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.

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[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.

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[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.

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[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.

--- Later in debate ---

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.

Housing: Private Rented Sector

Lord Kennedy of Southwark Excerpts

Thursday 14th June 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, we are clearly in favour of anything we can do in that regard. As my noble friend will know, we are progressing a policy of a higher premium on empty buildings in legislation that is currently passing through this House, and it is important that we look at all avenues available to us to ensure that we use buildings for housing.

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

My Lords, I refer the House to my relevant interests. While the overwhelming majority of private sector landlords do a good job, does the Minister agree that compulsory landlord licensing schemes, like the one in the London Borough of Newham, are an effective way of tackling rogue landlords? Will he join with me in congratulating Newham Council, the present mayor, Rokhsana Fiaz, and the previous mayor, Sir Robin Wales, on the effective work they have done in conjunction with the Metropolitan Police which has protected tenants but also uncovered council tax and income tax fraud, people trafficking, and people hiding in plain sight who were wanted by the Metropolitan Police in connection with serious crimes?

[Lord Bourne of Aberystwyth]

My Lords, I know that the noble Lord has raised this issue before, but not quite on such a broad front. This morning it is almost as if he had been sponsored by the London Borough of Newham. However, I congratulate him on getting that in. It does much good work, as all London boroughs do, and licensing, where appropriate, is certainly effective. The noble Lord will know that we are doing much in this House and elsewhere to encourage effective licensing of landlords, and I thank him very much for his support in that regard.

Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018

Lord Kennedy of Southwark Excerpts

Wednesday 13th June 2018 Lords Chamber

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

My Lords, I draw the attention of the House to my registered interest as a vice-president of the Local Government Association. I thank the noble Lord, Lord Bourne of Aberystwyth, for bringing the regulations forward today. I know that he has worked hard on this, and I am genuinely pleased that they have come forward.

To go through some of the history, client money protection was debated during the passage of the dreaded Housing and Planning Act 2016. That Act received Royal Assent on 12 May 2016, and this, frankly, is one of the few welcome measures in it. As we heard, a working group was then set up, chaired by the noble Lord, Lord Palmer of Childs Hill, and my noble friend Lady Hayter of Kentish Town. I join other noble Lords in thanking both of them for the excellent work they did on that to bring forward the scheme we have. Their consultation closed in October 2016 and their report was published on 27 March 2017. The very next day the noble Lord himself announced from the Dispatch Box that the Government would go ahead with a mandatory scheme of client money protection, and everybody was very welcoming of that.

The two regulations are before the House today, 13 June 2018, and the requirement to become a member of a scheme comes into force on 1 April 2019. As I said, I am delighted that the Government have finally done this, but you certainly could not accuse them of acting in haste on the matter. The regulations to require letting agents to belong to a mandatory scheme come into effect just short of three years after the Act giving the power for this to happen received Royal Assent. We all want this to work properly and to be right, and we all want it to be a success and effective—but having to wait 35 months to get to this point is a little excessive. So, although I welcome the regulations, perhaps the Minister when he responds could take on board the point that it seems a little excessive. I cannot see why it could not have been done in 18 to 24 months.

Having said that, what the noble Lord outlined is welcome, both as regards the approval regulation and the requirements regulation. I am delighted that they are coming into force, although I endorse entirely the comments made by the noble Lords, Lord Best and Lord Shipley, on enforcement. The regulations must be enforced properly, and to do that will require lots of training. Again, however, I very much welcome them.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have contributed to the debate on these regulations, and I will seek to address the points made by noble Lords in the order in which they were made.

First, the noble Lord, Lord Best, knows exactly what he is talking about in the whole area of our department’s work, so I always listen to him with great interest and much respect. He painted a picture of the need for action against a background of dubious property agents who inhabit a sort of Dickensian and Trollopian netherworld. While I accept that there are some agents who certainly need this urgent action, it is worth saying that the great mass of landlords and agents operate reputably, and I know that the noble Lord will agree with that point. Nevertheless, we need to weed out—words the noble Lord used—firms, agents and businesses that operate in a risky and nefarious way. This development of a fledgling letting fees agency industry—again, to use the noble Lord’s words—is against the backdrop of the Tenant Fees Bill, which, as I say, is in the other place and will probably be with us before the Summer Recess.

To explain the context of the link between the regulations and the Bill, as a result of the Housing and Planning Act we can act in relation to the regulations only by initially transferring the authority to do this to district councils. However, when we consulted on these measures, the feeling was that it was appropriate that trading standards should be the agency responsible, so the tenant fees legislation, when it comes into force, will move the responsibility from district councils to trading standards. That explains the choreography.

The nub of the critique of the noble Lord, Lord Shipley, related to the cost of enforcement. He is absolutely right that enforcement is key here, and in a moment I will address some of the very fair points that he raised. It is intended that the fines picked up by trading standards will be the resource available and, as the noble Lord said, there is no reason why the system should not be self-financing. Indeed, there is every reason why it should be. I will come to the points that he made in that regard, as well as the other points that he raised.

The noble Lord, Lord Shipley, again referred to the need to clean up the world of private letting, and that is what this series of measures is about. The Government’s thinking is that we want a market for the private rented sector, which has been growing. The noble Lord referred to the increase in the number of people renting in the private sector. There are now 4.7 million and that figure is set to rise further. Our thinking is that, although it is inappropriate to regulate rents, we need to create an appropriate framework so that we know that the people operating within the industry do so lawfully and appropriately, and that is what this and the other suite of measures that we have been talking about seek to address. That is the background to what we are seeking to do.

The noble Lord then made a very fair point about publicity. Obviously, we will want to ramp up the publicity once the regulations are agreed. The approval regulations will come into force immediately—the day after they are passed, I think—and we will want to publicise that on the website. We will want to work with the Local Government Association on how we can give the regulations wider publicity to make sure that potential tenants and landlords know about them. If I may, I will write to noble Lords to seek to allay concerns and to address the very fair point made by the noble Lord.

Like Mary Tudor, when, many years from now, the noble Lord, Lord Kennedy, is no longer with us, the Housing and Planning Act 2016 will be there within him, because this is certainly something that he feels very strongly about. I agree with him about the importance of these measures and the need to ensure that they are successful. I believe that, as reflected in the contributions from around the House, this is something that we have come together on. We are at our most effective when we agree essentially on what we want to do and then carry it forward. That has been very important, and I pay tribute to noble Lords who have helped in that process.

Grenfell Tower

Lord Kennedy of Southwark Excerpts

Monday 11th June 2018 Lords Chamber

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

My Lords, I thank the Minister for repeating the Statement made earlier in the other place by his right honourable friend the Secretary of State for Housing, Communities and Local Government. I shall start where the Minister finished: as he said in the Statement, when we say “never again” we mean it, and that is absolutely paramount.

As the Minister said, the fire happened a year ago next Thursday, and the total of 72 people is the biggest loss of life in Britain due to a fire since the Second World War. Recently I watched the “Panorama” programme, which brought back the images of what happened that night. It was a truly horrific and terrible event and all our thoughts and prayers are with the victims and their families. Every time we have a Statement on Grenfell, our thanks go out to everyone in the local community who has helped: the civil servants, the staff from the borough council and from other councils, the faith sector, the charities, and the community who have come together to help this part of north Kensington to move on and try to get lives back on track.

Having said that, here we are a year on and still more than half the Grenfell survivors are in either hotel rooms or temporary accommodation. I accept entirely that the Minister would not want to see that but it is still not a good situation to find themselves in. There are also more than 300 other tower blocks with the same unlawful cladding on them and so far only 10 have had it removed or replaced. We are not sure where we stand with the private sector, where there are even more such blocks. This is not a good place to be. It is fair to say that the residents of Grenfell Tower were failed long before the fire, and some of them clearly feel that they have been failed since. Actually, if I am right, only 82 residents out of the 209 are in permanent replacement homes, and that is just not good enough.

I believe the North Kensington Law Centre has released a document saying that even in the new homes there are defects in terms of damp and delayed repairs, while some of the tenancies that have been offered are not the same that the residents had at Grenfell Tower. I do not know if that is the case, but if it is then it really needs to be corrected; they should be offered exactly the same tenancies that they had in the tower.

Does the department now have any sort of estimate or deadline for when people will be permanently rehoused? To start with, the Prime Minister talked about getting it done in a matter of weeks, but that has been extended and extended. I know that in the last Statement the Government talked about a year’s time, but at what point do they now see everyone getting into a new home and being able to start to rebuild their lives? We do not want to be back here again in the autumn not much further forward.

On the question of the other high-rise blocks, only 10 local authority tower blocks out of more than 300 have had their cladding replaced. The Government said they would do everything it takes to “keep our people safe”, so in that sense I welcome the £400 million funding that the Minister has announced to remove the cladding. It has come from another budget but it is still welcome. I also welcome the intention to ban combustible material on the outside of tower blocks. Is that all the Government are going to do, though, or are they going to go further? There has been talk before of looking at retrofitting sprinklers in tower blocks. I do not know if the Government are thinking about those sorts of things. Where are we on the question of evacuation procedures in blocks of flats? When will we be in a position to confirm that all blocks of flats are safe?

I was pleased with the important point that the Minister made about the private blocks, which has our full support: blocks in the private sector have to be corrected as well and those costs should not be passed on to the leaseholders. I welcome that.

On the inquiry itself, the tributes to the victims and families were very moving. I wish the inquiry well as it has a very important job to do. After that there will of course be the result of the police investigation, but I will leave it there.

[Baroness Pinnock (LD)]

My Lords, I remind your Lordships’ House of my interest as a vice-president of the Local Government Association and as a Kirklees councillor.

Seventy-two men, women and children tragically died in the Grenfell Tower fire. Our responsibility to their memories and to those who survive is to seek the truth, secure justice and make the radical change to culture and practice so that no such fire occurs ever again.

Last week, I met representatives of Grenfell United and listened. I was struck by their quiet determination and by the inspiring leadership of their fellow survivors. They want all the facts before, during and after the disaster to be exposed to the full light of day. Then, those responsible for the decisions that enabled the fire to be so catastrophic must be brought to justice.

All these issues are, of course, the subject of the Grenfell Tower inquiry and we must wait for it to hear the evidence and draw its conclusions. However, what is clear so far is the painfully slow response of the Government to the consequences of this disaster. One year on, some of the survivors are still living in hotel accommodation and have been for a whole year. There is no chance for them even to attempt to start their lives again.

From the information I was given by Grenfell United, some of the accommodation purchased by Kensington and Chelsea Council was totally inappropriate. Perhaps the Minister will comment on the information I heard that one of the survivors was allocated a basement flat with no direct access to daylight. Does he regard this as appropriate in the circumstances of what those families had already endured?

Then there is the issue of the dangerous cladding. I welcome the proposal for a ban on ACM cladding in today’s Statement and that a consultation will begin shortly. This is really positive but this cladding continues to be on many public and private buildings. It is reported in the press that 32 NHS hospitals, several hotels and at least one school, as well as 132 private sector and 208 public sector tower blocks, have this dangerous cladding. Can the Minister assure the House that all these buildings will have the cladding removed as quickly as possible so that people who live or work in them can have some improved peace of mind? Meanwhile, can the Minister explain what actions are being recommended to provide additional safety in these buildings and information as to whether those in the public sector will have compensatory government payments for all their additional costs? As many people will know, fire safety wardens are being employed 24 hours a day, seven days a week, to ensure that no fire starts in these buildings and that, if one does, prompt action can be taken. This will be a huge additional cost in the social housing sector. Can the Government assure us that all buildings with this cladding have been identified, with the owners acknowledging their responsibility, and that the Government will monitor that effective remedial action has or will be taken in a timely way? If we are not careful, the curse of this cladding will continue for years to come.

On this day, our thoughts and prayers are with all those people—residents and rescuers—whose lives have been indelibly scarred by this disaster.

[Lord Kennedy of Southwark]

Before the Minister responds, I make clear that I am also a vice-president of the Local Government Association.

[Lord Bourne of Aberystwyth]

I am grateful to the noble Lord for refreshing our memory.

I start by thanking both the noble Lord and the noble Baroness—and the noble Lord, Lord Shipley, over a period of time—for their general support in dealing with what has been a very difficult, heart-rending situation. It has aided the consideration of some very important issues in this House, so I thank them very much.

I shall try to deal with the points made by the noble Lord and the noble Baroness in so far as I can. If I miss any—and on some points of detail—I may need to write to them, and I will of course ensure that that is copied to other noble Lords participating on the Statement, with a copy placed in the Library.

First, I thank the noble Lord and the noble Baroness for their words about the civil servant and public sector work that has been done in the community since the dreadful fire at Grenfell, and about the faith sector and the charitable sector. I was recently at a meeting in the community hall of the local mosque, where Muslim Aid was talking about the work done and the commitment of people in the faith sector and particularly mentioned the West London Synagogue. This was a general commitment from the faith sector in the area, an outpouring of support from individuals and from the third sector, which is a continuing feature of what is happening at Grenfell.

The noble Lord mentioned points in the North Kensington Law Centre report. I know of the report but I must admit that I have not studied it in detail. I will certainly do so and cover those points in response to him. He will be aware that experts will be sitting with Judge Moore-Bick on the second phase of the inquiry, which I think helps to provide the disinfectant of sunlight which we all welcome for transparency. He asked questions raised by the North Kensington Law Centre about rent in the same general terms. Of course, there is a rates, rents and utilities holiday—although holiday is not the right word. There will be no rent, rates—council tax—or utilities payable until June 2019, I think, for families who were in Grenfell Tower or Grenfell Walk. For other families, there is an abatement of those bills, although not on the same terms—to a lesser extent.

The noble Lord referred to the rehousing effort. Let me say first that every household has been offered at least one alternative. The noble Baroness mentioned somewhere without sunlight in a basement. I am extremely surprised to hear that, but I will look at that case. If she has more detail, that would be useful. I join her in paying tribute to the work done by Grenfell United. We may have been at the same occasion when Grenfell United was present, and it has done a remarkable amount, as have others from the community.

The noble Lord asked about retrofitting sprinklers. He will be aware that new blocks more than 30 metres high, I think, are having sprinklers fitted. There is a general issue about retrofit. He will know that this was not recommended by Dame Judith Hackitt: she dealt with the issue but did not recommend that. However, in addition to the £400 million support specifically for ACM cladding, if local authorities can justify it, we will certainly consider financial flexibility for them. This follows recommendations done earlier by the Lakanal inquiry about sprinklers, and that local authorities can do that independently. There is nothing to stop that happening, except perhaps the finance, but we will look at financial flexibilities if the case is made.

The noble Baroness referred to interim measures while the cladding work is being done. Of course, we are committed to all the combustible ACM cladding being removed from both social and private sector buildings. We think we have identified all the private sector buildings and are confirming whether all of them have ACM cladding. We have identified buildings that might have it and we are now seeking to ensure that. If I am wrong, I will address it in a letter, but I believe that local authorities have now come up with definitive figures on that. Interim measures will be in place while or until the cladding is removed, and this will be a matter for the local fire and rescue services to advise on and determine. It would certainly include the 24-hour presence of safety wardens, a ban on the use of car parks, and so on. We are obviously in discussions with local authorities on measures that need to be taken and, as I say, I think we have identified all the buildings. I hope that that addresses all the points raised, but if I have missed any I shall certainly address them in a letter.

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

Lord Kennedy of Southwark Excerpts

2nd reading (Hansard): House of Lords
Monday 4th June 2018 Lords Chamber

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

My Lords, first, I draw the House’s attention to my registered interest as a vice-president of the Local Government Association. Generally, the Opposition support the changes proposed in this three-clause Bill. That is not to say that we do not have questions, and we will be moving amendments both in Committee and on Report as we consider it in your Lordships’ House.

As outlined by the Minister, Clause 1 addresses the Supreme Court decision on the staircase tax relating to how unconnected units occupied by the same business are treated. The measure will put businesses in no worse a position than they would have been in before the court ruling, by retrospectively reinstating the business rate valuation practice that applied prior to the Supreme Court judgment.

As we have heard, the practice of the Valuation Office Agency since the judgment has been that separate units of property in a shared building should be treated as separate rating units. In the autumn 2017 Budget, the Chancellor of the Exchequer announced the reversal of this position and the return to previous practice, and Clause 1 implements that.

Business would further be allowed to ask the Valuation Office Agency to recalculate valuations so that business rate demands would be based on previous practice and backdated to April 2010. The Budget papers confirm that local government will be fully compensated for this loss of income, but the Government have since changed their mind and view the extra income that local government may have received as an unexpected windfall, with no associated liability for compensation for councils.

Can the Minister set out how he will ensure that local government will be, at least, no worse off as a result of the Bill? What sort of assessment are the Government undertaking or have they undertaken of the impact on local authorities piloting the 100% business rate retention scheme in 2018-19? Can he confirm that those authorities will not have to refund money that they never gained as a result of the judgment? Can he also state clearly whether the Government are making any additional funding available to local government as a result of the consequences of this ruling? The Federation of Small Businesses has illustrated the problem facing smaller firms that necessarily operate in larger premises but do not qualify for business rate relief. Perhaps the Minister can comment on that in response to the debate.

Far more needs to be done to protect the high street in our town and city centres. Business rates are a significant cost and can be the difference between a business surviving or failing today. This is a matter we have discussed many times in your Lordships’ House. The noble Lord, Lord Naseby, who is not in his place, has raised it many times, particularly at Question Time, and I have supported him in his endeavours. The noble Baroness, Lady Pinnock, also referred to the issue in her remarks this afternoon.

We have seen some of the largest companies get away without paying their fair share of tax across a whole range of taxes, while high street-based businesses, which are central to our communities thriving, are taxed through business rates before they earn a single penny. That imbalance between companies is unfair and needs to be addressed.

The noble Earl, Lord Lytton, is very experienced in these matters, and his contribution to these debates will be invaluable. He raised a number of very important technical issues that need to be explored further as we consider the Bill. I certainly welcome his contribution at further stages.

Clause 2 will give local authorities the power to double the council tax premium on homes deemed long-term empty by increasing it from 50% to 100%, in addition to the usual council tax charge that applies to that property. That is a welcome move, and I hope it will prove an incentive to the owners of long-term empty properties to bring them back into use. I can see a case for increasing this further when properties have been left empty for two, five or maybe even 10 years. I shall move amendments to enable the House to debate that in Committee and on Report. Some of those concerns were outlined by the noble Baroness, Lady Pinnock, and raised by my noble friend Lord Campbell-Savours. It is an important area that we need to get right.

The noble Baroness, Lady Thornhill, referred to local government’s powers to charge additional council tax for empty properties. I very much agree with her comments about the difference between the north and south. There are issues in London and the south-east that may not apply in the north, and we need to explore those fully.

In this House, we regularly discuss housing, the shortage of housing, the failings of the Government and their continued resistance to local authorities to playing their full part in building homes. The Government will not meet their targets unless they get local government fully engaged in building. We have over 200,000 empty properties in England; I very much agree with the noble Lord, Lord Patten, that we should get it down to a much lower figure. I think he mentioned a figure of just over 100,000, and we need to get government working together to achieve that.

We also have 120,000 children not living in permanent accommodation. The noble Earl, Lord Listowel, made the important point about not placing additional burdens on councils, because of the importance of early intervention when dealing with children. Councils’ funding is now so stretched, and we know that many are already struggling to do all the things they need to do.

We are one of the richest countries in the world, and homelessness is at truly shameful levels. The Government have to do more to get a grip on the situation. While not part of the Bill, the Government should consider what they can do to allow councils to keep 100% of the capital receipts from the homes sold under right to buy to help to alleviate the problem by reinvesting that in new housing.

Housing is one of the most pressing issues facing this country—I think we all agree on that—and eight in 10 people think the Government ought to do more to address the housing crisis. Those calls are led by the Local Government Association, led by the Minister’s noble friend, the noble Lord, Lord Porter of Spalding, who agrees that more should be done. It would like the Government to go further and give councils greater power to borrow, build and deliver the homes that we need, not on a case-by-case basis, but by trusting local authorities to understand their areas and get homes built quickly. I agree with the Local Government Association’s comments on these matters.

This is a small, three-clause Bill, but it is important none the less. As I said at the start of my contribution, I am very happy to support it. We have some concerns and suggestions and will propose them in Committee and on Report, but we wish the Bill well at this stage.

Leaseholders’ Rights: High-rise Blocks

Lord Kennedy of Southwark Excerpts

Tuesday 22nd May 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that the position will vary according to the nature of the lease in question: it may vary enormously from one lease to another. We already have the example of Citiscape in Croydon where those responsible, the leaseholders under the lease, have had the owner of the block, Barratt, come forward and say it will bear the cost. We are hoping that that position will be replicated in other cases. We rule nothing out, but in the meantime the round tables that my right honourable friend the Secretary of State is organising provide a way forward to see how this will be received.

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

My Lords, I refer the House to my relevant interests as a vice-president of the Local Government Association. The sum of £400 million for removing potentially dangerous cladding is welcome. Can the noble Lord confirm whether this is new money or money diverted from the affordable homes programme? Have the Government completely ruled out providing any new additional funding to alleviate the problems highlighted by the noble Lord, Lord Shipley?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right and I suspect he knows the answer he is going to get. The money is out of the existing funding programme but additional money will be forthcoming in the year after: it alters the profile by delaying that additional housing by a year.

Tower Blocks: Dangerous Cladding

Lord Kennedy of Southwark Excerpts

Monday 21st May 2018 Lords Chamber

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

My Lords, I join the Minister in sharing our thoughts and prayers with the victims and the families and wishing the inquiry well. I declare an interest as a vice-president of the Local Government Association. I thank the Minister for repeating the Answer to the Urgent Question asked by my right honourable friend John Healey MP in the other place.

Following the woefully inadequate response from Kensington and Chelsea Council, does the Minister accept that the Government have been slow off the mark, as illustrated only last week by the Government giving a formal direction to local authorities to ensure that they know whether high-rise blocks in their area are safe, nearly a year after the tragedy? While the £400 million announced by the Prime Minister to remove that cladding is welcome, it also comes nearly a year after the tragedy. This is not an example of the Government acting with speed.

What action are the Government taking to ensure that blocks in the private sector are also safe and have all potentially dangerous cladding removed? What action are the Government taking to ensure that tower block residents have been told the correct course of action if a fire breaks out in their block? That could be either “stay put” or “get out”, but residents need to know about the action for their area.

[Lord Bourne of Aberystwyth]

I thank the noble Lord, Lord Kennedy, very much indeed for joining in the thoughts that I am sure we all share as the inquiry gets under way and as tributes are made by the bereaved. We can fully understand the angst that that must be causing. I had the privilege of meeting some families last week and I fully understand what they must be going through.

The noble Lord referred to the £400 million announced by the Prime Minister last week, which I think is significant. Of course, that is an estimate of the full funding of the work necessary for the measures in the social sector. The noble Lord also asked what else we are doing. Of course, there are interim measures in place while the replacement of cladding is carried out. We expect that work to be very effective—for example, patrols to make sure that the building is safe while the work is carried out—so it is not as if we are not doing anything. This is a very complex area, as I know the noble Lord appreciates, and we are doing a great deal to ensure that people in high-rise blocks are safe.

The noble Lord asked, quite rightly, about the private sector. We have, along with local authorities, identified 101 private residential blocks. We have made money available to help local authorities identify the blocks that need assistance. They have the testing available in just the same way as the social sector; there is no cost attached to the testing of the ACM cladding in those situations and interim measures will apply in just the same way. As the Statement made clear, we are expecting landlords to step up, as some have done—Barratt, for example, for Citiscape in Croydon—to ensure that they are meeting the costs. As the Statement also made clear, the Secretary of State is holding round tables to look at these remediation issues with a view to ensuring that those that can bear the costs do so and those that cannot bear the costs do not. Those round tables will start this week.

East Suffolk (Local Government Changes) Order 2018

Lord Kennedy of Southwark Excerpts

Wednesday 9th May 2018 Grand Committee

[Baroness Scott of Needham Market]

I am very pleased to put a cloak of respectability over the noble Lord and the area in which he lives. I hope that he sleeps more soundly as a result. Yes, I was citing the report that went to East Suffolk, but there is a general point. I would have preferred a much more strategic look at the whole county and how services are delivered so that we can all feel that councils are genuinely representing us. I think that that is exactly where we will be in five years’ time, but that will probably have cost us a lot of time and money.

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

My Lords, first, I should draw the attention of the Grand Committee to my declaration of interests: I am a vice-president of the Local Government Association. I am not a resident of Suffolk, although I have friends there and visit often. It is a wonderful place to spend time.

I am clear that there is local support for the order. I know that the Minister has addressed the issue raised by the Secondary Legislation Committee, and I am happy with that. I have talked generally about consultation: we must ensure that our consultation processes actually involve talking to local people to get their views; we do not always do that. I am not saying that about this case.

I agree with the noble Baroness, Lady Scott of Needham Market. I think that local government in England is a little confused. If you go to one place, there is a unitary council that does everything for the whole county. In the next place, you will have four or five tiers of local government doing the same job. There is an issue there. That is not the case in other parts of the country. In some parts of the country, you can have a metro mayor and a combined authority, the PCC, a county council, a district council and the parish council, all delivering different services to you. In another place, you have just a unitary council or a unitary district. I know that the Minister will say that we like it being bespoke and everyone can do as they like, but you could equally argue that it is a bit confused and a bit of a dog’s breakfast in some parts of the country.

In principle, I am not against what is suggested here, bearing in mind the points I made.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I do not dissent from the general point that leadership means that proposals have to come from somewhere. I am keen to make the point, and perhaps to restate the point to overstate the point, that these are locally led proposals from local leaders. Of course they are not going to come from individual residents, but the evidence we have from the consultation, which the Secretary of State will have borne in mind when looking at these proposals, was that there was strong local support for them.

I take the point that there has to be a government policy, but the Government, of whom I am proud to be a part, are keen for there to be diversity and bespoke deals. The noble Lord probably takes a different view of this, but it is not a view that the Government subscribe to. We have a broad policy of saying these things have got to be locally led. We will look at them and scrutinise them to ensure that they are locally supported and represent value and so on, but local democracy is the key point.

[Lord Kennedy of Southwark]

I take the Minister’s point. I am conscious that in other parts of England there are other places where there are differences among what councils want. Oxfordshire is an example where there are very different views about what is wanted in the future. Do I take it from what the Minister said that if councils do not want things to happen, they will not happen?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

Well, for district mergers, there has to be 100% support from the councils. What I am saying is that there does not necessarily have to be 100% support from the local MPs, for example, and that has not been the case. I am sure the noble Lord will appreciate—

[Lord Kennedy of Southwark]

Excuse me, but I am conscious that, in Oxfordshire, there may well be a view that they want a unitary authority. But Oxford City Council does not want that and is very clear about it.

[Lord Bourne of Aberystwyth]

I am making the point in relation to district councils, as it is district councils we are looking at. There are other considerations in relation to unitary authorities but, in relation to district councils, there has to be unanimous support from the authorities concerned, as there was in these cases. It happens that, in these cases, they have support also from the surrounding authorities, not all of which are in Suffolk itself.

Lastly, I will turn, if I may, to the point made by the noble Baroness, who also has great experience of local government. We are looking at Suffolk, but she will understand from the point of view of Kirklees the need for that local dimension. We have the local dimension here, as demonstrated by the feelings of the people in the area. That is the point I wish to emphasise.

In both cases, it is about recognising—once again I will adopt the words of my noble friend Lord Tebbit—a move from the de facto to the de jure. In both cases, there has been close co-operation. In both cases, for understandable reasons, it is intended that branch offices will be kept open while headquarters will be, in one case, in Bury St Edmunds, and, in the other case, in Melton, on the outskirts of Woodbridge. So there will be no change in that regard, but it is moving very sensibly from the de facto to the de jure, which is what they want. With that, I commend the regulations and the orders to the Committee.

Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018

Lord Kennedy of Southwark Excerpts

Wednesday 9th May 2018 Grand Committee

[Lord Shipley (LD)]

My Lords I remind the Committee that I am a vice president of the Local Government Association. The regulations have my entire support. This is a very welcome change. I have one question for the Minister, which I have raised on previous regulations. It takes a very long time to effect change—it is three years since the initial consultation took place in May 2015—and I wonder whether things might be speeded up a bit. We have to consult carefully on the regulation to get the right outcome, nevertheless it does seem to take a very long time.

It has to be right that local authorities can regulate the minimum size of rooms that may be occupied as sleeping accommodation. It has to be right that the local housing authority can specify the maximum number of persons who may occupy a specified room for the purpose of sleeping accommodation in that licenced HMO. It has to be right that local authorities can make schemes in respect of refuse storage and disposal that a landlord would have to implement. In all those respects this regulation has to be right.

There was a time when the definition of HMOs was adequate. They were of three or more storeys and were occupied by five or more persons forming two or more households. That was for many years a standard definition that stood the test of time. The difficulty now is, as the Minister said, that the private sector has grown to the point where it represents one in five household tenures in the UK, and standards have slipped. We have HMOs which, as the Explanatory Memorandum makes clear, are under the radar, and something has to be done about that.

I understand that there has been some debate about a reasonable minimum size for sleeping accommodation. As the Minister made clear, 6.51 square metres for one person over the age of 10 is a minimum size, not necessarily a desirable size. Indeed, it is actually very small. If you calculate that in your own mind, it is not very big at all. I understand that there are some residential landlords who would like all the accommodation in an HMO, which might include communal accommodation, to be calculated as part of the minimum amount. It seems to me that sleeping accommodation, which is the private space of an individual in an HMO, has to be of a reasonable size for someone to do things other than just sleeping. Therefore, I find 6.51 square metres small. I do not think it reasonable to say that we should include communal accommodation and reduce the amount that is required under the law for sleeping accommodation.

With reference to paragraph 7.9 of the Explanatory Memorandum, I wonder whether the period of 18 months’ grace is too long. For a while, I felt that once this has been approved, giving landlords a year, or perhaps nine months, would be adequate. Given the fact that it may prove complicated for local authorities to identify, investigate and agree with landlords what will happen, a period of 18 months is probably justified. When he replies, can the Minister explain the basis for the 18-month period as opposed to any other?

These regulations are very welcome. They help us to solve a problem. Where standards in the private rented sector are declining, they give local authorities powers to act to protect the interests of tenants. They should therefore be commended.

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

My Lords, these are important regulations before the Grand Committee. I, too, declare my interest as a vice-president of the Local Government Association.

I do not know whether any noble Lords here have ever lived in an HMO. I certainly have not. My honourable friend in the other place, Melanie Onn, and I were work colleagues in the Labour Party; she lived in an HMO as a young homeless person and she will tell you what conditions were like there. She has some knowledge about this. These regulations are important and I am very happy to support them; they certainly go in the right direction, but there is a lot more to do.

I have also been out in Newham on a number of housing raids. Of course, Newham has a licensing scheme, but the standard of accommodation some people are expected to live in is absolutely shocking. The regulations are a step in the right direction, but we must never lose sight of the poor accommodation that we have and expect some people to live in. I support improved rights and protections for renters; the regulations will go some way to improving the rights of some of the most poor and vulnerable people in our communities.

We have had discussion of the national minimum room standards. As the noble Lord, Lord Shipley, said, the room allocated to someone in an HMO is not just a bedroom. Other than the shared bathroom and kitchen, you need a bit more space to put a bed and a wardrobe in. This must be taken into account when concluding that the proposed minimum standard for a single occupier should be 6.51 square metres or 10.22 square metres for two people. Those sizes will be further compromised if young children are there as well.

Some local authorities may seek to provide larger minimum space standards in their licensing schemes, which is good. However, we need to consider carefully that these rooms are not just bedrooms. They are your bedroom and living room. They are the room where you put all your property. Everything you have in life goes into this one room. I certainly think that we have to look carefully at size there.

The Minister mentioned fines for letting out rooms that are smaller than the minimum, which is good. However, we must make the point that we can have all the regulations we like, but it becomes an issue when we cannot enforce them. The other issue with HMOs, particularly when they are very small or even illegally let, is the danger of overcrowding and overcluttering, which creates a fire risk and other problems that people get into in insufficient spaces.

Ultimately, we need to think also about issues such as the impact on mental health. You have to remember that people are letting one room and are sharing the building with people they do not know. Often, they will lock the door to their room at night, and that is not a great way to live your life. These are some of the most vulnerable people and there are real issues here, in particular for their mental health.

That leads on to the wider problem of a housing market in crisis, which we have talked about many times in this House and elsewhere. The standard and quality of some of the accommodation that people live in is shocking and we need to do much more about that.

I have to mention the dreaded Housing and Planning Act 2016, which offered little respite to people in this housing crisis. We need always to be on top of this. I support the regulations because they are a move forward, and I thank the Government for that, but we need to do much more. I am not sure if the Minister has been out to look at the situation, but I can recommend that he do so with Newham Council. He would find it shocking—I was last out with the council in February. For people to be living like that in HMOs in 2018, in one of the richest countries in the world and one of the richest cities in the world, is truly unbelievable. I am very happy to support the regulations before us today.

Fire Safety: Building Materials

Lord Kennedy of Southwark Excerpts

Tuesday 1st May 2018 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what action they are taking to ensure the safety of the public in the light of the Association of British Insurers’ report, published on 25 April, on fire safety testing of building materials following the Grenfell Tower fire.

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

My Lords, in asking the Question standing in my name of the Order Paper, I refer the House to my relevant interests in the register.

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

My Lords, the Government have taken advice from their expert panel on fire and safety on this report. The expert panel has advised that the report’s findings do not require changes to be made to the advice that has been given to building owners about actions that they should take. The programme to identify and make safe buildings with ACM cladding continues. The British Standards Institution has already sent the report to the relevant technical committee for review.

[Lord Kennedy of Southwark]

My Lords, the report of the Fire Protection Association, commissioned by the Association of British Insurers, highlighted that the official testing regime may have overlooked a number of real-life factors when conducting its tests on the appropriateness of the standard test for cladding materials. I hear what the Minister says, but will he look at whether there is a need to convene a committee to look at the British Standard 8414 test so we can be sure that the findings of the report have been considered carefully?

[Lord Bourne of Aberystwyth]

My Lords, I am grateful to the noble Lord. The relevant standard, BS 8414, was originally set in 2005 and has no doubt been effective. As I indicated, the report has gone to the relevant technical committee of the BSI for analysis. It will take a view on it and, if appropriate, refer it to the Government. That is the appropriate process. Of course we will take it very seriously when it gives us the report.