Deregulation Bill

Lord Rooker Excerpts

Wednesday 4th March 2015 Lords Chamber

[Lord Rooker (Lab)]

I do not want to interrupt the noble Lord, because I agree with everything he has said. When he discussed this with Westminster, I am curious to know whether they discussed the insurance implications—not so much the contents, but one assumes that the owner in a block of flats pays insurance through the service charge. Quite clearly, the lease must be being breached in the sense of the numbers. The insurance companies must have some view about this, because it leaves everybody else liable and may leave the owner of the particular dwelling subject to sanctions by the insurance company. That may be a route to helping to solve the problem.

[Lord Tope]

The noble Lord asks if I discussed this with Westminster: specifically no, not with Westminster City Council. However, in the course of the many months that this has been going on, my noble friends and I have heard from numerous individuals and organisations involved in this. It is indeed one of the issues that others have raised and the noble Lord is right to draw attention to it. Others have been health and safety, fire regulations and all sorts of issues, which will be helped, to some extent, by whatever regulations are introduced.

I began by saying I wanted to be brief. I think that I am temperamentally incapable of being brief on this issue, but I will try. On registration, which is absolutely critical, I will quote from the letter that the leader of Westminster City Council wrote to the noble Lord, Lord Ahmad, on exactly that point. She concluded by saying:

“Having dismissed the suggestion of a simple, light-touch notification process for those seeking to let out their property on a short-term basis”,

which is what the Minister did at the previous stage, she asks,

“how will a local authority be able to identify and therefore enforce against a property being let for the 91st day within a calendar year?”.

I re-emphasise the point because it is critical. Unless we have some sort of notification and registration process, it is simply unenforceable, whatever else we say and do.

The other issue I want to speak to briefly is how we determine that the property concerned is indeed the residential property belonging to the person letting it. It has been suggested that this is done by the requirement, in the Government’s amendment, to pay council tax. We all know that lots of people pay council tax, but it is not necessarily their residence, let alone their principle residence. It is a bit unusual for a Liberal Democrat to quote Westminster City Council so frequently, but it does have the greatest experience on this. It says:

“This provision would therefore change nothing. The real change would be if the Government stipulated that only principal permanent residences were eligible for short-term letting”.

That is the purpose of the amendment in our package.

We are now at the last possible stage of this Bill in this House, apart from ping-pong, and we need to understand why we are at this stage. I raised this issue—as did others—at Second Reading in July, we had a considerable debate on it in Grand Committee on 30 October and we returned to it in February, one day after the Government finally published their policy guidelines and then only under considerable pressure from the noble Lord, Lord Ahmad, who realised that he would have to reply to the debate. We are now trying to put into the Bill details of regulations that should have been properly and fully consulted over that nine-month period. We should have tried at least to reconcile the differences between the different interests—and they are substantially reconcilable if the Government had ever tried. The one local authority most directly involved and with the most experience states in writing twice that up until a week ago, it had had no such consultation.

We are now at the stage where the Government have understood, as I pointed out on Report on 11 February, that it is too late for the regulations to be tabled to receive their 40-days waiting period to be considered in this Parliament. On Report, that was impossible; it is clearly even more impossible now. For this Government not to give a blank cheque to whomever forms the next Government and whoever is the next Minister, we are now putting in the Bill details that ought to have been in regulations, drafts of which should have been produced months ago, discussed and consulted on so that whatever we are to legislate for was clear—hopefully agreed, but at least we could agree where the differences are. We are at the last possible stage putting in the Bill just what the Government until now said that they would not do, but ought properly to be in regulations that have been consulted on and largely agreed.

--- Later in debate ---

[Lord Rooker]

Given the assuredness and spirit with which the noble Baroness is speaking for the Government, before she sits down, will she ask the Minister to tell us about the results of the consultation? In the mean time, will she tell us whether she has been privy to the results of the consultation in preparing her speech?

[Baroness Shields]

I am sorry, I missed that. I did not understand the last question.

[Lord Rooker]

I am asking the noble Baroness whether, in preparing her speech, she has been privy to the results of the consultation.

[Baroness Shields]

No, I have come to present the view of my declared interest in this new sector of the economy. I am not privy to that information.

The Government’s proposals aim to allow people to short-term let their residences while they are away, while ensuring that local communities are protected. I believe that the right balance has been struck. That is why I support the reform and urge your Lordships to vote in favour of the government amendment and against the other amendments which have been tabled on the issue.

[Lord Ahmad of Wimbledon]

My Lords, we are discussing short-term lets, and it is perhaps ironic that we have had a long-term slot when it comes to issues of deregulation. We are talking about London, and people have talked about London specifically. Let me put it into context as someone who was born in London, educated in London, worked in London, lived in London and represented a London council. Unlike my noble friend, who has had a very distinguished career in the London Borough of Sutton, I had the honour and privilege to serve in the London Borough of Merton, which, as we all know, hosts the great event that we know as Wimbledon. Therefore, it is my great honour also to carry it in my title. Perhaps there are people in Wimbledon who currently let their properties on a short-term basis.

It is important that we respond not just to the challenges and concerns that have been expressed today, to which I will come specifically, but acknowledge that this is commonplace not just in inner London; it is experienced, perhaps with a different perspective, in other boroughs across our great capital.

Starting with the noble Lord, Lord McKenzie, first, I put on record his broad support at least for the spirit and principle of what we are trying to achieve. In noting that, I thank him for his constructive discussions. We have not always agreed on the issues, as is clear from our debate on Third Reading thus far, but I have always found him to be someone with whom I can have a constructive and honest exchange. I put on record my deep thanks to all noble Lords with whom I have had meetings since I have taken over this ministerial responsibility, but particularly to my noble friends Lady Gardner, Lady Hanham and Lord Tope, who have always been courteous in their exchanges. To “courteous” I wish that I could add “uncritical”, but clearly they have had concerns, which they have expressed again today. However, I assure my noble friends and all noble Lords that I have taken that in the spirit that it has been well intentioned and reflects noble Lords’ experience in local government.

In talking about the amendments to government Amendment 4, the noble Lord, Lord McKenzie, asked about this being an integrated group of amendments. We agree that we are treating these amendments as consequential.

The noble Lord, Lord McKenzie, and my noble friend Lord Tope also raised issues about notifications to local authorities, as an addition to some elements that the Government have already introduced. Perhaps I may repeat something which have I shared with them at previous stages of the Bill’s passage: we believe that this would be a further burden on the person letting. It is not a restriction which applies elsewhere in England. Part of our principled stand on this is that we are seeking to bring London into line with other great cities around the country.

The noble Lord, Lord McKenzie, and others including my noble friend Lady Gardner also raised the issue of two periods of 90 nights being allowed to run across calendar years. We recognise that it would be possible for 90-night periods to run continuously across the calendar years but we also think it right not to be overly prescriptive about when the 90 nights should take place in the year. I commend my noble friend Lady Shields for her contribution and I congratulate her. When you are standing in your Lordships’ House, there is always the great expertise in what others have expressed—not only others; I pay tribute to her own expertise in this field. She highlighted what numbers of nights some of the other great cities around the world apply.

Several noble Lords asked why we need the Secretary of State’s consent. We believe that the Secretary of State’s intervention will ensure that the provisions are applied appropriately across London and that there is consistency and fairness to them. The noble Lord, Lord McKenzie, asked whether Amendment 4 could be used to disapply exemption from properties where there has been a statutory nuisance. I draw his attention to proposed new Section 25B(2), which allows the Secretary of State or a local planning authority to make a direction where,

“it is necessary to protect the amenity of the locality”.

Indeed, such a direction could be made when there has been a statutory nuisance.

I believe that the noble Lord, Lord McKenzie, also raised limiting council tax liability, and whether that could still be done commercially. The council tax liability test has to be read and taken in conjunction with the 90-day limitation, as I said in my opening remarks. That will make it unattractive to undertake commercial letting on a long-term or continuous basis.

The noble Lord, Lord McKenzie, also talked about building on the government amendments. As I said at the outset of my closing remarks, I welcome the spirit in which our discussions have taken place. One of the contributions today alluded to the fact that Governments change positions, or that the Bill today is not where it had been. My noble friend Lord Clement-Jones raised a specific question on this. In my time as a Minister responding from this Dispatch Box, I find that you are in one of those situations where if you do not change, you are accused of being terribly rigid and not flexible in listening to your Lordships’ House. However, when you change you are told, “This is not what was presented to us initially”. Perhaps some answers on the back of a postcard would be welcome. I jest, of course, but the important point here is that the Government have listened carefully to the concerns and expressions that have been raised across Parliament, both here in your Lordships’ House and in the other place. We have sought to provide a correct balance in what the Government are presenting.

Several concerns were expressed by my noble friends Lady Hanham, Lady Gardner of Parkes and Lord Tope about the consultation. I regret that my noble friend Lady Gardner feels that the responses I have given in this respect have not answered her question. I gave my latest response only yesterday, as I believe she acknowledged. I wrote to my noble friend on the details of the consultation but in the interests of the public record let me reflect on the public consultation held last year, in which local authorities were asked the question. As noble Lords will know, including the Corporation of London there are in total 33 local authorities across London. Fifteen London authorities responded in total. Eight authorities opposed reform of the legislation. They were—I will feel a bit like a train announcer here—Haringey, Enfield, Camden, Westminster, Newham, Redbridge, Lambeth and the City of London. Seven were not opposed to a review, which included Lewisham, Sutton, Southwark, Hammersmith & Fulham, Harrow, Islington and Greenwich.

I also wish to set the record straight on the issue of Westminster. My noble friend Lord Tope is correct that I have received a letter from the leader of Westminster Council—indeed, I have responded to her—but I want to put officially into the record what has happened. In addition to taking full account of the written representations we have received, officials in the Department for Communities and Local Government have met a number of local authorities, including Westminster Council, on 20 June and 7 October 2014 and 26 February 2015. A further meeting with Westminster was also scheduled for 3 March. I hope that these specific dates give some reassurance to my noble friends, given the concerns they expressed.

I think that I have covered the concern about the Government changing position which my noble friend Lord Clement-Jones posed, but on transparency for police and local authorities, let me assure my noble friend that we believe that our measures will offer the assurance to Londoners that they can do what they like with their homes, as with anywhere else in the country. However, the police and local authorities do not have this power anywhere else. This does not affect the police and local authorities in acting against any antisocial behaviour, or in tackling the genuine concern about terrorism. My noble friend Lady Gardner raised that concern and talked of Sydney, but it is a tragic fact that we have been victims of terror attacks right here in our great capital city. Nothing is proposed in the Government’s amendments which seeks to lessen the importance or priority that they are giving more generally to tackling that. I know that that sentiment is shared by all noble Lords across the Chamber.

My noble friend Lady Gardner also raised the issue of the £20,000 fine for short-term letting. Enforcement action is of course taken at the discretion of local authorities. What is significant—this is what the government proposals are about—is that authorities still have the ability to take action, which acts as a disincentive and deterrent to anyone considering breaking the law. That will continue.

[Lord Rooker]

For the avoidance of doubt and so that it is on the record, when the Minister read the list of authorities out earlier he said that 15 replied. He mentioned that seven did not disagree; I take it that eight disagreed. Can we get it on the record that the majority of local authorities which responded to the consultation disagreed? Do I have that correct?

[Lord Ahmad of Wimbledon]

When the noble Lord referred to the 15 and the seven, I thought, “I hope I have got my maths right”, so I am glad that we said that there were eight and seven. He is quite correct. I mentioned those authorities which did not want the review to happen and, subsequently, the seven which did not object. To clarify that point, I say that the noble Lord is quite right. I hope that I am being clear. I am being detailed in my response so, while I am not expecting it, I at least hope—and one should never give up on hope—that I shall carry the House in certain elements of what I am saying, and that there will nevertheless be clarity in covering the issues that have been raised.

My noble friend Lord Tope also raised council tax liability as a way of demonstrating residency. We believe that this provision distinguishes between private and business premises because it requires liability for council tax, which means that if a property was used as a residence, a hotel or a hostel, it would be liable for business rates. Combined with the 90-night limit, we believe that this provides an appropriate safeguard against short-term letting on an ongoing basis.

I welcome the interventions of the noble Lord, Lord Rooker, as I do those of all noble Lords. I listened to him attentively. He raised the issue of insurance. It is of course a matter for landlords to enforce, and for tenants to abide by, the terms of the lease and any insurance policies. Our amendments relate to the need to apply for planning permission and do not affect issues under an existing lease or indeed an insurance policy.

I hope that I have addressed most, if not all, of the issues raised in the hour and 10 minutes that we have had on this group of amendments. This is an important area, and I assure the House again that the Government have listened to the concerns expressed during the passage of the Bill. We believe that what is in front of us today, and what we are proposing more generally, is a balanced approach, with the objective of updating a law that would work for the benefit of ordinary Londoners wishing to let their homes in a legal way.

I hope that noble Lords will accept the reassurances that I have given again today: we are proposing amendments to seek to prevent the loss of housing stock by allowing the short-term letting of homes for a maximum of 90 days without the need for planning permission. I stress again that there are safeguards in the Bill to check that the added freedom will apply only to those people who are providing their homes and paying council tax; and we are providing local authorities with the power to apply to the Secretary of State where exceptions may be and where local amenities need to be protected.

I believe that the Government have listened and present a balanced perspective on where we are today. If I may, I end with the words of the song:

“Maybe it’s because I’m a Londoner

That I love London Town”.

I believe that what the Government have proposed does just that.