Renters’ Rights Bill

Kemi Badenoch Excerpts

Wednesday 9th October 2024 Commons Chamber

[Mrs Kemi Badenoch (North West Essex) (Con)]

It is a privilege to open for the Opposition on Second Reading of the Renters’ Rights Bill in this momentous week. As the Secretary of State mentioned, Labour reaches 100 days in office this week, for which it is to be congratulated, as not everyone gets to 100 days—Sue Gray didn’t. [Hon. Members: “Liz Truss didn’t!”] Neither did Sue Gray. The point is that not everyone gets to 100 days, so we congratulate the Government. So far, the only real actions we have seen are the noisy infighting and chaos that resulted in the hurried reset we saw over the weekend—oh dear. This Renters’ Rights Bill will only add to the chaos.

The first time the Secretary of State and I faced each other across the Dispatch Box, I warned her that she is being stitched up by the Prime Minister and the Chancellor. I also told her that we are here to help, and we are, especially as it has been a particularly rough time to be a woman in the Labour party. It is not just the sacking of Sue Gray—she is soon to be awarded what Winston Churchill called a “disapeerage”—as the hon. Member for Canterbury (Rosie Duffield) has taken the brave decision to leave the Labour party. I have followed the hon. Lady’s career in this place closely and, although we do not agree on everything, she is very brave.

[Dawn Butler]

On a point of order, Madam Deputy Speaker. This is Second Reading of the Renters’ Rights Bill, and the shadow Secretary of State is all over the place.

[Madam Deputy Speaker]

I am sure the shadow Secretary of State will come back to that subject.

[Mrs Badenoch]

I am still on that subject, Madam Deputy Speaker.

As I was saying, the hon. Member for Canterbury took the brave decision to leave the Labour party. I have followed her career in this place closely and, although we do not agree on everything, she is very brave. Perhaps the Secretary of State will feel nervous as she introduces the Bill, because I know that her Department is already breaking promises of its own. It promised a new national planning policy framework within 100 days, yet there is no new framework. There is just a consultation, as I predicted during our last debate on this subject.

To be fair, the Department has finally produced this Renters’ Rights Bill, after copying and pasting quite a lot of our Bill, but it is still not ready. The truth is that it cannot fix the rental market by tying it in knots with further interventions and directives. The simple truth is that this Bill will not work and the proposals will fail.

We know the Bill will fail because this approach has been tried in Scotland by those great experts in failure, the Scottish National party. Research by Indigo House, the housing expert, has found that none of the Scottish legislation since 2017 has protected the majority of private residential tenants against excessive rent increases or high advertised market rents. It has discovered that tenants have found it more difficult to find a home, and that there is a particularly negative impact on those in greatest need, including homeless households and those with less economic power, such as those claiming welfare benefits.

[Andrew Griffith]

My right hon. Friend is making a powerful speech on an important subject. Is she familiar with this week’s report from Scotland’s Housing Network revealing that 16% of landlords are reducing their supply, and fully 12% are considering leaving the sector over precisely this sort of attempt to over-regulate what would otherwise be a free market?

[Mrs Badenoch]

I have not seen that specific report, but I have seen others that indicate that this is happening. We have to be careful. I appreciate that the Government want to make renting more secure and affordable, and we want to do that too, but this Bill will have the opposite effect, as we have seen in Scotland. As this Government will find out over the course of this Parliament, they cannot buck the market.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

Does the Secretary of State recall why the previous Government failed to introduce such measures, as they intended?

[Mrs Badenoch]

Yes, I do recall. The reason why our Bill did not get through is that we recognised its flaws. That is what I mean when I say that I worry about the Secretary of State, because the bright young things in Downing Street who have sent her out with this Bill do not care if it fails. They will take the credit today, but she will get the blame tomorrow, and tenants will get bad regulation, shortages and higher prices, as we have seen in Scotland. Those higher prices will be paid by tenants, especially young people and the less well off.

[Shaun Davies]

Is it not the case that, as the country will see from the right hon. Lady’s speech, tenants in the private rented sector will fear the return of the Conservative party, in the same way as mums who rely on maternity pay?

[Mrs Badenoch]

That question is nonsense. My point is that tenants will not be able to find properties to rent in the first place. From that intervention, it seems that Labour still does not understand these concepts.

We worry that the higher prices will be paid by tenants, especially young people and the less well off. Demand is rising in England, but availability is not keeping up. Forty-seven per cent. of landlords have either attempted to sell a property in 2023 or are thinking of doing so, with the biggest reason being to their fear of new laws.

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

Penrith and Solway contains the Lake District national park and other tourist areas. Does the right hon. Lady recognise that the previous Government’s failure to introduce their promised reforms to section 21 has led to many private landlords moving from the private rented sector into the holiday let market? Her reasoned amendment says the Bill will

“reduce the supply of housing”—

[Madam Deputy Speaker]

Order.

[Mrs Badenoch]

Private landlords react to legislation, which is why we say that such legislation will reduce housing in the private rented sector. Fifty-six per cent. of landlords cited our Renters (Reform) Bill as a factor in their decision to sell. We already recognise those flaws, and such a reduction in supply is bad for both tenants and landlords. We are losing homes in the private rented sector.

[Nesil Caliskan (Barking) (Lab)]

Does the right hon. Lady recognise that the reduction in supply over the past few years is primarily down to the increase in interest rates, which has driven landlords out of the sector? A sector that is fundamentally broken requires the Government to take action to provide security for those who need a home for themselves and their children.

[Mrs Badenoch]

Of course we want people to have security in homes, but to do that we need to increase supply. We did what we could when we were in government, and we will help this Government to deliver. The fact of the matter is that this legislation is not going to help. We would love it if it did—we tried to make it work and we could not—but it would have a negative effect.

Landlords provide a vital service. The private rented sector is essential for those who cannot yet afford a mortgage, for young people and for those who need to move for work. Landlords selling and giving up homes for rent for mortgages do not help many of the people who need to rent. The overwhelming majority of landlords are responsible—I am glad the Secretary of State acknowledged that—and law abiding, and they see their property as a sustainable long-term investment.

The Government claim the Bill will reform the rental market. We do not believe it will—it will break it. Respect for property rights is not just an abstract principle. It underpins confidence in our economy and legal system. If the Government do not protect property rights, investment is damaged. If investment is damaged, growth is hit. It is painfully clear to anyone who understands markets that the Bill will act as a powerful disincentive for anyone to rent out their property. Most tenants do not have friends and family to rent from and, unlike Members of the Labour party, they do not have millionaire donors to put them up, so they will suffer most when supply goes down and rents go up.

[Luke Murphy (Basingstoke) (Lab)]

If it was so patently obvious and it was such a fundamental principle of property rights, why did everyone on the Conservative Benches, including the right hon. Lady, stand on a manifesto committed to reform? Is it not the truth that rather than thinking such legislation would not work, the previous Government simply failed to deliver it, in common with many other things?

[Mrs Badenoch]

There is a big difference between having a headline in a manifesto and seeing the detail, as many Members on the Government Benches will soon find out. Earlier on, their Prime Minister could not answer the question about whether the Government will increase taxes. Campaigning is easy, but governing is hard.

[Shaun Davies]

How is your campaign going?

[Mrs Badenoch]

We will find out soon enough.

Perhaps Members on the Government Benches are oblivious to these costs and dynamic effects—listening to their interventions, it appears so. I note that no impact assessment for the Bill is available, an omission that has rightly drawn criticism from the Regulatory Policy Committee. Will the Secretary of State tell us whether an impact assessment has been undertaken? If it exists, where is it? If it does not exist, why did the Government not ask for one? I hope this is not how the Labour Government mean to go on.

When I was in government, I provided impact assessments on all sorts of complex legislation. I know that is difficult and can create arguments, but I also know there is a lot more badly thought out and costly regulation where this came from, and we on the Opposition Benches are worried. I know Members on the Government Benches will want to point to the last Government’s Renters (Reform) Bill—I have heard their interventions—but the fact is, that Bill was flawed. I am quite happy to say that, but at least it recognised the practical effect of its provisions and would not have come into full effect until the courts were ready.

The then Levelling Up, Housing and Communities Committee warned in 2023 that the equivalent provisions in the Renters (Reform) Bill created

“a real risk that the current systems will be overwhelmed, and there will be a logjam with lengthy delays.”

This Government are pressing ahead with measures that will cause gridlock in our justice system, and pit landlords and tenants against each other in protracted litigation.

[Ben Coleman]

It is absolutely extraordinary to hear strong opposition to every part of the Bill from the right hon. Lady, or am I mistaken? Is she opposed to the parts of the Bill that will protect children from getting breathing problems and ending up being hospitalised? Is she against the protections the Bill introduces so that people can finally live in decent accommodation? If she does not oppose those things, why is she so relentlessly negative and—forgive me, as a new Member—so relentlessly patronising?

[Mrs Badenoch]

I do not mean to be patronising, but it is quite difficult when there are very clear issues that have a precedent in Scotland. The question is not why I am being patronising; the question is why the Government are ignoring what has happened when these proposals have been tried in another part of the UK. That is a serious problem. All of us here want the best for children and to see tenants do well. It is very wrong of the hon. Gentleman to ascribe negative motivations when we are pointing out problems with legislation. We on the Opposition Benches are doing our job. We do not think the Bill will work.

[Mike Martin (Tunbridge Wells) (LD)]

On that point, will the right hon. Lady give way?

[Mrs Badenoch]

I would like to make some progress.

The Government are pressing ahead with measures that will cause gridlock in the justice system, which will create even more problems for tenants. The people the Government are trying to help will not be able to get a home in the first place—none of us want to see that. We have to do better.

[Dame Siobhain McDonagh (Mitcham and Morden) (Lab)]

On that point, will the right hon. Lady give way?

[Mrs Badenoch]

I will give way first to the hon. Member for Tunbridge Wells (Mike Martin).

[Mike Martin]

I thank the right hon. Lady for giving way. Some 25% of Conservative MPs are landlords. Does that have any bearing on the Conservative party’s position on the Bill?

[Mrs Badenoch]

We need to focus on the contents of the Bill. If anyone has an issue with landlords in this House, it is Labour Members—I notice the hon. Member for Ilford South (Jas Athwal) ran away before the discussion about the Bill started. They should look at themselves, and the hon. Member for Tunbridge Wells had better check his fellow Members before asking that sort of question.

As I was saying, when the problems of protracted litigation in the courts are combined with the new, extended and highly convoluted notice requirements for recovering a property where the tenant has not paid the rent, a landlord whose tenant is in arrears will face many months of uncertainty and cost. Let me summarise in two words why the Bill will fail: unintended consequences. That is what we get when we start with policy rather than first principles.

[Dame Siobhain McDonagh]

Does the right hon. Lady think that there is already gridlock in the county courts? As of today, a landlord who secures a possession order will wait 12 weeks to get a bailiff’s warrant. Our courts are gridlocked right now.

[Mrs Badenoch]

That is an excellent point—we should not make the problem worse.

We should start with first principles not policy, but there are no first principles here that will help the Bill get through. We want to help the Bill become legislation to deliver for tenants and landlords. However, as I have heard from the comments that have been made, this seems to be about the left being seen to be tough on landlords and passing legislation with the right sounding title, rather than delivering real improvement to people’s lives.

I heard the Secretary of State teasing my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), but it is hypocritical to criticise those of us in the House who declare our interests—we on the Conservative Benches do that well—when a Labour MP was disgraced in the press for letting out unsanitary homes with mould. The Government should look at why they have Members who are behaving that way.

We want a housing market that works for everyone—landlords, tenants and those who want to own their home. By attacking those who rent out homes, they will damage investment in new homes. They will push landlords out of the market and drive up rents. That is bad for everyone. By piling on excessive regulation, they will push good landlords out and empower those bad landlords who simply ignore the rules. We need to look at enforcement of the rules we already have.

We all agree that renters need a better deal, but this Bill is not going to work. It is not what renters need—we found that out and we want to help deliver a good Bill. If the Government want to help renters, they should drive up housing supply: so far, no sign of that. If the Government want to help renters, they need to reduce immigration: so far, no sign of that. Some 80% of recent migrants have moved into the private rental sector, creating a demand the sector cannot cope with. If the Government want to help renters, they need to enforce existing rules against the bad landlords that do not look after their tenants, rather than create new rules that will make the problem worse.

This legislation is typical of Labour in government. We have tabled a reasoned amendment because the Bill fails to fix the major issues and adds yet more rules and regulations to keep the bureaucrats busy, rather than finding solutions to help those tenants who desperately need them.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Housing, Communities and Local Government Committee.

--- Later in debate ---

[Matthew Pennycook]

My hon. Friend is absolutely right. We think that the legislation will take the burden off advice charities. The database provisions will ensure that tenants and landlords have access to information, and know better what is required from them under the new system. It is absolutely right that we move at pace to get the legislation through the House.

During the many hours we have debated the Bill, an extremely wide range of issues have been raised, and I will seek to respond to as many as possible in the time available to me. First, I want to address the reasoned amendment tabled by the Opposition. My opposite number, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), struck a constructive tone, but when the shadow Secretary of State, the right hon. Member for North West Essex (Mrs Badenoch), made the case for the reasoned amendment, we were treated to a bizarre spectacle; she chid us for copying and pasting many of the sensible provisions in the previous Government’s Bill, but then told us that those provisions would have “added to the chaos”. The problem is that she supported that legislation at every stage. She voted for its Second Reading; she supported it through Committee; and she voted for the carry-over motion to see it progress. She voted for it on Report and Third Reading, and took it into wash-up. She now asks us to accept that she believed it was flawed all along. Well, party leadership election contests can do funny things. She may not have confidence in her manifesto—which, let me remind her, stated that the Government at that time were committed to passing renters reform along the lines of their previous legislation—but we have confidence in ours and we are determined to deliver it.

[Mrs Badenoch]

Will the Minister give way?

[Matthew Pennycook]

No. The right hon. Member has had her time.

We strongly refute the central contention in the reasoned amendment that the Bill fails to provide security and affordability for private renters or to respect the property rights of landlords and that it

“will reduce the supply of housing in the private rented sector”.

The Bill strikes the right balance between the interests of landlords and tenants. While we acknowledge that it will take time for the sector, including build to rent providers, to adjust to a significant change in regulation, we do not believe that this legislation will have a harmful impact on future rental supply—which, by the way, we are taking steps to boost, not least by providing more opportunities for investment in a growing build to rent sector. The reasoned amendment is weak and disingenuous. I urge colleagues to vote it down when we arrive in the Lobby in a few minutes.

Let me turn to a set of specific issues referred to in the reasoned amendment and raised by a number of hon. Members in the debate: namely, tenancy reform, fixed-term tenancies and court improvements. The move to a new single system of periodic tenancies is at the heart of the Bill. The introduction of the new tenancy regime will see the end of fixed-term tenancies and the long-overdue abolition of section 21 no-fault evictions. As a result, tenants will enjoy greater stability and security, and landlords will benefit from clear and expanded possession grounds to evict tenants in circumstances where that is justified and reasonable.

To avoid confusion and to ensure that renters on existing tenancies do not have to wait even longer for the threat of arbitrary evictions to be lifted, we intend to apply the new system to all tenancies in a single stage. We will appoint the commencement date by regulations at an appropriate interval after Royal Assent. Our intention is to give the sector as much notice as possible.

A number of hon. Members mentioned fixed-term tenancies. I want to be clear that it is the Government’s firm view that there is no place for fixed terms in the future assured tenancy system. Fixed terms mean that renters are obliged to pay rent regardless of whether a property is up to standard, and they reduce renters’ flexibility to move when they need to. It is right that the Bill ensures that all tenancies will be periodic in future, ending the injustice of tenants being trapped paying rent for substandard properties.

Good landlords have nothing to fear from this change, either. Tenants simply do not move houses unless it is absolutely necessary. When they do leave, they will be required to provide two months’ notice, giving landlords sufficient time to find new tenants. Nor will the PRS become an Airbnb-lite, as some have suggested. Tenants will still have to pay up to five weeks’ deposit, complete referencing checks and commit for at least two months. Locking tenants in for longer with fixed-term tenancies would mean people being unable to leave dangerous situations and being trapped in situations, for example, of domestic abuse. We are not prepared to accept that.

Ensuring that the Courts and Tribunals Service is prepared for the implementation of the new system is essential. I take on board the challenge that many hon. Members, including Opposition Front Benchers, put to us in that regard. In considering the potential impact of the Bill on the county courts, it is however important to bear in mind that most tenancies end without court action being needed. It would also plainly be wrong to assume that all evictions that presently occur following a section 21 notice will in future require court proceedings under section 8 grounds.

One of the main effects of the Bill will be to reduce the number of arbitrary evictions that take place. That said, we recognise that landlords need a reliable and efficient county court system to ensure that they can quickly reclaim their properties when appropriate, and that we need a well-functioning tribunal process to resolve disputes in a timely manner. We agree that improvements to the courts and tribunals are needed to ensure that the new system functions effectively. As my right hon. Friend the Deputy Prime Minister said at the outset of the debate, we are working closely with colleagues in the Ministry of Justice to ensure that they are made, and exploring options for improved alternative dispute resolution so that only cases that need a judgment come to court.