Housebuilding: Target

Lord Shipley Excerpts

Thursday 20th December 2018 Lords Chamber

Asked by

[Lord Shipley]

To ask Her Majesty’s Government when they will achieve their commitment to build 300,000 new homes a year.

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

My Lords, we have announced bold measures to make our housing market work better, including planning reforms and total financial support of over £44 billion to 2022-23. Furthermore, at Autumn Budget we abolished housing revenue account borrowing caps, which will help to bring forward a new generation of council housing. This supports our ambition to create, fund and drive a housing market that delivers 300,000 homes a year by the mid-2020s.

[Lord Shipley (LD)]

My Lords, I thank the Minister for his reply and note his optimism, but I think that the signs are not good. The Minister will know that Shelter now estimates that there will be 320,000 homeless people over Christmas, that there are 1.25 million families on social housing waiting lists and that the country built only 222,000 new homes in the last year—that figure includes conversions. Is he aware that the National Housing Federation estimates that we need to build 90,000 homes a year for social rent for the next few years? Will the Government publish an action plan to show how they will deliver the homes that the country so urgently needs?

[Lord Bourne of Aberystwyth]

My Lords, I agree with the noble Lord about the challenges that we face, but I do not agree with what he said about the 222,000 homes in the most recent figures. That represents the best figure for 31 years, bar one year, and so is a considerable achievement. Yes, there is more to be done. We have committed money to social housing, as he will be aware. We have abolished the housing revenue borrowing caps, which we had been urged to do. That, too, will make a considerable difference.

Tenant Fees Bill

Lord Shipley Excerpts

Report stage (Hansard): House of Lords
Tuesday 11th December 2018 Lords Chamber

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

My Lords, I will first speak briefly on Amendments 1, 2, 5 to 12, 16 to 19, 33, 35 to 41, 60 and 66, which are minor and technical and are intended to bring consistency and ensure the Bill best delivers on its policy intent.

First, while unlikely, as the Bill is drafted a letting agent could conceivably require a tenant to enter into a contract for services with themselves for additional services related to letting, such as providing an inventory. Amendment 5 clarifies that letting agents are prohibited from requiring a tenant or other relevant person to enter into a contract with themselves.

Secondly, it is possible that a relevant person other than a tenant might be a party to a tenancy agreement or an agreement with a letting agent. We have made amendments to Clauses 1 and 2 to be clear that, where a person is acting on behalf of a tenant or guaranteeing a payment of rent, that person cannot be charged a default fee unless otherwise permitted by the Bill.

In the same vein, Amendments 9 to 12 to Clause 4 provide that a term of agreement which breaches Clause 1 or Clause 2 does not bind a relevant person. Similarly, Amendments 33 and 35 to 41 replace the references to “tenant” in Clause 28 as it applies to pre-commencement tenancy agreements and agreements with letting agents with references to “relevant person”.

Finally, we want to ensure that we use consistent language and terminology throughout the Bill. Amendment 66 changes a reference to “incorrect and misleading information” to “false and misleading information” to align with other references in Schedule 2. Amendments 16 to 19 ensure that the language on day and date in Clause 11 is consistent, and Amendment 60 makes it clear that the definition of a television licence in paragraph 9 of Schedule 1 applies to the entire Act.

[Lord Shipley (LD)]

My Lords, since we have begun Report I should declare my vice-presidency of the Local Government Association. I simply say that these are helpful and relevant amendments that have our support.

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

My Lords, as this is the first time that I have spoken on Report, I draw the House’s attention to my relevant interest as a vice-president of the Local Government Association, as the noble Lord, Lord Shipley, did. I thank the noble Lord, Lord Bourne of Aberystwyth, and his officials for a number of the amendments we will discuss, in this group and others. Generally they are very helpful and improve the Bill. That is good news for tenants, and I am genuinely very grateful for that. That is not to say that I agree with everything in the Bill, but I am pleased to say we are making progress. I am very happy to support these amendments and I concur with the noble Lord’s comments.

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[Lord Bourne of Aberystwyth]

My Lords, we are all clear that the purpose of the Bill is to ban agents and landlords from charging unfair letting fees to tenants. However, in achieving this objective it is crucial that the legislation does not have an adverse impact elsewhere. Amendments 3, 4 and 29 to 31, in my name, ensure that the Bill does not prevent vital work supporting tenants more broadly.

First, Amendments 3 and 4 exclude local housing authorities or organisations acting on behalf of a local housing authority from the definition of “relevant person” under the Bill. I am most grateful to the noble Lords, Lord Shipley and Lord Beecham, for raising this issue during Second Reading. Local authorities have a duty, as housing authorities, to help the homeless to find accommodation. This is set out in the Housing Act 1996, the recent Homelessness Reduction Act and the homelessness code of guidance. We recognise that, as part of this, councils might need to provide support to applicants—financial or otherwise—to access private rented accommodation. This is vital work, and Amendments 3 and 4 ensure that it can continue. These amendments will ensure that local housing authorities can make payments in connection with a tenancy when acting on behalf of a tenant or guaranteeing their rent.

Secondly, Amendments 29 to 31 ensure that the important work of Homeshare schemes, and its parent network in the UK, Shared Lives, can continue. I have said on multiple occasions that the Government strongly support the work of organisations such as Homeshare in matching a licensee, usually a young person in housing need, with a licensor, usually an elderly householder in need of companionship, sometimes combined with some low-level care or assistance. I know that support is shared throughout the House.

The Bill would have unintentionally prevented Homeshare organisations operating by banning payments made by the licensor in respect of the advice and support received from Shared Lives. I reiterate that the intention of the Bill is not, and never was, to undermine or prevent this important and innovative work continuing. I thank in particular my noble friends Lady Jenkin and Lady Barran for taking up this issue and bringing it to the House’s attention.

The Government recognise that we must take this opportunity to amend the Bill to ensure that such work is not adversely affected. To do this, our amendments provide for changes to Clause 26 to exclude from the Bill such licences as those granted under a Homeshare scheme. We have specified that an excluded licence will be one granted to the licensee by a licensor who resides in the housing, where particular conditions surrounding the grant, renewal and continuation of that licence are met. These conditions include a requirement for a charity or a community interest company to give advice to the licensee or licensor in connection with the grant, renewal or continuation of the licence and where the licensee provides companionship or companionship and low-level care or assistance, together with one or more payments in respect of council tax or utilities, for example. Such arrangements are indicative of Homeshare organisations.

The amendments will therefore ensure that excluded licences that meet the conditions I have just set out are exempt from the tenant fee ban. I hope that my noble friend Lady Barran will agree that these amendments address the concerns she raised in Committee and that this achieves our shared ambition—one we can all surely support—which is that organisations such as Homeshare can continue doing their fantastic work well into the future.

[Lord Shipley]

My Lords, the Minister referred to what I said at Second Reading and he is entirely right. I welcome Amendments 3 and 4. They are hugely helpful because they give local housing authorities the flexibility they need to do their job properly, and for that reason they have our support.

[Lord Beecham (Lab)]

My Lords, I join the noble Lord, Lord Shipley, in supporting these government amendments. It certainly is an important function for local authorities. I have to confess—and I refer to my interest as a sitting local councillor—that I am not entirely sure where the funding for this comes from. Do the Government support this financially, or is it left entirely to local authorities? In the latter event, will he look into the extent to which authorities are financing this important element of support for tenants? We certainly support both amendments.

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[Lord Flight]

My Lords, I similarly would like to speak to Amendments 42, 43 and 44, on tenancy deposits. The objective for everyone is to have a fair balance that works. I note that, at Second Reading in the Commons, the Secretary of State referred to the then proposal of six weeks as,

“a balance of greater protection to tenants while giving landlords the flexibility to accept higher-risk tenants”.—[Official Report, Commons, 21/5/18; col. 642.]

I also note that Scotland has an eight-week as opposed to a six-week arrangement.

I urge the Government to think again on this issue. Reducing the security deposit to five weeks’ rent rather than six leaves scope for unfairness to landlords. There is always the risk that, at the end of a long tenancy, the tenant will leave the property in a poor state or will have had pets. Cutting the deposit to five weeks’ rent will quite likely leave the landlord out of pocket. In turn, that will make landlords more cautious about the tenants they take on, at a time when the need for more rented accommodation is acute. This is not a huge issue, but the Government’s previous proposition of six weeks was the sensible and fair balance. I do not understand why they have moved to five weeks, and nor does the industry—having not been consulted or advised about this, it feels somewhat mistreated by the Government.

[Lord Shipley]

My Lords, if I might, I will intervene at this stage to speak to Amendment 43, which is what we are currently talking about. In the flurry of amendments not being moved, no debate took place, but the issue has now been raised by two noble Lords.

My name is attached to the amendment that refers to five weeks, and I think it is the right conclusion. I want to thank the Government for having agreed a change from six weeks to five. At Second Reading and in Committee, we went through every option: from the Scottish model of eight weeks to my probing amendment proposal of four weeks. As I recall, the Government at that stage said the figure would be between the four weeks we requested and the eight weeks that apply in Scotland.

There is a lot of money at stake here for tenants. Having heard from the perspective of landlords, I would like to speak on behalf of tenants. For a large number of poorer people, a change from five to six weeks could make finding that level of deposit a strain. Anything that can be done to minimise that strain is a good thing. The figure was described as being “up to” six weeks, but the fact that it is now five weeks will be of benefit to a large number of tenants. Because it covers the difficulty that, in some months, four weeks may not be a month and many people operate tenancy agreements on a monthly not weekly basis, it is legitimate for the Government to propose that we go to five weeks. I want to express our support for the Government’s decision.

[The Earl of Lytton]

My Lords, I beg to differ slightly from the conclusions of the noble Lord, Lord Shipley, although I well understand that this involves a cash-flow issue for tenants. I pay tribute to the noble Baroness, Lady Gardner, for bringing us back to this set of amendments. The Minister himself defended the Government’s long-standing line that a six-week deposit was fair. However, as the noble Lord, Lord Flight, said, we seem to have moved away from that without apparent pause for breath.

I declare a non-interest here, as I do not charge deposits for tenants and have not done for a number of years due to special personal circumstances. The industry standard has been six weeks for a considerable time. In my part of Sussex, six weeks’ rent represents a figure between £1,200 and £1,800 in general terms. That does not go a long way if, in addition to non-payment of rent—bear in mind that defaults tend to have many heads—the tenant also leaves the property in a damaged condition, including damage to carpeting, kitchen units and electrical wiring.

Given that situation, can the Minister explain why it is now five weeks? If you strip out non-payment of the last month’s rent, under this proposal you are left with a single week’s rent to cover any other form of loss. Does that represent a fair balance? I am not sure that it does.

Homes (Fitness for Human Habitation) Bill

Lord Shipley Excerpts

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

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association. This has been a helpful debate. I noted very carefully the comments of the noble Baroness, Lady Gardner of Parkes, and no doubt the Minister will respond to them. The problem is that the English Housing Survey, which was two years ago, found that one-fifth of the homes in this country fail to meet the decent homes standard, which I regard as very serious. As we know, category 1 hazards are growing and enforcement activities by local authorities are falling.

There is a very serious problem here, and I am delighted that the Bill has cross-party support and, crucially, very strong support from the Government. We have heard the list of all the organisations that support it externally, and it is a tribute to the mover of the Bill in the House of Commons, Karen Buck MP, and to the noble Lord, Lord Best, in this House that it has attracted such a degree of unanimity. That is a rare event in Parliament and a clear demonstration that this is a problem that needs a solution. We on these Benches, as noble Lords have heard, commend the Bill.

A few years ago I had the privilege of leading Newcastle City Council and one of my aims was to ensure that the decent homes standard was reached in the 30,000 or so homes for which the council had responsibility. It was vital that we achieved that and we did. However, I also recall at the time not understanding why a tenant in the private rented sector could ask the council to take enforcement action against their landlord but a tenant of the council had no right to seek enforcement by one department of the council against another. Crucially, this Bill puts that omission right.

My noble friend Lord Tope reminded us about electrical safety issues, and I look forward to hearing the Minister’s response to the specific points that he raised. I will just add that we should always remember that the Grenfell fire began through an electrical fault, so the questions asked by my noble friend Lady Grender about the problems raised by Grenfell residents and the points raised by my noble friend Lord Tope about the need for better electrical safety checks are very pertinent. To be specific, can the Minister tell us, first, whether the social rented sector will have the same statutory application that is planned for the private rented sector and, secondly, when the parliamentary time is likely to be secured to pass the legislation that the Government have promised? In particular, I would like to know whether the Government will prevent a landlord renting a property where there is no record of an electrical safety check. This matters greatly.

I do not seek to repeat all that has been said in this debate, which has been compelling, but I want to raise two or three other issues that have not been covered so far. One relates to how tenants can represent themselves in court. The Parliamentary Under-Secretary at the Ministry of Housing, Communities and Local Government has said that guidance will be produced on how tenants can represent themselves in court—but, given the cuts in legal aid, a great deal of thought needs to be given to how this will work.

Reference has been made to legal aid. It would help enormously if it could be restored for cases involving the disrepair and unfitness of properties, but I also wonder whether the Government might look carefully at expanding systems of advocacy. The councils for voluntary service, certainly in my area, support advocacy systems, and I would like to think that systems might be made available to simplify the process for tenants. They need to be briefed properly on their rights as tenants but they also need to have the confidence to take forward any problems they have. Therefore, the way in which tenants represent themselves will become an increasingly important issue.

There seems to be a problem with security of tenure in that, if a tenant makes a complaint, action must have been required by the local authority. It must have inspected the premises and served a notice on the landlord to protect the tenant’s security of tenure. I hope that the Government will look very carefully at how they can ensure that, if the local authority is not involved in the process, a tenant is protected.

In conclusion, let us re-emphasise that we are dealing with a small minority of landlords. As the Minister in the other place, Heather Wheeler, said, with this Bill the Government plan to disrupt their business model. The Bill provides a critical opportunity to achieve better enforcement and higher standards. It enables tenants to be empowered to take action directly, bypassing the local authority if they wish to, and leaving local authorities better able to concentrate on the worst cases. It is extraordinary that tenants today do not have an automatic right to live in a home fit for human habitation. With this Bill, they will have that right.

Housing: Shared Ownership

Lord Shipley Excerpts

Tuesday 6th November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

Both are important parts of the buying programme. We have been encouraging Help to Buy; the noble Lord will be aware that it has been extended for two years. We are very keen on shared ownership. As I said, a consultation on social housing has just ended. We seek to extend this more to private housing and are therefore asking for proposals. That consultation is open until 1 February 2019.

[Lord Shipley (LD)]

My Lords, does the Minister agree that the main reason why shared ownership is so important is the high price of houses? He referred to the announcement in the Budget. Will he explain further why Help to Buy, which has increased house prices and builders’ profits, has been extended in the Budget to 2023?

[Lord Bourne of Aberystwyth]

My Lords, we value shared ownership very much. That is why we are looking at it in the private context as well as the social one, where it was focused previously. As I have indicated, Help to Buy has been extended for a further two years. It is very easy for those in this House, most, if not all, of whom will own their own homes, but we should recognise that this is an aspiration for a lot of people and that is exactly what the Government have done.

Tenant Fees Bill

Lord Shipley Excerpts

Monday 5th November 2018 Grand Committee

[Baroness Grender (LD)]

In moving Amendment 1, I shall speak also to Amendment 17. First, I thank the Minister and his officials for the discussions held so far and the time spent in advance of Committee. As noble Lords know, the Bill is very welcome and the sooner it is on the statute book the better, but there are a few wrinkles to iron out first. The most substantive change I want to explore will come when we look at default fees in a later group.

Amendment 1 would allow the Secretary of State to make regulations regarding holding deposits to make the process more transparent. This is an attempt to adopt the welcome changes introduced by the Government on Report in the Commons regarding transparency, or greater transparency, on default fees, although more about that—and how we do not need default fees—later. The model, however, is still useful and applies in this respect to holding deposits. There should be a transparency requirement for landlords and agents to set out in writing to a tenant why they have not returned a holding deposit. There is ongoing confusion and a lack of clarity around the circumstances in which landlords or agents may and may not return a holding deposit. The confusion was highlighted at Third Reading in the House of Commons and Members on the government side called for greater clarity at that point.

We would like to see something that explains how landlords and agents will treat a holding deposit and, if they are not returning it, their reasons for this, including any information they believe to have been false or misleading. This will make it possible for tenants to challenge if their holding deposit is withheld unfairly. Equally, understanding exactly why a holding deposit has been withheld should help to prevent tenants applying for properties and repeatedly losing numerous holding deposits for the same reason.

The Minister is already aware of the excellent work done in this area by the noble Lord, Lord Bird, on creditworthiness, but until that change comes into force—or is adopted by the market, as I believe it will be—people with thin files on their financial viability and little evidence to offer of regular payment of rent or council tax are not included and become the most vulnerable to the less scrupulous agents or landlords in terms of holding deposits.

Generation Rent has recently spoken to four privately renting friends who each put down a £180 holding deposit on a property in Bristol with the letting agent Be Streets Ahead. During the week that the holding deposit was down, one of the tenants found that he had a brain tumour that had grown in size and had to move back to his family for hospital treatment. The remaining three tenants were unable to find another sharer to pay the deposit and rent with just a couple of days’ notice and had to withdraw from the tenancy. The letting agent has ignored repeated requests for a refund of the holding deposit on these health grounds. Such health grounds could be included in any secondary legislation, providing grounds for tenants to walk away from the tenancy without losing a holding deposit.

What I have just described is a clear case for regulating the transparency around holding deposits. If anything, this will get worse before the Bill is enacted. Generation Rent believes that letting agencies are worrying about future admin fees and being—shall we say?—more assertive in their use of current rules than previously to make up for any future losses they anticipate. When I met the Minister before the summer, I expressed concerns about the danger of the delay on one of these issues. I wondered if there was any way of offering an incentive—a carrot, perhaps—for the industry to adopt these measures before it came through Parliament. I would still ask him, at this late stage, to consider that, given the scenario I have just described to him. Generation Rent is absolutely convinced, in this case, that the concern about admin fees being lost at a later stage has led to a slightly harsher judgment.

Amendment 17 is of a different nature. It simply poses the question, which I raised with the Minister in advance, as to why tenants are prohibited, or strongly discouraged, from paying multiple deposits by the cap at one week’s rent. I am aware—and have only just managed to read most of it over the weekend, for which many thanks in advance—that there is some guidance about what needs to happen. But we believe it is very unlikely that this guidance will be pursued, unless there is more transparency on what happens with holding deposits. I have read the relevant part of the guidance, but I still think we need something with a little more bite.

I support the other amendments in this group. I would like, in particular, to advance Amendments 1 and 17. While I understand, from meetings with officials, that this is on the issue of tenants from abroad, I am still unable to see why we cannot have more of a level playing field between the tenant putting down the holding deposit and the landlord or agency holding one deposit. I would still like to explore that, and that is why I am proposing these amendments. I beg to move.

[Lord Shipley (LD)]

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

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

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

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

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

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

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

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

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

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[Lord Kennedy of Southwark]

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

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

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

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

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

[Lord Shipley]

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

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

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

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

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

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[Lord Shipley]

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

[Lord Kennedy of Southwark]

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

--- Later in debate ---

[Lord Kennedy of Southwark]

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

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

[Lord Shipley]

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

[The Earl of Lytton]

My Lords, the first part of this amendment is, to put it bluntly, a no-brainer. It is perfectly right and proper that there should be clear and comprehensive information. If I have any reservations, one is a very small item in proposed new subsection (4)(b), which refers to a website. Given that a significant proportion of landlords are individuals with perhaps only one or two properties, they may not have a website. Perhaps a tweak of the wording might be needed there.

On proposed new subsection (6)(a) and (b), there is a duty on the landlord or prospective landlord to,

“have regard to the likely needs and characteristics, in respect of the provision of information, of persons to whom the information in question is to be provided”.

It goes on to refer to the provision of that information,

“otherwise than in the way in which it would normally be provided”.

I scratch my head a bit about this, because I was beginning to try to work out what I, as a landlord in the middle of Sussex, might need to acquaint people with. It seemed to me that one characteristic might be a physical disability and another might be linguistic—those two immediately came to mind. I would be interested if the noble Lord, Lord Kennedy, could actually spell out what he intends from those two provisions. It might be a bit of a hostage to fortune in either providing something unnecessary or having to try to second-guess what the particular characteristics and the method of delivery might need to be in any given instance. That said, in an area where people come from an Asian heritage background, I can see no objection to publishing it in languages other than English. That would be perfectly possible. However, to do it as a generality would be difficult. Therefore, putting this in guidance and providing for what the Secretary of State will do with it might be a hazardous operation.

--- Later in debate ---

[Lord Kennedy of Southwark]

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

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

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

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

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

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


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

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

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

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

[Lord Shipley]

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

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

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

--- Later in debate ---

Moved by

[Lord Shipley]

9: Clause 23, page 15, line 22, leave out subsection (2) and insert—
“(2A) If the lead enforcement authority is the Secretary of State, it is the duty of the lead enforcement authority to issue guidance, in the form of regulations made by statutory instrument, to enforcement authorities about the exercise of their functions under this Act.(2B) If subsection (2A) does not apply, it is the duty of the lead enforcement authority to draft guidance to enforcement authorities about the exercise of their functions under this Act, which the Secretary of State must lay before Parliament in the form of regulations made by statutory instrument.(2C) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”

[Lord Shipley]

My Lords, this grouping is extremely important. The intentions behind my Amendment 9 and the amendment in the name of the noble Lord, Lord Kennedy, are broadly similar. The Bill says, in the subsection that I seek to delete:

“It is the duty of the lead enforcement authority to issue guidance to enforcement authorities about the exercise of their functions under this Act”.


This is not sufficient. The problem is that if we have only guidance, the likely result will be that too many people will decide not to implement it. In Amendment 9, I seek to change “guidance” to,

“guidance, in the form of regulations made by statutory instrument”.

Proposed new subsection (2C) makes clear that there should be:

“A statutory instrument containing regulations under this section … subject to annulment in pursuance of a resolution of either House of Parliament”.


In other words, it gives power to Parliament to ensure that the regulations are strong enough. The noble Lord, Lord Deben, said a while ago that there are people who do not obey the law. He is right, but I would add that there are even more people who do not obey guidance. In this situation, we need to stiffen up our legislation. I fear that, if we end up passing the Bill, the Act will be difficult to implement because too many people will decide that this is enforced only by guidance that is not strong enough. I am very keen to hear from the Minister what the problem is in converting what is currently proposed guidance into formal regulation giving Parliament the power to agree, or not, with what is proposed. I look forward to hearing the Minister’s response to that question, which to me is very important. I beg to move.

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

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

--- Later in debate ---

[Lord Bourne of Aberystwyth]

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

[Lord Shipley]

My Lords, I have found what the Minister has said helpful but I do not feel that it is satisfactory. I am concerned by the report of the Delegated Powers and Regulatory Reform Committee. It has raised concerns about legislation which is to be supported only through guidance. Paragraph 55 of the report makes it very clear that the committee thinks that the guidance should be subject to parliamentary scrutiny—in this case with the negative procedure.

I hope that there might be an opportunity for us to talk in a little more detail on this issue. My fear is that this Parliament will pass legislation which is not implemented fully because it is not strong enough to be enforced on the ground. I do not think that guidance on its own is sufficient and I would like there to be much firmer regulation. However, I will read Hansard very carefully tomorrow and will possibly hope to meet the Minister before Report to see whether there is any way in which we can build a framework that is stronger than simply guidance. I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

--- Later in debate ---

[Baroness Barran (Con)]

My Lords, this amendment builds on the points raised by my noble friend Lady Jenkin in her speech at Second Reading relating to home share schemes. I am aware that in his summing up of that debate, my noble friend the Minister noted that this is an issue he is keen to resolve. I hope that this amendment will go some way to achieving that.

Clause 25 sets out the meaning of the term “letting agent”. However, as currently drafted the Bill is likely to define home share organisations as letting agencies and to ban them from charging young people who currently pay a contribution towards those organisations’ costs. Although home share is relatively small in this country it helps several hundred older and younger people. It is an approach that I believe has great potential. Indeed, before I joined your Lordships’ House, as the chief executive of SafeLives we developed a partnership with Homeshare, looking to use the scheme to support the victims and the perpetrators of domestic abuse.

My amendment seeks to ensure that home share schemes are explicitly excluded from the definition as it stands. As drafted, it seeks to capture the essence of home share arrangements and to distinguish them from those of commercial letting agents. I have tried to put in the technical aspects of the arrangement; namely, the nature of the instructions from the landlord, the absence of any rent or occupation charge from either the tenant or the home share organisation and the potential contribution by the tenant towards utility costs, as well as, crucially, the purpose of the scheme. The purpose must be quite clear: it is to promote the landlord’s well-being. The amendment also clarifies the meaning of the term “principal home” in line with Section 1 of the Housing Act 1988; “utility costs” which could also potentially include additional council tax; and “well-being” in line with Section 1(2) of the Care Act 2014.

The amendment is needed to ensure that home share can continue to grow in the UK. It helps hundreds of isolated and lonely older people. I have spoken to a number of family members whose parents are supported through home share schemes and they could not praise them enough for the support their parents receive. It also has the potential to help thousands in the future. This is clearly timely given the epidemic of loneliness that we hear so much about facing not only older people. There is increasing evidence that it is an issue for younger people as well. Indeed, without addressing the definition of a letting agent to explicitly exclude home share schemes, their sustainability will be put at risk.

In her speech, my noble friend Lady Jenkin articulated powerfully the scheme’s strengths, highlighting the human benefits to both the landlord and the home sharer, the contribution to the duties of the local authority under the Care Act 2014 and, importantly, the potential for these schemes to be financially sustainable. The quality of the relationship between the two individuals in the home share scheme is crucial to its success. It is specifically for people whose primary motivation is not commercial but who each want to contribute to the other’s life. It is vital to frame an exemption for genuine home share agencies from the prohibition on charging tenants, without creating a loophole for commercial letting agents.

To reiterate, the amendment seeks to exempt from the fees prohibition house-sharing arrangements that meet four tests. The first test is that they have been arranged by an organisation that recruits, vets, supports and, where appropriate, trains people for the purposes of providing support in a shared home environment. The second test is that the individual with the licence to occupy pays no rent. The third test is that they contribute to an agreed level of companionship, care or support. The fourth test is that it happens in the home of an individual who requires that support. To be absolutely clear, in this arrangement the homeowner receives no rent or any payment from the agency.

As I mentioned at the beginning, home share helps hundreds of young and old people in the UK, but if we look at home share as it works in Europe, we see that it has the potential to help thousands more. I hope that this amendment is a step towards making sure that that becomes reality. With that, I beg to move.

[Lord Shipley]

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

[Lord Kennedy of Southwark]

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

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

Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018

Lord Shipley Excerpts

Tuesday 30th October 2018 Grand Committee

[Lord Beecham (Lab)]

My Lords, I refer to my interest as an elected councillor in Newcastle, and one who will be seeking re-election next May. Next Sunday will be the 14th anniversary of the referendum on the proposal at that time to create an elected regional authority for the north-east. Forty-eight per cent of the electorate cast their votes and, I am sorry to say, resoundingly rejected the idea by 77% to 23%. Disappointing as it was to those of us who saw in the concept a real opportunity to create a body capable of promoting the interests of the region as a whole, the result was not a great surprise. Local rivalries have never been confined to the football pitch.

In the mid-1960s, at a time when local radio was being promoted by the BBC, the then leader of Gateshead Council declared that nobody in Gateshead could possibly be interested in anything broadcast from Newcastle. In the mid-1990s I wrote a paper advocating the establishment of a north of England councils’ association, incorporating the counties of Northumberland, Durham, Cumbria and Tyne and Wear—the latter of which has since vanished—and their constituent city and district councils. Knowing that if such a proposition was seen to have emanated from Newcastle its prospects of success would have been negligible, I passed it to the then leader of Northumberland County Council, who circulated it without attributing its source. The association was accordingly established with Hugh Little of Cumbria as its first chairman. When Cumbria departed, it became the North East Assembly and when Tees Valley in turn departed, it became the Association of North East Councils.

It is unfortunate that the four councils south of the Tyne have so far declined to join the new combined authority—I should add that part of Northumberland is south of the river but will be within the boundaries of the new authority. I can understand some of their concerns. The new structure will be led by an elected mayor, a requirement imposed by the Government on all new combined authorities. Newcastle itself voted 62% to 38% against having an elected mayor when it was compelled to hold a referendum—for just the city itself—in 2012. This time, people are being denied a voice completely on that issue.

Moreover, the much-vaunted investment by the Government of £600 million over 30 years, which is all of £20 million a year shared between three councils, is frankly pitiful. Newcastle alone is facing cumulative cuts which, by next year, will amount to £280 million annually, and there is no suggestion from the Government that there will be any benefits flowing our way under any changes in the local government finance system. The same would apply to the neighbouring authorities.

There are, however, some promised changes which are welcome. These include local control of the budget for adult education, with enhanced powers to promote development, and a joint committee to manage public transport. Can the Minister say whether the latter will include a role in relation to rail transport, including the east coast line? Can he give any assurances about the future of the region’s airports? If, as has from time to time been suggested, the Scottish Government abolishes air passenger duty, will the region’s airports, and in particular Newcastle Airport, be able to follow suit?

On the housing front, I understand that the current chairman of Homes England is to chair a housing land board. Can the Minister explain how this will work in relation to the role of the councils in the provision of social housing? Will it be possible for the councils to provide more social housing for rent? Who will determine the size and nature of local housing provision and the provision of the necessary services for residents?

There are ambitious claims for job creation and new housing, with apparently 9,500 people to be helped into employment and 10,000 houses to be built. Can the Minister indicate over what period these goals are expected to be achieved? How many of the 10,000 homes will be provided respectively by local authorities, social housing providers and for sale?

Transport is an important issue for the whole region. It is to be hoped that both the new combined authority and the four councils which will remain from the existing authority will continue to work together through the joint transport committee.

The Metro, which serves Newcastle, North and South Tyneside, Gateshead and Sunderland, is a critical service covering all the authorities in the currently established set-up. There is clearly a potential to expand the service, not least to the west end of Newcastle, one of whose wards I represent. Will the department invest in this important area? It is a modest task in the light of the vast amounts being spent on Crossrail and HS2.

Will the Minister’s department put pressure on the Department for Transport to tackle the dreadful performance of the laughably misnamed TransPennine Express in the service between the north-east and the north-west, a more important project in the eyes of many of us than HS2?

The region is one of 10 bidding for funding from the £1.7 billion transforming cities fund. Six mayoral authorities have already shared £840 million. Given the problems facing the north-east, which are threatening to worsen after Brexit, it is vital that we secure investment of this kind. I understand we are looking for funding in the range of £50 million to £100 million. I hope the Minister will support our bid from the region.

There are some issues which cross the boundaries between the new combined authority and the four south of Tyne authorities. Two further education colleges, on either end, in effect, of the Tyne tunnel, are now combined. One will be in each of the two combined authorities hereafter and I am not clear what the implications of that will be. I do not know whether the noble Lord is in a position today to respond to that. He may need to consult the Department for Education. However, there will be services which cross the river, as it were, which will not apparently be affected directly by the new authority structure and there will have to be arrangements to deal with that.

It is similar in the National Health Service. We have, for example, a Newcastle and Gateshead clinical commissioning group which also crosses the boundary of what will be the two combined authorities. Is it envisaged that any change will be made in the NHS area, given the changing boundaries within local government and the important connection between local authorities’ social care provision and the NHS?

The justice system is another area which merits consideration, especially the probation service, which hopefully is to be restored as a single service in the light of the systemic failings of the split between probation and Chris Grayling’s community rehabilitation companies. Will the combined authority have oversight of both the custodial and probation services in its area and, indeed, of the court system, where court closures are having a serious impact on the working of the courts? It may well be that at least oversight of these areas could well be placed within the province of the new combined authority.

Many of us are hoping that, whatever doubts we may have about aspects of the changes in bodies in the order, they will help the region to address the serious problems it faces, constantly exemplified for me by the presence in the council ward that I have represented for the past 51 years of the busiest food bank in the country. I look forward to the evolution of a North East Combined Authority with the determination and resources to help transform the life chances of our citizens. I endorse the conclusion of the Secondary Legislation Scrutiny Committee’s report:

“It will be important that all involved keep under review the success of cooperation between the new mayoral Combined Authority and the other councils, against the objective identified by DCLG in 2014 of promoting more effectively economic growth and prosperity for the area concerned; and that the Government should be ready to adapt arrangements in the light of experience”.


We are in a period of change. There is real potential for improvements to be made, but it will not be enough simply to rely on that reorganisation, not least in relation to the necessary funding to address the very serious economic and social problems that the area faces. This is a step forward. There is still a long way to go to transform the life chances of people living in the north-east, and in particular in the area covered by these changes.

[Lord Shipley (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Beecham, in a debate. He reminded us of the history of devolution and of some of the current problems in public investment and governance across the wider north-east. I agree with him that this proposal is a step forward. He used the word “unfortunate” to describe the fact that the four councils south of the Tyne have refused to take part. I think I might have used a stronger word, but for the moment “unfortunate” will do. Indeed the Secondary Legislation Scrutiny Committee said:

“Progress towards establishing a mayoral Combined Authority in this part of the North East has not been straightforward”.


Let us all agree with that. I have been very critical of this and of the failure of local councils across the wider combined authority area to speak with one voice. As the Secondary Legislation Scrutiny Committee reminded us, key business stakeholders appear to view the latest proposal as a second-best option. It is the only option on the table. It is a second-best option, but the final sentence in the Secondary Legislation Scrutiny Committee’s comment is,

“the Government should be ready to adapt arrangements in the light of experience”.

I very much hope that the Minister will be willing to confirm that that is exactly what the Government plan to do.

I support this proposal because I believe that the north of the Tyne should not be left behind because of the approach taken south of the Tyne. Indeed, there are powerful combined authorities elsewhere across the north of England that have mayors. They give focus to strategic planning and to the delivery of growth, jobs, higher education and skills standards. For that reason this proposal should be supported. It is a very great pity that the area to the south of the River Tyne decided not to take part.

The Minister referred to the transport arrangements. It is true that the current structure will remain in place. There will be a statutory joint authority to bring all the councils and passenger transport executives together on key issues. The seven local authorities are said to be confident that these arrangements will work. Well, they need to work. There will have to be an agreed clarity of purpose for the whole subregion, because this could come unstuck when a critical decision has to be made.

Affordable Housing

Lord Shipley Excerpts

Thursday 25th October 2018 Lords Chamber

Moved by

[Lord Shipley]

That this House takes note of the case for building more affordable housing.

[Lord Shipley (LD)]

My Lords, I declare an interest in that I am a vice-president of the Local Government Association. I am pleased that so many colleagues have put their names down to speak in this debate, and I thank them. I thank too all those organisations that have sent briefings to us for their contribution to this debate; it is appreciated.

This debate is an opportunity for us to examine government policy on affordable housing. The Motion talks about the case for building more affordable housing—that is, more housing that is officially defined as affordable, but also housing that is more affordable for individuals, which increasingly is not the case. The general public think of affordability as related to income rather than market rates.

The term “affordable” has existed for some years. It was created by the then Deputy Prime Minister—now the noble Lord, Lord Prescott—in 2006. It was defined as,

“subsidised housing that meets the needs of those who cannot afford secure decent housing on the open market either to rent or buy”.

That seems a thoroughly reasonable definition. The official definition of “affordable rent” is that it is set at a maximum of 80% of local market rent. That definition was first introduced by the coalition Government in 2010. The problem is that that concept of affordability is out of date because it is no longer affordable in high-cost parts of the country. Indeed, the Joseph Rowntree Foundation estimates that today’s policy on affordable rents will see 1.3 million more people in poverty in 2040, placing huge additional pressures on the housing benefit bill.

In the words of Shelter, we need,

“a new generation of homes for social rent”.

Just 5,380 were built in 2016-17. Shelter estimates that we need at least 90,000 a year to meet the backlog. We have a huge shortage of decent homes and a huge backlog in demand for them. The Office for National Statistics may have downgraded its household growth projections from 210,000 per year to 159,000, but that remains a large number and may anyway omit households that would have formed but could not afford to.

The lack of affordable homes has led to the current crisis in homelessness. I am grateful to Shelter for its latest figures, which show that there are 268,000 homeless people in this country, including 123,000 children; there are 80,000 households in temporary accommodation, up by nearly half in the last five years; and there are 1.2 million households on council house waiting lists. Today we learn from the Huffington Post that 50,000 homeless households have had to move out of their communities in the last five years. I find that a national disgrace.

The Government’s White Paper, 18 months ago now in February 2017, Fixing Our Broken Housing Market, said:

“The starting point is to build more homes. This will slow the rise in housing costs so that more ordinary working families can afford to buy a home and it will also bring the cost of renting down”.


However, I submit that to bring down the cost of renting requires government support.

The evidence of unaffordable prices and rents is stark. Buying a home costs eight times annual workplace earnings; 20 years ago that figure was three and a half. Home ownership has gone down from 71% in 2003 to 63% in 2016-17, and it is just 37% today in the 25 to 34 age range. Private rents have risen steeply. The English Housing Survey in 2016-17 showed that private renters are spending 41% of their income on housing, as opposed to 31% for social renters and 19% for owner-occupiers.

There is a major affordability crisis in the private rented sector. Take Bristol: on Sunday the Observer reported that 200 people are sleeping in their vehicles in Bristol because the cost of private renting is unaffordable, given the low wages that they earn. According to the Valuation Office Agency, rents have risen 33% in Bristol in the last four years.

The Prime Minister has taken a keen personal interest in housing. She has talked in terms of a national housing crisis. She is right, but we need a coherent strategic plan to deal with the housing crisis, which still seems to be lacking. The Government’s emphasis has been on promoting owner-occupation. Last year, a further £10 billion was announced for Help to Buy but only an additional £2 billion for affordable housing, which meant only an extra 5,000 affordable homes a year. The Chartered Institute of Housing reminded us last year that only £8 billion of the £51 billion allocated for housing to 2021 will fund affordable homes. At the same time, the Office for Budget Responsibility has recently said Help to Buy pushes up house prices.

The balance between support for rent and support for owner-occupation is wrong, and perhaps there is growing recognition of that. Earlier this month, it was finally admitted that the cap on councils borrowing against their assets to build houses should be lifted. Might the Minister tell us why that decision took so long, when it could lead to around 10,000 extra affordable homes a year?

However, this speech is not all about criticism. I want to praise the Government for something: I praise them for not implementing the worst elements of the Housing and Planning Act, such as the forced sell-off of high-value council homes. What is the policy on starter homes, since they are defined as affordable? And is the forced sale of housing association homes now well and truly in the long grass? I also look forward to the impact of some of the reforms that the Government have introduced: the role of Homes England, the changes to the National Planning Policy Framework and, hopefully, some announcements in the Budget as a consequence of the Letwin review on the build-out rate.

In August, we had the social housing Green Paper, which was delayed almost a year. It is unclear why it took so long to write when in the last five years, according to the Chartered Institute of Housing, 150,000 social homes have been lost. I wonder whether the Government have taken account of the impact on the housing benefit bill of the increasing dominance of the private rented sector. The Joseph Rowntree Foundation has stated that,

“investing in 80,000 affordable homes per annum could reduce the housing benefit bill by £5.6 billion per annum by 2040”.

That demonstrates that government policies must be for the long term.

But so much effort is having to go into dealing with the symptoms of the lack of sufficient homes: high house prices; high rents; rogue landlords; the misuse of viability assessments for affordable homes, which I hope is now at an end; and high housing benefit costs caused by inflating rents. As we know, private sector conditions can be very poor with insecure tenure. Almost 750,000 tenants live in unsafe or dirty homes because rogue landlords ignore the rules. Thankfully, the Government want to make progress on these issues, but they are taking time and there is a need for resources both nationally and locally. The only long-term solution to these problems is to increase the supply of new homes at prices that are genuinely affordable to those on average incomes.

Underpinning public policy should be agreed values that we are aspiring to achieve. I submit that only when those values have been achieved will we be able to say that the housing crisis is over. We need to agree the values that should underpin our approach to housing policy. These are that no one should be forced to spend more than a third of their income on housing costs. Those in work on the living wage should be able to afford to live reasonably close to where they work. No one should be forced to sleep rough or depend on temporary accommodation when they cannot find a permanent place to call home. No child should be forced to move school and away from friends because a landlord serves notice to quit because that landlord can command a higher rent if the existing tenants leave. Space standards for new homes should be sufficiently large to enable families to live comfortably in them.

I have concluded that the current housing crisis represents the biggest failure of public policy of the past 20 years. Over that time, we have built about 2 million too few homes, resulting in high prices, high rents, many fewer social homes and serious difficulties for younger people wanting to buy their own home. The Government need to achieve a threshold of 35% of affordable housing in all private developments, with a higher 50% threshold on all public land. We need to promote high-quality modular building, with its potential cost savings and faster building timescales.

Crucially, we need to capture an uplift in land values for public benefit. I note the work of the Centre for Progressive Capitalism, which states that currently 75% goes to the landowner and 25% to community benefits. It should be reversed. That requires reform to the Land Compensation Act 1961.

I also believe that the time has come to suspend the right to buy until the problem of the inadequate provision of social housing is put right. Suspending the right to buy has occurred in Scotland and will be introduced in Wales next January. Above all, we need to achieve the building of 300,000 homes a year.

If there is one immediate thing that we could achieve from this debate, it would be that the Government agreed to stop using the term “affordable” when, for so many people, homes described as affordable are out of their reach. I beg to move.

[Lord Young of Cookham (Con)]

My Lords, with the constraints of a two-hour debate, given the number of noble Lords who wish to speak and the published time limits, the mathematics reveal very little margin for error. I urge noble Lords to stick to the limit of four minutes.

--- Later in debate ---

[Lord Shipley]

I thank the Minister very much for his full reply, and thank all those noble Lords who have taken part in the debate. It has been extremely instructive and helpful, and I hope that when we read Hansard, there will be much in it to reflect on; the Government will no doubt reflect on it too. We have the Budget next Monday of course, and we will listen carefully to it. I understand there will then be a debate on it in your Lordships’ House on 13 November. I certainly hope that we will be in a position to explore some of these issues further on that occasion.

Motion agreed.

Property Guardians

Lord Shipley Excerpts

Monday 15th October 2018 Lords Chamber

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association. I welcome this debate and thank the noble Baroness, Lady Jones of Moulsecoomb, for bringing this important issue before the House.

During the passage of the then Housing and Planning Bill in April 2016, the noble Lord, Lord Beecham, moved an amendment on this matter. He expressed a number of concerns which I thought were justified, and we on these Benches were strongly supportive of them. Despite the Government winning that vote, I think it is time for them to look again at the issues underlying the guardianship schemes. While there are only around 5,000 to 7,000 property guardians in the UK, the number is likely to rise significantly. In the Netherlands there are some 50,000 property guardians, and we have a much higher population here so a rise seems likely. Yet in the debate on the Bill the Government refused to acknowledge that they had a role, as the noble Baroness, Lady Jones, has mentioned. The noble Baroness the Leader of the House said on 11 April 2016:

“We as a Government do not endorse these schemes and do not have any plans to introduce new regulation in this area as we believe that doing so could be regarded as tacitly endorsing the use of property guardianship schemes as a legitimate housing option”.—[Official Report, 11/4/16; col. 111.]


The Government’s subsequent factsheet for current and potential property guardians confirms this in paragraph 3, which says:

“The government does not endorse or encourage the use of property guardianship schemes as a form of housing tenure”.


I have come to the conclusion that that is insufficient in the circumstances. It may be true that a number of protections exist in law already for licensees acting as property guardians but they do not cover everything, and it is surely the role of the Government to regulate when regulation is needed. In the Netherlands the property guardianship sector has created an independent property regulator to set standards and monitor compliance. It also has a complaints board. Even though membership is not mandatory, it means that standards are clearly defined. I understand that in this country there is to be a property guardian providers association, and I welcome the fact that seven providers covering 80% of the sector are involved, although that of course raises questions about the other 20%. It will be interesting to see how its powers and effectiveness compare with the Netherlands, but I nevertheless welcome the efforts being made by the sector itself.

I acknowledge the work of the London Assembly and the 11 recommendations in its report published earlier this year. For the time being this is primarily a London issue, but there are signs of growth across the country so what is done in terms of property guardians in London will be relevant elsewhere. There would be merit in taking the London Assembly’s 11 recommendations and the mayor’s response and using it as the basis for consultation. Issues needing clarification concern redress schemes, deposit schemes, the role of the planning system, financial issues around business rates and council tax and the absence of property guardianship as a form of tenure from any existing legislation.

In principle I agree with the noble Baroness, Lady Jones, that, properly run, property guardianship can be beneficial to both landlord and licensee. It gets empty property into use and gets it looked after, and for many people the system works well. For the landlord, they have someone helping to protect the property. For the licensee, it is usually much cheaper than a conventional tenancy; it means that they can save more for a deposit to purchase a home; it means they can leave at a month’s notice; in most cases they have the benefit of being with other people; and it can be more conveniently located for them in terms of work. It gives opportunities too for social enterprise and, through social enterprise, for volunteering. I noticed that one of the companies involved, Dot Dot Dot, has a requirement for 16 hours of volunteering a month. This approach is to be commended.

The problem is that there is also a downside. As we have heard, it is usually not residential accommodation that is used, and some licensees can be exploited simply because they urgently need somewhere to live that they can afford in the absence of sufficient social housing. As a consequence they can end up in poor accommodation, and there have been numerous reports of poor plumbing, poor lighting, dirty conditions, a lack of adequate fire protection—that is, conditions that do not meet the standards required for residential accommodation. Indeed, in their factsheet the Government seem to admit this. Paragraph 8 says that the properties may be,

“in poor, unsafe and unclean condition with poor physical security and limited access to facilities”.

The key question is whether the properties are meeting regulatory standards that would apply to residential accommodation. I am afraid I do not think it is enough simply to advise licensees that they should approach their local housing authority or citizens advice bureau. It takes a lot of time, knowledge and effort to complain in that way. Clearer, publicly understood regulation would be so much better.

There is a remaining issue that I hope the Minister may be able to comment on: the implications of the Bristol judgment, where a property guardian was confirmed in his view that he was actually an assured shorthold tenant, not a licensee. The reaction to that judgment seems to be that you simply have to reword the licence to turn a tenancy into a licence, but I would appreciate the Government’s view on that because it seems to me to be a very important judgment. Indeed, the question sums up the need for clarification on the rights of property guardians as a whole.

The noble Baroness, Lady Jones, said she wants this issue to be on the Government’s radar. She also said there was a massive opportunity to use empty properties. I concur with both views: there is a massive opportunity here but, because of that and because many more properties might become used under licensee terms as property guardianship, there is a need for the Government to ensure not just that the issue is on their radar but that they have regulated when regulation is needed.

Tenant Fees Bill

Lord Shipley Excerpts

2nd reading (Hansard): House of Lords
Wednesday 10th October 2018 Lords Chamber

[Lord Shipley (LD)]

My Lords, this has been a helpful Second Reading debate. It has identified a number of issues that we will need to explore further in Committee. Indeed, the noble Baroness, Lady McDonagh, despite the limitations of time, has raised a number of issues that would be worthy of spending a little time on in Committee if that were felt by her to be appropriate. I remind the House that I am a vice-president of the Local Government Association.

I refer first to the contribution by the noble Baroness, Lady Jenkin of Kennington, which I found very helpful. One good thing about a Second Reading debate is that it enables us to identify things that may be a problem or an unintended consequence. She talked about the home-share model. I want to raise with the Minister another one that we need to be clearer about. It relates to local authority incentive payments to landlords which prevent homelessness. On the one hand, a landlord may claim that they do not require a payment; on the other hand, any agreement would reflect the fact that a payment was being made. It would appear, under the Bill as it is currently drafted, that that could well be illegal. When the Minister responds about the home-share model, I hope that he might be in a position to respond about local authority incentive payments to landlords which prevent homelessness.

I want to welcome the Bill and to pay tribute to the work of my noble friend Lady Grender who has campaigned for some time on this matter—it is good to see us in the position that we are—and to pay tribute to my noble friend Lord Palmer of Childs Hill and to the noble Baroness, Lady Hayter, for their work on the client money protection scheme. These are all part of a trend to remove rogue landlords and letting agents from the industry. There is no doubt that the Bill will bring transparency, as the Minister said, to the sector; it will provide protections for tenants and it will prevent double charging. It is good to see the proposed ban on letting fees and most other up-front fees paid by tenants, in particular the proposed cap on security deposits, the new duty on trading standards authorities, and the new penalties on any landlord or letting agent who contravenes them. As my noble friend Lord Strasburger reminded us, “most agents do a decent job”, and, in the words of the noble Lord, Lord Best, “this Bill will end the ‘here today, gone tomorrow’ letting agencies”. I think we need to pause and repeat that we are dealing here with those who do not abide by the system properly. The vast majority of letting agents and landlords operate in a caring and ethical manner, and represent the reputable part of the lettings industry.

One of the problems that we are dealing with is the impact of 4.7 million households in the private rented sector. The noble Lord, Lord Best, referred to the enormous growth which requires the Government to legislate more and more to keep up with the problems which have arisen as a consequence of that growth. Many people in the private rented sector are having to move more often because of the nature of the tenancies they have currently, and when they do, they are having to pay more than they otherwise would if they had longer tenancies. Of course, as the Minister will know, one of the solutions to this problem is to build more social housing. I am absolutely convinced that the problems we now have in relation to the private rented sector are caused by not having enough social homes for rent. There will be other opportunities for us to debate that in the coming weeks.

The Government are to give £500,000 to assist with setting up costs. I want to concur publicly and absolutely with the Minister’s view that this should be self-financing. I think it does need to be. There are other areas, particularly in the treatment of rogue landlords, where local authorities can make themselves cost-neutral in terms of their investment. However, setting this up does require £500,000. It would be helpful if the Minister explained why this figure was selected; it does sound like quite a lot of money. On the other hand, there are an awful lot of local authorities in the country, all of whom will want some of it, I imagine. My suggestion is that there does perhaps need to be sub-regional training and sub-regional structures. The Government need to be very careful about how that money is allocated because I do not think that simply divvying it out to every council would work.

There is a general need for publicity. Presumably, money for that will come out of the £500,000. Perhaps it will, perhaps not, but I think that it will. If so, we need to be careful about ensuring that there is enough publicity for those who need to understand that the law has changed: landlords and letting agents on the one hand and tenants on the other. It needs to be made much clearer to people what their legal rights and responsibilities are. I am very pleased to hear about the new role of the noble Lord, Lord Best, which will be hugely helpful in this respect. There has been a debate about the cap and the figure of six weeks’ rent. That may be right; we will need to explore it in Committee. A five-week figure may be better. I take my noble friend Lord Strasburger’s point about the problem with a four-week figure in months with five weeks and we need to look carefully into that.

The issue of default fees is becoming more important. They must not permit agencies to bring in hidden extras that cannot be challenged. When people sign a lease, they need to be clear about what they are committing themselves to. My noble friend Lady Grender asked why such fees are needed at all, which we will need to explore in Committee. Equally, we have had several briefings on the Bill, but I was particularly taken by what was said by Citizens Advice:

“The default fee clause has the potential to fundamentally undermine the Government’s aim to end tenant fees and prevent unfair practices … The Government must significantly tighten this clause with a clearer definition of when a default fee is legitimate. Leaving this to non-statutory guidance risks inconsistent outcomes for renters”.


That is true. We need to be very careful about that danger.

Will this measure result in higher fees? The evidence I have read from Scotland suggests that it will not, but it may. I was taken by two comments: first, that rents are set by the market, as was said by the noble Lord, Lord Best. That is an important consideration. The second was the comment made by my noble friend Lady Grender that many tenants would prefer to pay monthly if they had to pay a higher sum overall. Again, I hope that we will explore that further in Committee.

I will make two final points. First, it would help enormously if the draft regulations, given their importance, were made available to us prior to Committee stage, which I understand may be on Monday 5 November. I hope that this will not be one of those Bills where the draft regulations appear at or around Third Reading, or occasionally not at all. Our deliberations will be detailed so it would be helpful to have them made available. Secondly, the Minister said something about electrical safety checks; I am trying to recall his words. He rightly identified that this is part of an overall package of improving conditions in the private rental sector. He said that the legislation for electrical safety checks would be forthcoming, the parliamentary timetable permitting. Can he tell the House what might prevent that timetable undertaking something substantial that really matters? Overall, the Bill is welcome and I commend it on our behalf.

Housing: Local Plans

Lord Shipley Excerpts

Thursday 13th September 2018 Lords Chamber

[Lord Shipley (LD)]

My Lords, I remind the House of my registered interests. Is the Minister aware of reports that approximately 160,000 homes could be built by bypassing local plans by 2020 as a result of the housing delivery test? Does the Minister recognise this figure? If it happens, what is the point of local plans?

[Lord Bourne of Aberystwyth]

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