Tenant Fees Bill

Debate between Lord Deben and Lord Kennedy of Southwark

Monday 5th November 2018 Grand Committee

[Lord Kennedy of Southwark]

My Lords, Amendment 6, moved by the noble Baroness, Lady Grender, would amend Clause 8, which is concerned with financial penalties. The amendment adds paragraph (d) to subsection (4), which lists those situations where a financial penalty may not be imposed. The amendment, which I am happy to support, stops an enforcement authority imposing a fine where the relevant person has recovered funds through an application to the First-tier Tribunal. It seems to address an omission on the part of the Government and it is a sensible proposal.

Also in this group are Amendments 7 and 8, which I think would strengthen the Bill. Amendment 7 provides for the First-tier Tribunal to order the landlord or lettings agent to pay up to three times the sum of the prohibited payment that they improperly collected. There is no provision in the Bill for any form of compensation when a prohibited fee is charged and that in my opinion is a serious omission on the part of the Government. We believe that compensation will undoubtedly be appropriate in many cases given the likelihood that charging prohibited payments will cause tenants significant financial hardship.

Compensation would also act as an incentive for tenants to recover illegal fees where the enforcement authority is unable to enforce the law and would be appropriate recognition of the time and effort that it takes for an individual to enforce their rights through the courts. Compensation is an established principle in the consumer industry where one party is entrusted with another person’s money, in addition to enforcement penalties where rules or laws have been breached. This includes all sorts of bodies such as train operators, travel agents and lawyers. The idea of being paid compensation where the consumer has not been well served is well understood, and getting the money back is important, as the noble Baroness, Lady Grender, said.

My amendment is consistent with other legislation governing the private rented sector. I do not accept that compensation should be sacrificed in support of the Government’s aim that enforcement will be funded exclusively through fines. Amendment 8 seeks to add a further restriction on the termination of the tenancy. I believe this is a very important addition that brings a further element of fairness.

Section 21 notices have undoubtedly been abused in the past, to the considerable detriment of tenants. It would be a complete travesty if, having stood up for yourself and your rights, and having taken action to recover the money that was improperly taken from you, you are then punished, in effect, and served with a Section 21 notice to leave your property. This amendment seeks to ensure that that does not happen and that the victim—here, the tenant—cannot be treated in that way. I do not see why we would allow rogue landlords or letting agents to behave in this way. My amendment seeks to ensure that they cannot, by implementing that six-month cushion.

[Lord Deben (Con)]

I wonder whether my noble friend will address the point raised by the noble Baroness when she referred to the number of letting agents that did not obey the law on their websites. I have found that in many areas—including modern slavery, an issue I am particularly interested in—a number of people just do not obey the law. It seems to me that it would be odd if we left it to the local trading standards officers. What is the arrangement? If you find such a case, who in government is supposed to enforce it? This also is a piece that might be dealt with in this legislation. If it is true—I assume that it is—that 17% of letting agents do not even obey the law of having to say what their fees are, that is outrageous.

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

Debate between Lord Deben and Lord Kennedy of Southwark

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

[Lord Deben (Con)]

My Lords, I support the comments that have just been made. As the former Member of Parliament for Suffolk Coastal and as someone of whom, if you asked him where he really lived, the answer would be in Suffolk—although not coastal Suffolk—I am the owner of a second home. It is a situation in which I am happy to pay my council tax in full, as I do in on my small flat in London. That is how we operate, and I think that is right. One just has to recognise that there are circumstances in which people have to work in one place and live in another, and that is absolutely acceptable.

I emphasise the point about the coastal communities of Suffolk, which I represented for so long. I saw the change; it was fascinating. Southwold was but latterly added to my former constituency—as they moved me closer and closer to the sea, people said that they were trying to tell me something. It has very largely become a place of second homes, and so has Aldeburgh and, increasingly, many other villages round about. It is a real problem for community cohesion; I understand that, having committed myself to the view that people should be allowed to have—and very often need—a second home. However, I do not support the idea that people can avoid their proper contribution to the community by using what has elegantly been referred to as a loophole. It is worse than that, because they are telling a direct lie. They are not running a business; they have no intention of running a business. They are trying to get the business rate and then not to pay it because they have the small business special arrangement. Of course, however, you can be a small business even if you do not let anything. It is not difficult. We could all be a small business if making nothing were the purpose of being a small business. With my family, I own and run small businesses, but we intend to make a profit, otherwise there is not much point in us doing it. However, to run a small business in order not to make a profit and to get the profit from the community is entirely unacceptable.

I want to make some difficult comments. I have now been in one or the other House of Parliament for a very long time. It does not matter which Government are in power—or which mixture, as sometimes it is a coalition—when they want to avoid dealing with something, they always promise the most careful consideration and the most urgent assessment of the real issues that may well arise. They warn that there may be other unintended consequences, meaning that one should not move too quickly. Sometimes they suggest that, although they have looked at it, they have not found quite the right answer, but the House can be assured that such an answer will be found, but not yet. I say to my noble friend, whom I respect enormously, as he knows—I have told him so from time to time—that Wales is right on this. Wales is right on quite a number of things in the climate change committee. I have to remind the United Kingdom Government how much better in some things Wales and Scotland are at moving on climate change. It is not surprising that Wales is right on this.

We have to deal with this for a reason that is not just about equity—although that is very important—or the resources of Suffolk Coastal District Council; I do not have to declare an interest there because I live in the Mid Suffolk District Council area. That reason is social cohesion, in the sense that it annoys, upsets and very often angers people that their neighbours are not paying what they are paying for local services. I do not think it is acceptable or reasonable and it seems something very simple to change. All we have to do is what the Welsh have done. It would be jolly nice to acknowledge that the Welsh got there first and that we in the rest of the United Kingdom are following suit.

[Lord Kennedy of Southwark]

My Lords, briefly, I endorse the comments made in the debate so far, particularly those from the noble Lord, Lord Deben. He is absolutely right. Suffolk is a beautiful part of the world. I know that as well as him; I spend a fair bit of time down there. It is a wonderful place. He is absolutely right that people should not be allowed to pretend to have businesses and to take advantage of these things to avoid paying what they are supposed to pay to provide for local services. That is completely wrong. I hope that when the Minister responds to the debate he can give us some comfort that the Government will look at this. It is totally out of order. If someone lives in an area they should contribute to the services provided by the local authority.