Renters’ Rights Bill

Earl of Kinnoull Excerpts

Tuesday 6th May 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to Amendments 153, 201, 217 and 241, in the name of the noble and learned Lord, Lord Etherton, who cannot attend the Committee today. I know the whole Committee will join me in wishing him well. These amendments seek to limit the financial penalty that local authorities can impose for offences under these clauses. In the absence of the noble and learned Lord, Lord Etherton, I will briefly set out my reasons for supporting his amendments in this group.

I should declare an interest that, as a practising solicitor for over 50 years, I am always concerned about penalties that are outside the judicial process, but my concern increases when the level of financial penalty is as high as is proposed. I agree with the noble and learned Lord, Lord Etherton, that the level of financial penalty set by the Bill is extremely high. A financial penalty of £40,000 would be ruinous for most landlords. According to the Government’s own Property Rental Income Statistics: 2024, the

“average income from UK property remained relatively stable at around £17,000 between 2018 to 2019 and 2022 to 2023”.

Therefore, a £40,000 penalty would, in effect, represent more than double the rental income of an average property.

In certain egregious cases, a penalty of that severity may seem appropriate, but those cases can be dealt with by the courts. We must ask ourselves what effect this new level of financial penalty that can be imposed by local authorities will have on landlords today. We have serious concerns that the risk of a large financial penalty being imposed may encourage existing landlords to leave the sector and discourage new landlords from entering it. A more reasonable level of financial penalty would prevent that chilling effect.

I have carefully heard the words of my noble friend Lord Jamieson on the Front Bench, and I know that my noble friend Lady Scott of Bybrook, also on the Front Bench, will surely agree with the noble and learned Lord, Lord Etherton, on this and consider the warning that we have given. Of course we accept that the Government will have their Bill, which should be effective in delivering its objectives, but we are seriously concerned and worried about the impact that these excessive financial penalties will have on the rental market.

[The Earl of Kinnoull (CB)]

My Lords, I am deeply grateful to the noble Lord, Lord Hunt, for introducing the amendments of the noble and learned Lord, Lord Etherton, so well. I spoke to the noble and learned Lord about these amendments before his illness, and I was going to pass on only two or three comments that I recall he made to me.

The £40,000 is a life-changing amount of money—I think that was the way he put it. The reason I have my iPad here is that he referred to the civil penalties under the Housing and Planning Act 2016, on which the MHCLG has issued a very helpful note. It is so complex that local authorities needed a 20-page note to tell them how to implement this. The maximum under that Act is £30,000, and I do not see why we have suddenly gone to a £40,000 world. The £30,000 was reserved for a relatively small number of offences, and each involved knowingly doing something truly evil and wrong. I feel that that, as a principle, is conceded, as it were, even though £30,000 is a bit rich. Therefore, I agree on the £40,000; I do not understand why we have had to go up from £30,000. With the next group, we will come to the issue of knowing and recklessness, which is deeply serious as well.

I will pause briefly on some of the amendments. Amendment 153 refers to a schedule. This is one of the ones where it is up to £40,000 currently. It refers to a very complex schedule—yet there is a recklessness trigger for a fine of up to £40,000. It seemed to me that that was not as serious as some of the things that are a £30,000 offence under the Housing and Planning Act 2016. So I was dubious about whether that was truly worthy of a £30,000 lump. I therefore agree very much with the £7,000, which is where the noble and learned Lord, Lord Etherton, had come to.

On Amendment 241, there are a couple of things here that trigger the £40,000. Again, recklessness is for mistakes made in giving data to the new database. When people give data to databases, it is inevitably quite boring, and things can go wrong. Recklessness is an incredibly difficult thing to cope with, as we will discuss next, no doubt. So I felt, again, that this was very different from the £30,000 triggers under the Housing and Planning Act 2016. I felt that there was a strong case for moving the maximum down to £7,000. I am going to stop there in the analysis, because it was better done by the noble Lord, Lord Hunt, but that line of thinking—bringing it down to £7,000 from £40,000—was intended to improve standards of justice because, if people have been truly evil and truly wrong, the courts are there for that. They are made for that, and they can be a lot heavier with people. But, for local authorities, roughly £7,000 per offence—it could be multiple offences, of course—or 50% of an average year’s rental income, would be proportionate.