Deregulation Bill

Baroness Hanham Excerpts

Wednesday 11th February 2015 Lords Chamber

[Baroness Gardner of Parkes]

I will be happy to clarify that. There seems to have been a slight muddle in that the last amendment I had on Clause 33 was meant to be degrouped, but instead only one was degrouped. I am therefore turning this into a slightly longer and wider field because I lost the opportunity to do that on the previous amendment, which was my original intention. I hope that your Lordships will understand that.

Everything is supposed to be perfect until you do it, then you find—well, I advise noble Lords to read it for themselves. It is from Monday 2 February, in the Evening Standard. There is another whole page on the other side about the woman behind the “unhotel revolution” and pseudo hotels—so it is quite a wide issue. It is interesting that the fraud teams are being brought in to look into the whole issue. I had a reply from the treasury officer when I asked him what of these lettings would be tax free. The answer was, “Nothing, except the right to sublet a room in your own house to a lodger for a sum of £4,000 and something—less than £5,000”. That would be the only free opportunity. It is very interesting that the Serious Fraud Office attended a meeting that we had in the House of Commons in January, partly on this issue but on property in general. There is such an opportunity for fraud that it will be very interesting to know who declares what, with no one able to check on anything at all as to who is in these places, with risks of terrorism and fraud or whatever else is going on. People tell me that they find it almost unbearable, the smell of drugs being smoked in the flat above them, because it becomes so intense to have 10 people in one room. Again, are there no restrictions on how many people can fit into one bedroom? I find it hard to believe that you can have 10 people—and this is in three different flats.

I could go on and on, but I do not intend to, because it is late and the House has had a very busy time, with more to follow. I hope that the Minister will be a bit more open about things, as I am very dissatisfied that Questions for a Written Answer have simply not been replied to. I beg to move.

[Baroness Hanham (Con)]

My Lords, with my noble friend Lord Tope, I have three amendments down on this matter. To start with, I point out to the House that this is a very small clause with a very large impact. It consists of six subsections, four of which require regulations. As my noble friend said, not only have we not seen any sight of these regulations but, apart from the Written Ministerial Statement that appeared on Monday, we have no clue what direction the Government take on this, other than that it is a complete liberalisation of the situation as it stands.

My noble friend Lady Gardner laid out in her usual elegant way some of problems with the legislation before us. We have a slightly different view on the emphasis to be placed on this, but we are all agreed—my noble friend Lord Tope, myself, my noble friend Lady Gardner and the local authorities—that this cannot just be allowed to rip. Local authorities have not paid any attention to people letting out their homes for short times. It has been illegal ever since the Greater London Council (General Powers) Act came in in the 1970s but, by and large, there has been a very sensible attitude taken about this—that if it is your home and you can get money in for a fortnight or so, it will not be a matter that a local authority will bother itself with. However, once it is acknowledged or admitted that the situation has been happening but that it is against the law and always has been, somebody does something about it.

London is different from everywhere else. Although the Written Ministerial Statement says in a rather patronising way that these measures, whatever they are going to be, will draw London into the 21st century, we should all recognise that London has actually been living in the 21st century since the 20th century—or halfway through it. We live with a great deal of problems, not only those which my noble friend described about people who come to live in a property for a short time and cause trouble. Another problem is that a lot of the housing now being built is investment property for rent and, unless there are some controls on who can let out accommodation on a holiday let, all hell will be let loose and there will be rentals all over London taking place in an entirely illegal way.

The laws have up to now been broken and there are now companies, some of which my noble friend mentioned, which, unwittingly or not, have enabled people to do that. But a business is building around all this, and there can no longer be any suggestion that this is just people having a one-off whim to go on holiday for a fortnight in New York or whatever and to earn a bit of money on the way. That is not the reality. The reality is that agencies are already set up to deal with people who want to let their houses short term. Some of them will be very good and some will already have measures in place to let houses in a way that means that they are properly managed, they are cleaned up afterwards, they are looked after and their tenants do not cause problems—and there is some security aspect about who those tenants are. However, let us not delude ourselves that that is what will happen. As the business builds, more and more businesses will be built around it. Unless there is some regulation as to what is and is not allowed, we can say goodbye to quite a lot of accommodation that we are pleased to describe as permanent accommodation at the moment.

My amendments do three things. One says that there must be at the very least a fine-touch registration system with the local authority. It can be done quite easily and uniformly across London, with a website—and I have spoken about the royal borough, to which my noble friend has already referred. It can be done securely on a website. What can be discussed subsequently is whether people have to register before they go away or whether they have to register annually and say that they may be going away and letting their property under those circumstances. It requires some indication as to how many days they will be able to do that for, and the Written Ministerial Statement suggests that it should be 90. I do not know about you, but I am jolly lucky to get 90 days’ holiday a year. It seems to be quite a lot—and I think that most families would find 90 days quite a lot to go away. There will have to be a balance between 30 days, which I think has been promoted, although it is very hard to know as we do not have any regulations before us, and the 90 days being proposed by the Government.

There must be some way in which the local authority knows that the property may be let by the permanent owner, and it must have some idea of how long they will be entitled to do that—and for a very good reason. If the local authority gets complaints about that property, it is very helpful for it to know, for enforcement action to be taken, that it is being let by the owner. There are plenty of examples. My noble friend could give spiels of examples of where a property has been abused and people’s lives have been made a misery by lettings such as this and longer term. That would bring the planning authority back into the situation. At the moment, it has been completely chucked out. The provision in the Greater London Council (General Powers) Act goes and is amended with a few regulations that we do not know about and have not seen.

There is what I hope is an unwitting tendency at the moment to keep downgrading London. A later clause in the Bill on waste amends the London Local Authorities Act and this clause amends the Greater London Council (General Powers) Act. London is always going to be different and will always have different pressures and requirements. If every time local authority legislation goes through some of the measures get thrown out, that is not at all helpful or supportive. I think we would all hope that this clause would go away—at least until we have had an opportunity to sort out what the regulations are going to be, and how much regulation, even if it is light-touch regulation, we can put back in. My amendments try to achieve that. It is essential that the Government take note of the concern on this subject and do not try to pretend that London is some doolally maiden of two centuries ago with no idea of how anything works. They must recognise that London is an exceptional place, with great pressure on it from all sorts of sources, such as development, investment and the general movement of people in and out of the city.

I believe that our amendments are proportionate. I apologise to my noble friend the Minister for the fact that it is me—as well as my noble friend Lady Gardner—who is leading the attack from behind him, but I beg the Government to go back and take note of the concerns of London Councils. I should have declared my position as a co-vice-president of London Councils. It represents every local authority in London and it is absolutely against all these provisions.

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[Lord Leigh of Hurley (Con)]

I thank the noble Lord. I was planning to speak to Amendment 48, so my comments are directed to that group of amendments rather than to the specifics of Amendment 47. I declare my interests both as an investor in residential property and as president—

[Baroness Hanham]

I hesitate ever to come in on a point of principle but my noble friend Lady Gardner said that she wanted Amendments 47 and 48 to be grouped, and that is what we have done. Have we spoken to Amendment 47 separately? Is there any way in which we can get this settled? I have spoken to the group commencing with Amendment 48, not Amendment 47. I was waiting for the noble Lord, Lord McKenzie, to come in and speak to his amendments. It seems to me that my noble friends Lord Tope and Lord Lytton have also spoken to the group starting with Amendment 48. I am sure that there must be a quick way of getting this sorted so that we are all speaking to the group commencing with Amendment 48.

[Lord Ahmad of Wimbledon]

My noble friend makes a totally valid point and I apologise—there should have been some closure with regard to Amendment 47. Perhaps I may suggest that I respond specifically to the issues around Amendment 47 and then we can move on. I understand that the amendment, having been called, will need to be withdrawn. Therefore, if my noble friend Lady Gardner is minded to speak to Amendment 48, perhaps she can, first, withdraw Amendment 47, as that will be a useful way of moving on to the more substantive debate.

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[Lord Ahmad of Wimbledon]

My Lords, first, I thank all noble Lords who have taken part in the debate, but make special mention of my noble friend Lady Gardner. I know that she had a fall yesterday and I am glad to see her in her rightful place today. We were concerned that on such an important issue we might not see my noble friend in her place. Much as some of the questions she has posed are challenging, I wish her well in any subsequent recovery. As we have seen again today, she has put forward some very compelling arguments in respect of her position.

I will also say from the outset that I of course understand that noble Lords are keen to ensure that any relaxation of legislation governing short-term letting in London is available only to residents, so that they can make their property available when they are away for a limited duration, not to allow non-residents to use property almost or exclusively for short-term letting. I confirm that this is exactly the aim of the Government’s proposals. We clarified our intentions for the reform of legislation on short-term letting of residential accommodation in London in a policy document that was shared with your Lordships, as my noble friend Lord Tope said, on 6 February. I am sure we can come up with varying definitions of “short” and what have you, but it is late in the day, so I will not dwell on that too long.

Section 25 of the Greater London Council (General Powers) Act 1973 provides that the use of residential premises for temporary sleeping accommodation for less than 90 consecutive nights is change of use, for which planning permission is required. London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. There are currently, as I am sure noble Lords appreciate, thousands of London properties advertised on websites for use as short-term accommodation. However, each potentially is in breach of Section 25 as it stands.

In response to our Review of Property Conditions in the Private Rented Sector, the new policy document that I referred to sets out the Government’s approach to modernising the legislation so that residents can allow their homes to be used on a short-term basis without unnecessary bureaucracy. The Government have carefully considered the views put forward in responses, and I thank the noble Lord, Lord McKenzie, for acknowledging the time that I have certainly sought to take to respond to some of the concerns of noble Lords on this issue. In bringing forward our reforms, we will therefore seek to make provision for safeguards to protect London’s housing supply and residential amenity and provide the ability for local exemptions to be made which would exclude specified premises or areas from the changes.

The Government want to enable London residents to participate in the sharing economy and to enjoy the same freedom and flexibility as the rest of the country, without the disproportionate burden of requiring planning permission. This policy is aimed at helping residents, not at providing opportunities for change of use from residential to business premises. In order to address the issues raised and to respond to some of the concerns, the Government intend to restrict short-term letting of residential premises to a maximum of 90 days in the calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.

I also confirm that we intend to include the requirement that properties must be liable for council tax, to exclude business premises. I also assure my noble friend Lord Tope that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility, where there is a strong case to do so. In response to the issue around regulations, I say to noble Lords that the Government intend to consider the matters I have just mentioned in deciding the most appropriate way to bring these measures forward into law.

For completeness, it is appropriate for me briefly to mention Amendment 47, which sought to restrict the ability to let residential property on a short-term basis, without planning permission, to those times that coincide with,

“a major national or international sporting or entertainment event”.

It would be extremely challenging to define such events in a way that would exclude many other sporting or entertainment events that occur in London on a weekly or even daily basis; for example, European or international football matches and major concerts at venues such as Wembley and the O₂ arena. I am grateful to my noble friend for withdrawing that amendment.

I will respond to some of the questions that have been raised. My noble friend Lady Gardner raised some concerns about Parliamentary Answers. It has been confirmed to me that I provided Written Answers to her Questions. Perhaps they were not as complete as she expected but I have checked the records; those Answers were provided and referred to the policy document and the fact that this would be made available before Report, which I hope has indeed been done.

My noble friend Lord Tope raised the issue of not consulting, in particular with Westminster Council. I assure my noble friend that my officials have met with London Councils officials and representatives from a number of London boroughs, including Westminster.

My noble friend Lady Gardner raised the issue of tax liability. We expect people to pay tax where they are liable. The “Rent a Room” scheme to encourage people to take in lodgers provides a tax allowance on income received from renting out a room; it is a long-standing provision. My noble friend also talked about subletting in Camden. To confirm, a tenant will need to check with their landlord whether under the terms of their tenancy they can sublet. We do not seek to discriminate between people who own their property and tenants.

Amendments 48 and 49ZA would restrict the ability to let properties on a short-term basis, without planning permission, to no more than 30 days a year, as my noble friend Lady Hanham said. Amendment 48 would also prevent hosts being able to accept bookings from overnight guests at less than seven days’ notice, and would require them to notify the local authority of every single letting. It would allow local authorities to establish a fast-track notification process and introduce an administration fee. Amendment 49C would also require notice of short-term letting, and its intended duration, by the property owner.

We want to deregulate in order to provide the ability to let property on a short-term basis for 90 nights per year. This will provide residents with meaningful and proportionate freedom and flexibility in how they use their property. The Government believe that a limit of 30 nights is unduly restrictive. One of the major advantages of the internet is the ability to make transactions quickly and flexibly, and we want our reforms to facilitate this. A requirement for seven days’ notice would unreasonably limit the ability of hosts to offer accommodation to customers seeking to book at shorter notice.

[Baroness Hanham]

My Lords, for clarity, my amendment said 30 days. In speaking to it, I did not support the situation about the seven days’ notice, nor did I do anything other than say that we would want a short, light-touch registration, which could be up to as much as a year—very much supporting what the noble Lord said. It is important to get the nuances, which are slightly different, and I tried to make them clear but we were in a muddle about where we were.

[Lord Ahmad of Wimbledon]

The noble Baroness is always well placed to clear up muddles, as she has done so again. I fully accept that she spoke specifically to the issue of the 30 days.

Amendment 49, which would restrict the deregulation only to those properties which are the principal and permanent residence of the owner, and Amendment 49ZA, which would restrict the deregulation to the principal London residence of their owner, are unnecessary and overbearing. They would unreasonably prevent tenants carrying out short-term letting, which may be permitted within the terms of their lease. It would also prevent people short-term letting who may have another residence outside London, even though the London property would be viewed very much as their home.

Amendments 49A and 49B would remove the ability of the Secretary of State to direct that specified areas should be exempt from the changes. The Government want to be able to grant exemptions but only in exceptional circumstances and where a strong case has been made by the local authority. Otherwise, we want to be clear that our aim is to provide the same rights for all Londoners in all local authority areas.

The amendments would create different regulatory approaches across the capital, potentially resulting in differences between local authority areas. Residents would find that their near neighbours had either greater or lesser freedoms to short-term let their property, without any apparent justification.

Amendment 49C would remove the deregulation measures where a relevant enforcement process had taken place. It would also require the Secretary of State to make regulations for local exemptions where there were strong amenity grounds. I can assure noble Lords that we intend to provide that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility where there is a strong case to do so.

Amendment 50 is also unnecessary in the Government’s view. It is already the case that anyone carrying out illegal short-term letting risks a planning enforcement fine of up to £20,000. It is already possible for local authorities to apply for costs in the event of unreasonable behaviour during an appeal against enforcement action.

I assure noble Lords that the Government’s intention is only to deregulate Section 25 to allow residents occasionally to let out their property on a short-term basis; for example, when they are away on holiday. We are not seeking to create new opportunities for short-term letting on a permanent basis. Our policy document shows how we intend to achieve this in a way which balances the reasonable aspirations of residents to let out their homes temporarily with safeguards to prevent abuse of our reforms.

For these reasons, it is the Government’s belief that Clause 33 should remain part of the Bill. I fully acknowledge that differing views have been expressed by noble Lords, but I think that it is the shared intention of the Government and your Lordships to allow letting of property for residents but not on a commercial basis. I hope that some reassurance has been provided by what I have said and I urge noble Lords not to press their amendments.

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[Lord McKenzie of Luton]

My Lords, in moving Amendment 53, I shall speak also to our other amendments in this group, Amendments 54, 55 and 56. I am grateful for the support of the noble Baroness, Lady Hanham, and from the noble Lord, Lord Tope, on these amendments.

Local authorities as we know are precluded from using their civil parking enforcement powers to raise revenue. It is suggested that enforcement by CCTV is particularly unfair because a motorist might be issued with a ticket as a consequence of a camera. The ticket arrives at their home some time after the event when they have no opportunity to examine the location when the alleged contravention took place. However, the Government’s consultation on local authority parking last year acknowledged the benefit of CCTV in enforcing moving traffic congestion where cars use bus lanes, do not exit box junctions, and so forth.

Our amendments go further, particularly in relation to the use of CCTV around schools. This matter was addressed forcefully in Committee by the noble Lord, Lord Tope, who pointed out the nonsense of allowing CCTV enforcement for 10 metres around a school—the zig-zag lines—but not beyond. Amendments 54 and 55 would include in the Bill exemptions from the ban, some of which the Government have already conceded should be provided. This applies to contraventions for stopping at bus stops and bus lanes, school entrance markings and red routes on the grounds of safety and the needs of bus services.

It is understood the wording of our wider use of CCTV within 100 metres of a school entrance may not always be practical, depending on the configuration of the road and other junctions. For so long as the principle is accepted, however, the wording could be tidied up at Third Reading. The arguments for preventing parking on the zig-zag lines at pedestrian crossings are similar to those made in relation to school entrances. Cars parked on the white zig-zags on either side of pedestrian crossings can obscure motorists’ view of those about to cross, especially children, the visually impaired and wheelchair users. This is particularly dangerous at zebra crossings where there are no traffic lights and motorists slow down only on seeing a pedestrian starting to cross.

Amendments 54 and 55 would extend the exemption to clearways. Currently there are junctions and other parts of clearways where parking is prohibited to protect pedestrian cyclists and motorists themselves. It is unclear why the Government have chosen to exempt red routes but not clearways, given that the same safety considerations are our concern.

Amendment 66 will ensure that the provisions of Clause 39 cannot have an effect until the equalities impact assessment and a regulatory impact assessment have been undertaken. If the Government continue to argue that the former is not necessary, perhaps they would make clear why. As for the RIA, it has apparently asserted that the measures have no impact on business. However, the LGA says that it has heard directly from private companies contracted to enforce parking, which assert that it does have an impact. Do the Government refute that assertion? I beg to move.

[Baroness Hanham]

My Lords, I have added my support to all the amendments in this group. The anomaly between the treatment of zig-zag lines at school gates and those by pedestrian crossings is ridiculous. Both involve strong safety issues, and the Government should be able to see their way to including pedestrian crossings, at the very least. They also need to review the regulations about the amount of land taken up as a result of a school entrance. That aspect does not make sense; the amount is far too little compared with what is there at present. That is a technical matter that needs rearranging. The rest of the amendments all seem good common sense. I want to get rid of CCTV, but we cannot get rid of it completely if that will cause a safety hazard.

[Lord Tope]

My Lords, I too have added my name to these amendments, and I am sorry that the hour of the night that we have reached does not encourage us to give them the full debate that they deserve. I too am looking forward to the Minister’s explanation of why it is necessary to have CCTV enforcement on zig-zag lines outside schools, but apparently not on zig-zag lines by pedestrian crossings. I hope that he will say that the Government recognise that that is rather silly and, as they cannot find a sensible answer to the question why they are doing it, that there will be CCTV enforcement on zig-zag lines by pedestrian crossings.

The noble Lord, Lord McKenzie, will recall the debate—if that is the right word—that we had in Grand Committee, when we had only just received the draft regulations. I think that we all, including the Minister who replied on that day, recognised that the problem outside schools is rather more on the roads adjoining the zig-zag lines. I do not understand why the Government seem unwilling to allow CCTV enforcement on yellow lines adjacent to zig-zag lines outside schools, where there really is a problem. I would like to see a Minister go to a school in my former ward and explain to the people there that the rules cannot be enforced by CCTV on the yellow line, but can be on the zig-zag line. I remember my ward fondly, and I am certain of the answer that both the residents and the parents would give that Minister if he were brave enough, or stupid enough, to go and offer that explanation.

Amendment 56, to which the noble Lord, Lord McKenzie, has referred, deals with impact assessments. As he said, the LGA wants clarification of the grounds on which an EIA—equalities impact assessment—is not to be done, because it understands that one is required under equalities legislation. The noble Lord also mentioned regulatory impact assessments. As he said, the Government say that they have not produced one because they do not believe that their proposals would impact business.

However, I have in my hand a letter addressed to Eric Pickles, dated 30 January, from 11 companies that say that,

“these proposals DO directly affect our business and as such the government should conduct a Regulatory Impact Assessment in accordance with its own procedures”.

Some of those 11 companies are recognised as major companies in the parking industry, and they all say that this will have a significant impact on them, and call for a regulatory impact assessment. It is probably no small feat to get 11 companies all to affix their signatures to a letter, and we all look forward to the Government’s reply to the debate.