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

Debate between Earl of Lytton and Baroness Pinnock

3rd reading (Hansard): House of Lords
Wednesday 18th July 2018 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I am pleased to follow the noble Lord, Lord Campbell-Savours, although I have different reasons for wanting to know what might be included in the guidance. As we are at this stage of the Bill I reiterate my declarations of interest: I am a vice-president of the Local Government Association and a professional who deals with rating, as well as an owner-occupier of residential property.

My concern goes back to a point I made at Second Reading: namely, that we do not always know the full range of circumstances which lead to long-term vacancy. It is probably generally true to say that owners of residential property do not deliberately leave it vacant long term; it simply deteriorates. But there are reasons why it occurs, notwithstanding what one would reasonably suppose is owners’ innate desire to make best use of the asset. I am thinking of areas subject to some sort of wholesale blight; those might be areas which are destined for redevelopment and which are held in that form. If they are held by a developer, good luck to them, but if you happen to be a private owner of property that is in part of an area which is destined for long-term redevelopment, you are stuck with it, possibly with none of the end benefits.

Could the Minister therefore give us some clarification and reassurance that where there is an impact of some planning or public policy—perhaps including a local authority’s policy for an area—that results in genuine reasons for vacancy, this sort of thing will be covered by the guidance? If it is not, it does not matter how genuinely you are in the market and with what rent or other terms you might wish to let or sell the property; if it is in an area that is subject to serious blight, first, nobody will get a mortgage for it, and secondly, maybe nobody will want to live there. Crime, deprivation and so on are part and parcel of that algorithm. We therefore need to be careful that where there are genuine reasons, not all of which can be imagined at this juncture, provision in the guidance will cover that sort of thing. Can the Minister also say whether the guidance will be subject to wider public consultation than perhaps between just the professions—the sort that I belong to—and local authorities?

[Baroness Pinnock (LD)]

My Lords, I remind noble Lords of my relevant interests, which are in the register, as a councillor and a vice-president of the Local Government Association.

I thank the Minister for accepting the principle of the amendment that I and my Liberal Democrat colleagues tabled both in Committee and on Report. That amendment has now been transformed into a fully fledged amendment, and I thank the Minister for tabling it on behalf of the Government.

We fully support the amendment before us today. Its purpose is clear: to significantly reduce the number of homes that lie empty and unused, which some reports say is as high as 200,000. This is at a time when all agree that there is an urgent need to increase the supply of housing. This amendment is one way of making the most of the housing stock that we have. There are, rightly, exemptions to this policy, and the Minister has outlined what they are. Implementation of the legislation is at the discretion of local authorities, and I hope and expect they will take into account areas that are destined to be redeveloped, and where the sale of a house would be very difficult.

I also welcome the Minister’s comment that there will be a review of the guidance attached to the Bill. Like the noble Earl, Lord Lytton, I raised concerns about that guidance in the Bill’s early stages, namely that it probably lacked the clarity to ensure that the legislation was properly and fairly implemented.

As I said before in discussion on the Bill, there are some owners who, to my personal knowledge, leave properties empty for no other reason than that they do not want to sell them. One property that I mentioned before has been empty for 29 years. I asked the local authority concerned what action it has taken. It said that it has discussed the matter with the owner, who simply does not want to sell the property. So it is left there like a historic relic of 30 years ago. There are instances of that happening. My hope is that with an escalation of the premium on council tax, it will be a financial disincentive to leave homes empty for so long.

That is why I am totally supportive of this amendment, based on the principle that I and others laid before the House in Committee and on Report. I thank the Minister for the discussions we had and for his positive reaction to the principle that I set out. I am also grateful for the help I received from the Liberal Democrat Whips’ office in formulating this idea as an amendment. We fully support the amendment.

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

Debate between Earl of Lytton and Baroness Pinnock

Report stage (Hansard): House of Lords
Wednesday 4th July 2018 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I, too, thank the Minister for his clarification on the first part of the Bill and the non-domestic rating. Nobody has been beating a path to my door since the last time we discussed the Bill, and I take it from that that this is as good as it gets. I thank him very much for clarifying that.

I would like to make a couple of comments on the amendments that we are discussing, starting with Amendments 1 and 3. It seems that we do not fully know the reasons for long-term vacancies. What concerns me is that the amendments have the potential to make a blunt instrument. I always think that legislation is about as blunt as it gets, but this risks making it blunter still. I understand the point made by the noble Lord, Lord Shipley, about overseas owners; there is such a problem in certain areas, just as there is with certain other reasons for people deliberately holding property vacant.

We have to be clear whether this is some sort of fine or sanction for a socially reprehensible practice of deliberately keeping property empty, or whether it performs a legitimate housing stock amenity consideration. Is it something aimed at preventing the deterioration of neighbourhoods through some sort of social objective? In that case, I suspect that there are other measures. We need to be clear about how this is to be used if it is not to fall rapidly into some sort of disrepute. If it is used as a means just to bolster revenues for a billing authority, we would probably collectively feel that it was not quite the right way in which to do things. I declare my interest as a vice-president of the LGA; no doubt I will get a dart or a brickbat from that quarter if it thinks that I am speaking out of turn.

Either way, at the levels of escalation that we might be talking about, the question is whether we leave things to the sole discretion of billing authorities with a challenge, as I understand it, only by means of judicial review. Other noble Lords will correct me if I have got that wrong. If that is the case, I would regard it as a very significant impediment, because of the cost and time involved in embarking on that course of action—to challenge the views of a local authority by saying that no reasonable authority could have reached that decision, which I understand is the test. As an alternative, I suggest that we need to introduce a properly, but doubtless locally, codified method of application, exemptions and, possibly, appeals. In that case, a lot more needs to be sitting somewhere in the Bill—perhaps the Government will produce regulations or something like that—which is not in it at the moment. I leave your Lordships with those thoughts.

I absolutely get the purpose that sits behind Amendment 2, moved so eloquently by the noble Lord, Lord Stunell. I would hope that the rationale behind saying, “We’re improving the energy efficiency of the Bill”, is not going to be capable of being spun out as some sort of pretext to prevent the core principle behind this, which I accept—namely, that there should be some sort of escalator—from kicking in at all. I think that would be a mistake.

I have a concern about the word “normally”. I seem to remember that it has rather unfortunate antecedents. I am probably going back about 30 years here, but I recall that there were a series of measures whereby it was suggested that “normally”, or something that sounded rather like it, was insufficiently clear or distinct in how it would be applied. The question was whose norm and who would be the judge of that. So, while I support the noble Lord, I am not absolutely sure that “normally” will be sufficiently targeted to achieve what he wants. With that, I will listen with great care to what the Minister has to say.

[Baroness Pinnock (LD)]

My Lords, I apologise for being late. I was watching the screen avidly and then, all of a sudden, it turned to this item of today’s business. I remind noble Lords of my interests as a councillor and as another vice-president of the Local Government Association.

I thank my noble friend Lord Shipley for moving Amendment 1 in his name, my name and that of the noble Lord, Lord Kennedy, and giving ample expression to our proposal for adding the premium to be paid on council tax, to be dependent on the length of time for which the property is left empty. In doing so, I shall speak to Amendment 3, a technical amendment in the names of the same noble Lords that supports the principle of Amendment 1.

In Committee, when we first moved an amendment relating to an escalator in the premium on council tax, the Minister was kind enough to give us some warm words of encouragement in response. Subsequently, a couple of weeks ago, we had a meeting where we discussed that. I thank him for saying the Government would be willing to support the principle of the idea but that there may be some necessary refinements when it came back at Third Reading. I am very pleased that that has happened, because it shows how this House can work in making amendments to Bills and trying to improve them before they become full legislation.

The basis of our amendment is, of course, a premium of 200% after five years and 300% after 10 years for those properties that are empty for 10 years or more. Any financial incentive to get more properties into use by families and individuals who desperately need a hand is one that we can all support. At the same time, it stops empty homes from being a blot on their communities—and we all know examples of that. The third reason is that it means that, if we can bring empty properties into use, we do not have to release so much greenbelt land to developers.