Lord Greaves
Main Page: Lord Greaves (Liberal Democrat - Life peer)Housing and Planning Bill
Lord Greaves Excerpts
Lord Greaves
Lord Greaves (LD)
My Lords, it is an exciting privilege to set off this Committee. I do not know how many sittings we will have, but I am sure that by the end of it we will have completely forgotten today. I start by apologising for not tabling the amendments in time to go on to the Marshalled List. I was a bit spooked by the change in today’s business, so I apologise for that.
As it is the start of a new stage of the Bill, I should declare some interests: my membership of Pendle Borough Council, of which I am deputy leader; I am a vice-president of the LGA; and I am vice-chairman of the APPG on Local Democracy—I shall miss its reception today because of the Bill, and I would rather be there, but never mind. There will be other interests, but those relate to the amendments I have tabled at the moment. In moving my amendment, I shall speak to the others in the group.
We move straight to Part 2, and I say right from the beginning that, first, this is one of the better parts of the Bill and, secondly, it is one of the better written and presented parts, with a great amount of detail on the face of the Bill and in the schedules. If the whole Bill were like that, a lot of us would be a lot happier, but we can be happy for the time being. This part is headed:
“Rogue landlords and property agents”.
When I read it, I asked myself whether the word “rogue” is a proper word to appear in legislation. What does it mean? Is it not just slang and colloquial? Why is it here? We will come back to that.
Chapter 2—Clauses 13 to 26—is all about “Banning orders”. As I said, the clauses in this chapter are admirably clear. They require the Secretary of State to set out in regulations exactly what the banning orders may be put in place for but, nevertheless, by and large, it is a model of good legislation. Clause 13 bans a person from,
“letting housing in England … engaging in English letting agency work … engaging in English property management work, or … doing two or more of those things”.
That is absolutely clear. That is what a person is banned for if they get a banning order. The interesting thing is that, after the first clause of Part 2, the term “rogue” or “rogue landlord” does not appear at all.
What sort of offences are we talking about? It will require regulations, but it is clear that it could be maintaining their property poorly, posing a risk of harm to tenants or other people, dangerously overcrowding their properties, exposing people to unhealthy conditions, housing illegal immigrants, intimidating or harassing tenants who raise a complaint. These things are all absolutely clear, and clearly set out, but they are specific problems that lead to people being banned; it is not clear that they lead to a person deserving the epithet “rogue” or being given that epithet for however long.
In Chapter 3, we have the “Database of rogue landlords and property agents”. However, apart from a statement to that effect at the beginning of the chapter, the words “rogue landlord” do not appear again. Clause 27(1) says what the database is. It must include people with banning orders and it may include people convicted of a banning order offence while being a residential landlord or property agent. It includes some people who have to be on the list and some people who can go on the list, but it is all about banning orders and banning order offences.
This part of the Bill is complicated. I tried to get my mind round it perfectly, but I could not. Then I saw that it will rely on guidance from the Secretary of State so that local authorities can understand it in the way that I cannot. Okay, but it is very clear that what we are going to have is a register of banned landlords and others who have committed banning order offences. What will it be called? Will it be called the register of rogue landlords, because the word “rogue” does not appear in all this? I have the distinct impression that the phrase “rogue landlord” has been added to this legislation—after it was written by civil servants—by some spin merchant somewhere in the Government who thought it would be a good idea to get some good publicity to get it through. I do not think this is the way that legislation should be written. That phrase is in the heading, but it does not appear anywhere else.
Clauses 40 to 50, which are still under the part which is supposed to be about rogue landlords, are all about rent repayments. The phrase “rogue landlord” does not appear anywhere. It is not clear to me whether any landlords who get involved in the whole system of rent repayment are rogue landlords or not. The heading of this part of the Bill contains the words “rogue landlords”, but are they rogue landlords or are they just people on the list who are rogue landlords?
Chapter 5 is “Interpretation of Part 2”. Clause 52 quite rightly sets out in some detail the “Meaning of ‘letting agent’ and related expressions”. Clause 53 sets out the “Meaning of ‘property manager’ and related expressions”. Clause 54 is a typical clause at the end of a part of a Bill. It sets out the meaning of 16 different words and expressions, starting alphabetically with “banning order” and ending with “tenancy”. However, it does not define “rogue landlord”.
Another point about which I am not at all clear is whether, once a person comes off the banned list, they are still a rogue. The problem is that it is one of those words—once a rogue, always a rogue. What does it mean? I looked up the Oxford Dictionaries on the internet and it is full of colloquial meanings. For example, it mentions that:
“a distinct criminal culture of rogues, vagabonds, gypsies, beggars, cony-catchers, cutpurses, and prostitutes emerged and flourished”,
in the 16th century. I suppose that we would not accept Gypsies in that definition, but we are not going to have legislation denouncing people as coney-catchers or cutpurses. The synonyms in the dictionary include:
“scoundrel, villain, reprobate, rascal, good-for-nothing, wretch; … rotter, bounder, hound, blighter, vagabond”.
Later on, there was something about which I was not too happy—it says:
“Northern English informal tyke, scally”.
As a Yorkshireman born and bred, I was not too happy about “tyke” being there. Perhaps we will have legislation denouncing lists of “tykes” who have to be dealt with in some way. Another definition is:
“A person or thing that behaves in an aberrant or unpredictable way”,
I do not think “rogue” is a suitable word.
I have put “specified” in the amendment because I could not think of anything better. I was going to put “banned”, but it is clear that other people may also be put on the list who have not actually been banned but who nevertheless have been convicted of banning offences. It is not entirely straightforward, but I believe that the word “rogue” and the phrase “rogue landlord” are not appropriate to go into the law of England. The Government ought to think of another phrase which is less suitable for tabloid newspaper articles and more suitable for the law of the land. I beg to move.
Baroness Williams of Trafford
The noble Lord will know very well if he is a rogue landlord, because I will now read out the definition. It is a landlord or property agent who knowingly flouts the law by renting out unsafe and substandard accommodation. To be on the database, they will have to be convicted of certain serious offences—and, for that, they may come before your Lordships’ House.
Lord Greaves
My Lords, that is not the correct definition, with respect to the Minister, unless being banned by a First-tier Tribunal is a conviction. Perhaps it is—it is certainly a status—but it is clear that people banned by the First-tier Tribunal will be on the banned list. One assumes that they are therefore rogue landlords under the definition in the Bill, so they would not have to be convicted in a higher court of law. Yes, the Minister is nodding her head.
I will be brief. I am no friend of bad landlords—far from it. In the part of Colne that I represent, parts of those streets have been wrecked by bad landlords, and I agree that it is a clear phrase in the public mind. However, we are not talking about the public mind but about phrases that will have to be interpreted at some stage by the courts of the country. We are talking about words written into the law of the land. The use of such colloquial expressions, which are perfectly okay on breakfast-time television as the people who are denounced there deserve everything they get, will get us into trouble if we put them into the law.
If the Government are really determined to put this rather unusual and extraordinary expression into the law of the land, it ought to appear in the list of definitions at the end of Part 2 so that we have a clear definition of it, because when the Minister was asked just now she did not quite give an accurate one. At the very least, I ask that it appears in the list of definitions because words mean what they say. This is not Humpty-Dumpty land. Words actually have a meaning and, when it comes to the law, words have more of a meaning than they do in chat in the pub or on breakfast-time television. Having said that, I beg leave to withdraw the amendment
Lord Campbell-Savours
I will speak to the amendments moved and spoken to by the noble Baronesses, Lady Grender and Lady Bakewell of Hardington Mandeville. We all know the reality. The reality is that local authorities will be picking up this responsibility because people will be advised by the homeless charities or whatever to go to the local authority, and the local authority will have to pay. The question is: who should ultimately pay?
It may be that the Government should take upon themselves the right to take a charge on the landlord’s property. I know it would be very controversial—I am sure the lawyers would have a field day—but it would mean that the local authorities would get their money back. I therefore put that as a suggestion, which the Minister might wish to pursue when we get to Report.
Government Amendment 4, in the name of the noble Baroness, Lady Williams of Trafford, deals with further offences by the person who committed a first offence. What about people who transfer their interest, so that the further offence is committed by the person to whom the interest has been transferred? Clause 26 deals with the “Prohibition of certain disposals”. Subsection (1) states:
“A person who is subject to a banning order that includes a ban on letting may not make an unauthorised transfer of an estate in land to a prohibited person”.
Subsection (4) describes a “prohibited person” as,
“a person associated with the landlord”,
or , under subsection (4)(f),
“a body corporate in which the landlord has a shareholding or other financial interest”.
Subsection (5) states that an,
“‘associated person’ is to be read in accordance with section 178 of the Housing Act 1996”.
In that section of the 1996 Act, I am told that an “associated person” is someone who is in a marriage to, or is a cohabitee of, or lives with, or is a relative of the landlord, or someone whom the landlord is about to marry, or who is a child of the landlord. Does this include relationships that have developed and are registered overseas? Many landlords will be operating from overseas, so we will have great difficulty identifying who the owner of a particular property is.
This brings me to the second point, which is about,
“a body corporate in which the landlord has a shareholding or has a financial interest”.
What about companies registered outside the United Kingdom? The landlord might be in some tax haven or in some other part of the world, which is perfectly respectable but where we do not have much access to information. I think these bodies need to be more clearly defined in the law, and I wondered whether the noble Baroness might wish to comment on that as a proposition.
Lord Greaves
My Lords, the amendments put forward give rise to a very simple, brutal question—I speak as somebody who is wrestling with trying to produce a council budget at the moment, in very difficult circumstances—and that is: how much is this going to cost local authorities? I have looked at the impact assessment, and basically it talks about the cost to the private housing sector—to the providers of private-landlord accommodation. Unless I have completely missed it, I cannot find any assessment of the cost to the local authorities, who will have the responsibility of doing all this. My first question is: have the Government made an assessment of this and, if so, will they tell us what it is?
The second thing I have been trying to apply my mind to is, in my own authority, how we will deal with this. The point about local authorities, of course, is that they are very different: there are large unitary counties, there are large metropolitan and other unitary urban authorities, and there are small districts. It is the housing authorities as a whole which will have to deal with this, including the small districts. The way the small districts may be able to cope is perhaps very different to that of a large authority that employs a lot more specialist staff, such as solicitors and property management people. I have, therefore, been trying to get my mind round how local authorities will actually make the decisions about applying to the tribunal for a banning order—who will make those decisions, how it will be done, how much it will cost, how much work will go into it—and dealing with appeals, because it is quite clear that there will be a lot of appeals, assuming that a lot of people go through the banning process.
Then there is the second decision. Apart from the people who have gone through the tribunal and automatically go on the database, there is a decision about whether to put the other people who have been convicted of banning offences on the database. How much time and resource will that decision take? Again, there is the question of appeals, which are never cheap for local authorities, and then there is the cost of maintaining the database itself: whether or not that is onerous depends on how many people there are on the database. My second question is really linked to how much the Government think this is going to cost local authorities—any answer to that must be based on an idea of how many cases there are going to be over the period of a year, or whatever it might be. Do the Government have any answer at all to those questions?
Lord Kennedy of Southwark (Lab)
My Lords, at the start of the first day of Committee, and my first contribution at that stage, I should have declared that I am an elected councillor of the London Borough of Lewisham.
I join other noble Lords in concern about the lack of regulations available for noble Lords to see. Why does the Minister think that it is acceptable to bring forward a Bill in such a sorry state? Does she accept that it is wholly inadequate to suggest that the Government will consult fully and lay regulations months after the Bill has become law?
On Second Reading, and subsequently, I and other noble Lords from these Benches have welcomed the banning order proposals in the Bill. They will provide, we hope, an effective additional tool for local housing authorities to use against rogue landlords and persons engaging in letting agency or property management work who think that they can rip off tenants and treat them badly with impunity. With an ever-increasing number of people forced into the private rented sector, it is important that there are proper safeguards. Peter Rachman became synonymous with the rogue landlords of the 1960s. We want to ensure that we do not have any modern-day Rachmans, or, if we do, that they are dealt with effectively.
I also see the proposals in this part of the Bill as a first step to dealing with the issues in the private rented sector that make life difficult for tenants living at the poorer end of the market. The ward that I represent on Lewisham Council is typical of those that the Bill is aimed at: we have very little local authority housing other than a successful housing co-op, and until recently an overwhelming number of people there were owner-occupiers. However, there has been an explosion in the private rented sector in the last 10 years, for a variety of reasons. Most landlords are very good, with anything from one to a few properties. They often get into the market as a landlord because they have fallen into negative equity, have looked to move on but have been unable to cover their capital outlay. Many of those coming to my surgeries are now private sector tenants, invariably young people, both singles and couples, who cannot get any social housing because they are not in a priority group, cannot go on the housing list, cannot afford to buy and are left to seek refuge in the private rented sector.
When I was a member of Southwark Council in the 1980s, we had properties deemed hard to let—that nobody wanted to live in—and the council was able to let those to single people and couples who would not otherwise qualify for social housing. That category no longer exists. The amendment proposed by the noble Baroness, Lady Grender, in this group, has identified what is a significant omission from the Bill. The amendment has the full support of noble Lords on these Benches. After we have taken action against the rogue landlords, what happens to their tenants? These will be the very people who have suffered at the hands of the rogue landlord in the first place. It is right that the amendment should be in the Bill and not left to regulations, advice notes or any other procedure that does not involve it being clear in the Bill itself. If the noble Baroness, Lady Williams of Trafford, does not accept the amendments today, I hope that she will at least reflect on this proposal and meet with colleagues from your Lordships’ House to discuss this matter before we get to Report.
We also support Amendment 7, in the names of the noble Baroness, Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Palmer of Childs Hill. Following an enforcement action resulting in a financial penalty, it must be right that the money should be retained by the local authority and not be lost to the Consolidated Fund or some other place where money from these penalties goes and never returns.
The remaining amendments in this group are government amendments. Amendments 3 and 8 appear to correct drafting errors and make matters clearer. Amendment 4, to which my noble friend Lord Campbell-Savours referred, seeks to deal with the situation where a person convicted of an offence continues with the breach after conviction. I have an issue with this amendment. Does it go far enough when dealing with people who, at this stage, have no respect for the law, or where the tenants are again in a difficult situation? We may need to look at that further.
My noble friend Lord Beecham will ask more questions of the Minister when she moves her amendments. At that point, we may need to look at the issue further and bring an amendment back on Report.
Lord Greaves
I have an amendment later on that refers to empty dwelling management orders, which do not work very well at the moment. If a local authority is managing a property because the owner of that property has a banning order, is it assumed that the only money the local authority can spend on the property, which may be severely substandard—that may be why the banning order is there, or may be related to it—is the money taken in rents, even if it is not sufficient to bring it up to standard? If so, do we accept that a local authority is managing a substandard property for a period of time and if not, where will the local authority get the money to put into that property?
Baroness Williams of Trafford
I think that comes back to the point made by the noble Lord, Lord Campbell-Savours, about charges on properties. The local authority cannot in any circumstances of managing that property be out of pocket, but nor would the tenants be expected to live in substandard conditions. Therefore, any money that needed to be spent on the property could be recouped by a charge on the property. I think that answers the questions of both the noble Lords, Lord Campbell-Savours and Lord Greaves.
Baroness Williams of Trafford
That might be the case. The point is that the local authority could recoup the costs. I think the premise of all the questions is the local authority not being out of pocket because of its obligations to the tenants. The noble Lord, Lord Greaves, is shaking his head so I will let him intervene.
Lord Greaves
I am grateful to the Minister for giving way when I was not asking her to. This is a new convention which perhaps we should adopt. I think the point that my noble friend Lord Foster of Bath was making is that it might be a very long time before the property is sold by the owner. It could be 50 years, by which time who knows whether local authorities will still exist? There appears to be no means by which the local authority is guaranteed to get its money back within the period of the banning order.
Baroness Williams of Trafford
My Lords, I hope I made the point clearly that ultimately, the local authority will get its money back. That might mean that at the end of a tenancy the local authority could force the sale of a property in order to get its money back, but the point is that the local authority can get its money back. I guess if it incurred any interest charges over the period, it can claim those back as well. But such is the level of the civil penalty that local authorities should be in a fairly good position, using penalties and other things to service any housing costs they might have and to not be left out of pocket.
Lord Greaves
My Lords, I am trying to be helpful to the Minister. It would be extremely helpful if she could write to us all with some examples and figures showing how this might work in practice, both in terms of the procedure and some numbers, so that we can understand it—which we are not going to this afternoon, clearly.
Baroness Williams of Trafford
My Lords, I think I understood what I was saying, but I am sorry if noble Lords did not. I shall be very happy to write and explain. I always use the example of a house that costs £100, so it will probably be something around that.
Lord Campbell-Savours
My Lords, I am not sure that the Whips’ Office has jurisdiction in these matters. The amendment in the name of the noble Lord, Lord Flight, deals with a local authority’s arrangements for gathering council tax payments and business rates. However, there is another very important form of taxation when discussing these matters, which is taxes raised by the Inland Revenue—that is my explicit interest in Amendment 16, as spoken to by the noble Baroness. We now have a booming rental market in the United Kingdom, with programmes on television promoting buy to rent and organisations issuing leaflets and sending them to people’s homes explaining the benefits of buy-to-rent arrangements. A lot of people should be paying taxes on rental income.
Take a flat in London with two bedrooms, costing £500 a week or £25,000 a year. There will be many examples in London of people gathering in very substantial rents, even on just one property, who through some means or another are simply not declaring it to the Inland Revenue. Any system, including the system promoted by the noble Lord, Lord Flight, would be helpful in itself, but the system proposed by my noble friend, of a mandatory register of all private landlords, would certainly be very helpful in enabling the HMRC— which I keep referring to as the Inland Revenue, being a bit old-fashioned about these matters—to identify those people who should be paying tax on their rental income. The Inland Revenue are missing a trick here, because I suspect that there are probably billions in unpaid taxes on rentals which are not declared to the Revenue.
Lord Greaves
My Lords, I have Amendment 33A in this group. I do not want to say too much but give general support to the two amendments spoken to by the noble Lord, Lord Beecham, which tackle the question of the register from opposite ends but which are mutually complementary, as far as I can see—there are two different purposes but both would be desirable. There are two points in this amendment.
First, it is our view that wherever possible, local authorities should have discretion over what they do, and therefore this question of whether a local register of private landlords should be set up and collected should be a matter for the local authority concerned. For all the reasons put forward by the noble Lord, Lord Beecham, and indeed to a degree by the noble Lord, Lord Flight—as well as those in the very interesting contribution from the noble Lord, Lord Campbell-Savours, which bring in a different dimension altogether—I suspect that most authorities would want to do it, because of the value there would be. However, the real reason we would like to see it is for local housing purposes, to enable a local authority to maintain proper scrutiny over the private rented sector in its area and to more easily take action when action is required. My amendment is a statement against “one size fits all”-ism to some extent, but if the Government were minded to set up the kind of register that the noble Lord, Lord Beecham, is proposing, and it were compulsory for all local authorities, I do not think we would squeal too much.
Secondly, it seems to us that a register ought to pay for itself. An ordinary register would not be terribly expensive to run, and it ought to pay for itself rather than requiring further contributions from local authorities. Those are the two reasons for my amendment.
I listened carefully to the contribution of the noble Lord, Lord Flight. I am not sure that the council tax register as such would be a particularly efficient way to do this, since as I understand it, people only really register for council tax in the sort of sense he is talking about when they are new residents in a property. Over a period of time, they might well provide the information he wants, but in the short run I do not think they would, because people simply pay the bills they get each year rather than filling a form in to register again afresh each year. No doubt these are details which could be discussed.
Lord Flight
I think I need to respond to that. Yes, it is correct that this would essentially be when a new residence starts, but there could be a simple form that went out with regular council tax demands.
Lord Greaves
Indeed, but it would not be compulsory to send it back—or perhaps it would if the legislation said that it was. Equally, it might be more efficient to do it with the electoral register. I do not know, but I am sure it could be done. However, there is a growing consensus on this, and sooner or later Parliament will have to legislate on the Government’s behalf. Registers of private landlords are going to be required for a number of varied purposes, which have been discussed around the Committee today.
Earl Cathcart (Con)
My Lords, I should declare that I am a landlord. I support Amendment 21, tabled by my noble friend Lord Flight. This is a bit of a hobbyhorse of mine, and I raised this exact solution in a Question last summer, when I said:
“One of the problems is not knowing who the landlords are. Some suggest that there ought to be a national register of landlords, but the good ones might register while the bad ones will not bother and thus remain below the radar. Surely a better way is if all new tenants, who are required by law to complete a council tax registration form, put on that form the name, address and contact details of their landlords; then, councils would build up over time a complete picture of all the landlords in their area”.—[Official Report, 23/6/15; cols. 1467-68.]
I raised the point again at a later date, but that, too, fell on stony ground. My noble friend the Minister then kindly arranged a meeting with Brandon Lewis, the Housing Minister, and all three of us agreed that it was a jolly good idea—until an official put a spoke in the wheel by suggesting that such a measure would put a burden on local authorities. Quite what that burden would be I do not know. It must be in local authorities’ interests to know who all the landlords in their area are—the good and the bad. I understand that, as my noble friend said, some local authorities already require this information on their council tax registration forms. So surely this is best practice, not a burden.
There are numerous occasions when the Government need to contact landlords, but cannot do so because they do not know who they all are. We heard from the noble Lord, Lord Beecham, that the Smoke and Carbon Monoxide Alarm (England) Regulations allowed only two weeks for landlords to comply, but the Government could not write to the landlords, so how on earth could they comply on time? We also heard from my noble friend Lord Flight about the provisions in the Immigration Bill legally requiring landlords to monitor whether their tenants are legally allowed to rent in this country. I wholeheartedly support my noble friend’s amendment. I shall not go over all his arguments, but I hope that the Minister will agree to look at this again.
Lord O’Shaughnessy (Con)
My Lords, I register my concern about Amendments 18, 27 and 33A because of the unintended impact of the regulation that I believe they would introduce.
It is worth reflecting once again on the reasons behind the Bill: we have too little housing in this country, it is too expensive and is not of a high enough quality. To address this crisis we need to generate radically greater investment in housing. I think everyone in the Committee agrees with that. That investment must come from government and the private sector. Several noble Lords have already commented on the growing role of the private rental sector. For better or worse, we now have 4.4 million households in private rented accommodation—the second highest tenancy after ownership. Earlier, the noble Lord, Lord Kennedy, talked about an explosion of private rental housing. I welcome this in its own terms because we will simply not get the housing we need without the billions—indeed, trillions—of pounds of investable money that is sitting in pension funds and other investment funds.
It is also worth remembering that we have a public debt of 80% of GDP and a budget deficit, so private sector funding is essential to meeting our housing need. Whenever you talk to private pension fund and investment fund managers about investing in housing, you find that it is the complexity of the product that puts them off. We must be very wary about increasing that complexity.
What are the conditions needed to encourage this investment? Clearly, any investment needs to look for an economic return. I think we all agree that that is available in the housing sector. We need a quick and simplified planning system—we are not dealing with that part of the Bill today but will do so—and a low regulatory burden for the non-rogue landlords. It is on this last item that these amendments are problematic. I totally understand their intention but believe that they will provide another barrier to entry for potentially good landlords.
My noble friends Lord Flight and Lord Cathcart talked about the fact that licensing schemes will tend to attract good landlords and not capture the bad ones. For that reason, a mandatory licensing and accreditation scheme—let alone the charging of fees, as suggested by the noble Lord, Lord Greaves—would potentially discourage investors and raise the costs of housing while also increasing the burden on local authorities. Surely this is not the way forward to generate the housing that we need.
What we need, of course, are greater powers to crack down on rogue landlords—exactly what we discussed earlier today—a proportionate response to the problem rather than a blanket response. As we discussed—and will continue to discuss—these are well provided for in the Bill, with great agreement across the House. So the discussion of voluntary arrangements—
Lord Greaves
I do not understand how a simple act of telling the council that you are the owner of a property is a huge regulatory burden. But putting that on one side, how is a council supposed to crack down on a rogue landlord if it does not know who owns the property?
Lord O’Shaughnessy
That is a perfectly good question. I was going to end by talking about the voluntary arrangements that have been discussed in both this area of registration and with the Housing Ombudsman. However, the amendment of my noble friend Lord Flight points to a simpler, lower-impact and more elegant way of gaining the information that we are after. Every time there is a change of tenancy or of ownership is precisely the point at which a new registration would have to be made. I do not believe you would need to send out forms every year; you would just need them when the occupancy or the ownership changed. That would provide a rolling database of the information that local authorities need.