Queen’s Speech

Lord Best Excerpts

Tuesday 2nd June 2015 Lords Chamber

[Lord Best (CB)]

My Lords, I am delighted to follow the noble Lord, Lord Kerslake, and I congratulate him on a very significant maiden speech. After a distinguished career in local government, he was an outstanding chief executive of the Homes and Communities Agency before going on to be both Permanent Secretary at the Department for Communities and Local Government and head of the Home Civil Service. These are impeccable credentials for contributing to our deliberations and his speech today assures us that he will be a wise, influential and most welcome addition to this House.

My comments in this debate take forward some of the points on the forthcoming housing Bill made by the noble Lord, Lord Kerslake, and other Peers, including the noble Baroness, Lady Hollis. I am sure that there will be some helpful and positive ingredients in the new housing Bill since I believe that the Government are sincere in their stated aim to increase housing supply and, indeed, to meet their target of adding some 275,000 affordable homes over the lifetime of this Parliament. The problem is that a key component in the Bill is likely to completely undermine their good intentions if it is not greatly modified.

The Bill’s problematic ingredient has two related parts: first, a requirement on charitable housing associations to sell their properties at substantial discounts—up to more than £103,000 in London and £77,000 elsewhere—to tenants who have lived there for three years or more; and secondly, a requirement on local councils to sell their most valuable properties on the open market in order to raise the money for those costly housing association discounts. I see that I am in good company in questioning the wisdom of this two-part policy: the Economist, the Spectator, the Telegraph and the London Evening Standard alongside the Mayor of London are among the critics, as is Martin Woolf in the Financial Times, under the heading:

“Tories wrong to buy votes with housing”.

The Institute for Fiscal Studies has called this right-to-buy extension a “substantial giveaway” and warns of harm to the UK public finances over the longer term.

I shall summarise the objections to this policy initiative. First, in relation to housing policy, there are hundreds of thousands of households that are unable to buy but are crippled by the cost of open market renting. For all these, the target of 275,000 extra affordable homes by 2020 is essential and, with government backing, definitely achievable. However, the National Housing Federation estimates that about 221,000 households, out of 1.5 million identified by the Government as eligible, are in a position to buy—and why should they not take advantage of this sudden lucky windfall? If these tenants purchase over the next five years, and if councils over that period are required to sell thousands of their best properties to raise the funds to pay for the housing association discounts, then the social housing providers will have tried to fill the bath with the plug out. At the end of this Parliament, instead of increasing the stock of affordable homes that the country needs so badly, all these efforts will have been in vain and, at best, we will be back where we started.

Moreover, the whole process of selling some social housing and building elsewhere will have grave consequences. With councils having to sell in the best areas and having to build in cheaper places, a divisive segregation results, separating the better-off and the less affluent, in contradiction to the universally preferred alternative of mixed communities. As the London mayor has pointed out, replacing the homes sold in London with homes built outside will deny London the key workers on which this city depends, while affordable homes sold off in rural communities will often be quite impossible to replace.

Secondly, the financial considerations of this double measure are alarming. The National Housing Federation estimates that the cost could be around £11.5 billion. Do these payments to a relatively small number of people represent the very best use of several billion pounds? A windfall grant to those already in decent affordable housing seems strange indeed when the money could help thousands of others in severe housing need. According to the National Housing Federation, this level of funds would, for example, secure no fewer than 660,000 shared ownership homes, helping three times as many aspiring owner-occupiers.

Moreover, what happens if selling good council housing as it falls vacant fails to raise all the funds to cover the cost of the new discounts, let alone pay for the councils to replace the homes they sell off? Can the Minister confirm that whatever the cost, housing associations will be guaranteed reimbursement for the loss of their assets? Will the taxpayer pick up the bill, regardless of the impact on the public finances?

Thirdly, and finally, there are some serious legal and practical objections to this policy. In the 1980s this House very firmly rejected the extension of the right to buy to charitable housing associations, principally on the grounds that government should not be ordering independent charitable bodies to dispose of their assets to the benefit of some tenants of today but at the cost of diminishing the charity’s capacity to help others in need in the future.

On the practical side, there are worries about the response of lenders to the new uncertainties that this measure creates. There are also concerns about planning agreements, which have required a proportion of rented homes in private developments to be retained in perpetuity for those on lower incomes, never to be sold. Are these planning agreements now to be torn up, and will the housing associations be forced to renege on promises to landowners who have given land or sold cheaply, on rural exception sites, for the benefit of their local communities? If so, this is surely an end to such concessions in the future.

Clearly there are serious housing policy, financial, legal and practical difficulties to this multibillion-pound initiative. It looks incredibly fraught. I conclude by asking the Minister: will there now be extensive consultation on the new policy, not least with Members of this House, before it is taken to its next stage?

[Lord Gardiner of Kimble (Con)]

My Lords, I ask for noble Lords’ indulgence and assistance. Our timings are such that if we continue to have the length of speeches that we have had, the House will sit very late indeed. The advisory time of seven minutes is to ensure that the House rises at a respectable time, and I am sure that your Lordships would wish me to be helpful in that regard.

Immigration Bill

Lord Best Excerpts

Thursday 3rd April 2014 Lords Chamber

The changes in the Government’s position to which I have referred are welcome but there has been no satisfactory explanation as to why under the Government’s proposals the order to extend the scheme further will not have to be made by the affirmative procedure. We agree with the principle of preventing illegal migrants from accessing properties, but we need to ensure that the proposals that the Government have put forward actually work as intended before we go ahead with the scheme, since there are real doubts—which have been expressed in this House and by others outside this House—about the effectiveness and consequences of parts of the Government’s proposals. That is why the terms of our amendment require further primary legislation, since it is only through that process that there is certainty that the time will be made available for proper consideration of the evaluation of the pilot and the basis on which it is then proposed by the Government of the day that the scheme should be further extended.

[Lord Best (CB)]

My Lords, I have been engaged with the landlord and tenant clauses of the Bill through all the stages of its passage through your Lordships’ House. In Committee, I tabled nine amendments covering the duty for landlords to consider the immigration status of their tenants and, as a result, have had meetings with the Minister, the noble Earl, Lord Attlee, and the key civil servants from the Home Office, together with representatives of landlords and tenants. These sessions have led to a series of clarifications and alterations to the Bill on which I will now comment.

We have already heard the welcome news on student accommodation, where, very helpfully, the Government have moved a long way. Another key ingredient in our discussions has been the issue covered by Amendments 24 and 25. This relates to a pilot scheme, trial or pathfinder, which representatives of both landlords and tenants see as essential before the new measure is applied more generally.

I pay tribute to the Minister for his concerted efforts to take on board the anxieties of those from the Residential Landlords Association, Crisis, the British Property Federation and others at our meetings. It would not be true to say that the requirement for landlords to check the immigration status of their tenants is welcomed. Landlords do not want an extra administrative task, with a hefty fine if they get it wrong. Those representing tenants’ interests remain convinced that the measure will make it even more difficult than it is already for anyone who might possibly be thought of as a foreigner to get a decent flat. However, these organisations are a good deal happier today than they were at the start of the process. A whole series of undertakings and expressions of intent has now been set out. Some of the changes will appear in the Bill through the government amendments brought forward today. Others will come in the details in secondary legislation and subsequent guidance and codes of practice, including in relation to potential discrimination.

I now have a long list of commitments and clarifications from the Government which, in combination, waylay a good many of the fears we have raised about this duty on landlords. I will now summarise the most significant of these, not least to enable the Minister to correct me if I am mistaken in any respect.

First, as we have heard, lettings to almost all students are taken out of the equation, including in private sector halls and also in houses and flats. Secondly, hostels run by charities and housing associations for homeless people are excluded, as are refuges for women fleeing violence, and accommodation for vulnerable people in immediate need. Thirdly, those leaving prison will be able to rely on much simpler paperwork to satisfy requirements than was feared.

Fourthly, only in exceptional circumstances will there be any need to check on tenants after they have moved in during the period of their tenancy. Fifthly, landlords will not have responsibility for checking on anyone else moving into the property after the tenant moves in, provided any additional occupier does not pay rent to the landlord.

Sixthly, the Home Office will have a hotline to deal with queries within 48 hours. After I expressed some disbelief that this would actually happen, I received reassurances that, if the Home Office fails to provide an answer within 48 hours on working days, the landlord can assume the verification has taken place and will not incur any penalty.

Seventhly, any organisation which wants to take responsibility from landlords for verifying the status of tenants can act as an agency. I understand that a number of bodies, including some that currently conduct reference and credit checks, have already made approaches to the Home Office. No doubt such agencies could do the job more quickly and cheaply than most local managing agents by becoming real experts in the process.

Eighthly, a consultative group chaired by a Minister will be created and will involve relevant bodies including the British Property Federation, Crisis, the Residential Landlords Association and others. This group will look at the secondary legislation, codes of practice, regulations, draft instruments and so on that relate to this measure.

Ninthly, with particular relevance to Amendments 24 and 25 that relate to one or more pilots, we now know that there will be such a trial in one area and that it will be big enough to provide for a proper evaluation. The consultative group will be fully involved to assess the impact of this new duty, and there will be no rollout of this measure before the evaluation is concluded and any consequent changes have been made to the arrangements. Finally, in any case there will be no rollout beyond the one trial area before the general election next year. All of these changes, and perhaps in particular the emphasis placed upon the pilot, trial or pathfinder scheme, have been well worth the effort in pursuing negotiations with the Home Office.

The position we are now in feels very different from where we came in a couple of months ago. This says something about the value of this House in raising concerns and, I believe, in improving the legislation and influencing the actions of government that will follow from the legislation. My guess is that the noble Baroness, Lady Hamwee, will receive the reassurances she seeks by her Amendment 24. It would be churlish of me to do other than express appreciation at this Report stage for the way in which the Minister has taken matters forward. Indeed, I look forward to joining colleagues on the ministerial consultative group that will engage with the trial run of the new regime.

Therefore I cannot, in all fairness, support Amendment 25 and those that follow in the names of the noble Baroness, Lady Smith of Basildon, the noble Lord, Lord Rosser, and colleagues. However, I am grateful for the consistent support of the opposition Benches for all the changes that now leave the Bill in much better shape in this regard.

Immigration Bill

Lord Best Excerpts

Wednesday 12th March 2014 Lords Chamber

Moved by

[Lord Best]

54ZZA: Schedule 3, page 62, line 4, at end insert—
“(3A) The third condition is that the building is covered by a code of practice for the management of student accommodation recognised under section 233 of the Housing Act 2004 (approval of codes of practice with regards to the management of HMOs etc).”

[Lord Best (CB)]

My Lords, we return to residential tenancies and come to a group of 12 amendments, of which the first nine are in my name, beginning with Amendment 54ZZA. I apologise for the number of amendments, but I will be brief in setting them out this afternoon. I am helped in speeding up the process by the very helpful points made by the Minister in our Committee session on Monday.

All these amendments are concerned with the practicalities of requiring landlords to check the immigration status of their tenants. We are past the stage of arguing whether the whole idea of imposing this new burden on landlords is a good one; rather, these amendments attempt to make the concept more workable and reduce the unfortunate consequences for tenants that it could create.

Amendment 54ZZA is about letting to students. The Minister made two welcome announcements on Monday. The first heralded the Government’s plans for an initial stage—I hope I am allowed to call it a pilot—in a single place to test the practicalities of the new scheme. The second announcement was that student lettings that are controlled, owned, managed or arranged by a registered educational institution will face no further need for immigration checking by landlords. This is obviously right since the student has been thoroughly vetted already by the higher education establishment.

Capturing the wider definition of what comprises a student letting will need a new form of words. The new clause to come before us on Report may go beyond the scope of my amendment, and the Minister may tell me that Amendment 54ZZA is now quite redundant. But perhaps the Government’s revised measure, which I think will pick up student digs that are lettings in ordinary street properties, may also benefit from the formula in my amendment, which comes from the experts at the British Property Federation.

I will explain Amendment 54ZZA. Sensibly, paragraph 11 of Schedule 3 already excludes specialist lettings to students in higher education, since they have been thoroughly checked by the university or the higher education provider. The Bill exempts traditional halls of residence using the definition that is used for council tax purposes. That definition dates back to 1991, since when there has been extensive private sector provision of purpose-built student accommodation. Amendment 54ZZA extends the exemption from the traditional university halls of residence to embrace privately provided purpose-built student halls—the smart new blocks of student flats now appearing in many university towns and cities.

To avoid going too wide, the amendment specifies that the provider must be a body covered by a code of practice officially approved under Section 233 of the Housing Act 2004. This confines the extension to private sector providers that are properly recognised as managing bona fide student accommodation in partnership with higher education bodies. The amendment avoids the bureaucracy, hassle and duplication of effort for student accommodation providers, who would otherwise have to recheck the status of the students they house when this has been done already by a higher education establishment.

Now that the Minister is willing to extend the exemption for student lettings—I know colleagues will be very pleased with that—I hope that the definition in my amendment covers at least some of the ground. To cover more of that ground, will the Minister comment on the idea put forward by the noble Baroness, Lady Hamwee, on Monday? She suggested that the perfect solution to this problem might be to allow the letter that universities issue to students to exempt them from council tax to also be proof of their exemption from immigration checks. Such an approach would exempt the great majority of students and their landlords, bringing comfort to the many Members of your Lordships’ House who are very keen to ensure that the new measure does not deter overseas students from choosing the UK for their studies.

Let me go swiftly through the rest of my amendments in this group. Amendment 54A would add to the list of exclusions from the Bill’s obligations on landlords, under the list of “excluded residential tenancy agreements”. I know that Crisis has been pleased with some helpful changes already made to the Bill, but tenancies organised for people who are or will be homeless and are placed in the private sector by a responsible body need to go on the list of exclusions in Schedule 3. Organisations such as Crisis are funded by the Department for Communities and Local Government to persuade landlords to take on homeless or potentially homeless people—indeed, the DCLG last week announced extra resources for this valuable work—but, at present, the landlord will still have responsibility for checking the immigration status of these nominees, even though they have been vetted already by the local authority, a charity or a regulated housing association.

The amendment would excuse the landlord from the potential threat that someone whose papers are not in order and who turns out to be here illegally renders the landlord subject to a fine. The arrangements for placing homeless households in the rented sector are extremely important in giving confidence to landlords to take in vulnerable tenants, including those leaving prison, who are perceived to be a high risk. It is not easy to negotiate with landlords who are understandably hesitant to take in people on the edge of homelessness. Telling landlords that they will ultimately carry the can if a household is found later to be here illegally sets up a new barrier. I hope that it is not contentious to exclude placements of this kind from the rigours of the Bill. I hope that the Minister will be able to respond sympathetically.

Amendments 55B, 55D and 55E attempt to head off a major problem with the proposed arrangements: namely, the requirement on the landlord to check the credentials not just of the tenant but of other people who come into the accommodation with the tenant, usually family members. These people are not named in the tenancy agreement and the landlord has no direct relationship with them. Here, the Bill introduces a duty for landlords that goes well beyond the comparable duty for employers. Employers are not required to make inquiries about a potential employee’s family or friends, but landlords will be expected to make thorough checks in relation to other people over the age of 18 who live with the tenant. This is fraught with difficulty and, of all the many reasons that a landlord may avoid getting involved with a particular household and risking a £3,000 fine, this scenario is about the most off-putting. The amendments would remove this extra and unreasonable duty on the landlord and confine the obligation to checking the status of the tenant or tenants who are on the tenancy agreement.

Amendment 55H would remove the obligation on the landlord to notify the Secretary of State of a change to the status of a tenant whom they have already housed. It would take away the need to recheck their immigration status after a tenancy has started. Instead, the landlord would have to reconsider the tenant’s status only when the tenancy ends and the tenant wants to renew it. Once a tenancy has been signed, the landlord clearly would not wish to engage further in these checks, and it seems a step too far to require landlords to look out for and report so-called post-grant contraventions, except when the tenancy comes up for renewal.

Amendment 55R would enable the Secretary of State to give extra time for a landlord who has received a penalty notice to bring forward an appeal if the prescribed 28 days appears in the circumstances to be too short a time. With the complexities involved in these matters, the Secretary of State might well be glad of some flexibility here in the future.

Amendment 56F addresses the tricky issue of the landlord’s obligation to establish whether a person is over 18 years old. We all know that supermarkets find it very difficult to verify a customer’s age when a young person wants to buy alcohol or tobacco. My previous amendments would remove the onerous obligation on landlords to account for the immigration status of people who are not on the tenancy agreement and with whom they have no direct dealings. This amendment is a safety net if the duty to check up on others in a household finds its way on to the statute book. It puts the onus on the Secretary of State to set out an order which makes clear that as long as the landlord or their agent takes specified steps to establish the age of the occupiers, they will not be in danger of being penalised later. Without the amendment, landlords will go in fear of a transgression, despite their best efforts, and the presence of teenage children in a household will present another reason for a landlord not to house a family for fear of breaking the new law.

Amendment 56H is my final amendment. I think it could be helpful in tackling the central problem here: namely, that respectable landlords will henceforth be extremely wary about accepting anyone for a tenancy who just possibly might be a migrant without the correct papers. The amendment shifts the burden of checking out tenants’ credentials to one or more bodies which take on that responsibility and are approved by the Secretary of State for that purpose. Those verifying bodies would no doubt charge for the service, but could make the cost quite modest through economies of scale, dealing with many hundreds or thousands of cases, and would become absolute experts in ascertaining who was and was not an illegal immigrant. As long as the landlord had received the all-clear from the approved body, which might be part of a trade association or a credit referencing agency, the landlord would not need to worry about the new liabilities that they face.

The concept of a body approved by government taking responsibility for a key aspect of the affairs of private landlords is the model used for handling tenants’ deposits. Initially three and now four agencies have been cleared to provide tenancy deposit schemes to deal with all the tricky aspects of collecting and returning deposits. Similarly, the Secretary of State approves bodies to provide ombudsman services to the sector. A similar approval mechanism could lift the burden on landlords struggling to undertake accurate immigration checks and would, I think, reduce the cost to landlords, which may get passed on to tenants if agents are involved, from about £50 a shot to, perhaps, £25.

That measure would be particularly helpful to the Home Office inquiries team, removing a lot of the pressure of fielding queries from amateur landlords up and down the country who would no longer need to bother the Home Office. That arrangement would, I hope, achieve everything that the Government want from this part of the Bill, while reducing a significant financial and administrative burden for the Home Office and greatly reassuring good landlords that they need not turn away people who might just be here illegally, because the checking has been done for them.

I hope that that idea appeals to the Minister, and I am grateful to Richard Jones of the Residential Landlords’ Association for devising it. I look forward to hearing the Minister’s response to the amendments.

[Baroness Hamwee (LD)]

My Lords, I have three amendments in this group. The noble Lord, Lord Best, has raised a lot of important issues—in some cases as to principle and in some as to workability, with which all of us have been concerned.

On his Amendment 56H, allowing for verifying bodies, it speaks volumes about the views of the Home Office, which we have heard in this Chamber and outside it, that such a suggestion has been brought forward. One sees the comments about the current standards of the Home Office and one looks forward to much improvement, but one can see how such a proposal has come about. I suspect that some such agencies might well grow up outside the statute if we do not provide for them. I can imagine what the Minister may say in response to the amendment—that no third party can be authoritative on this—but I can envisage small landlords casting around for an organisation that can help them with this work.

The first of my amendments, Amendment 56J, is much the same as the noble Lord’s amendment with regard to a person that a landlord thinks is under 18 but in fact turns out to be an adult, for the reasons that the noble Lord has given. Amendments 56K and 56L are to Clause 32. The first would ensure that the Secretary of State could increase only the range of agreements not treated as falling within the scheme—in other words, could increase the range of exemptions but could not bring in through this mechanism agreements that would otherwise fall outside the scheme—while the second would ensure, similarly with regard to occupants, that the Secretary of State could increase only the range of people treated as not occupying premises but could not bring in agreements that would otherwise fall outside the scheme.

I understand that a degree of modification needs to be provided for in the light of experience if the pilot—I shall continue to call it a pilot—proves to be unsuccessful. However, we should understand to whom the scheme is intended to apply at the outset—to whom and to what, I suppose. I am grateful to the noble Lord for raising such a range of issues. He is expressing the concern that we have heard already from all around the House.

--- Later in debate ---

[Lord Taylor of Holbeach]

Yes, I can confirm that. An agricultural tenancy or a house occupied in connection with any employment would clearly be covered. However, it should not be forgotten that the owner of that property, as an employer, would have already checked the person’s entitlement to be in occupation.

[Lord Best]

My Lords, I am grateful for support for the amendments in differing degrees from all around the House, including the noble Baroness, Lady Williams of Crosby, who makes the point that it is already incredibly difficult for overseas students to find anywhere to live that they can afford in London—and in other cities. We must not make life more difficult by putting up a new barrier that puts landlords off; that is such an important and fundamental point.

I am grateful to the noble Baroness, Lady Smith of Basildon, who raised a couple of significant points. The Rent a Room scheme that we already have is getting a bit tired; this is the opportunity to let a room in your house and pay no tax—indeed, fill in no forms and just get on with the letting on your own. It will make a difference to the individual who owns that property if having to check the immigration status of anyone whom they take in is added to the requirements on them. We need to look at the Rent a Room scheme again. The tax threshold—the amount you can receive in rent from someone in your own home—has not been changed for something like 11 years; we have to revise that. This is an important moment to look at that. The case is similar for lodgers and guests—these look like awfully murky waters. The Minister said that he would respond in writing, which will be helpful.

The noble Baroness, Lady Neville-Rolfe, picked up on having approved verifying bodies that take all the hassle away from landlords—indeed, that take it away from the Home Office. However, she felt that it would be better to produce guidance and let landlords do their own thing. A voluntary scheme means that landlords who want to use it would just get on with doing so. Some 60% of private renting is through local agents. Rather than agents having their own mini-schemes—how many agents will become expert enough at this?—a central approved body that can verify people’s status would cut the cost to the landlord, and that might be passed on to the tenant. It would give landlords greater reassurance. I declare an interest: I chair the Property Ombudsman, which looks after letting agents and estate agents and the complaints about them. In the world of property ombudsman-ery, there is a system of the Secretary of State approving certain bodies as ombudsmen. That works well: it means that people can join a scheme knowing that it is properly approved, so people can stand behind it. Applying that technique in this field could be a clever move to help everybody to get this right.

The Minister made some important points. He underlined that the student lettings amendment that will be brought forward on Report will be a really good one. We will look at it with care, but it sounds as though it will do a great deal of what we hope that it will. On people being placed with a private landlord by an agency such as Crisis, a charity that takes potentially homeless people and persuades an individual landlord somewhere to take them on, he was not quite able to give me the reassurance that I had hoped for that that would be treated—as I understand it—like a hostel specifically for the homeless. These are specialist schemes in which the vetting will be done by Crisis. To say to the landlord, “I am sorry, we are unable to take away from you the responsibility for checking the migration status of the people we are bringing”, just adds another difficulty when it is difficult enough to get landlords to take in people, even with rent guarantees and other useful techniques. It would therefore be good to talk about that further.

I am grateful to the Minister for earlier discussions and his agreement that we should jointly explore some of these matters further. I look forward to such meetings and, in the light of his reassurances, I beg leave to withdraw the amendment.

Amendment 54ZZA withdrawn.

Immigration Bill

Lord Best Excerpts

Monday 10th March 2014 Lords Chamber

I have spent quite a bit of time on the pitfalls and concerns around this clause. However, the issues that I have raised are not exclusive and there are many others. We will hear more about some of them but I want to emphasise the need for a pilot in this area. I have already made it clear that we support the principle of stopping illegal migrants from accessing properties but the real answer has to be to address the wider problem, not try to make landlords into immigration agents. Our concern is that this clause will not achieve its aims and it seems reasonable and sensible to ensure that it works before we go ahead. I appreciate the number of questions which I have put to the Minister but I hope that he can answer them and address the points that I have raised.

[Lord Best (CB)]

My Lords, there are a number of amendments in my name to this part of the Bill but I begin by supporting Amendments 50 and 51, introduced so well by the noble Baroness, Lady Smith of Basildon. All the amendments that I support relate to the proposals in the Bill for landlords to have responsibility for checking the immigration status of their tenants. I declare my interests in social housing and the private rented sector, as in the register. I have every sympathy with the proposition that the relevant clauses should not stand part of the Bill but I recognise that there are other factors here that mean that the Government will not be persuaded to drop this measure altogether. In the amendments in my name I am therefore concentrating on ways in which its impact can be moderated.

Moreover, I have had the benefit of a very useful meeting with the Ministers—the noble Lord, Lord Taylor of Holbeach, the noble Earl, Lord Attlee, and the Minister for Immigration in the other place, James Brokenshire—at which I and colleagues representing both tenants and landlords were able to clarify a number of points. Indeed, my colleagues from the Residential Landlords Association, Crisis, the National Housing Federation, the British Property Federation and the Joseph Rowntree Foundation commended Ministers and civil servants on a number of concessions and clarifications that have allayed some of their fears. Nevertheless, it remains the case that, as I set out at Second Reading and as the noble Baroness, Lady Smith, has emphasised, this new burden on landlords is likely to have a number of unfortunate consequences.

[Baroness Hamwee (LD)]

I am sorry to interrupt the noble Lord in full flow; I was waiting for a point at which I could come in. I just want to clarify whether he is speaking to amendments in this group; I do not think that it contains any in his name.

[Lord Best]

I am speaking to Amendments 50 and 51.

[Baroness Hamwee]

Fine. I thought that the noble Lord was talking to his own amendments that come later on. I am so sorry.

[Lord Best]

I shall come to them in due course.

The average private landlord will be keen to avoid committing the new offence of allocating a tenancy to someone who is not meant to be in this country, and to avoid being fined up to £3,000. They will want to play safe and not take anyone as a tenant who might just possibly turn out to be an illegal immigrant.

It will not be an offence not to check the status of a potential tenant; it will be an offence not to have checked only if it is subsequently discovered that the tenant is here illegally. So if someone is obviously not an immigrant, there is no need to go through the process of checking them out. How much easier, therefore, to turn away anyone with the appearance of being foreign, including perfectly legitimate applicants, using any number of excuses—most often that the property has already been let. Despite the guidance being prepared by the Home Office on how landlords can avoid acting in a discriminatory way, in those markets of high demand—London, much of southern England and hotspots everywhere—I fear that the Bill could mean that anyone who could remotely be thought to be a migrant will find it very tough to get decent rented accommodation. Frankly, it is difficult enough already for anyone who is not a young UK professional to persuade landlords to take them on. Remember that there are over 1.5 million private landlords, 78% of whom, as the noble Baroness, Lady Smith, said, own just one property; they are amateurs and they are going to be highly risk-averse.

Immigration Bill

Lord Best Excerpts

Monday 10th February 2014 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution to this debate covers simply the issue of a requirement, set out in Chapter 1 of Part 3, on landlords to make immigration checks of their tenants. As has already been noted, there is widespread anxiety that the outcome will be entirely unsatisfactory from the perspective of tenants, landlords and the Government themselves. I feel on very safe ground in pursuing this matter, since I note that the criticism of landlord-led immigration checks comes with equal emphasis from organisations representing landlords and representing tenants, and from those taking an overview from both perspectives. I am grateful to the Residential Landlords Association, the National Housing Federation, Crisis and the Joseph Rowntree Foundation for their briefings.

There is a series of dangers and hazards in giving landlords these new responsibilities. Many private sector landlords will turn away legal migrants because they do not want the hassle and delay of having to make these extra checks. As I understand it, it will not be an offence simply to fail to check someone’s status, but only to fail to check the status of someone subsequently discovered to be an illegal immigrant. So if the potential tenant is very obviously not a migrant, no extra checking will be carried out. Many landlords will play safe and avoid all applicants who just might be migrants, including the legitimate ones. Indeed, UK citizens without a passport—not an uncommon position for those on low incomes—may be rejected by landlords not wishing to take any chances.

Already we know that nearly three-quarters of all landlords will not let to anyone in receipt of benefits. So this measure means even greater pressure on vulnerable tenants, many of whom are likely to end up with the exploitative landlords who all of us want to see driven out of business but who will ignore the law on this, as on many other counts. Last November, I joined police and local authority staff in Newham on a number of “raids” on properties where it was suspected that landlords were in breach of the law. I witnessed shocking conditions of overcrowding, breaches of health and safety regulations, and exorbitant rents for appalling conditions. Most of the landlords in this borough own just one property and, unsurprisingly, many are woefully ignorant of landlord-tenant law. One has to question whether this is a reliable group on whom the Government can depend for implementation of their immigration policies.

Good landlords, who have a reputation to maintain, will do their best to do what is right, but is it reasonable to add this regulatory burden to their workload? The Minister makes comparisons with the task given to employers, but this argument has some flaws. The UK Border Agency’s guidance to employers is 89 pages long; little wonder it is not always followed by small firms. The private rented sector is very much like the smallest of SME businesses, with nearly 2 million landlords agreeing 3 million new tenancies each year. Checking entitlement to work is easier than checking entitlement to residence. The sheer logistics are daunting. The Government’s consultation document lists 20 typical documents that landlords might expect to be familiar with. Perhaps as significantly, employers are not required to check on the status of other members of the employee’s household, but landlords will be expected to check out the immigration position of other family members and anyone else in the household, even though the landlord has no direct legal relationship with these people—hence the criticism that this is simply getting landlords to become UKBA agents.

Problems are particularly acute in shared accommodation let to several tenants with joint liability. In such cases, there is likely to be a fairly rapid turnover of tenants, and given that those moving in will usually be chosen by those already there, landlords will find it extraordinarily difficult to check the status of new tenants. Such are the greater obligations and pressures on landlords compared with employers: and we all know the hazards for employers, to which the noble Baroness, Lady Smith of Basildon, has already drawn attention.

The measures will also place extra burdens on local authorities, which will have responsibility for carrying out checks where they nominate the tenants to housing associations or send homeless families to private landlords. Demands on them to act as the point of referral and accept the immigration checking role seem certain to grow. The National Housing Federation raises another concern: tenants are to be given the job of checking on lodgers and may find that role at least as difficult as would a landlord.

All in all, I would echo the call for a proper pilot scheme to establish the viability of this policy idea. It needs to be established that this really is likely to be an effective measure before it is applied to nearly 2 million landlords.