Homes (Fitness for Human Habitation) Bill

Lord Kennedy of Southwark Excerpts

2nd reading (Hansard): House of Lords
Friday 23rd November 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as other noble Lords have done, I refer the House to my relevant registered interest as a vice-president of the Local Government Association.

I am very much in support of the Bill and congratulate my honourable friend in the other place the Member for Westminster North, Karen Buck MP, on bringing the Bill forward and on securing government support for it, which is quite an achievement. I am delighted that the noble Lord, Lord Best, is taking this Bill through your Lordships’ House, and I join him and other noble Lords in the fulsome tributes paid to my honourable friend. The noble Lord, Lord, Best, also listed some of the examples that Karen Buck made reference to in the other place, which were truly dreadful. We should not forget that she represents one of the richest parts of our country and our capital. Those were examples of the dreadful conditions some people have to live in today.

I am pleased that the Government have decided to support the legislation; it is very welcome, and I was very much encouraged by reading the letter from the noble Lord, Lord Bourne of Aberystwyth.

The Bill, as we have heard in this debate, will improve standards in the private rented sector by giving tenants the ability to take legal action where the landlord fails to keep the property in a state that is fit for human habitation, and where they fail to ensure that the property is maintained in that state as the law requires them to do so. Presently, the only way a tenant can seek to rectify matters is where an environmental health officer, using powers contained in the Housing Act 2004, takes action against the landlord, as they are prevented taking direct legal action themselves to put the issues right.

So we have the situation where a landlord could rent out a property that is not fit for human habitation but only the local authority can take action against them. In many cases, the local authority will take action, but as we have debated many times in this House, local authorities are under severe financial pressure on a range of matters. According to estimated figures from the Local Government Association, the funding gap next year will be £3.2 billion. Having said that, I agree with the comment made by the noble Lord, Lord Carlile, that, unfortunately, some local authorities themselves have been proved to be guilty of providing properties that are unfit for human habitation. Unfortunately, that is a matter of fact.

Generally, this is a very welcome move, but that leads me on to the issue of legal aid, which many other noble Lords have referred to, to enable lower-income households to exercise their rights and have access to justice. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 cut legal aid for early advice on housing cases and restricted it to only the most serious disrepair cases, which is a matter of much regret. Even with this welcome Bill becoming law, if individuals do not have the means to seek redress in the courts, that is a barrier to improving housing standards for some of the most vulnerable people who need this protection. I am aware that the Government are conducting a review of the LASPO reforms, and I very much support the calls for legal aid to be restored for matters of disrepair and unfitness, including damage-only claims.

There is also the question of security of tenure and the protection from retaliatory eviction where tenants seek to enforce their new rights. I am aware of the protections that are currently in place—the noble Baroness, Lady Grender, made reference to those—but my point is that they require the local authority to protect tenants from eviction, and this situation risks undermining the new powers won for tenants if they have to rely on hard-pressed, cash-strapped councils for that protection.

I was pleased to receive the letter from the noble Lord, Lord Bourne of Aberystwyth, which I made reference to earlier. It expresses the Government’s support for the Bill, which is great. However, one of the most interesting sections of the letter was at the second bullet point on the second page, where it says that the remedies available to the tenant will include an order of the court requiring the landlord to take action to reduce or remove the hazard, and damages to compensate them for having to live in a property which was not fit for human habitation. I fully support and welcome that—it is wonderful.

However, that made me wonder why the Government are resisting compensation payments for tenants who have been ripped off and charged prohibited payments. We can see that in the Tenant Fees Bill. The line we get from the Government is that we can have compensation and fines, but it would be unfair on the rogue landlord to have both. I do not agree with that. I will come back to that bizarre position when we consider the Bill on Report; I am sure that we will come back to this issue then. It owes more to the funding regime envisaged by the Government for that legislation than any other consideration.

The noble Lord, Lord Best, referred to electrical safety checks, as did the noble Baroness, Lady Grender, and the noble Lord, Lord Tope. That leads me to ask, as a number of noble Lords have done, about the Government’s stated intention to bring forward mandatory electrical safety checks in the private rented sector. We heard the Government’s announcement on that in July, but they have been fairly quiet since then. Perhaps the Minister can use today as an opportunity to update the House on the action that the Government intend to take. We need progress on this matter. We are now in November; change has been a long time coming and it still has not got here yet. I hope that the Minister has some good news for us today; if not, I hope that he will write to Members of the House on these matters.

I want to add to the point made by the noble Lord, Lord Tope, about whether landlords will be prevented from renting out a property where they do not have any evidence that a mandatory electrical safety check has been carried out. We heard that this is the case in Wales. I look forward to the Minister’s response.

The right reverend Prelate the Bishop of Rochester was right to illustrate that most landlords provide a good product. We should be clear about that. Good landlords are providing a good product to people and meeting their legal obligations—we should not forget that—but here, we are talking about rogues and criminals who flout the law.

The noble Lord, Lord Tope, also referred to licensing schemes. I am very much in favour of local licensing schemes; they are positive and improve local housing situations. I have mentioned the Newham scheme many times before. Recently, I went to Newham with the noble Lord, Lord Young of Cookham, who was suitably impressed by the work undertaken by the council and the mayor there. I am sure that he has mentioned that to his government colleagues.

I will bring my remarks to a close. I support the Bill and thank the noble Lord, Lord Best, for bringing it forward. I want to make it clear that I have no intention of tabling any amendments to it whatsoever, which I know may surprise noble Lords. It is important that we do not do that. The Bill is very good and needs our support. I urge noble Lords to do the same as me, no matter how tempting their well-intentioned or well-meaning amendments may be. They would do great harm. I look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank all noble Lords who have taken part in the debate. I am not at all surprised that the noble Lord opposite will not table any amendments because I know how responsible he is. I am grateful to him, as I am sure other noble Lords are. This Second Reading has been a debate of great content. Some very interesting and important points have been made, to which I will do my best to respond. In so far as I cannot do so from the Dispatch Box, I undertake to write to noble Lords and place a copy in the Library.

In particular, I thank the noble Lord, Lord Best. I agree very much with the points made by the noble Lord, Lord Carlile, about the quality of the sponsorship of the Bills we have seen in the House today. We could not have a better pilot than the noble Lord, Lord Best; I thank him for his hard work on such a great cause. As other noble Lords have done, I also thank the honourable Member for Westminster North for introducing her Bill. I acknowledge her hard work in the other place; she has shown considerable determination in taking it through successfully. I am delighted that the Bill has received such widespread support across this House and in the other place.

The noble Lord, Lord Best, has given us an effective overview of the Bill and why it is needed, and I echo that. It is an important Bill and we heard from many noble Lords in this debate about the fact that 20% of the housing in this country is in need of urgent attention. That underlines the importance of having this Bill. We heard that from the noble Lord, Lord Best, and my noble friend Lord Horam. The noble Baroness, Lady Grender, also echoed that point.

This fairly short Bill builds on work we have been doing to improve housing conditions and tackle rogue landlords. I must say that, although I am as guilty of using it as anyone else, I wish we could get away from the phrase “rogue landlords” because it tends to make them sound a little too cuddly for my liking. “Bastard landlords” or something stronger would probably be more appropriate because they are far from being cuddly. I shall try to deal with the situations raised by noble Lords, particularly by the noble Baroness, Lady Grender, and the noble Lords, Lord Tope and Lord Shipley. All three asked about electrical checks, as did the noble Lord, Lord Kennedy.

Since 2015, we have moved on the requirement to install a smoke detector on every floor in properties and carbon monoxide detectors where the heating system uses solid fuels. We have taken tough action in the private rented sector on civil penalties for recalcitrant landlords who need action to be taken against them, which can go up to £30,000. It is worth noting that those civil penalties can be retained by local authorities, which helps them with housing enforcement. We have seen Salford City Council use those powers recently against one landlord, issuing three civil penalties for the flouting of three separate legal responsibilities and fines coming up to £55,000. As I say, local authorities keep the proceeds of those civil penalties.

Local authorities have the power to issue banning orders for landlords and add to them to the database. As noble Lords will know, we propose that the database should now become public, but I am afraid to say that that will happen when parliamentary time allows. I know that is a standard phrase which is trotted out. This issue does need legislative action, but we are dependent on the business managers finding time for that. As far as the department is concerned, this is certainly a high priority.

Private tenants can now apply to get up to 12 months’ rent back if the landlord has not dealt with health and safety hazards and the local authority has taken enforcement action through rent repayment orders under the Housing and Planning Act 2016. We have extended property licensing so that more homes in multiple occupation now need a licence and we are going out to consultation, or perhaps review, on the issue of selective licensing. We will report on that in the spring. We have also announced that we will carry out a comprehensive review of the housing health and safety rating system. The noble Lord, Lord Best, rightly stated that if that is extended, it will automatically come within the compass of this legislation. We also plan to require all landlords to belong to a mandatory redress scheme, which I think is known and understood, and we are proceeding, as noble Lords have made clear, with the Tenant Fees Bill, which will reach its Report stage in your Lordships’ House the week after next. Subject to this Bill receiving Royal Assent, we will produce guidance for tenants, as has been suggested. I have covered that in a letter which has been sent round. In response to the question put to me by the noble Lord, Lord Tope, I intend that to include points on electrical safety. That was a point well made.

I will try to pick up the points made during the course of the debate, but if I do not address them all I will seek to cover them in a letter to noble Lords. On security of tenure, as is, I think, widely known, the department is considering the position on three-year tenancies and will respond to this issue in the new year, so an announcement will be forthcoming early in the new year on this point.

I was asked some specific questions relating to electrical safety standards. We put a question on the private and social rented sectors having the same requirements in the social housing Green Paper. I think the intention is that they should be dealt with in the same way. I cannot see any reason why they should not be. If I am wrong on that and there is a reason I will cover that in the letter, but it is not apparent to me. We will issue a letter announcing our intentions on this area before Christmas, so I hope noble Lords will bear with us on that.

I thank the right reverend Prelate for the points he made, together with perhaps an anticipatory mea culpa in case there was an issue for the Church, but I am sure it is following good practice in this area. He made a point about legal aid, as did other noble Lords. I am always grateful when noble Lords exaggerate my powers, but as I am sure can be anticipated, this is not an area where I can opine from the Dispatch Box. I will endeavour to cover the point and, as was rightly said, there is a review in this area. I hope noble Lords will understand when I say that I will cover that in the letter, but I cannot give a definitive statement of where we are on that issue.

I move on to points raised by the noble Lord, Lord Carlile. I agree with him on the importance of design. The design of buildings generally, not just for residences, has been a particular interest of mine. I also agree that modernist future design is important. In the National Planning Policy Framework we have, I think for the first time, a requirement to consider good design. It does not specifically mention modern design, but it certainly does not exclude it. Modern methods of construction and self-build will lend themselves particularly to more modern design. I know that the Secretary of State is committed to good design, but that does not exclude modern design. I will make sure that the points made in the debate are brought forward to my right honourable friend the Secretary of State. I agree with the point made by the noble Lords, Lord Carlile and Lord Tope, that sometimes in an area where you might expect good housing—university towns would certainly be part of that—something that looks like good housing from the outside looks very different once behind the door. That is something we need to bear in mind.

We talked generally and correctly about the impact that poor quality and non-decent housing has on individuals but, as was said in the debate, it also has economic effects in terms of pressures on the health service, and I am sure it has an effect on kids’ education if they are off school and so on. It certainly has dreadful social effects as well. The points are well made, hence the importance of doing what we are doing.

I thank my noble friend Lady Gardner of Parkes for bringing forward points about the ombudsman and a housing court, which she touched on, which are still very much on the agenda. As my noble friend mentioned, the noble Lord, Lord Best, is central to the issue of the ombudsman. We are looking at that ombudsman service and the housing court issue and will be responding on that, I think, in the new year as well. I will cover that in the letter.

On holiday lets, which my noble friend mentioned, there is a special power for London in that there is a restriction of 90 days for the Airbnb-type let in London, as in other capital cities and tourist destinations around the world, such as Venice. There is a 90 days’ accommodation limit. My noble friend will know that the UK Short Term Accommodation Association is doing effective work to try to make sure that that is enforced in London. There is a separate issue with landlords enforcing the provision in their leases. I know from speaking with my noble friend yesterday that that can be a particular problem and is a particular problem for her. I have great sympathy with that issue. I will write to her on that point to see if there is anything specific we can do, but I thank her for bringing those points up.

I thank the noble Lord, Lord Shipley, for his contribution and support. He mentioned again the electrical issues and their importance in the context of Grenfell. We do not know with certainty about the cause of the fire—at least in a legal sense—because we have not had the criminal proceedings or the result of the inquiry, but he is right about the importance of this in general terms, so I appreciate the points he is making.

I will write on the retaliatory eviction point. Certainly, there is protection where there has been an inspection of the premises by the local authority and it has confirmed that there is a legitimate complaint on the part of the tenant, but I will write more widely to cover how that is dealt with elsewhere.

I thank the noble Lord, Lord Kennedy, once again for his support. I am very happy to discuss with him the point on compensation for loss. I can see why he thinks that is inconsistent, but I do not think it is. Our point here on compensation in relation to tenant fees is that it is legitimate for there to be a fine, where appropriate, of the landlord and for a return of the money, and compensation if there has been a loss, for example, if somebody has suffered illness and they can demonstrate that, which is what we are talking about here. Compensation for a loss is a bit different—I think the noble Lord is talking about exemplary damages. The noble Lord, Lord Carlile, will know the precise legal word.

[Lord Kennedy of Southwark]

We will come back to this on the Tenant Fees Bill. I thought compensation was for when you suffer some loss or injury and if you had money taken off you inappropriately for a prohibited payment. Why cannot there be compensation for that? We will come back to this on the Tenant Fees Bill, but I think it is for any sort of loss, potentially. The noble Lord, Lord Carlile, may want to intervene.

[Lord Carlile of Berriew]

If it helps the Minister, I did not immediately realise he was talking about exemplary damages because they are given in very restricted circumstances. It is pretty unlikely that they ever will be given in an ordinary landlord and tenant case.

[Lord Bourne of Aberystwyth]

I totally agree. We will perhaps come back to this but we are not debating it in this Bill.

[Lord Kennedy of Southwark]

I am certainly not talking about exemplary damages, but what if a landlord has been prosecuted and has to pay some compensation? Those are not exemplary damages.

[Baroness Grender]

What we were looking at when I tabled the amendment in Committee was compensation for expenses but, in addition, some kind of incentive, especially for people who are not on high incomes, to take the case forward. However, I am sure we will explore this further.

Women’s Refuges: Funding

Lord Kennedy of Southwark Excerpts

Wednesday 21st November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

The noble Baroness is right about the particular needs of that community, which she has just outlined. It was a group specifically identified in the bids that we have just been honouring in the 63 projects. I will write to her on the specifics of that, but the BME and the Muslim communities were identified as being in particular need in those bids.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer to my relevant interest as a vice-president of the LGA. Since 2010, specialist refuges have been cut by one-fifth. As the noble Baroness, Lady Burt, said, 60% of referrals to refuges by Women’s Aid are refused due to lack of bed space. That means that 90 women and their dependent children are turned away every day. Is the Minister saying that the money he referred to in his earlier answer will replace those cuts? If not, why are the Government not doing more?

[Lord Bourne of Aberystwyth]

My Lords, I said that there is work still to be done—I think I used those very words. Part of that is, of course, the funding review that is going on at the moment. I also said that an additional 2,200 bed spaces have been created and there have been some specific projects. The noble Lord mentioned women turned away. There is a No Woman Turned Away project which ensures that people have caseworker support. There is still more to be done—I would not argue with that point—but progress has been made on these projects, and progress will be made with the funding review.

Rogue Landlords

Lord Kennedy of Southwark Excerpts

Tuesday 13th November 2018 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what projects they anticipate the funds announced to tackle rogue landlords will be used for.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my relevant interest as a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the fund will target approaches that local authorities have told us would make a real difference to local enforcement, tackling rogue landlords who make tenants’ lives a misery. Projects can be of any size and could include better ways of gathering intelligence on housing stock, improved data sharing within and across local authority boundaries, and new software to make housing inspections easier. The Government are looking for approaches that could be shared across local authorities.

[Lord Kennedy of Southwark]

My Lords, there have been some disturbing reports in the media of individuals convicted of various serious offences still operating in the private rented sector. While the additional money announced is very welcome, does the Minister accept that the most pressing thing to do in respect of rogue landlords is to enter some names on the database, to allow public access to it and to find parliamentary time to make that happen? “When parliamentary time allows” is not an adequate response to this question.

[Lord Bourne of Aberystwyth]

My Lords, I have some sympathy with what the noble Lord suggests. He will know in particular that we are committed to opening the register to the public as soon as parliamentary time is available. On the broader issue of entries in the register, there are two things to bear in mind. First, there has been some inaccurate reporting in some newspapers of matters that are not banning offences and could not be entered in the register. Other matters that could be put on the register relate only to offences that have been committed since 6 April this year. Not only do such matters have to go through the courts but there must then be an application for the landlord to be put on the register, and time is allowed for the person who would be put on the register to appeal against that. So it is relatively early days, but I agree with the noble Lord that, in the fullness of time, we would expect—indeed, hope, in the light of circumstances—that names will go into the register.

First World War Commemoration: Pakistan

Lord Kennedy of Southwark Excerpts

Monday 12th November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, now is the time for the country to come together to commemorate the end of the Great War 100 years ago. That is important. As I indicated, people of different religions from what was then undivided India played a significant role; that contribution is readily acknowledged. That is the measure of what we need to do in the light of the country coming together yesterday. Going forward, we must learn lessons from that on the importance of this being reflected in our national education.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, it is important that we never forget the horror of war and why those who came before us took up arms in both the First and Second World Wars. It is also important to ensure that history is told accurately. The contribution of Muslims in what was then India and is now Pakistan should have greater prominence. At a time when there are those who want to divide us, trade in fake news and seek to spread misrepresentation of faiths and communities, does the Minister agree that we should work to ensure that the heroic efforts of citizens of different faiths and no faith from the Commonwealth and elsewhere, who stood shoulder to shoulder with the people of this country, should be properly reflected in the reporting of these events? I am sure that the Minister will agree. In particular, could he go back to the Department for Digital, Culture, Media and Sport on the question of arts funding—perhaps we should look there for better funding in future so that our broadcasters can properly reflect what happened in the two World Wars?

[Lord Bourne of Aberystwyth]

My Lords, I readily agree with the basic sentiment put forward by the noble Lord. We have had many programmes throughout the First World War commemorations, such as the VC paving slabs and Remember Together, which have been very important in bringing the country together. I hope that they will continue and I hope that the VC paving slabs for the First World War commemorations continue for those for the Second World War. It is important that the country comes together and that we learn lessons. That has happened in the past week, as people up and down the country would readily acknowledge.

Housing: Shared Ownership

Lord Kennedy of Southwark Excerpts

Tuesday 6th November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend and pay tribute to his work on home ownership in Islington and in the other place. On the specific issue of affordable homes and social homes, the Green Paper that was out for consultation until today is taking views on how we can facilitate shared ownership. An example is staircasing, which allows people to increase their stakes by a single percent, rather than by 10%, as it is at the moment. As I have outlined, we have been taking proposals on private housing since the Autumn Budget.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I draw the attention of the House to my relevant registered interests. How does the Minister respond to the suggestion that shared ownership is the poor relation of Help to Buy on the Government’s priority list?

Devolution: Sheffield City Region

Lord Kennedy of Southwark Excerpts

Monday 5th November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I pay tribute to the noble Lord’s service to Sheffield City Council—indeed, as leader at one stage. Regarding the deal, the best legal advice given both to the mayor and to us is that consultation is necessary, so that is the next statutory step and it is what we are pressing for. My right honourable friend the Secretary of State has indicated to the Select Committee that he will be making a Statement on devolution in general during the autumn. I do not think that he has any specific plans to meet the four city leaders as the way forward is quite clear regarding the statutory requirements.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I draw the House’s attention to my relevant interest as a vice-president of the Local Government Association. As the noble Lord, Lord Scriven, said, we are at an impasse. When is the Minister going to do something about it?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for the very brief question. As I have indicated, and in fairness to the city mayor, he is trying to ensure that the consultation takes place, because that is the necessary next statutory step according to the legal advice that he and we have received. The legislation has gone through both Houses. The way forward is for that to happen. More widely, it is worth remembering that a third of England is now covered by devolution deals, including London. As I have indicated, the Secretary of State will be making a statement shortly, during the autumn.

Tenant Fees Bill

Lord Kennedy of Southwark Excerpts

Monday 5th November 2018 Grand Committee

[Lord Shipley (LD)]

My Lords, I shall speak to Amendment 18. I remind your Lordships that I am a vice-president of the Local Government Association. I want to say at the outset that, like the Government, our aim is to make renting a home fairer and more affordable. I repeat our support for the Bill in its aim of reducing up-front costs for those seeking to rent a home. We should also remember that the Bill is about protecting tenants from bad landlords, but also about protecting good landlords from bad tenants. Our job in Committee is to assess, line by line, whether the Bill will achieve those objectives and whether it can be improved. The amendments in my name and those of colleagues seek to do that.

Amendment 18 is about whether the figure of seven days for a holding deposit is justified. There is a tendency to draft Bills with round numbers based on weeks, but such a decision requires clear justification that the amount to be paid by a tenant, and received by a landlord, be counted in weeks rather than days. There is a strong case for saying that the costs to the landlord are what should be reimbursed. There is evidence to suggest that such costs would be recouped with a three-day rent payment. I have received advice—as, I guess, other noble Lords have—from Citizens Advice, which supports the three-day period. Its justification is that 14% of tenants are currently charged a returnable holding deposit, at an average cost of £250. Some tenants, however, are paying much more than that. A cap of three days’ rent would help to prevent that.

We also need to recognise that a tenant’s circumstances or budget can change unexpectedly, and they might need to withdraw from renting a property that they originally and genuinely intended to take. This could be for reasons that prove beyond a tenant’s control. For example, there may be an unexpected failure of a credit or reference check. This can cause severe financial hardship for tenants and prevent them being able to access the private rented sector at all. Smaller holding deposits would still have the effect of deterring tenants from taking a large number of properties off the market, while avoiding hitting tenants’ finances unnecessarily. I am grateful to Citizens Advice for its briefing, from which I have quoted.

The question for the Minister is: can the Government explain why the figure of one week appears in the Bill, as opposed to a set number of days? As I said, it is very easy to talk in round numbers, but for some tenants trying to take up a tenancy, how much they will have to pay in cash is very relevant. I very much hope that, as we consider the Bill in Committee, the Minister might be able to explain the basis for one week, as opposed to three days.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as this is my first contribution to today’s proceedings, I draw the attention of the Grand Committee to my registered interest as a vice-president of the Local Government Association. I thank the noble Lord, Lord Bourne of Aberystwyth, for the letter and the draft guidance, which we received on Friday afternoon. I very much appreciated that: it was good to get the papers and look at them over the weekend.

Amendment 1, moved by the noble Baroness, Lady Grender, and to which the noble Baroness, Lady Thornhill, and I have added our names, raises an important issue for prospective tenants. It seeks to include in the Bill more certainty, and to provide greater fairness and transparency for the person or persons looking for accommodation. They would be provided with more information about how their money is to be treated. I am not against the use of holding deposits in principle, but I want to see real clarity in their operation, and the amendments in this group are a positive step forward.

I am sure the Grand Committee will be repeatedly told today that guidance is sufficient and we do not need to go down the route of regulation. But I am also clear that this is guidance; it is not statutory and, as such, has no legal effect—it is just guidance. Amendment 1 rightly places a requirement on the Secretary of State to set out in regulations the procedure to be followed by a landlord or letting agent when they take a holding deposit, and how the deposit is to be treated in a prescribed way so that it is clear what the prospective tenants should be told. The amendment would also ensure that there is a clear procedure to be followed where it is decided to withhold a deposit, and that evidence must be provided to the person who paid the deposit, setting out the ground on which it is being withheld. The regulations are to be approved using the negative procedure, which is the minimum of burdens for the Government and is the right way forward in this case.

Amendment 17, in the names of the noble Baronesses, Lady Grender and Lady Thornhill, and Amendment 22 in my name, seek to stop the practice of taking multiple deposits from people. I accept that this is referenced in the guidance, and that, as it says, a holding deposit creates a binding conditional contract between tenants and landlord. But if, as a landlord or letting agent, you accept multiple deposits, surely you must be in breach of this binding conditional contract. It can be said in those circumstances that there is no conditional contract whatever.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank noble Lords very much for participating in the debate on this part of the Bill. I should like to speak to the range of amendments that deal with the treatment of holding deposits.

As noble Lords are no doubt aware, this is the first time that we are seeking to cap the level of holding deposits—it has not been done before. I am pleased that we all agree that it is important to permit landlords and agents to charge a holding deposit. That seems to be universally accepted and I thank noble Lords for that. However, it seems that we still have some areas of disagreement and I will discuss each of them in turn.

First, Amendments 18 to 20 seek to lower the level of the cap on holding deposits from one week’s rent to three days’ rent. I am afraid I cannot accept these amendments. A cap of three days’ rent could unfairly penalise the landlord because the costs incurred in referencing a potential tenant include not only the cost of the reference check. Payment of a holding deposit means that a property should be taken off the market, and therefore costs might include lost rent for the landlord if the tenancy does not proceed. That lost rent will be higher in Fulham than it will in Newcastle.

Where a tenancy proceeds before the deadline for the agreement, the tenant will receive their holding deposit back in full. However, if the tenancy does not go ahead owing to the tenant’s default, it is not fair that the landlord or agent is penalised. We are seeking fairness here—no more, no less. We believe that tying the maximum holding deposit that can be retained to a week of rent is fair compensation for the landlord’s likely actual loss. However, our consumer guidance will encourage landlords and agents to retain only the costs they have incurred. In relation to the guidance, I will also look at the point about a draft agreement being seen before the agreement is entered into. That is reasonable. In general, I am very happy for noble Lords to engage in the guidance. We can organise a briefing on it and take on board any points that they wish to make.

However, it is important to state that the cap of one week’s rent represents an innovation and an improvement on the status quo. Currently, there is no prescribed limit. The Government’s 2017 consultation on banning letting fees asked tenants for a breakdown of the fees charged at their most recent letting. Similarly, it asked agents for a breakdown of the fees that they charged. The responses to the consultation were not necessarily a representative sample but they gave us a flavour of the level of holding deposits currently charged. Tenants said that they were charged a mean average of £370 as a holding deposit and agents said that they charged a mean average of £214. Currently, a website run by Generation Rent called lettingfees.co.uk has also compared letting fees as displayed on the websites of 1,088 agents across the United Kingdom. It found that, of 23 agents who declare that they currently charge a holding deposit, the average charged is £341. Between 1 April 2017 and 31 March 2018, the average monthly rent in England was £675, working out at £156 per week. That is what would be charged as an average. A cap of one week’s rent will help to improve affordability for tenants, while ensuring that landlords are not unfairly penalised should the tenancy not proceed for reasons within the tenant’s control.

Secondly, I will address Amendments 1 and 21, which seek to encourage greater transparency for tenants in how the holding deposit is treated. I appreciate the valuable points raised and the importance for tenants of understanding how their deposit is handled and why it may not be returned. That is entirely fair. I want to minimise the need for secondary legislation. The noble Lord, Lord Best, quite reasonably pointed out the down side of bringing forward regulations. I should say that it is not usual in this type of situation, despite what the DPRRC says. I have checked this with similar, although admittedly only parallel, legislation; of course, there is no legislation that is identical. If one looks at the Local Government and Public Involvement in Health Act 2007, the Local Government Act 2003, the Planning Act 2008 and the Small Business, Enterprise and Employment Act 2015—across a range of legislation, which I am happy to share with noble Lords—it has been usual for this to go in guidance rather than regulations. The noble Lord is absolutely right that not only would that sacrifice a degree of flexibility, it would slow this down materially—by how long it is difficult to say, given all the legislation currently going through, whatever the circumstances of deal versus no deal. Noble Lords will be aware of the considerable pressure on the legislative programme.

[Lord Kennedy of Southwark]

On the point about slowing the legislation down, the Bill will come into force. Most of the provisions will be enacted on a day to be determined by the Secretary of State through a statutory instrument. Even if the Bill goes on to the statute book, we will have to wait for a further period for many of these provisions to become law, and even then only by regulation. The Bill will not all come into force immediately. Some parts will but quite a lot, including the provisions on deposits, will come into force at a later date. It could be weeks or months after the Bill comes into force before anything actually happens. We will have to have a debate in the House on those provisions first.

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[Lord Kennedy of Southwark]

Could the noble Lord address guidance again? This will come up again and again as we go through the Bill. If guidance is not by regulation, what is its legal status? I suspect that it has very little; it is just guidance, which can be looked at and followed, but also ignored. My worry is that, if things are not down clearly, by regulation, they can be accepted but also ignored, and there is very little that anyone can do about it.

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[Baroness Grender]

I thank the Minister, especially for agreeing to take a look at multiple holdings. I look forward to working with him and his team on the guidance. There is some guidance, and the noble Earl, Lord Lytton, will be very relieved to hear that there is a suggestion in it that a tenant might produce a typo, but no suggestion that any landlord would do so. I am using a small example of something I have spotted already in the drafting. I very much appreciate that the guidance is a draft at the moment, and therefore I thank the noble Lord for the opportunity to sit down and work through the guidance to make sure that there is parity between tenants and landlords. There seem to be one or two disparities that I have already picked up from my brief reading of it over the weekend. That, in a way, is why I still want to pursue—and I am very happy to discuss with officials and the Minister—the possibility of getting some regulations to introduce transparency in holding deposits. I look forward to those discussions, but it may be that we will need to pursue this further on Report, depending on those discussions. With that, I beg leave to withdraw this amendment.

[Lord Kennedy of Southwark]

On the guidance, I accept the noble Lord’s point that it is a question of judgment and that he can point to other legislation where guidance is provided for in regulations. But does he accept that if it is guidance rather than regulations, that guidance is weaker because it does not have statutory back-up? That is the point I am making. The Bill addresses tenants’ fees, which we all agree are a problem. If the Government continue with the choice they are making at the moment, what they are offering people is weaker than if it was put in regulations. My other point is that if something does not happen on deposit fees—perhaps in regulations—this will be totally ignored.

[Lord Bourne of Aberystwyth]

My Lords, I am not sure that I do accept that. It is different in nature: some things are better in guidance, because of greater flexibility, and some things are better in regulations. So while I do not accept the general proposition, I accept that some things are better in regulations, but I do not accept that these are those things.

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Moved by

[Lord Kennedy of Southwark]

2: After Clause 5, insert the following new Clause—
“Transferable deposits
The Secretary of State may by regulations made by statutory instrument amend paragraph 2 of Schedule 1 to make provision which enables a relevant person, at the conclusion of a tenancy, to transfer all or part of a tenancy deposit from the landlord or agent with whom that tenancy was held to a second landlord or agent.”

[Lord Kennedy of Southwark]

My Lords, Amendment 2 seeks to enable a deposit to be transferred to another landlord or letting agent. This deposit passporting would be of great benefit to tenants and, as far as I can see, would have no detrimental effect on landlords or letting agents. The system would allow for the direct transfer of money between landlords and properties. The consumer group Which? found that 43% of renters have had to use a credit card, loan or overdraft, or borrow from family and friends to fund a deposit—that is terrible. It also found that 31% of renters had to find money for a new deposit before they had been paid back their existing deposit. In effect, this group of renters would, even if only for a short time, have paid two deposits, which is potentially a huge sum of money. That is just not fair, and the Bill does not address this at all. Renting in the private rented sector is stacked against tenants in many respects and this proposal would help tenants with the difficult issue of finding deposits.

I saw an article in the Daily Telegraph—not my usual reading, I must say—which included figures from the Tenancy Deposit Scheme. The article found that the average deposit is £1,180, as much as £3,266 in parts of central London, and around £498 in Lancashire’s Ribble Valley. These are not insignificant sums of money. The system is failing tenants and it could be improved.

Amendments 15 and 16, also in my name and those of the noble Lord, Lord Shipley, and the noble Baroness, Lady Thornhill, seek to put into effect what the Government originally announced: that there would be a four-week tenancy deposit cap. In this case, I stand with the Prime Minister and what she announced last year. It is appalling that the Government have had a change of heart here, and it would be useful if the noble Lord, Lord Bourne, could explain what has happened over the past year and why there has been a change of heart. The evidence shows that opting for this large deposit cap makes it harder for people to rent in the private rented sector, and makes it harder for them to raise money for a deposit, especially when there is no ability to passport deposits.

I am sure we will be told that there is a risk that renters will use their deposit to cover their last month’s rent without the consent or knowledge of the landlord. Citizens Advice—an organisation that we all respect—has done research that found that this happened without prior agreement with the landlord in only 2% of cases. Therefore, in 98% of cases, it did not happen. I am sure we will also be told that this higher figure of a six-week cap is needed to recover landlords’ costs, but again this just does not hold water.

The Deposit Protection Scheme did some analysis and found that over 50% of tenants get their full deposit back and the average deposit return is 75%. That illustrates that the Government were right to set the level at four weeks in the first place, and it is disappointing that they have changed their mind. The majority of renters getting most or all of their deposit back shows me that the four-week limit is the right level, which would still allow for a much higher than average deduction to cover landlords’ legitimate costs while protecting renters from excessive up-front costs. I beg to move.

[Lord Shipley]

My Lords, my name is attached to Amendments 15 and 16 in this group. Amendment 2 is a very reasonable suggestion and I hope the Minister will be able to respond positively to it.

In the previous group I raised how lengths of time are decided. I understand that they are often a judgment. The same issues around the length of time arise in this group. We need to protect both parties—landlord and tenant—and the question is whether six weeks’ rent is a reasonable sum to pay as a refundable deposit or whether some other length of time is more justifiable. There are two issues here. First, in Scotland, it is two months. Scotland has that figure for a reason. Have the Government looked at Scotland’s experience? Secondly, it was announced in the 2017 Queen’s Speech that in England it would be four weeks; that is, half the length of time that applies in Scotland. Differences of this kind for those on low incomes or who are short of savings can matter profoundly.

The Government have now decided that it should be six weeks. It is almost as if this is about splitting the difference between what they said it was going to be—four weeks—and the Scottish experience, which is eight weeks. It needs more rigour than that, should that be the case. Again, I refer to advice from Citizens Advice, which I think is material. The most common amount tenants pay for a refundable deposit is four weeks or one month. Setting the cap higher than four weeks might push up the cost to tenants. To put it another way, setting the cap at six weeks will help only 8% of tenants, according to Citizens Advice. However, a cap of four weeks would save money for almost half of tenants. I do not know what consideration the Government have given to that but I make the point that when it comes to the decision on whether it is four, six or eight weeks—or perhaps five weeks, which was mooted in the House of Commons—we need to be very much clearer about why six weeks has been decided on.

Citizens Advice’s research shows that only 2% of renters use their security deposit to cover their last month’s rent without the landlord’s knowledge or consent. Has the Minister considered the advice from Citizens Advice? If it is only 2% of renters, there is an issue for us to discover. Of course, the point is—and in defence of landlords’ interests—if tenants withhold the last month’s rent, that can lead to a landlord having no protection against the damage done by a tenant who is leaving if they fail to pay the last month’s rent as well. That would be a concern for me. That is one of the reasons why the House of Commons suggested that it should be five weeks, not six.

What I look for in this probing amendment is the evidence base the Government considered on how many weeks would be justifiable. They clearly changed their mind from the Queen’s Speech in 2017 when they announced that it would be four weeks. They have now come out with a figure of six weeks. I would like to understand better the Government’s reasoning for that figure.

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[Lord Shipley]

My Lords, perhaps I may ask the Minister two questions on points I raised earlier. The first is that it is not clear why the Government used the figure of four weeks in the Queen’s Speech last year and what has caused them to change their own decision. Secondly, can the Minister explain the consideration that has been given to the scrutiny by the Housing, Communities and Local Government Committee? Bob Blackman MP drew attention to the committee’s recommendation that the length of deposits should be set at five weeks to avoid the risk that a tenant may refuse to pay the last month’s rent if the limit was set at four weeks. That would avoid some of the financial hardship for tenants that could result from the six-week limit. Have the Government considered in full the pre-legislative scrutiny undertaken in the other place in coming to their decision that it should remain at six weeks despite the clear advice that it should be five weeks?

[Lord Kennedy of Southwark]

On a similar point, we understand that in the Queen’s Speech the Government mentioned a period of four weeks. At one time it seems to have been a manifesto commitment. I am sure that we will be told that it was not, but I would be interested to find out. I understand that the period of four weeks was announced in the Queen’s Speech, but what has happened? The Bill says six weeks. It would help to know the Government’s thinking on that.

[Lord Bourne of Aberystwyth]

I thank noble Lords for those points. The consideration was around the notion of an upper limit, not a norm. As I say, there are difficult cases where a four-week limit may not be appropriate. I have outlined some of those and we have to think about the consequences for tenants. It was that which motivated the reconsideration.

On the point made by the noble Lord, Lord Shipley, about Bob Blackman in the Housing, Communities and Local Government Committee, it is true that different periods were talked about—of four, five, six and eight weeks, as we have already rehearsed—but it is important to note that this was not pressed to a vote in the other place. We have considered the element of flexibility. We are not mandating that it has to be eight weeks; that is far from the case. The evidence from Scotland is that it has not gone to eight weeks; rather it has not really budged. However, it gives flexibility, and that has influenced us. We cover in the guidance the point that we do not expect it to reflect anything other than the loss on the deposit.

[Lord Bourne of Aberystwyth]

My Lords, I am happy to pass that on to the working group, but one has to be careful what one wishes for. As we know, there are all sorts of issues around deposit protection and to disturb the existing relationship may well be dangerous. However, I will ensure that the message is passed back to the group so that it can consider it if appropriate.

[Lord Kennedy of Southwark]

I want to come back to deposits. I accept that it is not easy to sort out, but a tenant in the private sector who is seeking to move will have paid, even on the average figures, £1,200 and will need another deposit of a similar value. As I mentioned, Which? found that 43% of people were using credit cards or loans to get this extra deposit. A lot of people in the private rented sector will be on lower incomes. If they end up borrowing money on their credit card to fund the deposit because they cannot get their previous deposit back, that is not a good place for anyone to be. A credit card is an expensive way of borrowing money for a short period. We need somehow to address that issue and I wonder what the Minister can say about it.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will know that I have a lot of sympathy with that point, not only in this context but for people being forced to use credit cards or loans where that is not appropriate. I could not agree more with him on that, so it is important that we get this right. That is what we are seeking to do. He will be aware, just from the discussion today, that there are different views even in the Committee about the levels. We are seeking to get this right, to reimburse the loan and to provide for passporting on a sensible basis, but we have to ensure that we are being fair to the tenants and the landlords while, at the same time, not killing the tenancy market, which is an important part of the offer to people. However, I take his general point, which is entirely fair.

[Lord Kennedy of Southwark]

In the Queen’s Speech, the cap was announced as four weeks. The Government have looked at this and taken soundings and they say that four to five weeks are needed, so why have they picked six weeks?

[Lord Bourne of Aberystwyth]

My Lords, it is good to see the noble Lord being so supportive of the Queen’s Speech, on this occasion at least. I suspect a little bit of mischief in his new-found support for the Conservative Government. Nevertheless, on the particular point, as I have tried to address, we have looked at the level and, on consideration, decided that we would establish an upper limit but not a norm. That is the thinking behind the more mature reflection. I absolutely accept that this is a question of getting it right.

[Lord Kennedy of Southwark]

I thank the noble Lord for that. I will leave it there and seek to withdraw the amendment, but it is fair to say that I am likely to bring the issue back on Report, as I think that six weeks is too much—I will be looking at four or five weeks and hoping that we can persuade the Government on this. Until then, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

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Moved by

[Lord Kennedy of Southwark]

3: After Clause 5, insert the following new Clause—
“Duty to provide tenants and prospective tenants with information
(1) Within one month of this Act being passed the Secretary of State must—(a) prepare guidance to assist tenants and prospective tenants to understand the effect of this Act, and(b) publish the information on a website maintained on their behalf.(2) The Secretary of State must take all reasonable steps to provide a copy of the information to any bodies appearing to the Secretary of State to represent the interests of—(a) landlords and letting agents in England;(b) tenants in England;(c) local housing authorities;and other bodies the Secretary of State considers appropriate.(3) The information must, in particular, include the following—(a) the date on which the provisions in this Act come into effect in England;(b) information about prohibited payments under the Act;(c) information about permitted payments under the Act;(d) information about where tenants can access help and advice about the Act;and any other information that the Secretary of State deems would assist tenants and prospective tenants to understand the effect of this Act.(4) Every landlord and letting agent must—(a) provide all tenants and prospective tenants with information about the provisions in the Act relevant to them (which must, in particular, include the information mentioned in subsection (3)(a) and (b)),(b) publish such of the information as it considers to be relevant to its tenants and prospective tenants on its website (which must, in particular, include the information mentioned in subsection (3)(a) and (b)).(5) Subsection (4) applies from the day on which this Act comes into force.(6) In making arrangements for the purposes of providing information under subsection (4) a landlord or prospective landlord must—(a) have regard to the likely needs and characteristics, in respect of the provision of information, of persons to whom the information in question is to be provided, and(b) consider whether, having regard to those needs and characteristics, it is appropriate to provide any of the information to any of those persons otherwise than in the way in which it would normally be provided.”

[Lord Kennedy of Southwark]

My Lords, Amendment 3 seeks to shine some light on the whole process for the benefit of landlords, letting agents and tenants. It would place a duty on the Secretary of State to take all reasonable steps to ensure that the new procedures coming into force are properly communicated to everybody concerned. I am sure that we would all agree that proper communication is vital to make legislation effective and ensure that it works. It is imperative that the introduction of the ban is clearly communicated to ensure that landlords and letting agents, as well as tenants, are fully aware of the changes and that this happens immediately. We would put a requirement on the Secretary of State to advise representative bodies, affected groups, local authorities and other bodies that the Secretary of State decides are appropriate. That would include bodies such as Citizens Advice that provide advice services to people.

In the private rented sector, it can be difficult to reach the people who rent, because of the often transient nature of the sector—people probably move around more than in other sectors. There will be groups of tenants who need support. Some, of course, will be very savvy about their rights and responsibilities, but there are other groups of more vulnerable tenants. We must make sure that smaller agents and smaller landlords—some may have only one or two properties—are fully aware of the changes and how they will affect them. It is particularly important that tenants are made aware since they are the people who will alert local authorities to the identities of landlords or letting agents who are not observing the law, charging prohibitive payments or doing other things that would be banned by this legislation. To ensure compliance—I know the Government want to see compliance with their own legislation particularly—we need a clear communication strategy. The Bill will change the law and introduce new criminal offences, with relevant penalties and consequences, so it is important that people are fully aware of the changes. We do not believe it needs to be onerous, but we need something to ensure that it is properly communicated to everyone concerned. I beg to move.

[Lord Shipley]

My Lords, I will briefly express my support for the amendment. It seems to be extremely helpful. Perhaps there could be a discussion about how it would be implemented. I say this because it is one thing for Parliament to pass legislation, but it is another for it to be actually understood in the wider world. For tenants and landlords to understand their rights and responsibilities, it is very important that the publicity is good. A lot of it can be standard wording. It does not have to be originated by every individual. It may need to be amended by individuals, but generally it can be the same. That leads me to remind the Minister of my view that the £500,000 allocated for enforcement—perhaps we will come to that in the next group—is a welcome sum, but probably not enough. Providing the necessary resource for this to work seems to be very important. Ultimately, this should be self-financing. Ensuring that there is the right level of publicity, particularly for tenants, is particularly important.

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[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords who participated in the discussion on Amendment 3. I will seek to deal with the points made. The first and entirely reasonable point raised was from the noble Lord, Lord Kennedy, and was echoed by other noble Lords. I am committed to ensuring that tenants, landlords and agents understand their rights and responsibilities under the legislation. As the noble Lord, Lord Shipley, rightly said, it is not just a question of the law being passed; it needs to be the case that people understand the rights and obligations that follow therefrom.

That is why my officials have been working hard with key stakeholder groups to produce comprehensive consumer guidance to support implementation. However, I do not agree that it is necessary to mandate that in the Bill, as we have discussed and as we will look at again. I have shared draft versions of the guidance for tenants, landlords and agents with noble Lords, and I hope they found them informative and detailed. Once again, I state that we are happy to engage on that if it is helpful to noble Lords. I hope noble Lords agree that the guidance provides important information on the points suggested by the amendment, including the date on which the provisions will come into force, information about what is prohibited and permitted, and information about where tenants can access help and advice.

We intend to share this guidance with tenants and tenant groups in advance of the legislation coming into force and as soon as possible after Royal Assent. We will seek to ensure that tenants, landlords and agents are aware of this guidance, including through online publication and promotion through our media channels, and by using smaller groups, as the noble Earl mentioned. I am grateful to the noble Lord, Lord Best, for mentioning Zoopla and Rightmove; Purplebricks is another one. Those and others are groups we can engage with to make sure that we get the relevant message across. We will also encourage landlords and agents to make tenants aware of the guidance, using our existing relationships with stakeholder groups to do so.

The noble Baroness, Lady Gardner of Parkes, asked about seeking to enforce the provisions of tenancies through this legislation. That is not something we are seeking to do here. It is a contractual matter and short-term tenancy agreements are, I think, beyond the scope of the Bill. However, I do know of the noble Baroness’s concern and, as she is aware, I engage with the short-term tenancy association on a frequent basis to see how we can carry things forward.

I think that deals with the points made by noble Lords and will, I hope, allay concerns ahead of Report. On that basis, I respectfully ask the noble Lord if he will withdraw the amendment.

[Lord Kennedy of Southwark]

I thank the Minister for that. I hope he can help us with a couple of points. He said earlier that in many cases there are good tenants and good landlords, all acting reasonably and responsibly. In that sense, the Bill is not for them. We are dealing with the rogue landlords or bad tenants, as well as people who are uninformed. If you are a landlord with lots of properties you will probably have systems in place to ensure that you are informed properly. I worry that the landlord of one or two properties will—intentionally or unintentionally—not notice the legislation and will seek to carry on charging their tenants prohibitive payments and generally abuse them. What are we doing to ensure that there can be no doubt that these people know their responsibilities in terms of the law? That is what my amendment was trying to do: to ensure the people are clear on that. What is going to happen when the Act becomes law so that we can be absolutely confident that people know this? We disagree on the guidance. It is not statutory; it is just guidance, and does not have the backing of the law. What are we going to do to ensure that those landlords are in no doubt? Just leaving it to the CAB and other groups to inform people is not good enough —we all know that these groups are under huge pressure, as are local authority departments. That is my worry: the small tenants and small landlords. Can the Minister help us on that?

[Lord Bourne of Aberystwyth]

My Lords, I am very happy to. On the point made by the noble Lord—in relation not just to responsibilities, in fairness, but to the rights of tenants and landlords—this is to get the full message across. We want to get the full impact of the law across to tenants, landlords and agents, as the noble Lord, Lord Shipley, said. To pick up the point about small agents and landlords who are in a different position, we have to act through the landlord associations, the portals and the means outlined by the noble Lord, Lord Best. As I said, I am happy to engage on the guidance ahead of Report. If noble Lords think they have other ways that we could be getting this message across, which is in everybody’s interests, I am more than happy to look at those.

[Lord Kennedy of Southwark]

Obviously, at this stage I will withdraw the amendment. I just want to address the points made by the noble Earl, Lord Lytton. I take his point about proposed new subsection (4)(b) but we are moving into more of a digital age and it is important to have that. Equally, proposed new subsection (6) may not be worded very well but it was my attempt to ensure that in certain parts of the country people get the information in a way that they are able to digest and can be fully informed of their rights. Perhaps I need to look at that when I look at this issue. I cannot say that I am happy with the Minister’s response but I will leave it there for now. We may return to this on Report. I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

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Moved by

[Lord Kennedy of Southwark]

4: After Clause 7, insert the following new Clause—
“Enforcement costs
(1) The Secretary of State shall reimburse—(a) a lead enforcement authority, where this is not the Secretary of State, for any additional costs incurred by the authority in the exercise of its duties under section 23 or section 24 of this Act, and(b) an enforcement authority for any additional costs incurred by that authority in the exercise of its duties under section 1 or section 2 of, and Schedule 2 to, this Act.(2) In this section “additional costs incurred” means costs incurred minus funding received by an enforcement authority from—(a) fines; and(b) the Secretary of State.”

[Lord Kennedy of Southwark]

My Lords, Amendments 4 and 5 in my name are concerned with enforcement in respect of the costs involved and how they are covered, and require a report to be laid before Parliament within 12 months of the Bill’s provisions coming into force. The Bill is a bit light—to say the least—on these matters, which are extremely important.

Amendment 4 would require the Secretary of State to reimburse the lead authority for any additional costs incurred in taking on these extra duties. If a local authority is designated as the lead authority and, after taking account of the money received from fines or other work is still out of pocket, what local authority would want its council tax payers to subsidise everybody else? We need a clause that covers that situation.

Amendment 5 would put a new clause in the Bill that would require the Secretary of State to,

“make an assessment of the resources available to … enforcement authorities; and … the lead enforcement authority”.

Proposed new subsection (2) sets out what the report “must consider”. Finally, proposed new subsection (3) says:

“The Secretary of State must lay a report … before each House of Parliament”.


It is essential that the Government provide additional funding to local authorities for enforcing this legislation, otherwise they will be letting down the very people—the private sector tenants—they say they want to help.

Trading standards departments in local authorities will be responsible for enforcing the ban. The noble Lord, Lord Young of Cookham, will be well aware of the evidence given to the Bill Committee considering this legislation in the other place. There have been cuts of over 50% to trading standards staff in some areas. Many areas are experiencing increasing levels of demand and legislation that they are expected to enforce. It is getting more and more difficult to do so. Indeed, trading standards departments are struggling to enforce existing regulations designed to protect renters. Analysis by Generation Rent found that, in 2017, 12% of letting agents did not list their fees on websites as required by the Consumer Rights Act 2015. They were clearly in breach of the legislation but they were still doing that.

It is important to keep in mind that local authorities have also gained additional responsibilities to enforce against rogue landlords and agents from the dreaded Housing and Planning Act 2016. While I obviously welcome the Government’s announcement of a fund of £500,000 for year one to cover the up-front costs of implementation and awareness raising, one-off seed funding is unlikely to cover the full costs and burdens placed on local authorities. That is not a new thing; we have discussed this many times in Grand Committee and in the Chamber.

The Government’s approach seems to be that any penalties will support enforcement functions. That would potentially penalise councils that have raised awareness of the ban with agents. They are less likely to benefit from collecting penalties than where people have not kept up with their obligations. That is no way to fund and deliver such an important piece of legislation. I beg to move.

[Lord Shipley]

My Lords, I am interested to hear the Minister’s response to this. Of the two amendments, Amendment 5 is more important because it would provide an evidence base without which it would be difficult to know whether the £500,000 that the Government are allocating will be sufficient. Amendment 4 would be difficult to implement. How does one understand or agree what a reasonable cost is? You then have to consider things such as overhead recoupment and so on. What is a reasonable sum of money for an enforcement authority to receive? I see a big problem in making a fair assessment of what the additional sums that cannot be recovered through fines or via the Secretary of State might be.

However, the broader issue that the noble Lord, Lord Kennedy, has introduced seems important: is enough money being provided up-front to enable enforcement authorities to get enforcement properly established? We have read some evidence in the press recently that, despite legislation passed in Parliament, local authorities have not always been able to provide the level of enforcement that might be deemed necessary. I am talking in particular about rogue landlords.

I hope the Minister can respond to us on this. I repeat my observation that we need Amendment 5, and I hope the Government will be willing to come back with something on Report that gives some life to it. Amendment 4 might be the consequence of having evidence under Amendment 5. However, for the moment, I hope that the Government will be able to indicate how they respond to funding enforcement overall.

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[Lord Young of Cookham]

As my noble friend the Minister said a few moments ago, the Bill covers assured shortholds and other lettings. It does not cover the sorts of lettings that concern my noble friend Lady Gardner and which are offered by Airbnb and other agencies. My noble friend has raised an issue that has been the subject of many exchanges in Questions. Our answer is that we believe that local authorities have enough powers to take action where a nuisance is caused by these activities. In many cases, it is up to the manging agents to enforce the terms of the lease.

As I have said on many occasions in the Chamber, many leases specifically preclude the letting of a property for periods of less than six months, and it is up to the managing agents of the block to ensure that the provisions of the lease are met. Again, I say to my noble friend that I have quoted from the action taken by one managing agent when they discovered that a flat in the block for which they were the managing agent was being advertised on Airbnb; that immediately stopped the letting of that flat and any other flats in that block. So the short answer—I fear it was a long one—is that we believe that powers are already available without giving local authorities the additional powers that my noble friend has asked for.

[Lord Kennedy of Southwark]

Before I withdraw my amendment, can the Minister tell me something about the amount of money provided? On the face of it, £500,000 seems a lot of money but how many councils is that actually for? I do not know off the top of my head, but I think it is for at least a few hundred of them. What sum will each council get? Will it be £2,000 or £3,000 each? When it is broken down like that, it could be quite a small sum of money in terms of an overall council budget.

[Lord Young of Cookham]

About 152 trading standards offices could potentially be eligible for this. It would be wrong to assume that £500,000 would be divided among them so that they each get a small sum. There are other models for providing the initial help. For example, a team from the department could go out to help the trading standards agencies set up the necessary skills and training to take forward the measure after year one. At the moment, we are discussing with the LGA exactly how best to spend the £500,000. Although one option would be to divide it up, that is not the only option; others are being explored. Before the Bill becomes an Act, we hope to find a way forward on how the money should be spent.

[Lord Kennedy of Southwark]

I thank the Minister for that answer. I accept that the money may not necessarily be divided up. I am just trying to understand the number of authorities and the amount of money available. Looking at things like that, it is not a huge sum of money at all.

The Government think that this will be funded by fines and other fees, so it will be self-financing in that sense. I am conscious that local government will say, “Well, they would say that, wouldn’t they?”. Local government often says that the Government do not provide enough funding for various things. How was this figure arrived at? Where did it come from? Did the Government use some formula or methodology, or was is just a case of, “Oh, we’ve got a spare half a million knocking around and we can make it available”? I do not know. I want to understand how that figure came about. Again, I am sure that local government will say that it is nowhere near enough, as it would say about other things. I am thinking particularly of the Homelessness Reduction Act, where there is the risk of a very good piece of legislation being affected by the amount of money provided by the Government.

[Lord Young of Cookham]

I hope the noble Lord will accept that, unlike other occasions when new responsibilities have been imposed on local authorities, in this case we are actually offering to help them with some pump-priming finance before the revenue stream comes on board. I hope he will accept that this is a welcome step forward from other initiatives taken by Governments of all complexions, where local authorities have been asked to do things with no resources at all and no opportunity of self-funding downstream. I can only repeat what I read out a few moments ago: the Government estimate that local authorities will incur a new burden in respect of enforcement of £500,000. I will make detailed inquiries to see if we can shed more light on exactly where that sum came from and will write to the noble Lord, with copies to other Members who have shown an interest. I will do that before Report.

[Lord Young of Cookham]

I am happy to give the noble Lord the assurance that he seeks that the money will be reimbursed to the relevant section of the local authority that enforces this legislation and other related legislation dealing with rogue landlords.

[Lord Kennedy of Southwark]

I thank the Minister for his response, and all other noble Lords who spoke in the debate. At this stage, I am happy to withdraw the amendment.

Amendment 4 withdrawn.

--- Later in debate ---

Those are the two options, in essence. The tenant can go to the council’s trading standards or to another authority and rely on officers to carry out an investigation, or take it upon themselves to make an application to the First-tier Tribunal. We need that back-up process, but all a tenant can get through it is the fee back, so we think there is merit in awarding a higher form of compensation to a tenant who goes through the process. That would create more of a deterrent for an operator who charges an illegal fee. As we have just been discussing, it would potentially save the council work and it would give tenants something back for the effort they have put in. Entitling tenants to compensation when recovering illegal fees through the courts in addition to local authority fines would strengthen the enforceability of the Bill while being completely in line with similar consumer industries, including the letting agent industry itself. I beg to move.

[Lord Kennedy of Southwark]

My Lords, Amendment 6, moved by the noble Baroness, Lady Grender, would amend Clause 8, which is concerned with financial penalties. The amendment adds paragraph (d) to subsection (4), which lists those situations where a financial penalty may not be imposed. The amendment, which I am happy to support, stops an enforcement authority imposing a fine where the relevant person has recovered funds through an application to the First-tier Tribunal. It seems to address an omission on the part of the Government and it is a sensible proposal.

Also in this group are Amendments 7 and 8, which I think would strengthen the Bill. Amendment 7 provides for the First-tier Tribunal to order the landlord or lettings agent to pay up to three times the sum of the prohibited payment that they improperly collected. There is no provision in the Bill for any form of compensation when a prohibited fee is charged and that in my opinion is a serious omission on the part of the Government. We believe that compensation will undoubtedly be appropriate in many cases given the likelihood that charging prohibited payments will cause tenants significant financial hardship.

Compensation would also act as an incentive for tenants to recover illegal fees where the enforcement authority is unable to enforce the law and would be appropriate recognition of the time and effort that it takes for an individual to enforce their rights through the courts. Compensation is an established principle in the consumer industry where one party is entrusted with another person’s money, in addition to enforcement penalties where rules or laws have been breached. This includes all sorts of bodies such as train operators, travel agents and lawyers. The idea of being paid compensation where the consumer has not been well served is well understood, and getting the money back is important, as the noble Baroness, Lady Grender, said.

My amendment is consistent with other legislation governing the private rented sector. I do not accept that compensation should be sacrificed in support of the Government’s aim that enforcement will be funded exclusively through fines. Amendment 8 seeks to add a further restriction on the termination of the tenancy. I believe this is a very important addition that brings a further element of fairness.

Section 21 notices have undoubtedly been abused in the past, to the considerable detriment of tenants. It would be a complete travesty if, having stood up for yourself and your rights, and having taken action to recover the money that was improperly taken from you, you are then punished, in effect, and served with a Section 21 notice to leave your property. This amendment seeks to ensure that that does not happen and that the victim—here, the tenant—cannot be treated in that way. I do not see why we would allow rogue landlords or letting agents to behave in this way. My amendment seeks to ensure that they cannot, by implementing that six-month cushion.

[Lord Deben (Con)]

I wonder whether my noble friend will address the point raised by the noble Baroness when she referred to the number of letting agents that did not obey the law on their websites. I have found that in many areas—including modern slavery, an issue I am particularly interested in—a number of people just do not obey the law. It seems to me that it would be odd if we left it to the local trading standards officers. What is the arrangement? If you find such a case, who in government is supposed to enforce it? This also is a piece that might be dealt with in this legislation. If it is true—I assume that it is—that 17% of letting agents do not even obey the law of having to say what their fees are, that is outrageous.

[Lord Young of Cookham]

I am grateful to all noble Lords who have taken part in this debate. The Bill proposes a number of enforcement measures that offer a strong deterrent to irresponsible agents and landlords. It also makes provisions to enable tenants and other relevant people to recover unlawfully charged fees, if other attempts have failed, by going to the First-tier Tribunal, which will order reimbursement to the tenant of money that should not have been paid. Of course, tenants should get back any unlawful payments in full, whether that is direct from the landlord or agent, via their enforcement authority or through an order of the First-tier Tribunal. However, in certain instances, we think it is also appropriate for the landlord or agent to be issued with a financial penalty, as well as ensuring that the tenant receives their money back. This is to deter future non-compliance.

Amendment 6 prevents an enforcement authority imposing a financial penalty under Section 12 if the tenant has got their money back. We think that giving a power to impose financial penalties for breaches of the legislation is an important tool for enforcement authorities. Therefore, we cannot accept Amendment 6. However, the enforcement guidance will stress that enforcement authorities should take account of the landlord’s and agent’s conduct and past behaviour when considering the level of financial penalty to charge, if any. This includes whether the landlord or agent has reimbursed the tenant quickly when asked to do so.

Turning to Amendments 7 and 8, while we think it is right that agents and landlords should be issued with a financial penalty, we do not think it is appropriate for the tenant to receive further compensation in addition to repayment of the money owed. To add compensation risks penalising agents and landlords multiple times for the same breach, which we do not believe is fair; for example, it would not be right to ask a landlord who has been fined up to £5,000 for an initial breach to also pay three times the amount of a prohibited payment to a tenant. This would in effect be two financial penalties for the same breach. The deterrent effect, mentioned by the noble Baroness in her opening remarks, would of course be secured by the fines under the Act.

It is also worth noting that Clause 17 already provides further protection to tenants by preventing landlords recovering their property via the Section 21 procedure in the Housing Act 1988 until they have repaid any unlawfully charged fees. This approach is in line with legislation that already applies; for example, where the How to Rent guide has not been provided or where a landlord has not secured the required licence for a house in multiple occupation. Further, Clause 4 ensures that any clause in the tenancy seeking to charge a prohibited fee is not binding on the tenant.

We do not consider that further provision is needed along the lines proposed by Amendment 8. For example, it is not fair if a landlord who appeals against the imposition of a financial penalty, and this appeal is upheld, is then restricted from using the no-fault eviction process for six months. Under the noble Lord’s amendment, this would be the case—although that may not be what he intended. We firmly believe that our existing approach restricting a landlord’s ability to serve a Section 21 notice strikes the right balance and offers a serious deterrent to non-compliance. I hope the noble Lord will not move his amendment.

I suspect the short answer to the questions raised by my noble friend Lord Deben is: the trading standards officer. I would like to write to my noble friend setting out in more detail what is being proposed, under both this and existing legislation, to prevent misleading information appearing on websites and tenants being misled.

[Lord Kennedy of Southwark]

My Lords, I was a little surprised at the Minister’s response on the question of compensation. We would have a situation where a tenant is illegally charged a prohibited payment—it is against the law, and they have been wronged. The Minister says that, in those cases, compensation would not be appropriate. I do not understand that. Surely, as we have highlighted in other areas, it is totally reasonable that, if somebody has done someone a wrong—they have committed an offence, overcharged somebody—that person should be able to seek some sort of redress and have compensation paid to them. I do not see how the Minister can say that would not be fair.

[Lord Young of Cookham]

The noble Lord has a choice. He can have either a situation where the tenant gets the compensation and there are no financial penalties imposed under the Bill, or the situation we suggest where the tenant gets his money back, the fine is imposed and the money goes to the local authority. What the noble Lord wants is for the landlord, in effect, to be penalised twice: first by paying compensation up to three times, and secondly by paying a fine up to £5,000. The Government’s position is that you can have one or the other, but doing both is not fair.

[Lord Kennedy of Southwark]

I think the Minister will find that, in other areas, people can be fined and be required to pay compensation as well, so I do not see the logic. Clearly, if it is an issue of amounts, that can be looked at. We are not going to agree on this, clearly. The principle that you can be fined and be required to pay compensation clearly is the case elsewhere. It is very unfair that the tenant—the victim, the person who has been out of pocket, ripped off and treated badly—should be thankful just to get their money back. It does not seem to be a very good place. Clearly, we are not going to agree on that at this stage.

[Baroness Grender]

I thank the Minister for his response, kind of. I gave four examples where, in industry, the Government do this already. It happens. I believe there is some merit in exploring it a bit further. If it is about the drafting, and one rules out the other, I am happy to look at how it is applied to the four existing examples where people are compensated and organisations are fined that I gave to the Committee. I would be very happy to look at that and work with officials before Report.

[Lord Kennedy of Southwark]

On my Amendment 8, if somebody has gone to a tribunal and the landlord has won then fair enough, they should be protected, but I am trying to get to an example where someone has enforced their rights. This poor tenant cannot get compensation but they get their money back, then the next day a Section 21 notice is served on them. That is the issue I want to deal with. It is really unfair for the tenants in these situations—proved right in a court of law, then given a notice to leave the next day. Without this, that could still happen.

[Lord Young of Cookham]

The defect in the noble Lord’s amendment is that, if the landlord won the appeal, he would still be banned. As I said, that may not have been the noble Lord’s intention, but it is what the amendment would do.

I say in response to the noble Baroness, Lady Grender, that I detect in the Committee enthusiasm for the two-track approach to penalties, for both the tenant and the local authorities recouping fines. That message has come through. Without giving any commitment, I will have another look at this, in view of the strength of feeling on the matter. I am happy to accept the noble Baroness’s offer.

[Lord Kennedy of Southwark]

Clearly, this must be a result of my poor drafting, as that was not my intention, which I hope I have explained. I am worried about the people who have been proved right in a court of law. I thank the Minister for his comments, but I hope that this can be looked at, as there is an issue. Someone who has enforced their rights should have some protection, even for a limited period—they should not be able to be evicted the next day through a notice being served. I thank the Minister for his offer.

[Baroness Grender]

I thank the Minister for his olive branch, which I happily and heartily accept. I look forward to at least trying to work in this area. I beg leave to withdraw the amendment.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Haskel) (Lab)]

If Amendment 9 is agreed, I cannot call Amendment 10 because of pre-emption.

[Lord Kennedy of Southwark]

My Lords, Amendment 9, moved by the noble Lord, Lord Shipley, as we have heard from him, seeks to put the guidance issued by the enforcement authority on a statutory footing. That is a very good idea. It gives clarity and certainty, which is missing from what is proposed by the Government at present: guidance not backed up by anything at all. It is proposed to make this guidance statutory via the negative resolution procedure, which I think is right in these circumstances.

Amendment 10 in my name proposes to do exactly the same thing in slightly different wording. As I said on a previous group, I was pleased to receive the guidance on Friday, before Committee stage. I am aware that the Government have consulted various stakeholders over the past few months. It would be good to understand, when the Minister responds to this debate, what the status of the guidance we already have is. Does he expect it to change much more when it is finally agreed, or does he think it is just about there? Is further consultation expected? I very much share the view of the Delegated Powers and Regulatory Reform Committee. Making draft guidance available is good, but that is insufficient to remove the need for guidance to be made subject to parliamentary scrutiny under the negative procedure. It is important that both Houses look at this stuff in detail and are able to discuss it and say what they believe is right and wrong. We have come back to the guidance a number of times—we will keep coming back to this—and I just do not accept that guidance not backed up by regulation is sufficient. There is always this risk that it has no legal status. It can just be ignored, as well as adhered to. I look forward to the Minister’s comments on this.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords who have participated in the consideration of enforcement authorities and the guidance, which we have supported so far. I am very grateful for their engagement on this part of the Bill. I am also grateful to the Delegated Powers and Regulatory Reform Committee for its general scrutiny of the Bill.

I acknowledge the views expressed by the noble Lords, Lord Kennedy and Lord Shipley, on the enforcement guidance, but I maintain that it is not necessary, and indeed somewhat unusual, for such guidance to be subject to parliamentary scrutiny. I have already outlined some parallel examples where guidance has been given just as guidance on legislation under successive Governments in this century—the Local Government Act 2003, the Planning Act 2008 and the Small Business, Enterprise and Employment Act 2015, to cite just three. There are many instances in statute and I argue that this is commonplace.

However, to give the reassurance that the noble Lord, Lord Kennedy, in particular asked about, we are still engaging with key stakeholders and enforcement authorities, as we have been doing throughout. Like the noble Lord, Lord Shipley, he very fairly talked about my having shared drafts of the guidance ahead of Committee, and indeed I have offered—and offer again—to engage with noble Lords ahead of Report on the content of the guidance. We are working on it with key stakeholders, representative organisations and enforcement authorities, and, as I said, I am very willing to engage with noble Lords on it too.

I have indicated that there would be a delay if we were to seek to put this in regulations, and I think it would also sacrifice a degree of flexibility. However, on the basis of what I hope noble Lords will agree is my openness in offering not just to share the guidance, which we have done, but to share in engagement on the guidance, I hope that at this stage the noble Lord will feel able to withdraw his amendment.

[Lord Kennedy of Southwark]

Does the noble Lord accept that such guidance, compared with regulations, has less force behind it?

[Lord Bourne of Aberystwyth]

The noble Lord has made that point before. I think it is a case of what is appropriate. I absolutely agree that some things are appropriately put in regulations, but others are appropriately put in guidance. We have both: we have some things in the legislation and others in guidance. I would argue that what we have in the guidance is appropriate for the way that we are proceeding.

[Lord Kennedy of Southwark]

I accept that the noble Lord believes that this is appropriate. However, my point is that you can have both but what the Government have chosen is of less value compared with having it in regulations.

[Lord Bourne of Aberystwyth]

My Lords, I suspect that we disagree on this point. There are many occasions when I agree with the noble Lord but on this point I do not.

--- Later in debate ---

Moved by

[Lord Kennedy of Southwark]

11: After Clause 24, insert the following new Clause—
“Report on operation of Tenant Fees Act
(1) The Secretary of State shall within a period of 12 months from the date of commencement of this Act and annually for the four years thereafter lay before Parliament a report on the operation of this Act, setting out—(a) the number of breaches of sections 1 and 2;(b) the number and amounts of financial penalties levied by enforcement authorities; and(c) the number of criminal prosecutions commenced and concluded in each 12-month period.(2) The report must also consider the impact of the provisions of this Act on the private rental sector including—(a) market competitiveness,(b) market transparency, and(c) vulnerable tenants, in particular in relation to how local authorities are able to discharge their duties to prevent homelessness.”

[Lord Kennedy of Southwark]

My Lords, Amendment 11 seeks to put a new clause into the Bill. If agreed, it would require the Secretary of State to report to Parliament within 12 months, then every four years after that. The report would provide valuable information on the number of breaches, financial penalties levied and criminal prosecutions in each 12-month period. It must also consider the points as listed in proposed new subsection (2), which are important when looking at the impact of the Act on the sector. I suspect that the amendment will not be greeted with great enthusiasm from the Minister, but can he tell the Committee whether any of the information referred to in the amendment would be collected by the department anyway? I may have a few more questions for the Minister after listening to his response. I beg to move.

[Lord Young of Cookham]

I am grateful to the noble Lord, Lord Kennedy, for his amendment. I assure him that we plan to monitor the implementation of the Bill through continual engagement with key stakeholder groups, represented landlords, agents, tenants and those in housing need, as well as through wider intelligence from agencies such as the lead enforcement authority and trading standards, which will enforce the requirements of the Bill.

I have no difficulty with the objectives of the noble Lord’s proposed new clause. However, bits of it are impractical. We will not be able to identify all the breaches of Clauses 1 and 2 as set out in proposed new paragraph (a) because we will be encouraging tenants to challenge their landlords and agency with a view to rectifying breaches if they have been charged prohibited fees. The enforcement authorities would not be involved if the breach were resolved between the tenant and the landlord, so it would not be possible to record every time that this happens.

However, owing to the reporting requirements set out in the Bill under Clause 14, information on the number of financial penalties and criminal convictions under the ban will be captured by the lead enforcement authority. In the light of what the noble Lord suggested, we will consider how best to share this information with Parliament. Both agents and landlords that are banned from operating will be captured on the rogue landlord database; the Prime Minister made it clear that we plan to make this information public. Local housing authorities also have powers to include persons convicted of a breach of the fees ban on that database, as well as including persons who received two or more financial penalties in a year for any banning order offence committed at a time when the person was a residential landlord or a property agent.

Further, Clause 23 places a duty on the lead enforcement authority to keep under review social and commercial development relating to the letting sector and the operation of relevant letting agency legislation, as well as to advise the Secretary of State about it from time to time. I hope this reassures the noble Lord that we will track and review the effectiveness and enforcement of the ban and its impact on the private rented sector. I hope that will we achieve what his amendment wants but we do not think it necessary to prescribe further reporting requirements in the Bill. As I said, we will consider how best to make this information available in the light of the debate.

We will also, as the noble Lord may know, review the legislation within five years in line with normal practice and submit that review to the appropriate Select Committee in the other place. We do not intend to review the Bill in isolation. Recently a number of legislative changes have been made to the lettings industry with more planned related to the regulation of letting agents. These changes, along with the Bill, support and deliver on our commitment to rebalance the relationship between tenants and landlords and to make renting fairer. We will keep all of these issues under review. With those assurances, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Kennedy of Southwark]

I thank the noble Lord for that response and I am pleased with some of the commitments that he has made. At this point I am happy to withdraw the amendment.

Amendment 11 withdrawn.

--- Later in debate ---

[Lord Shipley]

My Lords, very briefly, I spoke at Second Reading on the importance of exempting home-share schemes from the impact of the Bill. It seems to me that the amendment moved by the noble Baroness, Lady Barran, supported by the noble Lord, Lord Kennedy of Southwark, addresses the problem. I hope very much that the Minister is in a receptive mood.

[Lord Kennedy of Southwark]

My Lords, I am happy to have added my name to Amendment 12, proposed by the noble Baroness, Lady Barran. As we have heard, these issues were raised by the noble Baroness, Lady Jenkin of Kennington, at Second Reading.

In moving the amendment, the noble Baroness explained in detail that it would exempt people from being letting agents and being caught by the Bill’s provisions if they meet a number of conditions, as set out. She makes a very fair point. One thing we do not want to do, as is always a risk when passing legislation, is for it to have unintended consequences. This amendment seeks to stop that, so that the good work being done through this scheme—where no rent changes hands, and people give each other mutual support and contribute to utility bills—will not be caught by the legislation. I am happy to support the noble Baroness in finding a way forward to protect the scheme. If the Minister will not accept this amendment, I hope he will give a commitment to the Grand Committee that the Government understand this is an issue and will table their own amendment on Report.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords for this amendment, in particular my noble friend Lady Barran. I worked with her when she was involved in SafeLives and I know about the excellent work of that organisation with Homeshare on some issues. I also pay tribute to the work of my noble friend Lady Jenkin, who is currently in Myanmar or Bangladesh dealing with refugee issues.

The House came together on this issue at Second Reading—quite rightly. It is clear that we all support the valuable work done by home-share organisations in matching an older person with low-level support needs with a younger person in housing need. It is an admirable arrangement and I quite understand that the organisation does not want this to be characterised as rent. That is not the nature of the relationship. Again, the House was clear about that.

In a normal situation, the younger person will provide help with tasks, typically cleaning, shopping and gardening, and of course friendship and companionship in return for low-cost accommodation. It is a key policy challenge, which Homeshare supports for the country as a whole, helping an ageing population live in their own homes for longer and addressing issues of loneliness. In short, it is a good. At the same time, it helps a younger person in housing need find an affordable and safe home—something that is a key priority for my department and for the Government as a whole.

I am sure that the matching of two sets of needs through a single project is laudable and something that should be encouraged to grow. Home-share schemes provide ongoing support and reassurance to both householders and home sharers to ensure that the arrangement is beneficial to both. Unless we act, this would fall foul of the legislation, as has been pointed out; it is an unintended consequence. We will continue to work on that and I will undertake to come back to it on Report. I am more than happy to do that, although there is still work to be done. However, I am sure that we can take this forward.

I have listened carefully to the concerns expressed by noble Lords. As I indicated at Second Reading, I am extremely sympathetic to them and we will do something on this. We will return to the matter on Report. With those reassurances, I hope that my noble friend will feel able to withdraw her amendment.

[Lord Kennedy of Southwark]

My Lords, can I be absolutely clear on what the Minister is saying? He will bring back on Report or perhaps at Third Reading an amendment that will deal with this issue.

[Lord Bourne of Aberystwyth]

My Lords, I hope to engage with noble Lords ahead of that to discuss the way forward, but I am keen that we should deal with this. I have indicated that it is not appropriate to deal with it by private arrangements with the organisation because I do not think that that would satisfy its legitimate desire to ensure that this is not a tenancy-type agreement.

--- Later in debate ---

Moved by

[Lord Kennedy of Southwark]

13: Clause 28, page 20, line 33, leave out “one year” and insert “six months”

[Lord Kennedy of Southwark]

In moving Amendment 13 I shall speak also to Amendment 14, which is tabled in my name. Both amendments seek to highlight what is often, unfortunately, a recurring theme: the time it can take to make progress on important issues.

Under Clause 28, it will be a whole year after the Act comes into force before landlords will be subject to the consequences of the law if they make a tenant pay a prohibited payment. To be clear, that is not a year after the Act becomes law because Section 1 will not come into force until the Secretary of State decides by regulation when it should do so. We actually have no idea when it will come into force, if ever. It will certainly be some time after the Bill is enacted, and that is totally unacceptable. That is why I tabled Amendment 14, as it would bring the Act into force on the day it becomes law. Can the Minister please tell the Grand Committee when he thinks this legislation will come into force if he is not minded to agree to my amendment?

I remind the Minister and the Committee that it will be nearly two and a half years since the Government announced their intention to ban fees. Shelter has highlighted that that means spring next year at the earliest, and perhaps later. It will have taken longer to design and implement the ban on letting agent fees than the Government have taken to negotiate the Brexit deal. We will still have to wait with bated breath to see whether we end up with the final 5%, but that puts in context how long we have been waiting for this, and we still will not get there.

The delay in implementing the ban does not come without a price. We have already seen examples of some agents hiking fees in anticipation of the ban and, as a result, many tenants are currently facing even higher up-front costs than before the ban was announced. This waiting period is causing people real problems. The average letting fee among those who have paid fees appears to have risen significantly over the past two years. A survey of private renters shows that the average letting fee is £246, which is a significant rise compared with the average of £182 just a couple of years ago. The Government must recognise the price that people who rent are paying while waiting for these policies to be put into practice, and they must ensure that the Act comes into force on the day it is passed, as my amendment seeks.

The letting industry has known for many years that this ban would be coming and it has had sufficient time to adapt its business models. This delay is very disappointing and I hope that the Minister and his department will be able to respond positively. We need a fixed date and to get this legislation implemented as soon as is reasonably possible. We have waited far too long. I beg to move.

[Baroness Grender]

My Lords, I support these amendments. I have already raised my considerable concern about the timings. As the noble Lord, Lord Kennedy, said, the Government announced this measure in the autumn of 2016, at the same time as my Private Member’s Bill was progressing through the House, and I was absolutely delighted at their announcement. However, it feels as though it is taking a very long time. I know that the Ministers concerned are not responsible for that—they have worked very hard to push this through.

When the Government first started consulting on this issue, they rightly changed their mind and agreed to take a look at it. The consultation showed that the poorest tenants are being ripped off time and again, and that will not stop. If anything, it will get worse in the intervening period before this legislation is introduced. I am hugely in support of the legislation being introduced as quickly as possible. Generation Rent was talking to me about this only this morning. It is receiving evidence that letting agents are becoming more assertive over their administration fees to make up for what they believe to be a shortfall.

As I said at Second Reading, other organisations are playing a significant role in this matter. OpenRent, which I will mention in later arguments, started in 2012 and is now the largest letting agent in England and Wales. It has made a profitable model on the basis of never charging fees to tenants. Therefore, it is perfectly possible for an industry to be ahead of the legislation. However, with the exceptions that I have described, this particular industry is not ahead of the legislation, although it has been warned again and again. There has been working group after working group on this issue.

I was absolutely delighted that the Government decided, very wisely, in the Autumn Budget Statement of 2016 to flex their muscles and get on with this, but we need to do it. I would find any further delay, or suggestion of it, in the Bill extremely worrying, which is why I support the amendment.

[Lord Young of Cookham]

I am grateful to noble Lords for taking part in the debate. They have made their impatience over the date of commencement absolutely clear. We agree that we want this legislation to come into force as soon as possible, not least to protect the tenants referred to by noble Lords.

However, we need to strike a fair balance between protecting tenants and allowing landlords and letting agents time to become compliant with the legislation. The ban is not about unfairly penalising landlords and letting agents or driving them out of business. We have said that implementation will not be before April 2019; we intend it to be as soon as possible after that. Of course, at the moment we do not know when it might get Royal Assent. I understand that but we believe that there needs to be a reasonable gap between it reaching the statute book and it being implemented.

Turning to Amendment 13, the transitional provisions in Clause 28 provide that for the period of a year, the ban will not apply to tenancies whose terms were agreed prior to commencement. Similar transitional provisions are made for agents’ agreements with tenants. The amendment moved by the noble Lord, Lord Kennedy, seeks to reduce the period in which a landlord or agent could accept a payment prohibited by Clause 1 from one year to six months. We have already sought to give tenants greater clarity and protection with respect to the commencement date. Crucially, we have revised our position from that in the draft Bill, where there was no end date by which fees could be charged in pre-commencement tenancies. There has been a considerable shift towards protecting those who have already signed their contracts.

The noble Lord, Lord Kennedy, recognised that a transition period is necessary—his amendment proposes a slightly shorter one—because although most fees are charged at the outset of a tenancy, some landlords and agents will have agreed that tenants should pay other fees, such as a check-out inventory fee, at a later stage. Tenants will have signed contracts accordingly; we need to allow time for landlords and agents to renegotiate them to ensure that the legislation does not have a significant retrospective effect.

Our view is that 12 months is fair for the transition period. Data from the English Housing Survey shows that 45% of tenants had an initial tenancy of 12 months and 36% had one of six months. Reducing the period in which a landlord or agent could accept a payment prohibited by Clause 1 would mean that more landlords and agents with pre-commencement tenancies would be at risk of not being able to renegotiate their contracts and would not receive fees that the tenant had previously agreed to pay. Again, we do not believe that this would be fair.

We recognise the importance of having a clear point where the fees ban applies to all tenancies. As drafted, the transitional provisions mean that all tenants will receive the benefits of the fees ban one year after it comes into force; as I said earlier, initially there was no such arrangement. Unlike the proposed amendment, the provisions ensure that agents and landlords will not be significantly impacted on financially and will have the opportunity to review their contracts during the transitional year. I hope that the noble Lord will feel able to withdraw his amendment against the background of that explanation.

[Lord Kennedy of Southwark]

I thank the noble Lord for responding to the debate. I suppose that we will not agree, which is disappointing. It is a shame that although there is a lot of good stuff in this legislation that we can support, things take such a long time, as I said in my introduction. That is a recurring theme with the noble Lord’s department, which I have raised many times in other consultations and discussions on this. It often seems like we are pulling teeth to get things moving along. So we are frustrated at the length of time these things take, and that is why we have taken a stand on this.

I also tabled Amendment 14, which seeks to bring the Act into force on the day on which it is passed. My frustration here is the fact that, even when it is passed, we then have to wait for an SI to be tabled to bring it into force. I have no certainty as to whether it will ever come into force; potentially, it could be left there and might never happen. I am sure that will not be the case, but the Committee will see that there is no certainty as to an agreed date. That is very frustrating, and I may come back to this point on Report. At this stage, however, I am happy to beg leave to withdraw the amendment.

Amendment 13 withdrawn.

--- Later in debate ---

[Lord Best]

I think we are all aware that if there is the possibility of a loophole being discovered, somebody out there will discover it. The absolute, 100% intention must be to block it.

The noble Baroness, Lady Grender, suggested two alternative routes. One is for the costs that legitimately fall to the tenant, not the landlord or the agent, to be picked up in the tenancy deposit scheme so that you do not get so much back at the end. I wonder whether the tenancy deposit scheme is tightly defined enough and whether it is possible to take from the deposit sums relating to, for example, the cleaning of the common areas where No. 9 of the 10 flats has been up to no good or where someone has parked the car in the wrong place and so on. I am not sure whether such things can be taken out of the deposit; that is a technical question.

The other alternative suggested by the noble Baroness is that the landlord will be so fed up that they will not renew the tenancy or will evict the tenant. That is a bit harsh. It would be better to find a way to come to an accommodation with the tenant rather than take extreme measures. I will need to hear from the Minister the series of ways in which all the possible loopholes and abuses can be blocked because that must be the Bill’s intention.

[Lord Kennedy of Southwark]

My Lords, Amendment 23, moved by the noble Baroness, Lady Grender, has my full support. It would remove default fees from the Bill. I share the concerns expressed here today that this provision could be used as a vehicle for unscrupulous landlords and letting agents to recoup lost income resulting from the ban. We cannot allow this loophole to go unchallenged. I also agree with the comments of the noble Lord, Lord Best; if something can be got around, someone will usually be smart enough to work it out and get around it. We should always be aware of that; it is very important to stop that.

In the Bill, the Government seek to limit default charges and fees to costs that are “reasonably incurred”, which must be evidenced in writing. However, this will prevent landlords and agents including unfair terms in tenancy agreements and trying to charge unreasonable amounts. Of course, we will come back to this issue of what is reasonable; we have come back to the issue of guidance many times. In responding to the debate, can the noble Lord explain how he believes that tenants will be protected from this unfair practice? How does the legislation, as it is framed now, protect people from ingenious people looking to get round almost anything? How can we be confident that the Bill is watertight?

Amendment 24, in the names of the noble Baronesses, Lady Grender and Lady Thornhill, and my Amendment 25 seek to make provision for default fees to be more transparent if they remain in the Bill and, as drafted in my amendment, to be detailed in regulations setting out what is a permitted payment in this regard. This would provide a clearer, legal definition of default fees. That would prevent abuse, protect tenants, ensure that tenants understand what they could be charged for and increase confidence in challenging illegal, prohibited fees. In contrast to guidance, regulations would act as a deterrent and give tenants a statutory basis from which to challenge prohibited fees. The late payment of rent and lost keys are the most commonly cited examples; in each scenario, the purpose of the fee would be clear to the tenant, which would limit the opportunity for exploitation.

I take on board the points made by the noble Earl, Lord Lytton. If we were all reasonable people, we would not need legislation at all; unfortunately, there are good and bad tenants and there are good and bad landlords. Often, we have to legislate for the worst excesses in all cases, and that is partly what we are trying to do here. However, I accept that the noble Earl has made some fair points—I am not suggesting that that is not the case. I look forward to hearing what the noble Lord, Lord Bourne, has to say on these matters.

[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords who participated in the debate on this important section of the Bill. To echo the point made by the noble Lord, Lord Kennedy, this is about dealing with the small minority of tenants and landlords. I accept that the vast majority will not need the encouragement we are giving. That said, there is a difficult issue involved, as outlined quite fairly by the noble Baroness, Lady Grender. However, I take a slightly different view on it, so let me outline where I am. I am of course happy to carry on discussing this ahead of Report, so that we can get to a sensible position on it.

There are situations where it is quite reasonable that a landlord should be able to claim from the tenant for doing something that is perhaps the tenant’s obligation but which the landlord has taken up. We have heard some examples and there will be others that we have not thought of—I do not suppose anybody except the noble Earl had thought about condensation until today, but we are now aware that that situation perhaps needs to be covered. We are not necessarily going to be able to think of an exhaustive list, but the list we are looking at does not relate to damage.

It is not appropriate that a replacement key should come out of the deposit; the deposit is there to counteract damage that is done. That would be true of a locksmith coming in as well. How will that be shown to be a reasonable cost? It has to be evidenced in writing: for example, with the receipt from Timpson. I do not think anybody could reasonably object to that. It is entirely right. There is a whole jurisprudence on reasonableness, and I can happily supply it all to the noble Lord, Lord Kennedy—it runs to volumes and volumes in the law of negligence and elsewhere, as the noble Lord, Lord Beecham, will certainly be aware. This is an area in which there is substantial jurisprudence. We can give some examples but giving an exhaustive definition will take some time.

I share the view of the noble Lord, Lord Best, that it would not be appropriate to evict a tenant or to say that that has to happen in this type of situation. I think that a landlord would be very happy to renew a tenancy if he was able to claim in relation to lost keys and a locksmith being called out, and there is no reason why he should not be able to do that.

I am very keen to look at this issue ahead of Report to see how we can perhaps tighten it up, as I accept that there might be a need to do that. However, there are legitimate situations where it is not unreasonable for the landlord, during the currency of the lease—not at the end of the lease, when the deposit will kick in—to be able to claim for the cost of work that has been done. It is no more and no less than that. I recognise that we want to stop any potential abuse by the small minority of landlords whom we all have in our sights, but I hope that the noble Baroness will accept that there are legitimate situations that we can look at ahead of Report while trying to isolate the cases where there is abuse. With that assurance, I respectfully ask her to withdraw the amendment.

Housing: Prefabricated Council Houses

Lord Kennedy of Southwark Excerpts

Thursday 1st November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, that certainly sounds ambitious. We talked about being innovative and forward-looking, and the noble Lord is. I am happy to take that idea back and to speak to the noble Lord about some of the ideas that he has just outlined.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer the House to my relevant interest as a vice-president of the Local Government Association. Is the noble Lord aware of the excellent work undertaken by the London Assembly to promote the off-site manufacture of housing, led by my friend Nicky Gavron AM? Can he tell the House what the Government are doing to promote this type of construction and, in particular, about the scope for creating more jobs in the UK?

[Lord Bourne of Aberystwyth]

My Lords, I was unaware of the specific relationship that the noble Lord just mentioned, but I am certainly aware of the work of the Greater London Assembly. Much good work is being done across the piece. The noble Lord will be aware that £2.5 billion of the home building fund is being used to provide loan finance for modern methods of construction. He will probably also be aware that we have a working group on modern methods of constructions, which is looking at specific issues of mortgages and insurance, for example. The working group met in October with the Housing Minister. I will happily engage with the noble Lord to fill him in on more of the details, but we are very well aware of the importance of the issue and we are fostering and encouraging it.

Affordable Housing

Lord Kennedy of Southwark Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, first, I draw the attention of the House to my relevant interest as a vice-president of the Local Government Association. Secondly, as other noble Lords have done, I congratulate the noble Lord, Lord Shipley, on putting this Motion down for debate this afternoon.

Everyone agrees that we are in the midst of a housing crisis and that urgent action is needed to tackle the problem. To be fair, the Government have in recent times made some welcome moves, most recently with the announcement by the Prime Minister that the local authority borrowing cap will be removed—but much more needs to be done and I support calls for urgent clarification about when the cap will be removed. I agree with the noble Lord, Lord Horam, that most of the policies in the dreaded Housing and Planning Act have been dropped or quietly forgotten, which is excellent news. The latest one to disappear was the plan for the forced sale of council homes, which was very welcome indeed. But we are still not building enough homes and we are certainly not building enough affordable homes. The noble Lord, Lord Kerslake, made an important point that a significant increase in housebuilding across all tenures is urgently needed.

My noble friend Lord Whitty set out the housing problems and dysfunctional nature of the housing within a few hundred yards of this House, which can be clearly seen by all of us. The noble Lord, Lord Greaves, made the fair point that the housing crisis is different in different parts of the country, and we need to be more flexible in addressing these issues with different solutions in different places. My noble friends Lord Rooker and Lord McKenzie made reference to the tragedy of homelessness, which again we can see on the steps of this House, and how much we as a country need to do to tackle it.

A number of policy decisions, initiatives and even unintended consequences have come together to create a very different picture of housing in the UK today from what we see if we look back 30 or 40 years. The term “affordable housing” has become tainted and misused. In many parts of the country, and certainly in London, many of the homes deemed “affordable” are clearly unaffordable for many people. That has huge consequences for communities and society as a whole. Ensuring that everyone has a property that is warm, safe and dry is further away today than it has been for a very long time. For all the problems that this country has, it is still one of the richest in the world, so the situation of people who are not living in a decent home tonight is all the more tragic.

I shall look at some of the policy issues in play here. When right to buy was introduced, it was both popular and controversial. It was intended to help people to become home owners, and there is nothing wrong with that. The problem of course has been, as the noble Lord, Lord Kerslake, said, that the social homes were not replaced; councils still cannot keep all the capital receipts from the sale of those homes, as my noble friend Lady Donaghy referred to; and the number and quality of social homes for rent have reduced significantly over recent years, to the detriment of local communities, as my noble friend Lady Bryan of Partick made reference to. So will the Minister agree to speak to his right honourable friend the Chancellor of Exchequer and raise with him the case for local authorities keeping 100% of the receipts from right to buy sales to invest in new social housing? I make it very clear that these funds should be used to build new council homes on social rents.

The right to buy policy has created further problems, with many of these former council properties finding their way into the private rented sector, with vastly increased rents and, in some cases, becoming houses in multiple occupation. Communities have been disrupted and areas that were very stable now see a constant change and flux. This is no way to build strong and stable communities.

The private rented sector has grown dramatically. While most private sector landlords offer a reasonable product, there are rogues who rip off tenants and treat them very badly—and even when they are banned by one council they continue to operate in other areas, as we have seen reported in the press in the last few days. The rogue landlord database has been a failure in this regard, and urgent changes are needed.

The housing benefit bill has soared, as my noble friend Lord Rooker said. The Government do not own a brick for the billions that they pay out in housing benefit each year as families are forced to seek accommodation in the private rented sector because there is no local authority or housing association housing for them. I agree with the comments of the noble Lord, Lord Best, in this regard.

The planning system has often been wrongly blamed by the Government as a barrier to building new homes. The facts do not bear that out. In the past year, local authorities have approved more planning applications to build houses than have been completed. In 2016-17, 321,000 planning applications were approved and there are still 423,000 approved planning applications where not a single brick has been laid. I agree with my noble friend Lord Rooker on the need to deal with permitted development scams.

There are problems with planning that have not been addressed. We have the council tax payer still subsiding the planning process, even after the 20% rise in fees, and it would be helpful if the Minister could update the House on the consultation for a further increase of 20%. I very much support the position of the Local Government Association that we should seek to abolish these fees and introduce locally set fees to reflect local demands and local pressures.

Housing associations also have a big role to play in providing affordable homes, and are a key partner for both the Government and local authorities to provide the homes that are needed, as my noble friend Lady Warwick of Undercliffe mentioned. Housing associations are up for playing their full role in helping to build the homes we need, but the emphasis should be on truly affordable homes. The price of land is probably the biggest single barrier to building homes, as a number of Peers said.

It was most disappointing to me, when we passed a previous Bill on planning and compulsory purchase towards the end of the previous Parliament, that we were unable to persuade the Government to agree to the reasonable request from TfL and the Mayor of London to allow them to sell land below the cost value for homes for social rent. The department would not agree, which was very regrettable. I hope that the Government will see the value in allowing that to happen in future, so that the biggest barrier to building new social homes can be reduced to some extent.

The noble Baroness, Lady Walmsley, referred to off-site construction of housing. I concur with her remarks. My friend at the London Assembly Nicky Gavron produced an excellent report on off-site constructed housing and how it is set to play a much bigger part in solving the problems we are discussing today. I recommend her report to anyone who is interested in housing, as I think it is very much part of the solution.

I am a Labour and Co-operative Member of the House, and I think that the co-op sector has a big role to play. There have been exciting developments in community land trusts, which is community-led housing set up and run by local people to develop and manage homes. CLTs act as long-term stewards of the housing, ensuring that it remains generally affordable, based on what people earn in the area—and it will be affordable for years to come, for future occupiers. They have great potential to make a real difference, as does co-operative housing in general. Where the tenants are the co-op, they employ the staff and elect the board to run the co-op. I have seen wonderful examples of where co-operative housing has transformed areas to help local communities. The rents are truly affordable and estates are clean, well-managed and stable. There are excellent examples, such as the Ewart Road Housing Co-op in Crofton Park and the Phoenix Community Housing, which covers the Downham Estate in Lewisham. Both are providing community-led housing in meeting people’s needs.

It would be good if the Minister could say something about government support for housing co-ops. I hope that he agrees that, if enabled, the sector could play a much bigger role in dealing with the housing crisis.

In conclusion, I thank the noble Lord, Lord Shipley, for tabling the Motion for debate today, which has enabled us to discuss this important issue.

Yorkshire: Devolution

Lord Kennedy of Southwark Excerpts

Wednesday 17th October 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, without prejudging the Secretary of State’s response to the documentation he has received—just a week ago—we are of course wedded to ensuring that the economy of Yorkshire and the whole region thrives. There is, if not a proposal, documentation, to which the Secretary of State will respond. I come back to the point that, as has always been the policy, it is important that we all get behind the Sheffield city deal and it is executed in line with processes in this House and the other place, and with the election that has been held.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I draw the attention of the House to my relevant interest as a vice-president of the Local Government Association. Does the Minister agree that, whatever is finally agreed, it should be locally led? Will he confirm that nothing will be imposed by the Government?

[Lord Bourne of Aberystwyth]

My Lords, there certainly has to be a proposal. As the noble Lord will be aware, the process is that we respond to proposals made on devolution. There has been no formal proposal for the One Yorkshire deal, although documentation has been sent forward. However, it is clearly important that this is locally led, as we can only respond to proposals. I can confirm that the Sheffield city deal was locally led and, as I said, everyone should get behind it, because it is a sine qua non to moving on in the region generally—but I make no prejudgment of what the response will be.