Deregulation Bill

Baroness Hanham Excerpts

Wednesday 4th March 2015 Lords Chamber

[Lord McKenzie of Luton]

My Lords, in moving this amendment, I will also speak to our other amendments in this group. In doing so, I, too, draw attention to my interest in the register. We consider that this is an integrated group of amendments that stand together, should we decide to test the view of the House. I trust that that is agreed.

The issue of short-term lets has generated considerable controversy since it has been proposed that there should be some relaxation of the London provisions, but it has also focused attention on what is now happening in the market and why the status quo cannot be sustained. Currently, the letting of residential accommodation for temporary sleeping accommodation in London for a period of less than 90 consecutive nights constitutes a change of use for which planning permission is required. Notwithstanding that there is the possibility of a fine of up to £20,000 for failure to secure permission, we know that short-term letting is extensively carried on without permission being available.

We have covered in earlier debates the problems that can arise and the issue is helpfully dealt with also by the briefing we have received from London Councils for this debate. It concerns the potential loss of residential accommodation to the lucrative short-let market, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and significant challenges on continual enforcement. We know that other cities around the world are experiencing similar problems. There is clearly a market for this activity and business opportunities have been created, particularly via the internet, which are different, as the noble Lord said, from those of the 1970s. According to the Government’s own figures, there are currently thousands of London properties and rooms advertised as used for short-term lets, each potentially in breach of the law. That is an untenable situation.

The amendments that I am speaking to have the support of the noble Baronesses, Lady Hanham and Lady Gardner of Parks, and the noble Lord, Lord Tope, who have each added their names. Indeed, we have worked together across our party divides to come up with a package of measures that, building on the government amendments, would enable home owners who wish to let their homes on a short-term basis to do so unless there is detriment to the amenity of the locality and to do so within a system where there is proper notification to local authorities and where enforcement is enabled. Like the Government, we do not see this as providing new opportunities for large-scale commercial lettings. These amendments, too, are about providing safeguards for the local community.

Our amendments cover five issues. First, there must be provision in regulations for those letting properties on a short-term basis to have an obligation to notify the local authority. Our amendment is not prescriptive as to form and content and it need not be overly bureaucratic. The Minister rather set his face against that in introducing his contribution, but there is no reason why this could not be dealt with very straightforwardly via some web- based approach. It is not prescriptive, but it would give an opportunity for the local authority to gain an understanding of the scale of activity in its area. It would also aid local authorities in their enforcement role, which we know is a challenge at the moment, and of course could potentially be an encouragement to tax compliance.

Secondly, we consider the number of days in the calendar year that accommodation should be available for short-term letting should be 60 rather than 90, as the Minister recognised, with regulations enabling this to be reduced. We consider that to be a more reasonable constraint and protection on local amenity. But even that would allow a four-month back-to-back letting across a year end. The Minister simply asserted that 90 days was more appropriate. I am not sure that that assertion, frankly, carries more weight than one for 60 days.

The concept is that short-term letting should be allowed effectively for someone’s home. It appears that the Government are seeking to define that by liability to council tax. We think that that is inadequate. Would not a liability to council tax arise for somebody letting residential property on a commercial basis, for example, between tenancies? Limiting the relaxation to someone’s principal residence in London would better target the deregulations.

Fourthly, we welcome the provision that the Government are seeking to make for local authorities to disapply the regulation for certain properties or areas, but oppose this right being subject to the consent of the Secretary of State. Local authorities are better placed to make the judgment about the impact of short-term lettings in their boroughs. Surely, that must be the case. We agree that they should not be able to do this in an arbitrary manner and protection of the amenity of a locality is a fair yardstick. However, we believe that a desirable hurdle rather than one that is necessary is considerably fairer. Indeed, the necessary hurdle could give rise to substantial and fair challenges on the local authority.

Finally, there is the issue of enforcement. In their policy document of February this year, the Government stated that:

“To protect amenity and address concerns over nuisance, the Government proposes that the new flexibility should be able to be withdrawn from particular properties after just one successful enforcement action against a statutory nuisance”.

In his contribution, the Minister said that there was provision elsewhere for this to be effective, but I am not sure where it is. The Government were clear in their policy document that that was what they wanted to happen. Our amendment provides that regulation should make such provision but is potentially more flexible than the “one strike and you’re out” approach.

These amendments are designed not to undermine the Government’s position, but to strengthen the safe- guards, and also, in the spirit of localism, to recognise that local authorities and not the Secretary of State are best placed to determine whether the scale of short-term letting is destroying the amenity of their areas. I beg to move.

[Baroness Hanham (Con)]

My Lords, my name is also on this amendment, and I would like to draw attention to the declarations I have made in the past of being a joint president of London Councils and also a former leader and member of the Royal Borough of Kensington and Chelsea, which will be affected by this legislation.

The noble Lord has set out very clearly the amendments that we think are necessary to make this legislation tenable. London has a particular problem. I drew attention on Report to a phrase in the policy document which said that London needed to be brought into the 21st century over the renting and letting of property. I said then and I say now that I think that London is already and has been in the 21st century for a very long time. There is enormous pressure on property in London. There is probably more renting now in London than anywhere else. There is a hugely transitory population, so that we now have great areas where we know that people are not resident. The properties are not used; they are investment properties. London has a dichotomy. It is an area where people want to live but now cannot, largely because it is getting so expensive. Where there is investment, the people who have invested in property are not from this country but from abroad. Where there is a lot of very new property on land which perhaps could have been used for local people, it is now largely empty.

The temptation to let is enormous. To make sure that there is no abuse of the proposals which the noble Lord has brought forward, we have tabled these amendments. Before saying more about that, I want to mention some other things that I am concerned about. The Government—of whom I have been a great supporter —are all in favour of devolution, of passing powers to different parts of the country and to different parts of England. We have just done it with Greater Manchester. There is more devolution. London has had devolution through its ability to put forward Private Members’ Bills to deal with the issues that affect London. These Private Members’ Bills are not put forward in isolation: they have to be put forward with the agreement of all the London boroughs. That process has been deficient, at the very least, in terms of what has happened here. I saw a representative of London Councils here today in Parliament and, as far as I am aware, London Councils has been solidly against this proposal since it was first brought forward. By definition, that includes the London boroughs.

For some reason, the Government have chosen to try to override what London wants. They may not think that London figures very greatly within this category in relation to the rest of the country. One of the rationales for making the change is to enable London to do what other parts of the country do. But London is different. It has very different pressures, as I have tried to suggest.

In these amendments we are trying, first, to query whether people really do go on holiday for 90 days. I think we would all be jolly lucky if we managed to get that amount of time off. That suggests that if people want to let for 90 days they might not be quite as altruistic as they might appear to be at first sight. Is it not reasonable to suggest that people might like to go on holiday for a lesser number of days?

Secondly, the amendments are trying to ensure that somebody will at least know that the letting is likely to take place. We have not specified what that process should be other than that people should notify their local authority that they want and are likely to let their properties on a holiday-let basis. If that does not happen and something goes wrong or difficulties occur in those properties—I think that my noble friend Lady Gardner will go into this in more detail—no one will know why or how the properties have been let, or to whom they have been let, and the local authority will have no real powers of intervention. I think that that matters. I am all for deregulation but I also think that because of the whole problem of renting in London, a little more grip needs to be kept on this.

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Moved by

[Baroness Hanham]

20: Clause 57, page 47, line 1, leave out subsection (6)

[Baroness Hanham]

My Lords, I do not think that I need to delay the House too long on this, but I want to draw attention again to an issue that involves overriding what London is doing, which is becoming quite a concern. It relates to how waste disposal penalties are going to be put forward. London has been running its own waste penalty system since the London Local Authorities Act 2007; it has its own system set up and runs a very tight way of dealing with this, which is the forerunner of what is being proposed for the nation as a whole.

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[Lord De Mauley]

My Lords, I am trying to get there.

In our view, legislation should not provide for people to be issued with, or threatened with, financial penalties the first time they make a mistake. That is why we want local authorities to give householders a written warning. The requirements on people are not always obvious, particularly when they move to an area where a different collection system applies. It is right that people should find out what they have done wrong and should have the opportunity to rectify mistakes before they are asked to pay a penalty. People in London have as much right to this opportunity as anyone else in England.

Based on what we have heard from local authorities, we do not believe that this will add significant burdens compared with how the current arrangements operate. We know that many authorities already communicate well with their residents and seek to educate them if they are having difficulties with collection requirements, but if we do not amend the London Local Authorities Act, this legislation would still allow someone making a mistake for the first time in London, but not elsewhere in England, to be penalised. We do not believe that that is fair or right.

I am aware that some noble Lords consider that the system we propose is bureaucratic. Indeed, my noble friend described it as byzantine. She used the words “long and protracted” and mentioned our five-page schedule. Let me explain why I do not believe that we are introducing significantly more bureaucracy compared with the current London system.

London Councils produced a 22-page guidance document in December 2013 on the current system operating under the London Local Authorities Act. According to this, London authorities issue householders with a penalty charge notice. I quote from the guidance:

“Depending on each local authority’s policy, a verbal or written warning may be given before escalating”,

to a penalty charge notice. The householder then has 28 days to make representations to the London authority. If representations are made, the authority then has 56 days to make a decision. If it rejects the representations, a notice of rejection must be served. The householder may then appeal to an adjudicator before being required to pay the penalty. All that is under the current system in London.

Under our proposed system, London local authorities will first issue a householder with a written warning. The next time a householder makes a mistake they may issue a notice of intent. The final notice can then be issued after 28 days, taking account of any representations made. The householder may then appeal to an adjudicator before being required to pay the penalty. Is our proposed system really adding bureaucracy, compared with the current system?

As well as reducing the regulatory burden on householders, our proposals seek to ensure that the level of penalties is proportionate. Given the broad agreement that making a mistake related to household waste collection should not be a criminal offence, it would not seem appropriate for the penalty to be higher than for a criminal activity. The penalty under the London system for a breach of the rules about presentation of waste is currently set at £110, yet a shoplifter committing a first offence may be issued with a £90 penalty notice for disorder. Under our proposals, councils in London would be able to set the penalty between £60 and £80.

We believe that this range is proportionate, but understand that some noble Lords consider that it will not act as a deterrent. We should remember that for many people in London, as elsewhere, an £80 financial penalty is certainly significant. For people who consider that £80 is insignificant, I ask whether they really consider £110 such a radically different amount that they will treat it as a significant penalty. We believe that £60 to £80 is the right level and that householders in London have as much right to be treated fairly and proportionately as anyone else in England.

Also, I suggest that it would not be right for a “harm to local amenity” test to apply everywhere in England except London. Under the Environmental Protection Act, we propose that householders should be issued with a fixed penalty only if their behaviour actually causes problems in their local neighbourhood. They could receive a penalty for leaving bin bags on the street for days on end, but not for leaving a bin lid open. If we kept the London system as it is, we would be in the anomalous position where the legislation allows local authorities to issue penalties to householders who make any sort of mistake in this area if they live in London, but not if they live anywhere else in England.

We intend to work with local government to produce advice to help local authorities implement the test with confidence. My officials are of course also happy and available to talk to representatives from London Councils and others about the practicalities of operating this system if that would be useful.

This clause and schedule, as they stand, will introduce a proportionate approach, providing appropriate safeguards for householders throughout England, including London. I therefore ask my noble friend to withdraw her amendment.

[Baroness Hanham]

My Lords, I think I said on Report that I felt really sorry for the Minister having to respond, because it is clearly not an easy clause or schedule to respond to. There is absolutely no rationale to it whatever. The fact is that whatever the Minister has been told to say, this is a much more protracted procedure than is going to go ahead nationwide. Most local authorities will deal sympathetically with people who make a mistake by putting something out in a way that they should not. As I understand it, it does not require another offence to trigger the next stage. It can be the same offence that has not been acknowledged —so the warning of an offence, then a letter of intent, then perhaps a penalty charge notice, then an appeal, then to a tribunal, because under the England procedures you can continue on down the line. I totally fail to understand why London should be encumbered with this.

I did not make the point in my opening remarks about the level of the penalty. I worry that this is being presented by the Minister as a penalty appropriate to shoplifting. In London the penalty for this offence, as he has rightly said, would be in the region of £130, but then so is a parking ticket. London is a bit more expensive in what it does and a shoplifter would probably go to court anyway rather than have a penalty charge notice. Indeed, if people spit chewing gum on to the pavement, we are still looking at the same sort of penalties.

I think this is a daft bit of legislation and I wish to test the opinion of the House.