Private Rented Sector Licensing Schemes

Lord Kennedy of Southwark Excerpts

Tuesday 16th October 2018 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what plans they have to support local authorities to set up private rented sector licensing schemes.

[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 an 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, on 1 October, new regulations that extend the mandatory licensing requirements for houses in multiple occupation came into force. We published guidance for local authorities in June and held a series of events with them through the summer. Licensing of HMOs is self-funding, as councils can charge fees for licences to cover their costs. In addition, since April 2017, local authorities have had powers to retain income received through civil penalties and rent repayment orders.

[Lord Kennedy of Southwark]

My Lords, in April the HCLG Select Committee described the current process of application to the Secretary of State to operate a private sector licensing scheme as “not fit for purpose”. It said:

“Decision-making is too slow, lacks transparency, and is overly bureaucratic”.


When are the Government going to remove the 20% cap, return to local authorities the powers that were taken away in 2015 and allow locally elected politicians, who have a far greater understanding of local needs and are directly accountable for their decisions, to decide these matters?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be aware that the great mass of selective licensing schemes do not involve that 20%—it is about eight of just shy of 60. The 20% is there for a reason. On one occasion, in the case of Redbridge, we turned the application down because the proper consultation process was not followed. The application has since been resubmitted and we have approved it. It is there for a good reason and that is the only case we have ever turned down.

Tenant Fees Bill

Lord Kennedy of Southwark Excerpts

2nd reading (Hansard): House of Lords
Wednesday 10th 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, I welcome the Bill, which seeks to ban landlords’ and letting agents’ fees. It is something that the Labour Party has called for repeatedly and it delivers on a pledge that the Government made some time ago. It has taken a while to get this far. The private rented sector is a significant part of our housing tenure and an important part of the housing supply available to people. It has grown significantly and it is right that we should put legislation in place to protect people from unfair fees or practices in the private rented sector.

I rented in the private sector when I was in my 20s, having grown up in a council property with my parents, and I have been an owner-occupier for many years since. My involvement with the private rented sector was relatively short, but for millions of people and millions of families it could be the only type of accommodation they ever know. There are many excellent private landlords and letting agents who do a good job. Like lots of legislation, however, the Bill seeks to deal with unfairness, where the balance is unfairly loaded against the private renter, with fees being charged with little or no evidence of what they are for, of whether they are value for money or of any reasonable basis for how those fees were decided, and fees charged by landlords as well as letting agents.

The Bill seeks to ban landlords’ and letting agents’ fees, and most other up-front fees, by prohibiting what landlords and their agents can require a tenant to pay. As the noble Lord, Lord Bourne, has told us, the ban covers shorthold tenancies, tenancies of student accommodation and licences. Looking at the list of what can be charged for, I have an immediate concern that the Government have left the back door open and that, despite good intentions, the Bill runs the risk of not achieving all the Government want to achieve. I propose to go through the Bill and highlight those areas where I have concerns, and which I will be raising in Committee and on Report. The noble Lord, Lord Bourne, is someone I have huge respect for, as I do for the noble Lord, Lord Young of Cookham. In all our dealings, both noble Lords are courteous. I am sure they will listen carefully to the points raised around the House during our deliberations. I hope we will be able to persuade the Government that some areas of the Bill will require amendment. If not, and I am still not convinced by the arguments put forward by the Government, I will divide the House on Report stage a number of times.

Turning to the Bill and the issues that I have concerns about, what can be charged for? As the noble Lord told us, there is obviously rent. The Bill also includes a refundable tenancy deposit, capped at no more than six weeks’ rent. It is disappointing that it has been set at six weeks. This runs the risk of becoming the norm. I would prefer it to be set at four weeks, which is the level at which I believe the Prime Minister first indicated it would be set when announcing the policy some years ago. It also includes a refundable holding deposit, capped at no more than one week’s rent. I fully accept that a holding deposit should be paid, but this is set far too high. It should be capped at, say, three days’ rent or even £50—whichever is higher. At the same time, I would also like the tenant to be provided with a copy of the draft tenancy agreement, so that they can see in writing what they will be asked to sign. They can then raise issues with the landlord and/or the letting agent, while other processes are taking place. It is important for there to be full transparency on the part of the landlord or the letting agent over how they intend to treat a holding deposit, setting out clearly in writing, when the deposit is not returned to the prospective renter, the full reasons for the deposit not being returned. This will enable the renter to be more easily able to challenge the decision if they believe it is unfair.

We then have the ability for certain payments on assignment, novation or variation of a tenancy when requested by the tenant to be capped at £50, or reasonable costs incurred if that is higher. This provision appears open to abuse. How will reasonable costs be determined? What is the protection from the risk that the £50 becomes the minimum figure charged, and that tenants will pay much higher charges? I would appreciate it if the noble Lord could address that in his reply to the debate.

Payments associated with early termination of the tenancy when requested by the tenants, payments in respect of utilities, such as communication services and council tax, and payments in the event of a default of the tenant, such as replacing a lost key or late payment of a fine, are to be limited to the landlord or agent’s reasonably incurred costs, which must be evidenced in writing. This is another provision that I fear will be open to abuse. The Bill fails to protect tenants from unscrupulous practices where, in effect, the fees lost by landlords and agents will find their way back, being recouped through this provision. If the noble Lord, Lord Bourne, disagrees with me on this point, can he explain to me how the Bill in its present form guards against that? To guard against it, you have to go further than we have at present and clearly define matters, maybe in secondary legislation, saying what the Government mean and how it will apply. Secondary legislation will give the Government flexibility to amend regulations as necessary and give greater protection to tenants.

I am pleased to see the Bill dealing with enforcement and that for the first year at least some funding has been provided by the Government—although I am not convinced that it is at the right level. Trading standards, like other parts of local government, are under extreme financial pressure. The risk with inadequately funded extra requirements is that it will not be possible for the authority to deliver what is expected of it. I am not convinced that funding this work through fines levied in the future is the right model to develop a system that serves tenants, landlords and letting agents well. Perhaps the Minister can say a little about the thinking behind this when he replies to the debate.

I welcome the proposal to designate a lead enforcement agency. The Local Government Association’s suggestion that National Trading Standards should provide this function is well made and should be considered carefully by the Government when they make their final decision. Enforcement functions will be delivered by local weights and measures authorities. The local district council may also enforce provisions in the Bill if it so wishes. Can the Minister explain why the Government decided to construct the enforcement regime in this way? Is there a risk of confusion or duplication, particularly in the context of my earlier remarks about local government resources?

Where a ban is breached, tenants are entitled to a refund of illegal fees. The local authority can impose a financial penalty on the landlord or letting agent of up to £5,000 for a first offence with a further breach resulting in a fine of up to £30,000 or prosecution. In Committee, I will probe whether these fees are set at the right level. The tenant can apply to the First-tier tribunal for the recovery of illegal payments but is not entitled to any compensation. Why can the local authority not be empowered to recover the illegal payments on behalf of the tenant, in addition to imposing a fine, before passing the illegal payment back to the tenant? That would avoid the need to go to a tribunal in the first place and leave the landlord with the option of challenging the decision in the tribunal. It would be a real help to tenants.

Perhaps we should go even further with a compensation payment to the tenant who has been subjected to this abuse. It is not unusual in this country to award compensation to victims, in addition to levying a fine on an offender. If you have been ripped off and made to pay an illegal payment, you are a victim and it is not unreasonable to receive some element of compensation. That is certainly better than leaving the tenant who has been charged an illegal fee to go to the First-tier tribunal to recover the money taken from them illegally.

It is great that there is a provision in the Bill requiring fees to be published on third-party websites. My only question is: how prominently will they have to be displayed? I ask this because I am aware that companies over a certain size are required to have links to their modern slavery statements on their websites, but it is fair to say that they are not always the easiest thing to find. I want an assurance from the Government that there will be some sort of provision to ensure that they are put in a prominent place on the site. I support the provisions on client money protection schemes.

In conclusion, I look forward to Committee, where I will probe further, with a series of amendments that seek to engage the Government on the issues I have raised. I welcome the Bill. From my remarks, however, noble Lords will see that it can and should be significantly improved for private sector tenants. They are an increasing group of people who deserve regulations and legislation that afford them reasonable protection.

Housing: Local Plans

Lord Kennedy of Southwark Excerpts

Thursday 13th September 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the local plan is paramount— the noble Lord, along with many people in this House, was instrumental in getting broad, cross-party agreement on the neighbourhood planning scheme. That will remain the case, but the National Planning Policy Framework will provide an overlay of the number of houses that need to be built in conformity with the national plan. I do not see any consistency there—it is something that we will watch like hawks—but the local plan is paramount in terms of the needs of an area. Related to that are the housing delivery plans, on which we consulted widely and for which there was significant support, as the noble Lord will know.

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

My Lords, I declare an interest as a vice-president of the Local Government Association. The Minister will be aware of the hundreds of thousands of approved planning applications for housing across the United Kingdom where not a single brick has been laid by developer or builder. What is the benefit to local communities if the result of the test is just speculative, unsuitable developments that fail to meet local plans, fail to address local needs or have any connection with local demands?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will have heard me just say that the local plan will remain paramount. He will also have heard me say that, last year, we had record delivery of housing—only one year in the past 30 was better than that. Last year, permission for 304,000 homes was given in the rolling year to 31 March 2017. That is the challenge we have. The noble Lord is right about some speculative building. He will know that we are looking at that and remember our response to it in the Housing White Paper—it remains very much business that we want to attend to. In the meantime, we should realise that we are making progress. We should not be complacent—there are challenges, which I freely acknowledge—but, against the backdrop of the challenge we have of 300,000 houses per annum, we will be treading on some toes to achieve it. I am sure that we will have widespread support for doing that.

Homelessness

Lord Kennedy of Southwark Excerpts

Wednesday 12th September 2018 Grand Committee

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

My Lords, I congratulate the noble Baroness, Lady Smith of Newnham, on securing this short debate, as other noble Lords have done. I am delighted to have the opportunity to speak. I declare an interest as a vice-president of the Local Government Association. I will be unable to respond to individual points raised in the debate, due to time restrictions, but I agree wholeheartedly with the points raised by all noble Lords this afternoon.

We have debated homelessness on many occasions—its causes and the devastating effect it has on people’s lives. It is, as other noble Lords have said, a national disgrace that tonight, in one of the richest countries in the world, people will be sleeping on the streets only a few steps from this palace.

Like other noble Lords I welcome the rough sleeping strategy, which aims to eliminate it, although it is disappointing that the target for this to happen is 2027. The Government, and the policies that they have pursued, have made the problem so much worse over the past eight years. We have seen a 102% increase in rough sleeping and a 44% increase in homeless households—statistics from the department of the noble Lord, Lord Bourne. Despite well-meaning aspirations to tackle this problem, decisions taken on matters such as welfare reform, benefit reform, the supply of social housing and the freezing of local housing allowance have all contributed to making the problem so much worse, as the figures from Minister’s own department illustrate.

Another example is the Homelessness Reduction Act. It is a good piece of legislation and a positive step in addressing homelessness by helping individuals to address the issues, providing them with accommodation and preventing them becoming homeless in the first place. It is, however, completely undermined by the very Government who supported it and failed to provide the funding that local government needs to make it work properly. Local government has more duties and more requirements, but not the resources to deliver them.

We have a serious problem with housing at every point. I think that many in the Government see that, but for whatever reason they will just not take the simple measures that would make a real difference. Things could be done very quickly, such as properly funding the Homelessness Reduction Act, lifting the borrowing cap and allowing councils to retain 100% of the proceeds from right-to-buy sales. These would all make a positive difference, but the Government will not consider them. Until they do, I fear that we will debate these issues again and again, and, despite the good intentions of the noble Lord, Lord Bourne, the Government will not make the positive difference that they want to achieve.

Non-Domestic Rating (Nursery Grounds) Bill

Lord Kennedy of Southwark Excerpts

2nd reading (Hansard): House of Lords
Tuesday 24th July 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. I support the Bill and its intention of providing that buildings that are, or form part of, a plant nursery ground should be exempt from non-domestic rates if they are used solely for agricultural operations at a nursery ground. We have heard from other speakers in this short debate that this issue arose as a consequence of the judgment in the Tunnel Tech Ltd v Reeves case in 2015, which highlighted how structural changes in the industry have resulted in purely horticultural operations being rated, as opposed to being exempt. It is welcome that the Government have sought the opportunity to correct this and I congratulate them on it.

We know that since 1928 Parliament has had no intention of rating the agricultural industry. That is absolutely right: I support the industry and support sustainable growth in agriculture and horticulture. We have heard from other noble Lords that there is no longer a distinction between nursery grounds and market gardens: all operators consider themselves to be growers and I agree with that. That is an important point to make here, as is the point made by the noble Baroness, Lady Byford, that the industry is worth £108 billion a year and, excluding potatoes, horticulture is worth £3.1 billion a year to our economy. I agree with the noble Baroness that we produce some wonderful food in this country: we have some wonderful farmers and growers and we need to always be supporting them, so that they can sell their produce to us and also export it. For the United Kingdom it is very much about selling high-quality produce, so we must support them in growing that high-quality produce.

I too received the briefing from the National Farmers Union. It is an excellent briefing, as the noble Baroness said: seven pages long, which is six pages longer than the Bill. It highlights how important this is—at the moment for a small number of growers, but with the potential for many more—so I think it is important to support it. I am also aware that when the Bill went through the other place, no amendments were tabled or agreed. I think that was right and, unusually for me on a government Bill, I am going to suggest that we make no amendments either. I have no intention of tabling an amendment and I hope that other noble Lords will not table amendments, so that very quickly, when we come back in September, the minister can stand up and move to discharge the commitment Motion. That would be the best thing to do, so as to quickly get the Bill on to the statute book. I have looked at it very carefully and I think it is the right thing to do: it is a good Bill and I fully support it.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Lord Kennedy of Southwark Excerpts

3rd reading (Hansard): House of Lords
Wednesday 18th July 2018 Lords Chamber

[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. I do not intend to detain the House for very long as there is widespread support for the amendment. I am very happy to support the amendment tabled by the noble Lord, Lord Bourne of Aberystwyth, which, as we have heard, came out of a proposal from the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley. The proposal introduced the concept of having an increasing scale of how much council tax can by charged on an empty property. It was a very good, sensible idea. This government amendment looks at the practicalities of delivering it and has my full support.

My noble friend Lord Campbell-Savours raised the issue of the single person’s discount, and I hope that the noble Lord will address that in his response to the debate. The noble Earl, Lord Lytton, and the noble and learned Lord, Lord Mackay of Clashfern, raised the issue of the blight of empty properties. I hope the noble Lord can confirm that that will be addressed in the guidance that comes on the back of this Bill. As I said, I am very happy to support the amendment, and I thank the noble Lord and the Government for listening to the concerns that have been raised.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate on this amendment. If I may, I will deal with the contributions in the order in which they were made, and turn first to the noble Lord, Lord Campbell-Savours. I understand where he is coming from on this, but the essential point, as was just made by my noble and learned friend Lord Mackay of Clashfern, is that the premium is payable on the value of the property and not on the circumstances of the person or persons who happen to be there at the time. I can provide him with the precise provision that makes this absolutely clear.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, in moving this Motion, I express my thanks to noble Lords for their helpful insight and support throughout proceedings. I especially thank the noble Baroness, Lady Pinnock, and the noble Lords, Lord Shipley and Lord Kennedy. I am grateful to the noble Earl and other noble Lords who have participated in our discussions. For example, the noble Lords, Lord Campbell-Savours, Lord Stunell and Lord Best, and my noble friend Lord Deben, who is not in his place at present, have contributed as this has gone forward.

I also thank the Local Government Association for its engagement with my officials during the passage of the Bill—indeed, even before it was introduced in the other place. The conversations were constructive, and we will continue these as the Bill takes effect. Additional thanks are due to the Federation of Small Businesses, the Rating Surveyors Association, the Royal Institution of Chartered Surveyors and the Institute of Revenues, Rating and Valuation. Their expertise has been invaluable, and I am grateful for their assistance in developing the solution to the staircase tax, which has enjoyed wide support across both Houses.

I would also like to thank officials and the Bill team who have contributed to the Bill: Joshua Hardie, Gareth Adams, Shaun Morroll, Nick Cooper, John Hutchinson, Peter Bates, Thomas Adams, Antony Henderson and Hannah Ram—my cheerful, charming and efficient private secretary; that has earned me some Brownie points—who has worked incredibly hard on this Bill.

In summary, the Bill is much improved and has enjoyed broad support across the House. I beg to move.

[Lord Kennedy of Southwark]

My Lords, I join the Minister in thanking everyone in the House for their contributions to the Bill. It is a small, three-clause Bill, but an important Bill, which, as we know, deals with the staircase tax among other things. I also thank the department officials for their work, other colleagues around the House and all the organisations that the Minister listed, including the Local Government Association. Though small, the Bill is useful and will make a difference. I also thank the Minister, as always, for his management of the House.

Bill passed and returned to the Commons with an amendment.

Housing: Rent

Lord Kennedy of Southwark Excerpts

Tuesday 10th July 2018 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government for how many homes for rent on social rents as opposed to affordable rents they provided funding in the years 2016-17 and 2017-18.

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

My Lords, 5,900 homes for social rent and 24,390 homes for affordable rent were provided in 2016-17. Data on 2017-18 delivery is not yet available. We introduced affordable rent to maximise government investment in affordable housing and have delivered over 378,000 affordable homes since 2010. We recognise the need for a wider range of homes to meet the housing needs of all parts of the community, which is why, two weeks ago, we announced new funding for social rent. Some £1.67 billion has been made available to deliver 23,000 affordable homes outside London, 12,500 of which will be at social rent.

[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. How does the noble Lord think that his department will provide the strong and stable leadership needed to deliver the social and affordable homes to rent and homes to own that are so desperately needed when the merry-go-round that is his department has seen four Housing Ministers in 14 months?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be well aware of the changes of personnel in the shadow Government, so I do not think that that is a wise furrow for him to plough. The figures for 2016-17—the last year for which records are available—show that 217,350 new homes were delivered, and those are the best figures for 30 years in all but one year.

Affordable Housing: Social Homes for Rent

Lord Kennedy of Southwark Excerpts

Tuesday 3rd July 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I am glad that the noble Baroness welcomes the progress made. In 2016-17, the year to which she referred, we saw 217,350 new homes delivered—the highest number in all but one of the previous 30 years.

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

My Lords, I draw the attention of the House to my interests as set out in the register. How many homes for social rent have been lost since 2012 due to government policy requiring conversion to affordable rent, and how many will be lost under the same policy if it continues until 2020?

[Lord Bourne of Aberystwyth]

My Lords, as the noble Lord will know, the affordable rent figures are generally the measure that is used. I have referred to the additional 23,000 affordable homes outside of London that we are committed to. He will know that we have a separate agreement with the Mayor of London, who is going to provide 26,000 affordable homes, although not as many at social rent as outside of London. I am sure the noble Lord will be pleased at the progress that is being made.

Anti-Semitism

Lord Kennedy of Southwark Excerpts

Tuesday 26th June 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I do not want to be drawn too much into semantics on this. I think noble Lords will in general realise what is legitimate criticism of the policy of a particular state—that is legitimate—but they will be aware of the definition of anti-Semitism which the Government, the Conservative Party and many local authorities have adopted. That is a good thing and is recognised as such internationally.

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

My Lords, does the Minister agree that anti-Semitism is a truly despicable form of abuse and that it has absolutely no place in Britain? Will he join me in congratulating the Community Security Trust for what it has done in highlighting this abuse and racism? Will he ask his ministerial colleagues in the Home Office and the Ministry of Justice to ensure that everything is in place to support the police and the CPS to bring prosecutions against the perpetrators of these evil crimes?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord’s record is unimpeachable in this regard and I join him in paying tribute to the CST. He will be aware that at the top reaches of his party in the other place, there is still an issue to address, but I certainly exempt noble Lords in this House from that charge. However, there is much work to be done on anti-Semitism in the upper reaches of the Labour Party.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Lord Kennedy of Southwark Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 19th June 2018 Lords Chamber

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

My Lords, briefly, the amendment in the name of the noble Earl raises an important point and I am happy to support it. As he said, this is a simple administrative change that could help people.

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

My Lords, I am grateful to the noble Earl, Lord Lytton, for his amendment and the noble Lord, Lord Kennedy, for his contribution.

The measure we will deliver through Clause 1 has been welcomed by stakeholders. It will return the practice of the Valuation Office Agency back to the position that applied before the Supreme Court decision in Woolway v Mazars. As highlighted by the noble Earl, Lord Lytton, it is important that we still consider how this measure will be implemented. In December last year, my department issued a consultation document that contained a draft of Clause 1 and set out how we plan to implement this change in the law. As we explained in that consultation, to protect ratepayers from unwanted backdated bills on the 2010 rating lists, we will allow ratepayers to choose whether they want their bill changed before 1 April 2017. We will achieve this by allowing a new right of appeal on the 2010 rating list for those ratepayers affected by Clause 1. I understand that my officials are already working with the Rating Surveyors Association and other professional bodies on the regulations to deliver this new right of appeal on the 2010 rating list.

For the 2017 rating list—about which I think the noble Earl, Lord Lytton, is concerned—the Valuation Office Agency will update the list as it becomes aware, through ratepayers and local authorities, of assessments impacted by the change in the legislation. Keeping an accurate rating list in this way is a normal part of the business rates system. Where appeals on the 2010 rating list mean that the valuation officer believes that the 2017 rating list also requires changes, I assure the Committee that these will be resolved by the Valuation Office Agency as part of its normal duty to maintain the list. Ratepayers will also be able to request a prioritised check of their 2017 rateable value if they believe it has been affected by the ruling.

From the consultation, we have seen widespread support for this approach to implementation. The amendment before us would require the valuation officer to make consequential changes to the 2017 rating list after they have resolved a case on the 2010 rating list. As I have said, it is the intention of the Valuation Office Agency to make these necessary changes. What is more, the requirement of the Valuation Office Agency to correct the 2017 rating list is already captured in primary legislation. That is significant. Under Section 41 of the Local Government Finance Act 1988, the valuation officer is required to compile, and then maintain, local rating lists. Therefore, if through the settlement of an appeal on the 2010 rating list the valuation officer concludes that the 2017 rating also needs to be changed, they are duty bound to make that change. I can offer that legislative assurance. With those assurances, I hope the noble Earl, Lord Lytton, will agree to withdraw his amendment.

--- Later in debate ---

[Lord Shipley (LD)]

My Lords, I will speak to Amendment 4, on which my name appears, and remind the House that I am a vice-president of the Local Government Association. The case was very well put by the noble Earl, Lord Lytton, a moment ago. I am struck by the fact that this amendment, in the names of the noble Lord, Lord Kennedy of Southwark, and myself, seems to contain a reasonable set of proposals. I am particularly concerned by the noble Earl’s assertion that the professional bodies are saying that there has been little assessment of the impact and that we ought to know more. I have a particular concern about the authorities that are piloting the 100% retention of business rates. I very much hope that they will not be put in a position of having to refund more money than they originally gained. So this amendment—a probing amendment, in my view—seeks to ensure that the consequences of the Bill are well understood and reported to Parliament.

[Lord Kennedy of Southwark]

My Lords, I remind the House of my relevant interest as a vice-president of the Local Government Association. Amendment 2 in the name of the noble Earl, Lord Lytton, goes to the heart of the first part of the Bill, namely the positions some local authorities find themselves in—having to make refunds and potentially being out of pocket. In the 2017 Autumn Budget we heard the Chancellor of the Exchequer announce, following the decision of the Supreme Court, a return to the previous practice, and Clause 1 does just that. Business would further be allowed to ask the Valuation Office Agency to recalculate valuations so that business rate demand would be based on the previous practice, backdated to April 2010.

The Budget papers confirmed that the Government would fully compensate local government for loss of income—but then they had a change of heart and decided that if they had the extra money it was an unexpected windfall. The council would be very pleased about that, but if it had to pay anything back there would be no compensation for the authority concerned. The noble Earl’s amendment would require the Government to do exactly what they said they would do in the first place, and it has my full support.

Amendment 4 in my name and that of the noble Lord, Lord Shipley, would place in the Bill a requirement for the Government to undertake a review of the impact of the provisions in Clause 1. That seems a sensible and proportionate thing to do. The amendment would require the Government to have a review, sets out what it should cover and requires that the Government should lay it before both Houses of Parliament—but nothing beyond that. They would have to do nothing other than lay the review.

I hope that when the noble Lord, Lord Bourne, responds to this probing amendment and the noble Earl’s amendment he will see the point that we are trying to highlight. We are trying to give the Government the tools to do the analysis to make sure that they have got this right.

--- Later in debate ---

[Lord Kennedy of Southwark]

Is the Minister saying that the Chancellor did or did not say in the Budget that the Government were going to reimburse local government on these matters? I understood that the Chancellor had announced that the Government were going to reimburse local government but then the Government changed their mind.

[Lord Bourne of Aberystwyth]

My Lords, I say this with some hesitation because the noble Lord seems relatively certain about what he is saying, but I think I am right that in the 2017 Budget the Chancellor said that we were not going to reimburse local government in relation to this. I do not think that statement had been made before; or if it had, it was only shortly before. But I think in the 2017 Budget he made it clear that we would not be doing so. But that can be checked. As I say, I might be wrong on that.

[Lord Kennedy of Southwark]

That would be very helpful. Does the Minister have any estimate of the amount of money involved for local government? I accept that people have had the benefit of these sums of money for a period of time but, equally, everyone was surprised by the judgment of the Supreme Court. What are the sums of money involved for local government? They may be negligible or huge. We all know that local government is really pressed in terms of budgets and finance, and things are very difficult, with many competing demands. If it was a large amount of money, that could cause problems.

--- Later in debate ---

[The Earl of Lytton]

My Lords, this is another tidying-up amendment, which is really to ensure that there is adequate publicity for people wishing to avail themselves of the facility under the Bill, bearing in mind that there are a number of very complex matters involved in business rates. The amendment is intended to ensure that the Valuation Office Agency places on its website adequate,

“advice and guidance as to the provisions of this section”,

and the means whereby a business rate payer can make the necessary identification so that they can ascertain whether—and, if so, how—the provisions apply to this.

The wording is deliberate in setting out the publication process,

“forthwith upon the coming into force of this section”.

The reason why I say so is that at the end of last summer, when we discussed matters to do with business rates, I was given to understand that there would be guidance—for instance, on the question of how fines would be applied for misdeclarations of fact in going through the “check, challenge, appeal” process. I have not seen that information yet and I do not know whether it is available. I am not voicing this as a criticism; I am just saying that because of the particularly time-limited nature of the way in which the provisions will apply—particularly looking back into the 2010 list—it will be important that this information is published in a timely and reasonably prominent manner and, I hope, written in plain English. That is the purpose behind Amendment 3. I beg to move.

[Lord Kennedy of Southwark]

I fully support the noble Earl in his Amendment 3. I think we all deal online very much more now in our work and in terms of official and unofficial things, so this is a very sensible amendment.

[Lord Bourne of Aberystwyth]

My Lords, with the indulgence of the House, I would like to pick up a point from the last group. I failed to address a point made by the noble Lord, Lord Shipley, on the pilot business rate retention issue. We are speaking to the Local Government Association and others about that. It is not straightforward but we are not convinced that there is any loss. Still, I shall seek to address that in more detail in the letter. I apologise to him for not picking that up earlier.

I thank the noble Earl for moving this amendment, which would require the Valuation Office Agency to publish on its website guidance and advice on the effect of Clause 1. I understand and appreciate the motivation behind the amendment, backed by the noble Lord, Lord Kennedy. Business rates can be a complex area and confusing to ratepayers, and of course we support ideas that would give ratepayers more information to help them to plan for their business rates liability.

On Clause 1, I agree that it is especially important that the VOA provide clear guidance to ratepayers on when they may be affected. Clause 1 concerns contiguous properties that are assessed for rating in more than one part, but there are many reasons why a ratepayer may have seen their property split into two or more rating assessments. That will include properties whose rating assessments have split because of the Supreme Court decision in Mazars, but will not be limited to that. Clause 1 will change the law to mirror the practice of the VOA prior to the Supreme Court decision. Those ratepayers may therefore fall within Clause 1. However, there will be many other reasons why a rating assessment may have been split into several parts. A property may have seen physical change requiring it to have more than one rating assessment, for example, or part of the property may have been sublet. These splits are unlikely to be related to the Supreme Court decision, and those ratepayers will not be affected by Clause 1.

It is therefore important that we explain this to ratepayers. The VOA already has clear guidance on its website explaining in simple terms how the law currently applies under the Supreme Court decision, including some clear examples. I assure the Committee that once the Bill receives Royal Assent, the guidance will be quickly changed so that it explains the operation of the new law under Clause 1. I further assure the noble Earl that the VOA will share that guidance in draft with the professional bodies, including the Rating Surveyors’ Association. The noble Earl will therefore have the opportunity to consider this guidance from his expert perspective before it is published. I appreciate that we are very fortunate in having him look at this legislation in some detail because of his professional understanding of it. This, together with the information that ratepayers can already access about their own property on the VOA website, will provide ratepayers with the information that they need to decide whether they fall within Clause 1.

I hope that with these assurances the noble Earl will agree to withdraw his amendment.

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[Lord Stunell (LD)]

I will speak to Amendment 7, which looks at the same issue but with a different point in mind. The intention of tackling the issue of empty homes is laudable. I support the proposals in the Bill—I could hardly do otherwise, having been the Minister who introduced them in the coalition Government. The test of time over the last few years has shown that the escalation proposed here is a legitimate and practical measure and it is a good thing to expand it.

I support the amendment in the name of my noble friend on the Front Bench as well, but this amendment has a different perspective. It is a way of supporting improvement in the energy performance of buildings. The general aim of the Bill is clearly to get homes back into use as quickly as possible. That produces a risk of short cuts and of doing things the quickest and cheapest way possible, in order to avoid the penalty—or, as my noble friend said, the incentive—of the increased council tax payment by getting it done and let or sold as quickly as possible. That is the Bill’s general and laudable aim. The amendment aims to mitigate that risk in the situation where somebody is prepared to increase the energy performance of the home. It limits the additional payment that a local authority can charge if the developer or owner improves the energy performance of a property in refurbishing or redeveloping it.

That is the principle; Amendment 7 is just one simple illustration of how that might be done. The amendment says that there would be a 25% reduction in penalty if the energy performance of the home was going to be increased by at least two energy performance levels. In other words, if it is raised from level E to level C, or from D to B, there would be only a 75% increase replacing the numbers in the Bill. There are clearly plenty of other options. I have played around with a few of them, but just bringing forward the most simple and basic version allows the Committee to consider the general principle. I would be more than happy to discuss with Ministers the best way of introducing this approach before Report. It avoids, or at least lowers, the risk of cutting corners to get work finished at the expense of energy performance. It nudges those doing refurbishment to have more ambition in reaching energy performance without, at the same time, having to look at their back pocket and what might be lost if they take an extra few weeks to do the work.

More widely, this is a plea for joined-up legislation. The Government have decided not to proceed with the Green Deal or zero-carbon homes. On the other hand, they have introduced new rules for energy performance standards for lettings. This is a simple mechanism to produce a good outcome. I urge the Minister to adopt it, if not in the detail which I proposed then on the principle, which we can work on before Report.

[Lord Kennedy of Southwark]

My Lords, this is an interesting group of amendments. My amendment in this group is Amendment 6, which simply seeks to increase to 200% the amount of extra council tax that can be levied on an empty property. We all agree that we want to bring long-term empty properties back into use, and these amendments would give local authorities the discretion to use these powers.

Having said that, I very much like Amendment 5, moved by the noble Baroness, Lady Pinnock; it provides for an escalator, which I think works very well. The longer a property was empty, the more you would potentially pay, and that could be a good incentive to get people to bring their empty property back into use. I also like Amendment 7, in the name of the noble Lord, Lord Stunell, which would take account of whether people had spent money on their property to make it more energy efficient. The increase would be discounted or reduced to take account of that, and that seems a very sensible thing to do. Amendment 10 is just a tidying-up amendment.

I agree with the noble Lord, Lord Stunell, that these are interesting ideas. Perhaps if we could all get together and have a discussion and we brought something back on Report, the Government might support it. I think that there is something here that could improve the Bill dramatically.

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Moved by

[Lord Kennedy of Southwark]

8: Clause 2, page 2, line 35, at end insert—
“( ) In section 11B of LGFA 1992 (higher amount for long-term empty dwellings: England), in subsection (8) (definition of a long-term empty dwelling), for “2 years” substitute “1 year”.”

[Lord Kennedy of Southwark]

My Lords, this amendment, which has already been referred to, seeks to change the length of time specified in the definition of a long-term empty property from two years to one. As with the amendments in the previous group, it is an attempt to improve the situation by reducing the number of empty properties and get more properties back into use by incentivising owners. It is in that vein that I move this amendment. In short, this probing amendment seeks to halve the amount of time required before a property can be considered a long-term empty dwelling.

The amendment tabled by the noble Lord, Lord Bird, who is not in his place, is grouped with mine. It is an interesting amendment because it requires local authorities to determine what constitutes a long-term empty property in their areas. Perhaps we can return to it on Report when the noble Lord is, I hope, in his place. I beg to move.

[The Earl of Listowel (CB)]

My Lords, I missed most of the earlier debate and the commencement of this one but I have two or three questions that the Minister might be able to help me with now or, if not, to write to me about. My questions arise after listening earlier to my noble friend Lord Lytton. I know of men, for instance, who care for their mothers who are getting frail and elderly, and I can imagine a man in a rather unattractive rental area in the north who has a property which he vacates so that he can live with his mother and look after her. It is all a bit too much to manage as money is short and there is not much demand by people wanting to use that property. I would not want someone like that to have to pay a fine. Local authorities are very tough on those who do not pay their council tax. I imagine that that may well have been dealt with in earlier debates, and I am sorry that I could not be here for those. However, that is an example of something that might happen.

I guess that this discussion brings up the question of how we make the private rented sector attractive so that there are not areas in the north of England where it is difficult to find people to rent properties.

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[Lord Bourne of Aberystwyth]

I thank noble Lords very much for their contributions. I appreciate that the noble Lord, Lord Bird, is not in his place at present but he lobbed in a hand grenade, as it were, before departing the scene. I appreciate the point made by the noble Lord, Lord Kennedy, and will try to address some of the suggestions from the noble Lord, Lord Bird. He is always worth listening to on this area in particular, but he always has some innovative ideas.

I am grateful to noble Lords for raising the question of how the legislation will apply. The noble Lord, Lord Kennedy, is suggesting a one-year vacancy. I am also grateful for the cross-party support that we have received in both Houses for the measure that we are bringing forward, and I appreciate the points about possible refinements.

We are not seeking to alter the circumstances in which the premium is applied. Ninety per cent of local authorities applied a premium in 2017-18, and we are not aware of widespread concern that the two-year period is inappropriate. I feel that one year might be far too short a period in many circumstances. There are some exceptions where the premium does not apply, one of which is people going into social care, which the noble Earl, Lord Listowel, raised. However, situations that are not exceptions include that of people who might be adapting a property and trying to sell it. I fear that in those circumstances a year would be too short a period, and I have no doubt that there are other situations where that would be the case as well.

I understand the rationale for decreasing the qualifying period at a time of great concern about empty properties, but I remind the House that we have squeezed the number of empty properties down to a low level—a level that it has not been at for a long time, if at all. We have to make a judgment about how long the timeframe should be. I know from correspondence that the department has received that some home owners take longer than expected to sell or rent out their properties in a challenging local market. In such circumstances, retaining the two-year qualifying period therefore strikes the right balance. I understand the point that the noble Lord, Lord Kennedy, made about his desire to strengthen the incentive.

The amendment in the name of the noble Lord, Lord Bird, would allow councils to decrease or increase the qualifying period as they see fit. Local authorities would be given complete freedom to remove the requirement that a property be substantially unfurnished in order to be considered empty. I am happy to address those points. Although we should support giving councils as much discretion as is reasonable, the noble Lord’s amendment could lead to a confusing situation where the property, depending on where it is located, could attract premiums after just a few months or after quite a few years.

The principle of specifying that an empty property is one which is substantially unfurnished is well understood, and we will come on to amendments addressing that issue later. The risk of the amendment proposed by the noble Lord, Lord Bird, is that it would give local authorities an open door to extend that definition to types of properties that are not genuinely empty. Premiums could be applied to furnished properties that are periodically occupied either because they are someone’s second home or a job-related home or simply because the owner is away on holiday. I know there are views about second homes and properties that might be considered to be underoccupied, but this legislation is about long-term empty properties, which is a different matter. The design of the system already provides the right balance of flexibility for local authorities.

On the points raised by the noble Earl, Lord Listowel, about the impact of these provisions, I remind the House that local authorities have a discretion they can apply either in relation to excluding properties along the energy-efficiency line suggested by the noble Lord, Lord Stunell, or in terms of something highly personalised which relates to a particular property and the person in it. That is why it is best left to the local level to determine this issue.

The noble Earl also asked about the private rented sector and three-year leases. We are committed to dealing with this issue, which has strong support from the sector, and we are making progress. He will be aware that the private rented sector has grown significantly, and continues to grow. We are putting in place a framework that will apply in a reasonable way, with tenant fees proposals—which we will be looking at shortly—and that addresses the control of deposits, requires client money protection and so on. I will cover that in the normal write-round letter that I will issue to pick up the points made by the noble Earl.

With the comments I have made about how we are not persuaded of the need to alter the minimum period from two years to one year or anything below two years, I urge the noble Lord, Lord Kennedy, to withdraw his amendment.

[Lord Kennedy of Southwark]

I thank all noble Lords who have spoken in this short debate. I am happy to withdraw my amendment at this stage. This amendment and those in the previous group were designed to explore whether we have got this right. I may wish to come back to these amendments—particularly those in the previous group—on Report, but I am happy to withdraw this amendment given what I have heard from the noble Lord.

Amendment 8 withdrawn.

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[Lord Deben (Con)]

My Lords, I support the comments that have just been made. As the former Member of Parliament for Suffolk Coastal and as someone of whom, if you asked him where he really lived, the answer would be in Suffolk—although not coastal Suffolk—I am the owner of a second home. It is a situation in which I am happy to pay my council tax in full, as I do in on my small flat in London. That is how we operate, and I think that is right. One just has to recognise that there are circumstances in which people have to work in one place and live in another, and that is absolutely acceptable.

I emphasise the point about the coastal communities of Suffolk, which I represented for so long. I saw the change; it was fascinating. Southwold was but latterly added to my former constituency—as they moved me closer and closer to the sea, people said that they were trying to tell me something. It has very largely become a place of second homes, and so has Aldeburgh and, increasingly, many other villages round about. It is a real problem for community cohesion; I understand that, having committed myself to the view that people should be allowed to have—and very often need—a second home. However, I do not support the idea that people can avoid their proper contribution to the community by using what has elegantly been referred to as a loophole. It is worse than that, because they are telling a direct lie. They are not running a business; they have no intention of running a business. They are trying to get the business rate and then not to pay it because they have the small business special arrangement. Of course, however, you can be a small business even if you do not let anything. It is not difficult. We could all be a small business if making nothing were the purpose of being a small business. With my family, I own and run small businesses, but we intend to make a profit, otherwise there is not much point in us doing it. However, to run a small business in order not to make a profit and to get the profit from the community is entirely unacceptable.

I want to make some difficult comments. I have now been in one or the other House of Parliament for a very long time. It does not matter which Government are in power—or which mixture, as sometimes it is a coalition—when they want to avoid dealing with something, they always promise the most careful consideration and the most urgent assessment of the real issues that may well arise. They warn that there may be other unintended consequences, meaning that one should not move too quickly. Sometimes they suggest that, although they have looked at it, they have not found quite the right answer, but the House can be assured that such an answer will be found, but not yet. I say to my noble friend, whom I respect enormously, as he knows—I have told him so from time to time—that Wales is right on this. Wales is right on quite a number of things in the climate change committee. I have to remind the United Kingdom Government how much better in some things Wales and Scotland are at moving on climate change. It is not surprising that Wales is right on this.

We have to deal with this for a reason that is not just about equity—although that is very important—or the resources of Suffolk Coastal District Council; I do not have to declare an interest there because I live in the Mid Suffolk District Council area. That reason is social cohesion, in the sense that it annoys, upsets and very often angers people that their neighbours are not paying what they are paying for local services. I do not think it is acceptable or reasonable and it seems something very simple to change. All we have to do is what the Welsh have done. It would be jolly nice to acknowledge that the Welsh got there first and that we in the rest of the United Kingdom are following suit.

[Lord Kennedy of Southwark]

My Lords, briefly, I endorse the comments made in the debate so far, particularly those from the noble Lord, Lord Deben. He is absolutely right. Suffolk is a beautiful part of the world. I know that as well as him; I spend a fair bit of time down there. It is a wonderful place. He is absolutely right that people should not be allowed to pretend to have businesses and to take advantage of these things to avoid paying what they are supposed to pay to provide for local services. That is completely wrong. I hope that when the Minister responds to the debate he can give us some comfort that the Government will look at this. It is totally out of order. If someone lives in an area they should contribute to the services provided by the local authority.

[Lord Bourne of Aberystwyth]

I thank noble Lords very much indeed for what has been an interesting and diverting debate on this amendment. I will seek to deal with all the points that have been made. I will deal with the points made by the noble Baroness, Lady Pinnock, relating to the definitions of “unoccupied” and “substantially unfurnished”; then I will seek to deal with the issues relating to second homes brought up by the noble Lord, Lord Shipley, reinforced by my noble friend Lord Deben and briefly addressed by the noble Lord, Lord Kennedy.

The definitions are clearly important to the successful operation of the premium. Indeed, they are already important to its successful operation because it already uses these terms. It is something that more than 90% of local authorities are already doing. In so far as I can see, none of them is having difficulty interpreting these terms. If anyone can come forward with some issue they feel needs addressing I would be very happy to look at it. It is of course right that local authorities must understand the meaning of these terms and that they are applied consistently across England, as I said on an earlier group of amendments. I certainly share that view.

It might assist noble Lords if I explained a little about these terms. I do not want to repeat what the noble Baroness said about the information letter of 2014, although the more she said the more I felt that we have covered these points. You cannot produce a 100% reliable definition by saying how many cups and saucers you can have left in a cupboard or how many forks and spoons can be in the drawer. To say that these furniture items would normally be there—a bed, chairs, a table, a wardrobe, a sofa, and white goods such as a fridge, freezer or a cooker—is as good as it gets for guidance.

I think that the noble Baroness said at one stage that it was not always possible to have utility bills and that some people were overseas and so on. If that is the case, it will be very difficult for them to reinforce the fact that the property is being used. That is the whole point: these people might seek to have their property as occupied so that they do not have to pay the empty home premium. If they cannot establish it, because they are overseas or so on, that seems absolutely correct. As I say, I am very happy to engage with the noble Baroness and others to look at this issue if they can bring forward evidence that local authorities are having particular difficulties with this. However, in the light of the letter and in the light of case law, I do not think that this is an issue.

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Moved by

[Lord Kennedy of Southwark]

12: After Clause 2, insert the following new Clause—
“Impact of the charging of a higher amount for long-term empty dwellings
(1) Within 24 months of the date on which this Act is passed, a Minister of the Crown must undertake a review of the impact of the provisions contained within section 2.(2) The Minister of the Crown must lay the review before both Houses of Parliament.”

[Lord Kennedy of Southwark]

My Lords, the previous couple of debates have highlighted why this amendment is needed. We have talked about the effects of the Bill—although it is a small Bill—particularly with regard to council tax payers and empty properties. I think it is worth having in the Bill a clause that enables the Government to review—my amendment suggests within 24 months—what has happened in respect of Clause 2 and the impacts of the decision. My amendment also requires that after the review a report is laid before Parliament.

The noble Baronesses, Lady Pinnock and Lady Thornhill, have tabled a very similar amendment. Subsection (2) of their new proposed new clause suggests that,

“the Minister may also consider the impact of any penalties imposed on persons for failing to register their dwelling as empty”.

I am happy to support that as well. Considering the debates we have had on the previous groups, having a mechanism whereby the Government can look at the effects of the Bill, small though it is, is a good thing to do. I beg to move.

[Baroness Thornhill (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. I fully support the words of the noble Lord, Lord Kennedy. I thank the Minister for the very detailed and informative letter he sent all of us after Second Reading; in particular, his response to my comments on fiscal incentives and deterrents with regard to empty homes. I really appreciated that and took on board what he said. Perhaps he will indulge me by allowing me to hang on to the one measure that he did not elaborate on—that is, the matter of penalties.

It is probably little known that councils actually have the ability to levy a civic penalty on an owner for not informing councils that their home is empty. It is not surprising that it is little known; the maximum penalty for doing so is actually £70, so it is no surprise that it is rarely, if ever, used, and that the general public are oblivious to it. In fact, I suspect that if we talked to the general public we would find they believed that by informing the council that their home was empty they would actually pay less or no council tax, so that shows that we have a long way to go. As the average council tax, the band D monthly payment, is now around £165 a month, a penalty of £70 is nothing—it is neither a penalty nor a deterrent. So this is a small matter but I feel that the two should have been taken together. If we are going to, justifiably and rightly, hike up council tax premiums, the penalty that goes with not informing the council should send the same level of message—£70 is, frankly, derisory.

I see both these measures—the penalty and the increased premiums—as really important in motivating councils to move this up their agenda. I say this with a degree of experience in local government, particularly in district councils where this is not a priority, largely because of costs. At Second Reading we heard a lot about powers not being used because of costs, but I think that together these two things would encourage councils to publicise the need to not leave homes empty, and to make it a publicly unacceptable issue so that people would be enraged by it and want us to do something about it. If there were to be a review, would we also review penalties in this regard, as I feel that it would be a missed opportunity if we did not? I beg to move.

[Lord Bourne of Aberystwyth]

I am very grateful to the noble Lord, Lord Kennedy, and the noble Baroness, Lady Thornhill, for their contributions on this group of amendments that relate to how we seek to address the penalty point just covered by the noble Baroness and the issue of the review, which was raised by the noble Lord.

The amendments would require the Government to review the impact of the increase in the maximum permitted level of the empty homes premium. I pause briefly to say that I think I am going to organise a list of all the things that the noble Lord, Lord Kennedy, has asked us to do reviews on. I know that he very often says that we have so many things out for review and then we have a critique of that, but we have had a couple of issues today at least where he has asked for reviews. I am only teasing.

[Lord Kennedy of Southwark]

I am very happy that the department does this. My issue with the reviews is that the Government never come to a conclusion.

[Lord Bourne of Aberystwyth]

I think the noble Lord’s issue has been that there are so many of them that there is a bit of a logjam. Anyway, we could perhaps debate that on some other occasion.

The amendment tabled by the noble Baronesses, Lady Pinnock and Lady Thornhill, would also require the Minister to determine whether the review should also consider the impact of any penalties on council tax payers who fail to tell their local authority that their property is empty. The review would need to be undertaken within two years of the legislation being enacted, with a report laid before both Houses of Parliament.

I am afraid that the Government are unable to accept the amendments. First, the Government are clear that the use of the premium and the consideration of its impact and enforcement are best undertaken by local authorities. As I have said, we are giving a discretion to local authorities; some local authorities do not apply the premium at all while others apply it in its totality. We have provided local government with complete discretion on whether to introduce the premium. Noble Lords will recognise that local government has been running the empty homes premium now since 2013, with a steady year-on-year growth in the number of councils making use of the power. Fewer than 30 councils have no premium in place at all. That gives a very clear indication that councils across the country consider this to be a useful power to drive behavioural change in owners of long-term empty properties.

In considering the Bill’s proposal to increase the maximum level of the premium from 50% to 100%, I have been struck by the widespread support from across the House—admittedly with variations, but there has been support for that increase. There is clear confidence that this is a sensible step to take. Given that, I am not persuaded that we should introduce uncertainty into the process by committing the Government to a review within two years. That could be perceived as demonstrating a lack of faith in the measure which, of course, is not the case.

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These procedures are well established and effective, and contain a number of safeguards for taxpayers. Furthermore, they are administered by those in the locality best placed to consider their impact and make any necessary changes. I entirely appreciate the desire of the noble Lord and noble Baronesses to ensure that the implementation and impact of the change to the empty homes premium are reviewed. However, I assure them that this is what councils across the country should be doing as they make annual decisions about their local council tax regime. I am very willing to engage on the issue of the penalty, if there is evidence that local government is finding that it is hampering them. In the circumstances and in the light of what I have said, I appeal to the noble Lord to withdraw the amendment.

[Lord Kennedy of Southwark]

I am very happy with that explanation from the noble Lord and very happy to withdraw my amendment.

Amendment 12 withdrawn.