Deregulation Bill

Debate between Lord Mawson and Baroness Donaghy

Thursday 30th October 2014 Grand Committee

[Baroness Donaghy (Lab)]

My Lords, I thank the noble Lord, Lord Tope. I spoke on this issue at Second Reading and little did I know that I would be entering this twilight world of virtual hotels and absence of health and safety. It is a very new world and perhaps not one that I would welcome. I make no apology for speaking about a London issue. I am a Londoner by adoption. I have done my fair share of one-room bedsits and one-bedroom flats, so I think I have some knowledge of the standard of private sector renting. The big issue why it is special for London is the high proportion of flat-dwellers. We must emphasise that because it means that there is a whole new relationship with fellow homeowners, which does not necessarily exist in a street of houses.

I support what the noble Lord, Lord Tope, said. This is not a cosy, house-swapping issue. This is big business. We are talking about Airbnb valued at £10 billion and IHG valued at £8 billion and also about a crisis in housing supply in London. Can the Minister say how the Government reconcile that shortage and the fact that this is going to make accommodation even more short? How does that reconcile with the model tenancy agreement that the coalition Government are preparing? How can we be sure that there is going to be enough accommodation left for those who want to rent on a longer basis?

Noble Lords have already spoken about undermining the tourist industry. I will not go on about that, but I support everything that has been said about it. All the organisations that have approached other noble Lords have also approached me. I believe that the health and safety issue is important, because the Chief Fire Officers Association wrote in March to Airbnb saying the fire safety information given to people using its properties was wrong.

Finally, let me deal briefly, because others have covered the issues that I wanted to, with the libertarian issue. It is quite right that the homeowner ought to have the right to deploy their property in whatever way they choose. That has to be balanced by the right of the property owner not to have a major change in ambience of the place that they purchase. That is particularly true in blocks of flats. There is an expectation when someone buys a property within a block of flats that the ambience will not change, that it will be secure and settled and that it will not turn into the A&E department of the local private hospital, into a hotel, or into more unfortunate areas such as brothels and housing benefit fraudsters at the other extreme. The right of homeowners has to be balanced by the need for people to have some security in the property that they buy in London. If the noble Lord, Lord Tope, were to pursue this on Report, I would support the clause being deleted entirely, but as a reasonable compromise, I will support my noble friend Lord McKenzie.

[Lord Mawson (CB)]

My Lords, I am not an expert in this area, but following a discussion with an entrepreneur who is active in this field and behaving responsibly and who has developed a successful business in response to a real market, I thought it important that an alternative case be put. Over the years, I have often heard a strong case from the public sector as to why it would be unhelpful for a particular change to happen. I have heard attempts to hold the sea back before, but it has often proved impossible in the end. Change happens. As a social entrepreneur and innovator I have certainly been told by the public sector on numerous occasion that, “the sky will fall in” if such and such a change should happen. Having usually stayed the course, I noticed that, in reality, it never did and a new, often positive reality emerged.

The noble Lord, Lord Fowler, gave some excellent illustrations of this phenomenon, and attempts in the past to hold back business development, in his Second Reading speech. I shall articulate an alternative scenario to that painted by colleagues. I have heard considerable opposition to this change and concern over the unintended consequences that may arise as a result. However, I have yet to hear enough focus on the benefits of this reform, which in many people’s eyes is a sensible and forward-thinking piece of policymaking. It is these benefits that I shall focus on.

First, this reform will deliver a more optimal use of space and existing assets. With such well-documented pressure on our housing capacity, surely it makes sense to make better use of the residential property that we already have and to allow our properties not to lie empty for short periods when owners are away. I declare an interest as someone who lets out rooms in my London home. Secondly, a system which no longer makes people feel fearful of criminal sanction simply for renting out their residence when they are away will mean that families, many of whom are in need of additional income, will be free to tap into an additional revenue stream. Much of this revenue will be taxed and will ultimately boost revenue for the Exchequer to spend as it chooses.

Thirdly, it is evident that increasing the variety and stock of locations for tourists to stay will not only boost tourism in the capital, but will give a boost to local businesses that will benefit from this new mode of travel. This extra tourist footfall has the potential to reach parts of our economy that tourist dollars have previously never reached. Furthermore, when tourists decide to stay in people’s homes rather than in hotels, they tend to spend their money in local businesses, local restaurants and local museums. Finally, it should be pointed out that the costs for a family wanting to stay in a hotel in London are incredibly high and many people are simply priced out of a trip to our capital city. Short-term holiday lets provide travellers, especially families, with more choice and often more suitable properties in which to reside while on holiday.

We must be clear that the internet has fundamentally changed the way in which people live, work and travel. Either we decide to embrace this shift in our policy-making and our regulation or we will be left behind, as other cities embrace what is increasingly a preferred way to travel. The emergence of platforms such as Onefinestay, which has been mentioned and which enables people to rent out their residence safely and securely on a short-term basis when they are not at home, is something that we should embrace and not hinder.