Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Earl of Listowel Excerpts

2nd reading (Hansard): House of Lords
Monday 4th June 2018 Lords Chamber

[The Earl of Listowel (CB)]

I declare my interest in the register as a property owner—commercial and residential—and a vice-chair of the Local Government Association. I thank the Minister for introducing the Bill and speaking about the several measures the Government are taking to address the housing crisis.

Baroness Farrington used to speak—on at least a couple of occasions, to my memory—about the impact on families of living in temporary accommodation, particularly on children, having to move from place to place and from school to school, suffering disruption to their vital education. I have spoken a number of times to mothers who live in temporary accommodation and heard about the misery of that experience, the uncertainty about where they will be living next and when they will next have to move, and the pressure on their families. I was speaking to a grandmother living with her teenage daughter and her infant granddaughter in one room; they were moved every two or three months in one year. Thankfully, she is settled now. Then there is the isolation that these parents—although I have spoken particularly to mothers—often experience, whereby they may be separated from their friends, family and community because of the shortage of housing.

Given the measures the Government are taking, I get the sense that they recognise the gravity of the problem and are trying to tackle it aggressively, which I warmly welcome. I noted that in the briefings, the Local Government Association highlighted the need to look again at whether councils might be allowed to borrow to build. I hope that the Minister is keeping that under consideration.

I want to say a little about local authority funding, which comes under the Bill. I welcome the fact that some additional funding may arise from Clause 2. I am not sure how significant that will be but any contribution is welcome. We will want to ensure that under Clause 1, we do not impose additional burdens on councils. As your Lordships are well aware, there has been a 30% to 40% cut in local authority funding in recent years. I know that has taken place in a difficult world economic context.

However, speaking as treasurer of the All-Party Parliamentary Group for Children, I point out that we have been taking evidence over the last two years about the impact on access to child protection services—the access to early and later intervention for children in vulnerable families. They are a small proportion of the whole local authority population, at 1% or 2%, but they demand huge inputs of investment from local authorities. Huge amounts of local taxpayers’ money are going to those children and families. The evidence we have heard over the last two years is that the non-statutory services—the ones which local authorities are not required to provide, such as early intervention—have inevitably been reduced. What have been maintained to a significant degree are the statutory services, which come in when the family is in deep trouble and the child may be seriously at risk and even be removed. Of course, that is exactly the opposite direction from where we really want investment to go. We want it to go into early intervention so that we never have to get to that later stage of a child needing intensive support or being taken into care. This is just one aspect of why it is so important to ensure that we keep looking at the funding of local authorities and why I welcome the opportunity in the Bill to increase to a degree that funding.

One example of the strain that local authorities are under is how often directors of children’s services are changing. On average, in that immensely challenging job, they change every three years. It is not all about money but a part of it is about trying to do the best for these families in a restrictive financial environment. I know that the Minister for Children is listening carefully to these concerns. The All-Party Parliamentary Group for Children will produce a report later this month, which I know he will look at carefully. I expect that the members and officers of the parliamentary group will wish to speak to the Minister, so I give him notice that we will contact him so that we can discuss these concerns.

I welcome the Bill and the work the Government are doing to increase the housing supply for all families and individuals in this country. I look forward to the Minister’s response.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Earl of Listowel Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 19th June 2018 Lords Chamber

[Lord Kennedy of Southwark]

My Lords, this amendment, which has already been referred to, seeks to change the length of time specified in the definition of a long-term empty property from two years to one. As with the amendments in the previous group, it is an attempt to improve the situation by reducing the number of empty properties and get more properties back into use by incentivising owners. It is in that vein that I move this amendment. In short, this probing amendment seeks to halve the amount of time required before a property can be considered a long-term empty dwelling.

The amendment tabled by the noble Lord, Lord Bird, who is not in his place, is grouped with mine. It is an interesting amendment because it requires local authorities to determine what constitutes a long-term empty property in their areas. Perhaps we can return to it on Report when the noble Lord is, I hope, in his place. I beg to move.

[The Earl of Listowel (CB)]

My Lords, I missed most of the earlier debate and the commencement of this one but I have two or three questions that the Minister might be able to help me with now or, if not, to write to me about. My questions arise after listening earlier to my noble friend Lord Lytton. I know of men, for instance, who care for their mothers who are getting frail and elderly, and I can imagine a man in a rather unattractive rental area in the north who has a property which he vacates so that he can live with his mother and look after her. It is all a bit too much to manage as money is short and there is not much demand by people wanting to use that property. I would not want someone like that to have to pay a fine. Local authorities are very tough on those who do not pay their council tax. I imagine that that may well have been dealt with in earlier debates, and I am sorry that I could not be here for those. However, that is an example of something that might happen.

I guess that this discussion brings up the question of how we make the private rented sector attractive so that there are not areas in the north of England where it is difficult to find people to rent properties.

[Baroness Pinnock]

I am just a bit concerned that we seem to think that all these problems are in the north of England, where I live. I would rather that we were all a bit more careful about how we describe the north of England. There are some wonderful places there in which to live and, like everywhere else, including this great city of London, there are some not so pleasant places in which to live. I hope that noble Lords do not mind me saying that we should not always use the north as an example of an area where there are difficult places to live.

[The Earl of Listowel]

I thank the noble Baroness for her intervention and I very much take note of what she says. I will try to be a bit more careful. There are certain places in this country where it is more difficult to let private property, and that is what I might have said.

What comes out of the debate is the question of how we make private rented property more attractive in those areas where it can be difficult to let. This might be a bit off the board but, as there are not enough properties to buy, it seems very important that rental property is made a more attractive option. I believe that the Government had been thinking of introducing new tenure arrangements so that tenants could have a minimum of three years’ security of tenure. If the Minister can say what progress there has been on that, or perhaps write to me with the information, I shall welcome hearing from him.

It also occurs to me that the private rented sector might benefit from some sort of arm’s-length body to oversee security of tenure and fair rents so that the winds of politics do not intervene in the market too much, making long-term investment unattractive and putting people off becoming tenants. That is another issue on which I would be interested to hear from the Minister, and, again, he might like to write to me about that rather than respond now. The Government are introducing an ombudsman with responsibilities in these areas, and people might have recourse to him or her if they experience unfair treatment. Perhaps the Minister can respond on that as well.

Finally, I might not have declared my interest as a landlord, as listed in the register.

[Lord Bourne of Aberystwyth]

I thank noble Lords very much for their contributions. I appreciate that the noble Lord, Lord Bird, is not in his place at present but he lobbed in a hand grenade, as it were, before departing the scene. I appreciate the point made by the noble Lord, Lord Kennedy, and will try to address some of the suggestions from the noble Lord, Lord Bird. He is always worth listening to on this area in particular, but he always has some innovative ideas.

I am grateful to noble Lords for raising the question of how the legislation will apply. The noble Lord, Lord Kennedy, is suggesting a one-year vacancy. I am also grateful for the cross-party support that we have received in both Houses for the measure that we are bringing forward, and I appreciate the points about possible refinements.

We are not seeking to alter the circumstances in which the premium is applied. Ninety per cent of local authorities applied a premium in 2017-18, and we are not aware of widespread concern that the two-year period is inappropriate. I feel that one year might be far too short a period in many circumstances. There are some exceptions where the premium does not apply, one of which is people going into social care, which the noble Earl, Lord Listowel, raised. However, situations that are not exceptions include that of people who might be adapting a property and trying to sell it. I fear that in those circumstances a year would be too short a period, and I have no doubt that there are other situations where that would be the case as well.

I understand the rationale for decreasing the qualifying period at a time of great concern about empty properties, but I remind the House that we have squeezed the number of empty properties down to a low level—a level that it has not been at for a long time, if at all. We have to make a judgment about how long the timeframe should be. I know from correspondence that the department has received that some home owners take longer than expected to sell or rent out their properties in a challenging local market. In such circumstances, retaining the two-year qualifying period therefore strikes the right balance. I understand the point that the noble Lord, Lord Kennedy, made about his desire to strengthen the incentive.

The amendment in the name of the noble Lord, Lord Bird, would allow councils to decrease or increase the qualifying period as they see fit. Local authorities would be given complete freedom to remove the requirement that a property be substantially unfurnished in order to be considered empty. I am happy to address those points. Although we should support giving councils as much discretion as is reasonable, the noble Lord’s amendment could lead to a confusing situation where the property, depending on where it is located, could attract premiums after just a few months or after quite a few years.

The principle of specifying that an empty property is one which is substantially unfurnished is well understood, and we will come on to amendments addressing that issue later. The risk of the amendment proposed by the noble Lord, Lord Bird, is that it would give local authorities an open door to extend that definition to types of properties that are not genuinely empty. Premiums could be applied to furnished properties that are periodically occupied either because they are someone’s second home or a job-related home or simply because the owner is away on holiday. I know there are views about second homes and properties that might be considered to be underoccupied, but this legislation is about long-term empty properties, which is a different matter. The design of the system already provides the right balance of flexibility for local authorities.

On the points raised by the noble Earl, Lord Listowel, about the impact of these provisions, I remind the House that local authorities have a discretion they can apply either in relation to excluding properties along the energy-efficiency line suggested by the noble Lord, Lord Stunell, or in terms of something highly personalised which relates to a particular property and the person in it. That is why it is best left to the local level to determine this issue.

The noble Earl also asked about the private rented sector and three-year leases. We are committed to dealing with this issue, which has strong support from the sector, and we are making progress. He will be aware that the private rented sector has grown significantly, and continues to grow. We are putting in place a framework that will apply in a reasonable way, with tenant fees proposals—which we will be looking at shortly—and that addresses the control of deposits, requires client money protection and so on. I will cover that in the normal write-round letter that I will issue to pick up the points made by the noble Earl.

With the comments I have made about how we are not persuaded of the need to alter the minimum period from two years to one year or anything below two years, I urge the noble Lord, Lord Kennedy, to withdraw his amendment.