Deregulation Bill

Lord Ahmad of Wimbledon Excerpts

Wednesday 11th February 2015 Lords Chamber

Moved by

[Lord Ahmad of Wimbledon]

45: After Clause 29, insert the following new Clause—
“Tenancy deposits: provision of information by agents
(1) The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (S.I. 2007/797) is amended as follows.
(2) In article 2 (prescribed information relating to tenancy deposits), after paragraph (2) insert—
“(3) In a case where the initial requirements of an authorised scheme have been complied with in relation to the deposit by a person (“the initial agent”) acting on the landlord’s behalf in relation to the tenancy—
(a) references in paragraphs (1)(b), (g)(iii) and (vii) to the landlord are to be read as references to either the landlord or the initial agent;(b) references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.(4) In any other case, references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.
(5) Section 212(9)(a) of the Act (references to landlord include persons acting on landlord’s behalf) does not apply for the purposes of this article.”
(3) After article 2 insert—
“3 Article 2(3) to (5): transitional provisions
(1) Paragraphs (3) to (5) of article 2 are treated as having had effect since 6th April 2007, subject to the following provisions of this article.
(2) Paragraphs (3) to (5) of article 2 do not have effect in relation to—
(a) a claim under section 214 of the Act or section 21 of the Housing Act 1988 in respect of a tenancy which is settled before the commencement date (whether or not proceedings in relation to the claim have been instituted), or(b) proceedings under either of those sections in respect of a tenancy which have been finally determined before the commencement date.(3) Paragraph (5) applies in respect of a tenancy if—
(a) proceedings under section 214 of the Act in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and(b) because of paragraphs (3) to (5) of article 2, the court decides—(i) not to make an order under section 214(4) of that Act in respect of the tenancy, or(ii) to allow an appeal by the landlord against such an order.(4) Paragraph (5) also applies in respect of a tenancy if—
(a) proceedings for possession under section 21 of the Housing Act 1988 in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and(b) because of paragraphs (3) to (5) of article 2, the court decides—(i) to make an order for possession under that section in respect of the tenancy, or(ii) to allow an appeal by the landlord against a refusal to make such an order.(5) Where this paragraph applies, the court must not order the tenant or any relevant person (as defined by section 213(10) of the Act) to pay the landlord’s costs, to the extent that the court reasonably considers those costs are attributable to the proceedings under section 214 of the Act or (as the case may be) section 21 of the Housing Act 1988.
(6) Proceedings have been “finally determined” for the purposes of this article if —
(a) they have been determined by a court, and(b) there is no further right to appeal against the determination.(7) There is no further right to appeal against a court determination if there is no right to appeal against the determination, or there is such a right but—
(a) the time limit for making an appeal has expired without an appeal being brought, or(b) an appeal brought within that time limit has been withdrawn.(8) In this article “the commencement date” means the date on which the Deregulation Act 2015 is passed.”
(4) The amendments made by this section to the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (S.I. 2007/797) do not affect a power to use subordinate legislation to amend or revoke that Order.
(5) In subsection (4), “subordinate legislation” has the same meaning as in the Interpretation Act 1978.”

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

My Lords, I will speak to Amendments 45 and 45A before moving on to Amendment 46. Amendments 45 and 45A have been tabled in response to a recent court case, Charalambous v Ng 2014, and an unreported county court case, Cooper v Collins, which have created uncertainty in the private rented sector.

Amendment 45 clarifies that, where a letting agent has received a deposit on behalf of a landlord, the letting agent’s contact details can be given in the prescribed information instead of the landlord’s details. It makes detailed amendments to the Housing (Tenancy Deposits) (Prescribed Information) Order 2007—the order that lists the prescribed information that a landlord must give to a tenant—to make absolutely clear when a letting agent’s details may be provided instead of the landlord’s. The amendments to the order are retrospective, making clear that it is and always has been the case that a letting agent’s details may be provided in the prescribed information instead of the landlord’s. In speaking to these amendments and those that follow, I declare my interest as a landlord.

To ensure fairness, provision is also being made that would prevent the reopening of out of court settlements or court cases that have been finally determined on the basis of this issue. The amendments will apply in cases where legal proceedings are under way at the time the provisions come into force, but tenants will be protected from paying their landlord’s legal costs where the court subsequently decides against the tenant in the light of these provisions. This strikes the right balance between ensuring that tenants do not suffer financially as a result of the retrospective legislation and ensuring that landlords are not penalised where they have followed government advice.

Amendment 45A has been tabled in response to the Court of Appeal’s judgment in the case of Charalambous v Ng 2014, which concerned a landlord who received a tenancy deposit prior to the coming into force of the tenancy deposit legislation in 2007. The tenancy in question became periodic prior to the date that the tenancy deposit legislation came into force and has continued as such ever since. The court ruled that the tenancy deposit legislation should apply to all landlords in this position and that they would therefore need to protect deposits if they wished to rely on the no-fault ground for eviction known as Section 21. It was never the intention, either in 2007 or following amendments made to the tenancy deposit legislation in 2012, that it should apply in this way. The amendments that we propose will make absolutely clear that, although landlords affected by the judgment will need to protect deposits if they wish to rely on Section 21, they will not be at risk of financial penalties should they fail to protect.

Moving on to Amendment 46, I thank the noble Baroness, Lady Hayter of Kentish Town, for her desire to clarify “prescribed information” in relation to lettings, to which I have just spoken. Her amendment makes provisions along similar lines to those that I just outlined on Amendment 45. While the Government agree with the noble Baroness on this point, we believe that Amendment 45 addresses the issues in a more detailed way than Amendment 46. I hope that the noble Baroness will be sufficiently satisfied not to move her amendment.

The Government’s amendments will make welcome clarifications to the tenancy deposit legislation. I beg to move.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the Minister for that. He will not be surprised that I am delighted that the Government have seen sense and tabled their amendments, which are in far more correct language than I managed. They implement the amendment that I moved in Committee, which, as he said, appears in the Marshalled List as Amendment 46.

In Committee the Minister said that my amendment was unnecessary but, to be fair to him, he ensured that discussions took place with the tenancy deposit scheme, which had raised concerns about whether having the letting agent’s name in the paperwork, rather than the landlord’s, was sufficient. Clearly, those discussions persuaded officials that the change was necessary. I congratulate the Minister and the draftsmen on producing Amendment 45 in time for Report. For obvious reasons, we heartily support this and I will not move Amendment 46 when called.

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

45A: After Clause 29, insert the following new Clause—
“Tenancy deposits: non-compliance with requirements
(1) Chapter 4 of Part 6 of the Housing Act 2004 (Tenancy Deposit Schemes) is amended as follows.
(2) In section 214 (proceedings relating to tenancy deposits), in subsection (1) after “shorthold tenancy” insert “on or after 6 April 2007”.
(3) In section 215 (sanctions for non-compliance)—
(a) for subsection (1) substitute—“(1) Subject to subsection (2A), if (whether before, on or after 6 April 2007) a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when the deposit is not being held in accordance with an authorised scheme.
(1A) Subject to subsection (2A), if a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007, no section 21 notice may be given in relation to the tenancy at a time when section 213(3) has not been complied with in relation to the deposit.”;
(b) in subsection (2A), after “Subsections (1)” insert “, (1A)”.”

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

46A: After Clause 30, insert the following new Clause—
“Preventing retaliatory eviction
(1) Where a relevant notice is served in relation to a dwelling-house in England, a section 21 notice may not be given in relation to an assured shorthold tenancy of the dwelling-house—
(a) within six months beginning with the day of service of the relevant notice, or(b) where the operation of the relevant notice has been suspended, within six months beginning with the day on which the suspension ends.(2) A section 21 notice given in relation to an assured shorthold tenancy of a dwelling-house in England is invalid where—
(a) before the section 21 notice was given, the tenant made a complaint in writing to the landlord regarding the condition of the dwelling-house at the time of the complaint,(b) the landlord— (i) did not provide a response to the complaint within 14 days beginning with the day on which the complaint was given,(ii) provided a response to the complaint that was not an adequate response, or(iii) gave a section 21 notice in relation to the dwelling-house following the complaint,(c) the tenant then made a complaint to the relevant local housing authority about the same, or substantially the same, subject matter as the complaint to the landlord,(d) the relevant local housing authority served a relevant notice in relation to the dwelling-house in response to the complaint, and(e) if the section 21 notice was not given before the tenant’s complaint to the local housing authority, it was given before the service of the relevant notice.(3) The reference in subsection (2) to an adequate response by the landlord is to a response in writing which—
(a) provides a description of the action that the landlord proposes to take to address the complaint, and(b) sets out a reasonable timescale within which that action will be taken. (4) Subsection (2) applies despite the requirement in paragraph (a) for a complaint to be in writing not having been met where the tenant does not know the landlord’s postal or e-mail address.
(5) Subsection (2) applies despite the requirements in paragraphs (a) and (b) not having been met where the tenant made reasonable efforts to contact the landlord to complain about the condition of the dwelling-house but was unable to do so.
(6) The court must strike out proceedings for an order for possession under section 21 of the Housing Act 1988 in relation to a dwelling-house in England if, before the order is made, the section 21 notice that would otherwise require the court to make an order for possession in relation to the dwelling-house has become invalid under subsection (2).
(7) An order for possession of a dwelling-house in England made under section 21 of the Housing Act 1988 must not be set aside on the ground that a relevant notice was served in relation to the dwelling-house after the order for possession was made.
(8) Subsection (1) does not apply where the section 21 notice is given after—
(a) the relevant notice has been wholly revoked under section 16 of the Housing Act 2004 as a result of the notice having been served in error,(b) the relevant notice has been quashed under paragraph 15 of Schedule 1 to that Act,(c) a decision of the relevant local housing authority to refuse to revoke the relevant notice has been reversed under paragraph 18 of Schedule 1 to that Act, or(d) a decision of the relevant local housing authority to take the action to which the relevant notice relates has been reversed under section 45 of that Act.(9) Subsection (2) does not apply where the operation of the relevant notice has been suspended.
(10) References in this section and section (Further exemptions to section (Preventing retaliatory eviction)) to a relevant notice served, or complaint made, in relation to a dwelling-house include a relevant notice served, or complaint made, in relation to any common parts of the building of which the dwelling-house forms a part.
(11) But subsection (10) applies only if—
(a) the landlord has a controlling interest in the common parts in question, and(b) the condition of those common parts is such as to affect the tenant’s enjoyment of the dwelling-house or of any common parts which the tenant is entitled to use.(12) In this section and section (Further exemptions to section (Preventing retaliatory eviction)) a reference to a complaint to a landlord includes a complaint made to a person acting on behalf of the landlord in relation to the tenancy.
(13) In this section and section (Further exemptions to section (Preventing retaliatory eviction))—
“assured shorthold tenancy” means a tenancy within section 19A or 20 of the Housing Act 1988;
“common parts”, in relation to a building, includes—
(a) the structure and exterior of the building, and(b) common facilities provided (whether or not in the building) for persons who include one or more of the occupiers of the building;“controlling interest” means an interest which is such as to entitle the landlord to decide whether action is taken in relation to a complaint within this section or a relevant notice.
“dwelling-house” has the meaning given by section 45 of the Housing Act 1988;
“relevant local housing authority”, in relation to a dwelling-house, means the local housing authority as defined in section 261(2) and (3) of the Housing Act 2004 within whose area the dwelling-house is located;
“relevant notice” means—
(a) a notice served under section 11 of the Housing Act 2004 (improvement notices relating to category 1 hazards), (b) a notice served under section 12 of that Act (improvement notices relating to category 2 hazards), or(c) a notice served under section 40(7) of that Act (emergency remedial action);“section 21 notice” means a notice given under section 21(1)(b) or (4)(a) of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy).”

[Lord Ahmad of Wimbledon]

My Lords, it is always a pleasure to act on behalf of my noble friend Lord Wallace of Saltaire, in whose name this amendment stands. I may be doing a bad impersonation of him but it is always a pleasure to respond in his name.

A number of amendments relating to retaliatory evictions have been grouped together. For clarity, I will address government Amendments 46A to 46J before moving on to Amendment 52 and, finally, Amendments 46AA, 46AB, 46BA and 46HA.

The private rented sector is an important and growing part of our housing market. It has overtaken the social rented sector in terms of size and is now the second largest tenure with 1.9 million properties housing 4 million households throughout England.

The quality of privately rented housing has improved rapidly over the past decade. The Government are committed to promoting a strong, thriving professional private rented sector where good landlords can prosper and hard-working tenants can enjoy decent standards and receive a service which represents value for money for their rent. However, the behaviour of a small number of rogue landlords has a detrimental impact on tenants. Also, some tenants do not act responsibly, and it can be difficult and time-consuming to evict such tenants where it would be legitimate to do so—for example, because of mistakes made when serving a Section 21 eviction notice.

This amendment to the Bill is designed to be a balanced package of measures that will benefit both tenants and landlords. It covers four areas, which I shall go through briefly. First, it will protect tenants against the practice of retaliatory eviction where they have raised a legitimate complaint about the condition of a property and a local authority has issued a notice confirming that the repair needs to be carried out to avoid a risk to health and safety.

Secondly, the amendment will ensure that tenants are always given at least two months’ notice before they have to move out of their home. This will be done by providing that a Section 21 notice may not be given in the first four months of the tenancy and by introducing an expiry date after which a Section 21 notice ceases to be valid if possession proceedings have not been brought. The purpose of this measure is to deal with an approach adopted by, I stress, a small minority of landlords and letting agents in which they serve an eviction notice at the start of a tenancy. This disreputable practice can result in a tenant having to vacate a property with virtually no notice.

Thirdly, the amendment will make the eviction process more straightforward for landlords where the tenant can legitimately be evicted. It does so through the introduction of a prescribed notice to reduce errors and by removing the need for the date specified in a notice served under Section 21(4)—which relates to the notice to be given in relation to a periodic assured shorthold tenancy—to be the last day of a period of the tenancy, while retaining the requirement to give two months’ notice. We estimate that this measure alone will deliver savings to landlords of about £3 million a year.

The fourth element is to provide that, where a landlord has failed to comply with certain legal obligations, the tenant cannot be evicted using the Section 21 procedure. We envisage that this will apply to existing legal obligations such as the requirement to provide a new tenant with an energy performance certificate and to obtain an annual gas safety certificate. This restriction on the service of an eviction notice would be lifted as soon as these documents were provided.

While some of these changes will involve small one-off costs to landlords, primarily due to the need to familiarise themselves with the legislation, we estimate that this provision will deliver savings to landlords of, as I said, about £3 million per year.

The first part of the amendment introduces much needed protection for tenants against a very small minority of unscrupulous and rogue landlords who knowingly rent out unsafe and overcrowded accommodation and then evict any tenant who makes a complaint about the condition of the property—as I have said, a practice known commonly as retaliatory eviction. The amendment provides that a tenant cannot be evicted for a period of six months where they have requested that a repair is carried out to their home and the local authority confirms that the repair is necessary to prevent a possible risk to the tenant’s health and safety. The landlord will also be required to ensure that the repairs are completed.

As noble Lords will know, this amendment originally started out as a Private Member’s Bill in the other place. The amendment is very similar but there are some differences, which I wish to highlight. One is that we have decided to remove hazard awareness notices from the list of documents that can confirm a health and safety risk. The other notices are an improvement notice and a notice of emergency remedial action. A hazard awareness notice is a document that alerts the building occupier to a potential minor hazard—for example, a cracked window or uneven steps on a staircase.

We took the decision to remove hazard awareness notices from the list as they are normally issued only where there is a relatively small risk to the tenant’s health and safety—for example, in the case of uneven steps on a staircase. It does not require the landlord to actually do anything to rectify the problem. Local authorities will not be prevented from issuing hazard awareness notices. However, doing so would not give a tenant the protection against eviction that they would get if an improvement notice or a notice of emergency remedial action were issued. Local authorities would be aware of that and could be expected to take that fact into account when deciding what action to take following an inspection.

The local authority will also have a crucial role to play more generally. The protection against eviction which this amendment introduces will apply only if the local authority has confirmed that there is a potential health and safety risk. In addition, the tenant must have requested a repair before the serving of a Section 21 eviction notice. The amendment will not cover situations where a landlord serves an eviction notice and the tenant subsequently requests a repair. In addition, the amendment will not apply where a local authority determines that the issue being complained about has arisen because the tenant has breached their duty to use the property in a tenant-like manner. These measures will help to ensure that unfounded complaints are kept to an absolute minimum.

However, we want to ensure that landlords, and indeed tenants, are not left waiting for months and months for a local authority to inspect a property, which I know to be a concern. Therefore, the amendment provides that, by the time that the possession case comes to court, a local authority will need to have carried out an inspection or, where it has carried out an inspection, will need to have decided whether there is a defect that poses a risk to the tenant’s health and safety. If the local authority fails to do so, a tenant will not have a defence to the proceedings on the grounds of retaliatory eviction.

This should not be an onerous burden on local authorities. A tenant must be given at least two months’ notice of eviction under the Housing Act 1988. Typically, it would take a further two months for a possession case to go to court. So, on average, a local authority will have four months to carry out an inspection and decide whether the complaint by the tenant is legitimate. This should be ample time.

Retaliatory eviction is wrong and its continued practice is unacceptable. No tenant should face eviction because they have made a legitimate complaint to the landlord about the condition of their home. These are important amendments which introduce protection for tenants against rogue landlords, but they also contain provisions which we believe will benefit landlords and make it more straightforward to evict tenants in legitimate circumstances.

I move on to other amendments in this group. Amendment 52 is very similar in parts to the Government’s Amendments 46A to 46J. The amendment would protect tenants against the practice of retaliatory eviction where they had raised a legitimate complaint about the condition of a property and a local authority had issued a notice confirming that the repair needed to be carried out to avoid a risk to health and safety. The amendment would introduce protection for tenants against a small minority of unscrupulous and rogue landlords who knowingly rent out unsafe and overcrowded accommodation and then evict any tenant who makes a complaint about the condition of the property.

The amendment provides that a tenant cannot be evicted for a period of six months where they have requested a repair to be carried out on their home and the local authority confirms that the repair is necessary to prevent a possible risk to the tenant’s health and safety. Amendments 46A to 46J are designed to tackle exactly this problem, and in fact they go much further by introducing changes in several related areas. First, they ensure that tenants are always given at least two months’ notice before they have to move out of their home. A small minority of landlords and letting agents have adopted the practice of serving the eviction notice at the start of a tenancy—a point that I made earlier. This disreputable practice can result in the tenant having to vacate a property without notice.

Secondly, as I have already said, the eviction notice makes the process more straightforward for landlords in situations where the tenant can be legitimately evicted. It does so through the introduction of a prescribed notice to reduce errors and by removing the need for the date specified in a notice served under Section 21(4) to be the last day of a period of the tenancy, while retaining the requirement to give two months’ notice. The Government are keen to ensure that we take forward a balanced package of amendments that will help both landlords and tenants.

Thirdly, the amendments provide that where a landlord has failed to comply with certain legal obligations, a tenant cannot be evicted using the Section 21 procedure. We envisage that this will apply to existing legal obligations, as I have already mentioned, in relation to energy performance certificates and the annual gas safety certificate. The government amendment provides protection for tenants against retaliatory eviction. It also, as I have explained, delivers a range of other benefits for landlords.

Amendment 46AA would require tenants to wait for up to 28 days before they could expect their landlord to simply respond to a request by the tenant for repairs to be carried out to the property. At that stage the landlord would be required only to inform the tenant what, if anything, he proposed to do in response to the request. The Government have set a time limit of 14 days for the landlord to respond. In our view this strikes a fair balance between ensuring that landlords are given a reasonable time to respond to a complaint while not expecting tenants to put up with the disrepair in their property for an unreasonably long time. Renting out property is a business transaction and tenants, like any other consumer, have a right to expect their landlord to respond promptly to a request for repairs. In our view, 14 days is a reasonable period in which to require a response. Indeed, in many cases, a much earlier response could and should be expected—for example, if there is a leak in the property or a problem with the heating during the winter months.

There may be situations where a landlord is genuinely unable to respond within that timescale, but even if that is the case, that does not mean that the landlord would automatically be prevented from evicting the tenant for a period of six months. The local authority would still have to inspect the property and determine whether there was a potentially serious health and safety risk. However, it would be open to the landlord at any stage, before the inspection is carried out, to contact their tenant, assess what work needs to be done and arrange for it to be completed. If that has happened by the time of the inspection, and as a result there is no longer a potential risk to the health and safety of the tenant, the local authority will no longer have any role to play. In that scenario, the proposed restrictions on the service of a Section 21 eviction notice would not apply.

Amendment 46AB has the potential to reduce the length of time during which a tenant would be protected against retaliatory eviction. The Government propose that a tenant should be protected against eviction for a period of six months starting from the date that the local authority has determined that a property contains significant health and safety hazards, and has issued either an improvement notice or a notice of emergency remedial action. However, this amendment would reduce that time. Local authorities have a lot of competing demands on their time and it is very unlikely that they could inspect a property instantly, as soon as they have received a complaint from a tenant. If, for example, a local authority did not inspect a property until two months after it had received a complaint, even if a serious health and safety hazard was discovered, a tenant would then be protected against eviction only for a period of four months. That reduction would significantly weaken the protection that the Government have decided tenants must be given against the actions of the very few rogue landlords.

On Amendment 46BA, we are absolutely clear that tenants should pay their rent on the date that it is due. The Government’s proposals do not in any way undermine this central principle. When a tenant has fallen behind with their rent, landlords can use the procedures under Section 8 of the Housing Act 1988 to evict the tenant. Those procedures will remain unchanged and will not be affected in any way by the proposed restrictions on the use of a Section 21 order of the 1988 Act. We do not believe that a tenant should be denied protection from a retaliatory eviction when there are already adequate provisions in existing legislation for dealing with non-payment of rent.

Finally Amendment 46HA would apply to a situation when a tenant is entitled to repayment of any rent they have paid in advance for a period when they no longer occupy the property because the landlord has served a Section 21 eviction notice. It provides that the amount of rent repaid will be offset by an amount equal to any money that may be owed by the tenant to the landlord. The amendment is unnecessary, as there is nothing in the Government’s proposed legislation that would prevent a landlord offsetting any debts owed to them by the tenant against rent that they are liable to repay to the tenant. Therefore, I commend Amendments 46A to 46J and hope that, in the clarifications and assurances, noble Lords who have tabled Amendments 52, 46AA, 46AB, 46BA and 46HA will be minded not to press them.

Amendment 46AA (to Amendment 46)

Moved by

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, we are very happy to support the Government’s amendment. That is hardly surprising given that, as the noble Earl, Lord Cathcart, reminded the House, my noble friend Lord Stevenson of Balmacara and I tabled a very similar amendment to this—Amendment 50E to the Consumer Rights Bill—precisely to protect tenants against retaliatory eviction. Indeed, had the Government accepted it in principle at that stage, we would have had lots of time to discuss any tweaks and details. Furthermore, of course, that was the appropriate piece of legislation for it. It is exactly something that lives in a Consumer Rights Bill. It is quite hard to think why it should be in the Deregulation Bill but anyway it is here and we welcome the fact of it, and it is clearly the way the Government prefer it.

It is good to see the change of heart because when we moved that amendment in November, the noble Baroness, Lady Neville-Rolfe, who was dealing with it, said that the Government did not think it was necessary because it would not,

“add anything further to the guidance that is already available”.—[Official Report, 24/11/14; col. 761.]

To be fair, she supported the Private Member’s Bill in the other place and the Government have now decided to introduce this legislation, albeit perhaps not in the best vehicle, given that the Consumer Rights Bill is still in Parliament.

It is a shame that the Liberal Democrats who have added their names to the amendment did not share our concerns earlier. The noble Baroness spoke in favour of one of my other amendments, but it would have been nice to have their support when we tried to make letting agents belong to an ombudsman scheme. We got it through but without their help; nor did they support my attempts to get letting agents to put tenants’ rent into protected bank accounts, which would have safeguarded landlords as much as—if not more than—tenants, because when letting agents go walkies with the money it is usually the landlords who pay, but of course it is the tenants’ money that goes. But hey, I guess there is an election coming so now they are on the side of the tenants, and we welcome that support, belated though it might be.

We particularly welcome the Government’s view on this and their bringing forward these amendments. We know that it will please those who have campaigned a long time for this, including Crisis and Shelter, which have been mentioned, and the Brighton and Hove “Home Sweet Home” campaign, which has been working for a better and fairer private rented sector. Its members campaign on behalf of local tenants who are often too scared to speak out or to ask their landlords for repairs because they fear losing their homes. In places such as Brighton, that is not a joke; it does happen. As for the idea that there are rogue tenants—actually, the experience we have is of landlords mistreating their tenants.

These amendments give much-needed protection to tenants, as landlords will no longer be able to evict them in response to a valid complaint about their home. Tenants will no longer have to choose between living in poor conditions and losing their home. Unfortunately, revenge eviction has become a major cause of insecurity, not just in Brighton but elsewhere where there is a lot of pressure on the private rented sector. We want people to feel safe and secure in their own home, creating a fairer system for both tenants and landlords. We believe that these amendments will help achieve that.

We have one slight disappointment. As the noble Lord, Lord Ahmad, said, the hazard awareness notices are not included in these amendments, although they were in the Private Member’s Bill. We have some concerns that without these the protection risks being patchy. Some extra assurance on that would be welcome.

We are also pleased that, from what the Minister said in his introduction, the Government do not seem minded to accept Amendment 46AA in the name of the noble Lord, Lord Howard of Rising, which would extend the period that a tenant can wait before contacting the council from 14 to 28 days. Twenty-eight days is too long for a tenant to wait before legitimately contacting the council. None of us would wait that long if it was our home, especially if it was over Christmas. Therefore, where there is a serious problem that needs seeing to, we agree with the Minister that 14 days is the right balance.

I also pay tribute to the noble Lord, Lord Best, who has saved me from having to give a very robust response to those who fear that these amendments will achieve things that are too much in favour of the tenants and not of the landlords. We think that it is a fair deal between the two sides—although often, as people have said, they are not sides; it is a good relationship.

Meanwhile, given that the Government have decided—perhaps a bit late—to do something to help “generation rent”, it is a shame that it is not part of a wider strategy to ensure that tenants get a fair deal from landlords. We have undertaken to legislate for three-year tenancies, to give renters a stable home and landlords the confidence to invest. We will also stop letting agents charging fees to tenants, which we tried to do in the Consumer Rights Bill, but sadly that bit has not been brought over. However, I should not be churlish. We are delighted with the amendments that the Government have brought forward and we have pleasure in giving them our full support.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have participated in this debate. Again, it demonstrates the great expertise and interest in your Lordships’ House in this important issue. I will seek to answer all the questions that have been raised but if there are specific, technical questions, I add the caveat that I shall of course review all contributions and write accordingly to cover any points that perhaps I have not been able to cover in my response this evening.

I, too, thank the noble Lord, Lord Best, for his support for the government amendments. He always speaks with great expertise on housing issues across the board, so his support is most welcome. I hope it continues for the later part of the evening but we shall come to that shortly. I also thank my noble friends Lady Bakewell and Lord Stoneham for their support for the Government’s position. In thanking other noble friends who perhaps have not been totally supportive, I of course recognise the concerns that have been expressed across a range of issues and hope that I can address most of them in my response.

My noble friend Lord Howard asked about tenants who stop paying rent once they have made a complaint. I assure my noble friend that in this regard the amendment under no circumstances permits the tenant to stop paying rent, and the tenant will be obliged to pay. It provides that a Section 21 eviction notice can be invalidated only if a tenant’s complaint is supported by confirmation from the local authority. Indeed, if a Section 21 eviction notice cannot be served for a specified period, the tenant is still contractually obliged to continue paying rent. Failure to do so, as I said in my opening remarks, would leave them liable to eviction under Section 8 of the Housing Act 1988.

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

46B: After Clause 30, insert the following new Clause—
“Further exemptions to section (Preventing retaliatory eviction)
(1) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where the condition of the dwelling-house or common parts that gave rise to the service of the relevant notice is due to a breach by the tenant of—
(a) the duty to use the dwelling-house in a tenant-like manner, or(b) an express term of the tenancy to the same effect.(2) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where at the time the section 21 notice is given the dwelling-house is genuinely on the market for sale.
(3) For the purposes of subsection (2), a dwelling-house is not genuinely on the market for sale if, in particular, the landlord intends to sell the landlord’s interest in the dwelling-house to—
(a) a person associated with the landlord,(b) a business partner of the landlord,(c) a person associated with a business partner of the landlord, or(d) a business partner of a person associated with the landlord.(4) In subsection (3), references to a person who is associated with another person are to be read in accordance with section 178 of the Housing Act 1996.
(5) For the purposes of subsection (3), a business partner of a person (“P”) is a person who is—
(a) a director, secretary or other officer of a company of which P is also a director, secretary or other officer, (b) a director, secretary or other officer of a company in which P has a shareholding or other financial interest,(c) a person who has a shareholding or other financial interest in a company of which P is a director, secretary or other officer,(d) an employee of P,(e) a person by whom P is employed, or(f) a partner of a partnership of which P is also a partner.(6) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where the landlord is a private registered provider of social housing.
(7) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where—
(a) the dwelling-house is subject to a mortgage granted before the beginning of the tenancy,(b) the mortgagee is entitled to exercise a power of sale conferred on the mortgagee by the mortgage or by section 101 of the Law of Property Act 1925, and(c) at the time the section 21 notice is given the mortgagee requires possession of the dwelling-house for the purpose of disposing of it with vacant possession in exercise of that power. (8) In subsection (7)—
(a) “mortgage” includes a charge, and(b) “mortgagee” includes a receiver appointed by the mortgagee under the terms of the mortgage or in accordance with the Law of Property Act 1925.”

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

46C: After Clause 30, insert the following new Clause—
“Notice to be provided in relation to periodic assured shorthold tenancies
In section 21 of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy), after subsection (4) insert—“(4ZA) In the case of a dwelling-house in England, subsection (4)(a) above has effect with the omission of the requirement for the date specified in the notice to be the last day of a period of the tenancy.””

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

46H: After Clause 30, insert the following new Clause—
“Repayment of rent where tenancy ends before end of a period
After section 21B of the Housing Act 1988 insert—“21C Repayment of rent where tenancy ends before end of a period
(1) A tenant under an assured shorthold tenancy of a dwelling-house in England is entitled to a repayment of rent from the landlord where—
(a) as a result of the service of a notice under section 21 the tenancy is brought to an end before the end of a period of the tenancy, (b) the tenant has paid rent in advance for that period, and (c) the tenant was not in occupation of the dwelling-house for one or more whole days of that period. (2) The amount of repayment to which a tenant is entitled under subsection (1) is to be calculated in accordance with the following formula—
where— R is the rent paid for the final period;
D is the number of whole days of the final period for which the tenant was not in occupation of the dwelling-house; and
P is the number of whole days in that period.
(3) If the repayment of rent described in subsections (1) and (2) has not been made when the court makes an order for possession under section 21, the court must order the landlord to repay the amount of rent to which the tenant is entitled.Nothing in this section affects any other right of the tenant to a repayment of rent from the landlord.””

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

46J: After Clause 30, insert the following new Clause—
“Application of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period)
(1) Subject to subsections (2) and (3), a provision of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period) applies only to an assured shorthold tenancy of a dwelling-house in England granted on or after the day on which the provision comes into force.
(2) Subject to subsection (3), a provision of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period) does not apply to an assured shorthold tenancy that came into being under section 5(2) of the Housing Act 1988 after the commencement of that provision and on the coming to an end of an assured shorthold tenancy that was granted before the commencement of that provision.
(3) At the end of the period of three years beginning with the coming into force of a provision of sections (Preventing retaliatory eviction) to (Compliance with prescribed legal requirements) or section (Repayment of rent where tenancy ends before end of a period), that provision also applies to any assured shorthold tenancy of a dwelling-house in England—
(a) which is in existence at that time, and(b) to which that provision does not otherwise apply by virtue of subsection (1) or (2).”

--- Later in debate ---

[Lord McKenzie of Luton (Lab)]

My Lords, we should be grateful to the noble Lord, Lord Best, for moving this amendment, which we wholeheartedly support. If there were any doubt as to whether we were going to support it, praying in aid Nye Bevan just about did it for us. I welcome my noble friend Lady Wilkins back to the House and acknowledge her knowledgeable contribution on an issue on which she has campaigned over a long time. It is good that the noble Lord, Lord Shipley, and the noble Baroness, Lady Gardner, are on the same page as well.

We support the review of housing standards: a lot of good work has come out of it. However, one of the consequences, as we have heard, was that lifetime home standards and wheelchair-accessible standards have become optional extras. That is really the issue before us today. The noble Lord, Lord Best, has probed with a series of questions and I hope that the nature of those questions means that the Minister has ready and satisfactory replies to them all.

I draw the Minister’s attention to a couple of paragraphs of the housing review document. On page 6, paragraph 14, it says:

“Unlike other Building Regulations requirements the optional requirements described in the Approved Documents will not be mandatory. They will only be applicable where a local planning authority has put a plan policy in place specifically triggering the application of the optional requirement or nationally described space standard in particular circumstances. Neighbourhood Planning Bodies (and Neighbourhood Development Orders) will only be able to apply the space standard, and not optional requirements”.

Will the Minister tell us why that is the case? Perhaps more importantly, paragraph 21, which looks at applying optional requirements and nationally described standards, states:

“The first step is for a local planning authority to stipulate that an optional requirement or the nationally described space standard applies in that area. As stated already, this must be set in plan policies, which have been subject to normal Plan Examination processes. It would not be appropriate to apply optional requirements or the space standard through supplementary planning guidance, since this is not subject to a sufficient level of scrutiny”.

Have the Government moved on from that, or is that still applicable?

I have one small observation in relation to financial viability and cost. If the additional cost is £500 to £1,000, that is one or two weeks in a care home invested in a home on lifetime standards now. That obviously obviates that, going forward. I hope the Minister can satisfy us on those requirements, because it would be a great shame, given all the progress that has been made on lifetime home standards—particularly in London—if these developments were to push those backwards.

[Lord Ahmad of Wimbledon]

I thank all noble Lords, particularly the noble Lord, Lord Best, for raising this issue. As he is aware, we have been in regular correspondence on this issue. Before going any further, however, I would like to join the noble Lord, Lord McKenzie, in welcoming back the noble Baroness, Lady Wilkins, to her rightful place in your Lordships’ House. I, too, welcome her contribution here this evening.

The noble Lord, Lord Best, has rightly set out his concerns about the way in which the proposed building regulations’ optional requirements will operate, particularly in relation to issues of access. Let me say that the Government understand these concerns. I have written to the noble Lord with reassurances about the clause, explaining how the evidence gathering will work. I assure your Lordships that we will be issuing planning guidance shortly, to help authorities assemble evidence to use the new optional requirements. I hope that the letters that I have written to the noble Lord, Lord Best, have provided that level of reassurance, but I think it is important that I summarise some of the key points that have been raised in his questions.

Let me just put the amendment into context. In this particular context, we believe that the amendment is not needed, because Clause 31(4) is merely a general fallback power, a reserve power enabling the Government to use regulations to set out conditions for the way in which optional requirements should be used, but only if necessary. They might be necessary, for example, if the system is being misused in some way, or used without sufficient rigour; or if there are problems applying the new regulations. It could be that the guidance proposed does not have the effect expected or is not followed. The new system is based on an approach no different from how local planning authorities gather evidence to justify planning policies now. For the benefit of noble Lords, I will set out the key points about how it will work.

Optional requirements will allow local authorities to set building standards that are higher than those in the building regulations. They are a new concept in building regulations, and are widely supported following our consultation on this matter. They are an important new tool, which I am sure noble Lords will agree should be used appropriately. For the first time ever, we have put a series of housing standards into the building regulations, such as on lifetime homes and wheelchair housing. Giving these areas the full force of building regulations is a major new step that I hope will be welcomed by all noble Lords.

However, because not every new home needs to be built to such standards, and because it is costly to do so, we will let local authorities decide how to target the standards based on local needs, provided the standards do not make local housing developments unviable. The Government intend to issue planning guidance on matters to be taken into account by local authorities to work out their local needs, such as the proportion of older or disabled people. We consulted on the matters to be covered in that guidance. This will mirror the approach taken with planning guidance which supports the National Planning Policy Framework.

--- Later in debate ---

[Baroness Hanham]

I hesitate ever to come in on a point of principle but my noble friend Lady Gardner said that she wanted Amendments 47 and 48 to be grouped, and that is what we have done. Have we spoken to Amendment 47 separately? Is there any way in which we can get this settled? I have spoken to the group commencing with Amendment 48, not Amendment 47. I was waiting for the noble Lord, Lord McKenzie, to come in and speak to his amendments. It seems to me that my noble friends Lord Tope and Lord Lytton have also spoken to the group starting with Amendment 48. I am sure that there must be a quick way of getting this sorted so that we are all speaking to the group commencing with Amendment 48.

[Lord Ahmad of Wimbledon]

My noble friend makes a totally valid point and I apologise—there should have been some closure with regard to Amendment 47. Perhaps I may suggest that I respond specifically to the issues around Amendment 47 and then we can move on. I understand that the amendment, having been called, will need to be withdrawn. Therefore, if my noble friend Lady Gardner is minded to speak to Amendment 48, perhaps she can, first, withdraw Amendment 47, as that will be a useful way of moving on to the more substantive debate.

[Baroness Gardner of Parkes]

I will do so unless anyone wishes to speak.

[Baroness Gardner of Parkes]

No, I have not spoken to Amendment 48.

[Lord Ahmad of Wimbledon]

Unless other noble Lords suggest anything else, what I propose may be the most practical way forward. If my noble friend is minded to withdraw her amendment, we can move on to the substantive debate. Because of the confusion, I suggest that that is what she does. If she wishes to speak to Amendment 48, that is her choice, although I think that many of her points have been covered. However, this is a self-governing House and it is for the House to agree to that. I ask her to withdraw Amendment 47 to allow us to move on to the substantive debate, but of course I succumb to the will of the House on that.

[The Deputy Speaker (Lord Geddes) (Con)]

The noble Baroness has to indicate that she wishes to withdraw her amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, first, I thank all noble Lords who have taken part in the debate, but make special mention of my noble friend Lady Gardner. I know that she had a fall yesterday and I am glad to see her in her rightful place today. We were concerned that on such an important issue we might not see my noble friend in her place. Much as some of the questions she has posed are challenging, I wish her well in any subsequent recovery. As we have seen again today, she has put forward some very compelling arguments in respect of her position.

I will also say from the outset that I of course understand that noble Lords are keen to ensure that any relaxation of legislation governing short-term letting in London is available only to residents, so that they can make their property available when they are away for a limited duration, not to allow non-residents to use property almost or exclusively for short-term letting. I confirm that this is exactly the aim of the Government’s proposals. We clarified our intentions for the reform of legislation on short-term letting of residential accommodation in London in a policy document that was shared with your Lordships, as my noble friend Lord Tope said, on 6 February. I am sure we can come up with varying definitions of “short” and what have you, but it is late in the day, so I will not dwell on that too long.

Section 25 of the Greater London Council (General Powers) Act 1973 provides that the use of residential premises for temporary sleeping accommodation for less than 90 consecutive nights is change of use, for which planning permission is required. London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. There are currently, as I am sure noble Lords appreciate, thousands of London properties advertised on websites for use as short-term accommodation. However, each potentially is in breach of Section 25 as it stands.

In response to our Review of Property Conditions in the Private Rented Sector, the new policy document that I referred to sets out the Government’s approach to modernising the legislation so that residents can allow their homes to be used on a short-term basis without unnecessary bureaucracy. The Government have carefully considered the views put forward in responses, and I thank the noble Lord, Lord McKenzie, for acknowledging the time that I have certainly sought to take to respond to some of the concerns of noble Lords on this issue. In bringing forward our reforms, we will therefore seek to make provision for safeguards to protect London’s housing supply and residential amenity and provide the ability for local exemptions to be made which would exclude specified premises or areas from the changes.

The Government want to enable London residents to participate in the sharing economy and to enjoy the same freedom and flexibility as the rest of the country, without the disproportionate burden of requiring planning permission. This policy is aimed at helping residents, not at providing opportunities for change of use from residential to business premises. In order to address the issues raised and to respond to some of the concerns, the Government intend to restrict short-term letting of residential premises to a maximum of 90 days in the calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.

I also confirm that we intend to include the requirement that properties must be liable for council tax, to exclude business premises. I also assure my noble friend Lord Tope that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility, where there is a strong case to do so. In response to the issue around regulations, I say to noble Lords that the Government intend to consider the matters I have just mentioned in deciding the most appropriate way to bring these measures forward into law.

For completeness, it is appropriate for me briefly to mention Amendment 47, which sought to restrict the ability to let residential property on a short-term basis, without planning permission, to those times that coincide with,

“a major national or international sporting or entertainment event”.

It would be extremely challenging to define such events in a way that would exclude many other sporting or entertainment events that occur in London on a weekly or even daily basis; for example, European or international football matches and major concerts at venues such as Wembley and the O₂ arena. I am grateful to my noble friend for withdrawing that amendment.

I will respond to some of the questions that have been raised. My noble friend Lady Gardner raised some concerns about Parliamentary Answers. It has been confirmed to me that I provided Written Answers to her Questions. Perhaps they were not as complete as she expected but I have checked the records; those Answers were provided and referred to the policy document and the fact that this would be made available before Report, which I hope has indeed been done.

My noble friend Lord Tope raised the issue of not consulting, in particular with Westminster Council. I assure my noble friend that my officials have met with London Councils officials and representatives from a number of London boroughs, including Westminster.

My noble friend Lady Gardner raised the issue of tax liability. We expect people to pay tax where they are liable. The “Rent a Room” scheme to encourage people to take in lodgers provides a tax allowance on income received from renting out a room; it is a long-standing provision. My noble friend also talked about subletting in Camden. To confirm, a tenant will need to check with their landlord whether under the terms of their tenancy they can sublet. We do not seek to discriminate between people who own their property and tenants.

Amendments 48 and 49ZA would restrict the ability to let properties on a short-term basis, without planning permission, to no more than 30 days a year, as my noble friend Lady Hanham said. Amendment 48 would also prevent hosts being able to accept bookings from overnight guests at less than seven days’ notice, and would require them to notify the local authority of every single letting. It would allow local authorities to establish a fast-track notification process and introduce an administration fee. Amendment 49C would also require notice of short-term letting, and its intended duration, by the property owner.

We want to deregulate in order to provide the ability to let property on a short-term basis for 90 nights per year. This will provide residents with meaningful and proportionate freedom and flexibility in how they use their property. The Government believe that a limit of 30 nights is unduly restrictive. One of the major advantages of the internet is the ability to make transactions quickly and flexibly, and we want our reforms to facilitate this. A requirement for seven days’ notice would unreasonably limit the ability of hosts to offer accommodation to customers seeking to book at shorter notice.

[Baroness Hanham]

My Lords, for clarity, my amendment said 30 days. In speaking to it, I did not support the situation about the seven days’ notice, nor did I do anything other than say that we would want a short, light-touch registration, which could be up to as much as a year—very much supporting what the noble Lord said. It is important to get the nuances, which are slightly different, and I tried to make them clear but we were in a muddle about where we were.

[Lord Ahmad of Wimbledon]

The noble Baroness is always well placed to clear up muddles, as she has done so again. I fully accept that she spoke specifically to the issue of the 30 days.

Amendment 49, which would restrict the deregulation only to those properties which are the principal and permanent residence of the owner, and Amendment 49ZA, which would restrict the deregulation to the principal London residence of their owner, are unnecessary and overbearing. They would unreasonably prevent tenants carrying out short-term letting, which may be permitted within the terms of their lease. It would also prevent people short-term letting who may have another residence outside London, even though the London property would be viewed very much as their home.

Amendments 49A and 49B would remove the ability of the Secretary of State to direct that specified areas should be exempt from the changes. The Government want to be able to grant exemptions but only in exceptional circumstances and where a strong case has been made by the local authority. Otherwise, we want to be clear that our aim is to provide the same rights for all Londoners in all local authority areas.

The amendments would create different regulatory approaches across the capital, potentially resulting in differences between local authority areas. Residents would find that their near neighbours had either greater or lesser freedoms to short-term let their property, without any apparent justification.

Amendment 49C would remove the deregulation measures where a relevant enforcement process had taken place. It would also require the Secretary of State to make regulations for local exemptions where there were strong amenity grounds. I can assure noble Lords that we intend to provide that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility where there is a strong case to do so.

Amendment 50 is also unnecessary in the Government’s view. It is already the case that anyone carrying out illegal short-term letting risks a planning enforcement fine of up to £20,000. It is already possible for local authorities to apply for costs in the event of unreasonable behaviour during an appeal against enforcement action.

I assure noble Lords that the Government’s intention is only to deregulate Section 25 to allow residents occasionally to let out their property on a short-term basis; for example, when they are away on holiday. We are not seeking to create new opportunities for short-term letting on a permanent basis. Our policy document shows how we intend to achieve this in a way which balances the reasonable aspirations of residents to let out their homes temporarily with safeguards to prevent abuse of our reforms.

For these reasons, it is the Government’s belief that Clause 33 should remain part of the Bill. I fully acknowledge that differing views have been expressed by noble Lords, but I think that it is the shared intention of the Government and your Lordships to allow letting of property for residents but not on a commercial basis. I hope that some reassurance has been provided by what I have said and I urge noble Lords not to press their amendments.

[Baroness Gardner of Parkes]

My Lords, I thank the Minister for his reply. He said that he doubted that his previous replies were negative or non-existent, but he should just check his Written Answer dated 7 January in response to my Question referring back to his earlier Answer—my original Question was for oral answer. There was simply no reply at all to Written Question HL3615, which was then repeated. I have gone back on it yet again and there is still no answer.

[Lord Ahmad of Wimbledon]

I will review those Answers with officials and get back to my noble friend specifically on them. If there are other points that she wishes to make, perhaps we could move on.

--- Later in debate ---

Moved by

[Lord Ahmad of Wimbledon]

51A: After Clause 33, 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 modified as follows in relation to an order under subsection (1) of that section designating any area of land in England as an urban development area that is contained in an instrument laid before Parliament on or before 31 March 2016.
(2) The section has effect as if after subsection (1) there were inserted—
“(1A) Before making an order under subsection (1), 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) The section has effect as if for subsection (4) there were substituted—
“(4) A statutory instrument containing an order under subsection (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) 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.”

[Lord Ahmad of Wimbledon]

My Lords, the Government’s aim is to promote and support the regeneration of brownfield land and the creation of new, locally led garden cities. This is not news, nor is the fact that Urban Development Corporations can play a key role in driving forward the delivery of large-scale development. This is especially true in areas where previous ambitions have failed to progress.

Urban Development Corporations—UDCs—are statutory bodies which are established under the Local Government, Planning and Land Act 1980, whose objective is to regenerate designated urban development areas. Urban development areas and corporations are established by affirmative orders, 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 respect of all previous urban development areas and Urban Development Corporations.

A hybrid procedure is time-consuming and can be costly for all parties, involving processes of representations and hearings over what can be a substantial time. The formation of an urban development area or an Urban Development Corporation does not, in the Government’s opinion, impact on the private rights of individuals and businesses in the area. The powers available to Urban Development Corporations are already available to local authorities, notably in development management planning powers and, where necessary, compulsory purchase. We therefore do not consider that the creation of an urban development area or corporation gives rise to a loss of rights. It is the Government’s view that the hybrid procedure is not necessary in the case of statutory instruments establishing urban development areas and corporations, provided that there is proper consultation with individuals, businesses and local authorities in the area concerned before the statutory instrument is presented to Parliament.

The Government propose to create a statutory duty to consult. It would require the Secretary of State to consult,

“persons who appear to … represent”,

residents and businesses, local authorities and anyone else who the Secretary of State considers appropriate. The proposed duty to consult would increase the level of public scrutiny that proposals of this nature must undergo. It would ensure that anyone who wishes to can respond to a consultation and express their views and concerns.

Under the current legislation, there is no statutory duty to consult on the creation of an Urban Development Corporation. When the 1980 Act was passed, the affirmative and hybrid procedure was the only express means for local residents to influence government policy. Establishing a statutory duty to consult provides people with an opportunity to participate early in the policy-making process and voice concerns at the point at which they arise, rather than waiting for a chance to petition once a statutory instrument is laid before Parliament.

The way in which people engage with government has improved and changed greatly in recent years. The advent of new technology means that it is now quicker, easier and cheaper for members of the public to raise their concerns through consultation—more so than by bringing a petition in front of your Lordships’ House. Replacing the hybrid procedure with a statutory consultation duty would reflect this change in the way people now interact with government and the policy process. The Government therefore remain of the view that the negative procedure, subject to a statutory duty to consult, is the appropriate procedure for establishing UDCs.

I should like to place on record my particular thanks to the noble Lord, Lord McKenzie, for his participation in discussions on how to proceed on this matter. I know he shares my view that we want to see progress in taking this proposal forward. The inclusion of a 12-month sunset provision, with an expiry date of 31 March 2016, demonstrates our commitment to the regeneration of areas where development is waiting to happen. Any statutory instruments establishing an urban development area or Urban Development Corporation, if laid after 31 March 2016, would revert to the current, affirmative, procedure. It would be for a future Government to propose longer-lasting changes beyond the sunset date, and for the Parliament of the day to debate and decide on such changes. The Government have previously argued that such a change would be appropriate for all the reasons I have described, but we recognise that this issue will not be resolved in the current Parliament.

If the changes we are proposing to the Bill are approved, then, following Royal Assent, the Government will lay a statutory instrument establishing an urban development area and corporation for Ebbsfleet. The Government have already consulted on this proposal, and have published a report demonstrating the support expressed for our proposals in the consultation responses. Given the progress that has been made in recent weeks and months, and the strong case for an Urban Development Corporation at Ebbsfleet, it is perfectly reasonable that we should now move forward with establishing the Ebbsfleet Development Corporation as soon as possible. I therefore hope that this amendment carries your Lordships’ support, and I beg to move.

[Lord Avebury]

My Lords, if the provisions regarding short-term lettings were unsatisfactory, these provisions coming before your Lordships at this stage of the Bill are unsatisfactory in spades. The amendments that we are now looking at are in substitution of the new clauses reducing the power of Parliament over the order-making power to designate land as urban development areas and to establish Urban Development Corporations. The Delegated Powers Committee received those amendments originally on 25 October, and a memorandum explaining the nature and purpose of the proposals on 26 October, giving it time to report at lightning speed on 29 October. The report severely criticised the original proposals as a breach of the undertaking in the consultation document to obtain express parliamentary approval for these proposals, and called on the Government to withdraw them before the next stage in Committee.

The amendments were accordingly withdrawn but, unfortunately, as the Delegated Powers Committee pointed out in its further report published yesterday, the two new clauses that we are now considering still provide for parliamentary approval to be via negative, rather than affirmative, resolution until 31 March 2016. This means that until that date, interested parties would not have the right to petition against orders designating UDAs and establishing UDCs, as has always been the case in the past, leading to the hearing of evidence in a committee on the matters raised in the petition. The Government recognise that your Lordships would need time to consider and debate such a major reduction of our powers of scrutiny, but are insisting that in the case of Ebbsfleet—the only proposal likely to be affected by these amendments—they must pre-empt a more general debate.

I understand that in the consultation, some three-quarters of the respondents were in favour of this new town and one-quarter of them were against. That does not tell us whether any of the antis would have gone to the length of petitioning, but any who were minded to do so have been deprived of their rights although, as the Delegated Powers Committee points out, the Government gave no indication of this in the consultation. I am keen that Ebbsfleet should go ahead rapidly, but I regret the Government’s assumption that they could trample on the rights of scrutiny and the rights of private interests to be heard. They should have started the Deregulation Bill earlier in the Session or, at the very least, they should have found time for a debate on the proposal in the Minister’s letter that the negative procedure is appropriate for all UDC proposals, subject to a statutory right to consultation. I make no comment on the Government’s argument in the memorandum they submitted to the Delegated Powers Committee that the affirmative procedure leads to uncertainty, delay and a loss of business confidence which acts as an impediment to the process of regeneration that the UDCs are expected to deliver.

We are talking here about taxpayers’ expenditure of £1 billion on the infrastructure of these new towns, the first at Ebbsfleet in Kent, followed by others at Bicester, Ashford, Oxford and Northstowe in south Cambridgeshire. If the advice of David Rudlin, the winner of the Wolfson Economics Prize is being followed, they are the precursors to a further 35 similar new towns, giving a total of some 600,000 new dwellings, that will,

“take a confident bite out of the green belt”.

Ebbsfleet is entirely brownfield, as we have discussed, but that cannot be true of all 40 new towns that are planned. How do the Government intend to amend the National Planning Policy Framework to avoid inconsistency between the NPPF’s severe restrictions on development in the green belt and the new towns policy of taking a confident bite out of it? Or do they intend to make ad hoc decisions in each case as it arises?

Will the Minister say how the new towns will make a proportionate contribution towards meeting the dire national shortage of affordable homes? In the case of Ebbsfleet, Land Securities says that it has plans to develop up to 10,000 homes, but is there not a Section 106 agreement for the company to make a contribution towards infrastructure costs in lieu of any obligation to ensure that a given proportion of the homes are affordable? In his helpful letter of 9 February, my noble friend said that the UDC will not have plan-making powers but will have to determine applications within the context of the affordable housing policies set out in the Dartford and Gravesham local plan core strategies, both of which require private housing developers to deliver 30% of the units as affordable housing.

Land Securities is not building any houses itself, but will reach deals with housebuilders on parcels within the site. The Section 106 agreement that the company reached with Dartford Borough Council does not require any affordable homes, the money being allocated to schools. The local MP, Gareth Johnson, says it would be wrong to suggest that there will not be any affordable homes and that it would be a matter for the local development corporation, but surely that is not the way it works. Since all the land is owned by a single company and its objective will be to maximize returns for its shareholders, the LDC will have no say in the matter, unless it uses its compulsory purchase powers. Will there be anything in the rules of the LDC that will encourage it to use those powers to achieve a proportionate mix of affordable housing? How else does the Government think that Ebbsfleet and the other new towns will make any provision for people who cannot afford to buy?

I also asked my noble friend last week how the Government would ensure that LDCs would provide appropriate accommodation for caravan-dwelling Travellers, whose needs are even less likely to be a priority for developers. My noble friend said that they would be required to plan for the needs of Travellers in the same way as local authorities. Does that mean that they have to start from scratch with a needs assessment? Would it not be simpler for them to reach agreements with the local authorities contributing to their area to assume responsibility for a proportion of the needs that have already been identified and assessed by those councils?

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I am grateful both to my noble friend and to the noble Lord, Lord McKenzie, for their contributions. I will briefly answer some of the questions raised by my noble friend Lord Avebury, and will of course write to him on what I am unable to cover. He asked a question on Gypsy and Traveller provision within Ebbsfleet. The responsibility under the Housing Act 2004 rests with the local housing authority, and it will be for the Ebbsfleet Development Corporation to discuss, with both Dartford and Gravesham Borough Councils in the context of their respective local plans—which remain the development plans for Ebbsfleet—and their Gypsy and Traveller accommodation assessments, what provision may be needed in the UDC area.

My noble friend also asked a question—to which I also responded to him in writing—about whether there will be any element of affordable housing. The development corporation will not have plan-making powers and will, therefore, as I said to him earlier, work within the context of affordable housing policies set out in the local authorities’ existing development plans. He also asked about Section 106 and land securities. There is a Section 106 agreement in place. He also raised issues about the DPRRC’s report. I am grateful for the advice that we have got from the DPRRC. I have written directly to my noble friend Lady Thomas and am happy to share this letter. On the substance of the proposals, I know that my honourable friend Brandon Lewis proposes to make a Statement in the House on the substance of progress at Ebbsfleet, as parliamentary time allows.

I am grateful to the noble Lord, Lord McKenzie, for allowing us to reach a sensible way forward on this. Based on that, and just for clarity, I commend the amendment to the House and hope that the new clause will be inserted into the Bill.

Amendment 51A agreed.

Moved by

[Lord Ahmad of Wimbledon]

51B: After Clause 33, insert the following new Clause—
“Establishment of urban development corporations: procedure
(1) Section 135 of the Local Government, Planning and Land Act 1980 (urban development corporations) is modified as follows in relation to an order under that section establishing an urban development corporation for an urban development area in England that is contained in an instrument laid before Parliament on or before 31 March 2016.
(2) The section has effect as if after subsection (1) there were inserted—
“(1A) Before making an order under this section, 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 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 urban development area;(c) each local authority for an area which falls wholly or partly within the urban development area; and(d) any other person whom the Secretary of State considers it appropriate to consult.” (3) The section has effect as if for subsection (3) there were substituted—
“(3) A statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) The duty to consult under section 135(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.”