Deregulation Bill

Lord Ahmad of Wimbledon Excerpts

Thursday 30th October 2014 Grand Committee

[Baroness Hanham (Con)]

My Lords, I apologise to the Committee that I have not had the opportunity so far to take part on the Bill. I do so now as a very new co-president of London Councils and as a freeman of the Royal Borough of Kensington and Chelsea, of which I am a former leader.

I want to intervene on this issue because I am long enough in the tooth, as my noble friend is, to remember the 1973 Act being introduced. It was introduced then because there was an experience of a transient population developing within London along with scarce housing. They were coming in for a short time, going away again and not contributing at all to the settled population. I wish that that situation had changed but in fact it has not. Central London is still the magnet for people coming here for a short time. Why do we worry about that? I think that it is because it destabilises the population and the use of accommodation. It makes it almost impossible for a local authority to know what its property, or the property within the borough, is being used for.

The noble Lord, Lord Mawson, spoke about having proper regulation, but there is proper regulation. What is happening in the Bill takes that proper regulation away. It seems absolutely essential that the local authority should have the oversight of what is going on. An application has to be made to it for practically everything else to do with property, so it should be able to see what is going on and to approve, or not, the short-term use. Perhaps I may go back to the suggestion that this is stopping people letting out their homes for a short time. Nobody is looking at that. What they are looking at is somebody who owns a property and then deliberately turns it into not a buy-for-let but a buy-for-rent for six weeks or so.

In my own area, you often see people coming into quite expensive accommodation. They put their suitcases behind them and go in, and you have no idea who they are. They vanish again a week later and somebody else turns up. That is not at all helpful for stability and it certainly does not help us with the transient nature of the situation. Central London boroughs may suffer from that more than others: Westminster, Kensington and Chelsea, and probably Camden.

Secondly, there has been an enormous amount of new development in London which is not necessarily of any use to local residents. It will be made of less use to local residents if some of those really big glass buildings, even at the rents that are charged, are let out on a short-term basis. The coming and going there will be absolutely uncontrollable.

I do not know what mischief has brought this clause about. I very much hope that my noble friend Lord Ahmad will be able to tell us, because the legislation seems to have been running along quite happily, doing what it is meant to do, for more than 30 years. Why suddenly, at this moment when London is in turmoil, a perpetual fever, of people, including tourists, coming and going—apart from the fact that this is an opportune Bill to put it in—is it important?

My borough, the Royal Borough of Kensington and Chelsea, is very alarmed about this. It has made its position clear. One of the reasons why I support the opposition to the clause, as well as the amendments, is that it will be badly affected. Other boroughs may not be as badly affected, but if this is a matter where each borough will make up its mind about deregulation, that is its choice, its power and its local decision if its local residents support it. I do not think that there is a role here for the Secretary of State in making a decision that affects a local authority area that much.

It is London that is affected by the Bill. London was deliberately affected by the London Government Act because of the situation then. I doubt that any other city has the pressure that London has now—although that may develop. I very much hope that the clause will be reconsidered, because I think it is unnecessary. London has spoken before about this. People who want to let their houses when they go away must be exempted. As it stands, I am very much against the clause.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, first, I thank all noble Lords for their contributions to the debate. Many noble Lords have spoken from their personal experience in London and as representatives of various London councils.

Perhaps at the outset I may say that I am not an adopted Londoner; I am a born and bred Londoner and someone who has represented a London council and sat on the London Councils body itself, so I am aware of some of the key concerns that have been raised about the provisions. However, I cannot claim to have made a coherent contribution to the 1973 Act. I hope that my contributions today will be somewhat more coherent, but that is for others to judge.

The amendments, which would allow local authorities to make their own exemptions for particular properties and areas, would, in the Government’s view, risk removing the certainty and consistency that are behind our proposals for all London residents. Indeed, they would create a patchwork of different regulatory approaches across the capital, potentially resulting in unjustifiable differences between local authority areas. Residents may find that their near neighbours have either greater or lesser freedoms to let their property short term, which in many cases would be difficult for them to understand.

Let me be absolutely clear: we intend to retain the important safeguards of Section 25, which protect London’s housing supply for Londoners who live and work permanently in the capital city. However, through Clause 34, we want to provide certainty for all residents in all London local authority areas that they are able to let their homes on a short-term, temporary basis, such as when they are on holiday, without having to deal with the unnecessary bureaucracy of applying for planning permission.

These amendments also seek to exempt from deregulation properties that are not the main residence of the landlord. I reiterate that, through Clause 34, the Government only want to allow residents to be able to temporarily let their homes. This measure will do nothing to make it easier for those seeking to short-term let property on a permanent or commercial basis. Rather than specifying how the deregulation will work on the face of the Bill, the clause seeks the power to make regulations which will provide the legal framework. These will follow the affirmative procedure and will be subject to debate and the approval of Parliament on important issues, including in precisely what circumstances short-term letting will not require planning permission.

I turn to the detail of Clause 34. The clause updates an outdated 40 year-old law restricting Londoners from being able to temporarily let out their homes or spare rooms. Section 25 of the Greater London Council (General Powers) Act 1973 prohibits the use of a,

“building, or any part of a building”,

for “temporary sleeping accommodation” for fewer than 90 consecutive nights without planning permission for temporary change of use. In London, residents failing to secure planning permission face a fine of up to £20,000 for each offence. The regulations that the Government are bringing forward will clarify for London residents what is permissible.

[Baroness Donaghy]

What is the record of the number of fines imposed?

[Lord Ahmad of Wimbledon]

The noble Baroness makes a very valid contribution. Both the noble Lords, Lord McKenzie and Lord Tope, have mentioned that, and I shall come to it in a moment.

We are seeking to provide clarity for Londoners across all boroughs. The noble Lord, Lord Mawson, mentioned London as a capital city and its economy. Last summer nearly 5 million overseas visitors came to the capital. Some of those visitors, as well as UK residents, want to experience London as a local by staying with Londoners who live in London permanently or indeed in their homes while the resident is away on holiday. We know that there are currently thousands of London properties and rooms advertised on websites, but each is potentially in breach of Section 25 as it stands. That is the important point here, and I shall come to that in a moment. There is uncertainty for householders as to whether their local authority will take action against them for unauthorised short-term letting. Today’s technology enables internet sites, which we have heard about in the debate, to offer services to manage and quality-control short-term lettings. Planning legislation for the capital needs to catch up with the 21st century way of living. Noble Lords talked about their personal experience. Every year, thousands of visitors enjoy their holidays in Londoners’ homes, and such short-term letting is prevalent in areas such as Wimbledon during the tennis fortnight.

Through regulations, we want to provide certainty and consistency for all residents in all London local authority areas about when it will be permitted for householders to temporarily short-term let their property without the need for planning permission. The Government’s amendment to Section 25 crucially retains the main provision for protecting London’s housing for those who live and work permanently in London, while seeking to bring the current legislation up to date. Importantly, we want to make it clear that we do not seek to allow the short-term letting of London’s housing stock on a permanent or commercial basis. The Government do not seek to repeal Section 25 of the 1973 Act or amend its primary purpose of protecting London’s housing supply for Londoners who live and work permanently in the capital. Moreover, the Government fully recognise that London’s homes should not be lost to investors to let out exclusively for short-term lets, and our reforms will not enable this. It is the Government’s intention simply to allow Londoners to let their homes on a short-term, temporary basis, such as when they are on holiday, without having to deal with the unnecessary bureaucracy of applying for planning permission.

Clause 34 enables the Secretary of State for Communities and Local Government to bring forward regulations to prescribe the circumstances in which the use of a home as temporary sleeping accommodation is not deemed a material change of use, requiring planning permission. The clause also allows for regulations to exclude individual residential premises, and premises in particular areas, from any relaxation of Section 25.

I come to some of the questions that were raised. The noble Baroness, Lady Donaghy, the noble Lord, Lord McKenzie, and my noble friend Lord Tope asked about prosecutions. London boroughs have taken enforcement action against short-term letting. For example, in Westminster action has been taken against statutory nuisances and anti-social behaviour. This clause is designed to redress the sporadic enforcement of Section 25. It certainly creates greater certainty for residents who want to let their properties short term. The Government’s intention is to allow more people to enjoy and visit London. We are proposing allowing temporary, short-term letting for only householders and not commercial or permanent short-term letting.

--- Later in debate ---

[Baroness Hanham]

I clearly heard the Minister say that this provision is intended specifically to allow people to let out their homes. Under those circumstances, I wonder whether the current wording of the legislation, which refers to,

“accommodation of any residential premises”,

describes that particular position.

[Lord Ahmad of Wimbledon]

As a previous Whip to the noble Baroness, I know that when she asks questions one needs to be quite detailed in one’s response. Let me again assure the noble Baroness that I will write to her specifically on that element. I am sure officials have also made note of her quite specific question. My noble friend Lady Hanham also raised the issue of curtailing the role, or asking why the Secretary of State would retain this role. As I have already said, we will work with local authorities in London on how regulations covering the role of the Secretary of State would work.

I am just looking through the number of specific fines from local authorities. Again, I have touched on some of them. I do not have the detailed breakdown of how many people have been pursued by which authority, but I have requested that from officials and will write to all noble Lords in that respect. I trust that I have covered most if not all of the questions. For anything pending I shall, of course, review the contributions made by all noble Lords, which I welcome, not least because of the experience across the board. I reiterate that the Government recognise that this is an area where there will be considerable interest and we wish to ensure that we get the change right. Therefore, I welcome the contributions that have been made in Committee today.

I reassure noble Lords that the Government will be working closely with all interested parties in London, including the local authorities and the hospitality industry. The Government want to ensure that the measures brought forward meet householders’ aspirations of temporarily letting out their homes or spare rooms, while retaining the key purpose of Section 25 which is keeping London homes for those who live permanently in London. We believe that these reforms benefit those Londoners who wish to supplement their income by making their homes or spare rooms available. It offers an alternative to hotels and guesthouses—as the noble Lord, Lord Mawson, mentioned—and further supports the wider tourist industry. It also helps those temporarily working in the capital or searching for a place to live by expanding the pool of competitively priced accommodation on offer. I beg to move that Clause 34 stands part of the Bill and I urge the noble Lord, Lord McKenzie, to withdraw his amendment.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his very full reply and thank all noble Lords who have contributed to the debate on this amendment. I was slightly comforted by the Minister’s direction of travel. My understanding is it is likely that what is proposed is a narrower deregulation than might originally have been assumed from looking at the Bill. Whether it is narrow enough is something we need to look at with reference to genuine householders. I do not think that necessarily required a short-term let to be in respect of the householder’s property—that is it was their sole or main residence. That could impact on our position a little. I am not sure if we heard when at least the draft regulations are going to be available. The Minister prays in aid affirmative procedures. We have all done that and we know that is really only a marginal opportunity to influence the outcome of the regulations.

The Minister set his face against there being a right for London boroughs to take a different view and not follow the Secretary of State on the deregulation. That does not necessarily sit easy with those of us who are paid-up localists—normally including the noble Lord, Lord Tope. I think all noble Lords who spoke, including the noble Lord, Lord Tope, the noble Baronesses, Lady Donaghy and Lady Hanham, and, perhaps with respect to a lesser extent the noble Lord, Lord Mawson, share the analysis. It is just a question of where that takes us in terms of a solution.

The noble Baroness, Lady Hanham, made the point that central London in particular is a magnet for these operations and it does not necessarily apply to London as a whole. I do not think the survey that London Councils did—or maybe it was Camden—covered all the boroughs of London. I do not think there was 100% return, so it will be interesting to know what a wider spread might mean.

Clearly there is great concern about this provision. The Minister has helped to allay some of that concern this afternoon, but we need to have more detail before Report so we can determine which way we are going to proceed on this. Having said that, I beg leave to withdraw the amendment.

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

37: After Clause 34, insert the following new Clause—
“Provision of advice etc about residential licences
In the Housing Act 1996, after section 220 insert—“220A Provision of general advice etc about residential licences: England
(1) The Secretary of State may give financial assistance to any person in relation to the provision by that person of—
(a) information, training or general advice about any matter relating to residential licences in England, or(b) a dispute resolution service in connection with any matter relating to residential licences in England.(2) Financial assistance under this section may be given in such form and on such terms as the Secretary of State considers appropriate.
(3) The terms on which financial assistance under this section may be given may, in particular, include provision as to the circumstances in which the assistance must be repaid or otherwise made good to the Secretary of State and the manner in which that is to be done.””

[Lord Ahmad of Wimbledon]

My Lords, this amendment would enable the Secretary of State to provide financial assistance to an organisation providing advice, information and training concerning residential licences. Importantly, this would allow such assistance to be made available where advice is provided in connection with the law concerning park homes.

The Mobile Homes Act 2013 introduced significant changes to the law on park homes and marks this Government’s commitment to provide proper protection to park home owners, while ensuring that those site operators who run a decent and honest business can prosper without the heavy burdens of red tape and bureaucracy.

As noble Lords are aware, the sector is small—about 85,000 homes on 2,000 sites in England. The law applying to it is unique and complicated. Many homeowners are older people and some are vulnerable. They are often hard to reach. It is also fair to say that many of them have suffered exploitation at the hands of unscrupulous operators. Homeowners often lack basic understanding of the law and their related rights. Not surprisingly, therefore, a source of concern in the past has been the lack of available, accurate and independent advice on the rights and responsibilities of the parties to a residential park home contract. This is why the Government commissioned the Leasehold Advisory Service, known as LEASE, in 2013, following the introduction of the Mobile Homes Act, to provide free initial advice on park home law.

LEASE has for many years provided advice to the residential leaseholder sector and it has been funded to do so by the Secretary of State by way of grant aid under powers in Section 94 of the Housing Act 1996. Those powers were not available to fund LEASE in respect of its park home functions because Section 94 is only available to fund advice in respect of residential tenancies. The tenure arrangement for park homes means they are residential licences. The amendment would enable the Secretary of State in future to pay grant aid to LEASE, or any other organisation, in connection with park home advice, in the same way as he can in respect of leasehold advice. Therefore I beg to move the amendment.

[Lord McKenzie of Luton]

My Lords, I am happy to support this amendment.

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

38: After Clause 34, insert the following new Clause—
“Designation of urban development areas: procedure
(1) Section 134 of the Local Government, Planning and Land Act 1980 (urban development areas) is amended as follows.
(2) After subsection (1) insert—
“(1A) Before making an order designating any area of land in England as an urban development area, the Secretary of State must consult the following persons—
(a) persons who appear to the Secretary of State to represent those living within, or in the vicinity of, the proposed urban development area;(b) persons who appear to the Secretary of State to represent businesses with any premises within, or in the vicinity of, the proposed urban development area;(c) each local authority for an area which falls wholly or partly within the proposed urban development area; and(d) any other person whom the Secretary of State considers it appropriate to consult.”(3) After subsection (3B) insert—
“(3C) A statutory instrument containing an order under subsection (1) above designating any area of land in England as an urban development area is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) In subsection (4), after “No” insert “other”.
(5) The duty to consult under section 134(1A) of the Local Government, Planning and Land Act 1980 (inserted by subsection (2) above) may be satisfied by consultation before this section comes into force.”

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord, Lord McKenzie, for his succinct and focused response to the previous amendment. I hope this is hinting at a trend, but I fear not.

The Government’s aim is to promote and support the regeneration of brownfield land and the creation of new locally led garden cities. Increasing the supply of new homes is a key priority for our Government. We want to support people’s ambitions to deliver the homes they need in innovative ways. We believe that urban development corporations can play a key role in driving forward delivery of large-scale development, especially in areas where previous ambitious plans have failed to progress. Urban development corporations, as noble Lords will know, are statutory bodies which are established under the Local Government, Planning and Land Act 1980. Their objective is to regenerate designated urban development areas.

The legislation on urban development corporations is now over 30 years old. While the substance of the legislation remains fit for purpose, the Government believe that the procedure for establishing them should now be reformed. They are established through affirmatively approved instruments, which, if held to affect private interests, can be declared to be hybrid by the House, and therefore become subject to the hybrid instruments procedure. Once declared hybrid, the order is open to allow private interests to petition. This has happened in all previous cases. The hybrid procedure is time-consuming and can be costly for all parties, involving processes of representations and hearings over what can be a substantial period of time.

I say from the outset that I have received and read the Delegated Powers and Regulatory Reform Committee Report, which says, on page 5, that we need,

“better to manage local expectations and to ensure that the prior requirement for Parliamentary scrutiny and approval is properly understood”.

Balanced with that, I have already stated the Government’s intention, which I am sure is an intention shared by everyone, that more homes need to be built. Therefore, if there are no petitions, the delay can be short under current procedures. However, where there are petitions, the process can be very time-consuming, as they need to be considered in turn by both the Hybrid Instruments Committee and then, if necessary, a specially convened Select Committee before returning for debate in both Houses.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Baroness, Lady Andrews, and the noble Lord, Lord McKenzie, for their clear contributions. I take this opportunity to put on record the Government’s thanks to the Delegated Powers and Regulatory Reform Committee for its response and to formally apologise for the process that was undertaken and for the late submission of our memorandum. I fully adhere to, and the Government fully understand, the importance of submitting memoranda to committees in a timely manner and I am sorry that that was not achieved in this case. I thank the committee again, though we fell a bit short in our responsibility, for its ability to turn the paper around and respond so quickly. It would be entirely appropriate at this juncture to say that I have received confirmation that we will issue our formal response within the next two weeks, in advance of the next stage of the Bill. That was confirmed to me a few moments ago.

Several points have been made about procedure. It would be entirely appropriate at this juncture, bearing in mind the conventions of the House and that we are in Grand Committee, in line with section 8.102 of the Companion and the sensitivities and concerns that have been expressed, that I withdraw the amendment, but the Government’s intention is that we return to this issue on Report. I beg leave to withdraw the amendment.

Amendment 38 withdrawn.