct Authority will now be dealing with the problem. He is right to point out that the FCA has power under existing legislation. Perhaps we will see at last a reining in of these individuals, who have been feeding on the lifeblood of victims who cannot afford to allow part of their compensation to be siphoned off into a developing, stronger claims management company. In a way, I suppose my noble friend was saying that I have made a serious error of judgment in labelling them all as claims management companies. It may well be that they do not fit that description, but I think we all know what we are talking about when we refer to claims management companies. I call them claims farmers. I recently attended a conference where I was asked why I have this vendetta against claims farmers; I admitted that it is because they have no justification for what they do and for the way in which their business model has developed. The Minister has made a number of commitments—I can see him quickly checking his notes on what commitments I am referring to—and I sensed a considerable amount of sympathy for the point I was making. I want to reflect carefully on all the points.

[The Earl of Kinnoull]

I have here the report I referred to, from the Competition and Markets Authority. Paragraph 2.37 states:

“The range of services provided by CMCs can include … (d)”—


among other things—

“providing credit repair and credit hire for non-fault claimants”.

In other words, as far as the CMA is concerned, claims management companies certainly include credit hire companies. In my bit of the industry—underwriting—we would absolutely think that they are part of the same thing. No one has objected to that. It is very clear throughout that section of the CMA report that they are one and the same.

[Lord Hunt of Wirral]

I am grateful to the noble Earl for making that important point. I do not necessarily want to speak on behalf of the Minister, but I sense that his response may be that other people do that work as well. We need to try to ensure that we fulfil my objective that where there is a claim, there should be regulation. There should be a structure whereby there is some control of the companies seeking to exploit the situations certain people who need to bring a claim find themselves in.

I will reflect carefully on all the points my noble friend the Minister raised, but this problem is not going to go away. I can see it increasing.

As I am already becoming aware, there is other legislation in respect of which claims managers are looking at new areas to fasten on to and exploit. We have to be prepared to deal with that in advance, rather than seek to catch up, as we have tried to do for the last 10 years. Let us move ahead. In the meantime, I thank my noble friend for all he has said and I beg leave to withdraw the amendment.