Oral Answers to Questions

Debate between Marcus Jones and Teresa Pearce

Monday 24th April 2017 Commons Chamber

[Mr Jones]

The hon. Gentleman should look at the allocations for the £4.5 billion of social care funding coming to local authorities directly from the Government. That absolutely takes into account the fact that certain places can raise far more in council tax and from the social care precept than areas such as his own. That is reflected in the allocations, and I wish that he would recognise that.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Many care homes up and down the country are reliant on care workers from the EU; estimates suggest that there are about 100,000 workers. What meetings does the Secretary of State have with the care sector to reassure them that, when Britain leaves the EU, care homes will be adequately staffed with appropriately trained care workers?

[Mr Jones]

The hon. Lady makes a very important point and I can reassure her that my hon. Friend the Minister who is responsible for these matters in the Department of Health has met care providers, as has my right hon. Friend the Secretary of State for Communities and Local Government and as have I. This is an extremely important situation and we must ensure that we have enough care workers to support the most vulnerable in our society.

Oral Answers to Questions

Debate between Marcus Jones and Teresa Pearce

Monday 28th November 2016 Commons Chamber

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Changes to the local government pension scheme that recently came into effect were debated in a statutory instrument Committee last week. During the debate, the Minister indicated that EU directive 41/2003 does not apply to the LGPS, yet a letter I have here from his own Department says that it does. Will he confirm that the directive does apply and that it has been applied?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

I can assure the hon. Lady that the directive, we firmly believe, does not apply. If she would like to meet me to discuss the issue further, I would be more than happy to do so.

Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016

Debate between Marcus Jones and Teresa Pearce

Tuesday 22nd November 2016 General Committees

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

Thank you for allowing me the opportunity to respond, Mr Owen. I am grateful to the hon. Member for Erith and Thamesmead for opening the debate. This is not the first time that many of us have discussed these important issues. I shall once again attempt to tackle many of the misconceptions and reassure scheme members that their pensions are not at risk.

I reiterate that the local government pension scheme is a defined-benefit scheme, for which benefits are guaranteed by statute and are not directly affected by the investment performance of individual funds. Scheme members in different local funds, each with different asset allocations and funding strategies, receive the same level of benefits based on salary and length of scheme membership. Nevertheless, local administering authorities should seek to maximise returns from investments, thereby limiting the risk that town hall pensions would otherwise pose to council tax payers and local services. We have made it clear, on several occasions, that investment decisions must be taken in the best interests of scheme members and taxpayers.

I shall turn now to the main issues raised by the hon. Lady. The regulations are not an attempt by the Government to micromanage pension funds. Under the new investment regulations, administering authorities will be significantly more responsible and accountable for their own investment decisions. They will no longer be constrained by central prescription. We have, for example, removed the limits on the proportion of assets that can be invested in particular ways. With that extra freedom comes a requirement to act reasonably, which brings the scheme broadly into line with private sector ones in that respect and represents a landmark shift in policy.

The power of intervention has been included in the regulations as a backstop power—I reiterate that that is what it is—to protect about £200 billion of assets and 5 million members in the LGPS in the rare circumstances in which it might be necessary to do so. The regulations include a number of safeguards in the exercise of the power, including full consultation with the relevant authority, to ensure that the power is used appropriately and proportionately. Furthermore, the Government’s response to the consultation on the regulations made it clear that the power would be used only where there was clear evidence that an authority was failing to act in accordance with the regulations or guidance.

Let me underline the fact that I respect and understand the strength of feeling expressed by many of the people who responded to the consultation and those who signed the petition that was discussed by hon. Members last month, as mentioned by the hon. Lady. The proper conduct of pensions and pension investments is an important issue that should be of deep concern to us all. That is why, through the regulations, authorities will be required to publish, in their new investment strategy statement, their policies on the types of investment made. Scheme members and taxpayers will be able to scrutinise those statements and hold administering authorities to account.

The hon. Lady mentioned the participation of representatives from individual schemes in relation to pooling, and I hope that I can reassure her by saying that individual schemes will still set their own investment strategy, which will be followed within the pooling structure by the professional investment managers that the pools employ.

Some concern has been directed towards the Government’s position on local authority boycotts, divestments and sanctions against foreign nations and the UK defence industry. The investment regulations and guidance allow authorities to take into account non-financial factors, such as social, environmental and corporate governance considerations, when making investment decisions. In doing so, they must still take proper advice, act lawfully and take decisions that are in the best interest of scheme members and taxpayers. The hon. Lady said that that was paramount in relation to investments made by the schemes, and I completely agree. However, authorities must also act in a way that is consistent with UK foreign and defence policy. Such matters are properly addressed by national, not local, Government.

I would like now to take head on the case of Israel and the Occupied Palestinian Territories, which has been raised a number times in debates over the past months and has clearly been at the forefront of many hon. Members’ minds. The UK has a clear position on Israeli settlements in the occupied territories. Settlements are illegal under international law, constitute an obstacle to peace and take us further away from the two-state solution to the Israel-Palestine conflict. The Government recognise that there may be legal and economic risks to investment in the Occupied Palestinian Territories, stemming from the fact that Israeli settlements are built on occupied land and are not recognised as a legitimate part of Israel’s territory. The new rules expressly permit administering authorities to take those risks into account when making investment decisions, alongside the non-financial factors that I mentioned earlier, such as social, environmental or corporate governance considerations.

It is important that administering authorities act in line with UK foreign policy. They should only pursue boycotts, divestments and sanctions where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government, with whom policy responsibility for such matters should lie. Our guidance on this is no different from that on public sector procurement, which is in turn firmly based on the position in international law.

Another concern that has been raised—I think that the hon. Lady alluded to it—relates to a misconception that the Government intend to use the regulations to compel authorities to gamble scheme members’ money away on infrastructure projects. I make no apology whatever for the fact that the statutory guidance that accompanies the regulations makes it clear that authorities should be ambitious in developing their proposals on infrastructure investment, an increasingly important area that is seen as a suitable option for large pension funds with a longer-term liability. Figures published by the LGPS advisory board in 2013 show that only £550 million— 0.3% of the scheme’s total assets at the time, which were £180 billion—was invested in infrastructure. That falls some way behind other large pension funds that have elected to invest 10% or 15% in the area.

Investing in large-scale infrastructure projects can offer a useful match to the long-term liabilities held by pension funds. Other countries are well ahead of us in their thinking on infrastructure, and it is time we stepped up to the challenge. However, there is no compulsion on a fund to make a certain level of infrastructure investment; that decision is based purely on the fund’s circumstances and situation. The fund’s overriding objectives must be to get best value and to follow the fiduciary duty that it owes to scheme members.

The allegation that the hon. Lady raised—I think that she acknowledged that it was just an allegation—that the regulations may be unlawful under EU law has been looked at carefully. Our situation is different, because the funds in these pension schemes are not related to the employer involved; they are stand-alone funds. Although they are badged as a local area’s pension scheme, those funds are in a secure place where the employers and local authorities cannot access them—there are different rules on how they can be accessed. The legislation to which the hon. Lady refers exists to protect scheme members in pension funds to which the employer has access.

[Teresa Pearce]

Is the Minister saying that he is under no obligation to send these new regulations to the European Commission?

[Mr Jones]

We do not believe that the regulations have to be put to the European Commission. As I said, we are putting them in place to give authorities the freedom to invest in any asset class that they think is best, without being constrained by the limits on certain asset classes that were applied under the previous rules. As I have said several times during the debate, we have given repeated assurances that we will not force funds to invest in infrastructure or particular types of infrastructure projects. To protect members and taxpayers, we have set a broad framework for investment decisions in the regulations and guidance and provided the backstop power of intervention that I mentioned.

In addition, the benefits are guaranteed by statute, irrespective of a fund’s investment performance. The assets are separated from those of the sponsoring employer, as I said, which protects the members if the employer fails financially. We are absolutely of the opinion that these extensive protections explain why the LGPS is largely exempt from the directive. The directive increases security for members and safeguards assets from insolvent employers in schemes without such safeguards. In this case, we certainly do not believe the directive applies.

On giving that response, and because of the couple of things I will reply to the hon. Lady on in writing, I will delay the Committee no more.

[Teresa Pearce]

I thank the Minister for his comprehensive response. Although I understand that these are DB schemes, my understanding is that they do not enjoy the comfort of the Pension Protection Fund. Therefore, if the scheme runs out of money for some reason, future pensioners will not be safeguarded and will become creditors to the scheme as anybody else would. For that reason, although it is a DB scheme, I do not think that it gives as much comfort as some other DB schemes. That is still a point over which we have some concern.

The other issue that concerns me is that the Minister seemed to intimate that this new power would be scarcely used, which makes me wonder why we need the regulations. He said that, if it was used, it would be in consultation with the local council concerned. If such a move was made by the Secretary of State—interfering in a pension scheme is quite an unusual thing to do—I would like the Minister to make a statement to the House about why that was necessary. Although there is some comfort in some of what the Minister said, we are not fully satisfied.

[Mr Jones]

If I may, I will pick up on a couple of points. As I said at the outset of the debate, scheme members—the people working in local government and the various other areas that form part of the local government scheme—can rest assured because their pension benefits under the scheme are protected by statute, irrespective of which pension fund their scheme is invested in and regardless of the investment strategy and the returns that the fund has made.

On the backstop provision, the Government have made it absolutely clear that that is to be a backstop power. I would liken it to the current best value provisions that allow the Government to intervene in a local authority should it not be delivering best value for the residents it serves. The hon. Lady will know that the Government have only intervened, in a statutory sense, in five local authorities over the past 15 years or so. It is important to point out that that is an example of a backstop provision. The intention is to use this backstop provision sparingly and only when it is necessary to step in to protect the interests of both the scheme members and the local taxpayers, who might have to step in and bail out the LGPS if the investments are not made in a way that provides the best return from those funds.

[The Chair]

That was a very helpful but lengthy intervention.

[Teresa Pearce]

I thank the Minister for his further confirmation that the power will be used sparingly, but one wonders why it is needed in the first place, since we have people administering pensions whose sole duty is to do what he describes. It is slightly different from the best value provisions.

[Mr Jones]

Unlike in the 2009 regulations, we are not prescribing the size of investments in particular asset classes and so on. Each individual fund therefore has far more freedom in how it makes investments, but because of that freedom, a backstop position is required, so that the Government can, if necessary, intervene when an administering authority does not deliver on its obligations.

[Teresa Pearce]

I thank the Minister for his very thorough responses, but I still have so many concerns that I feel we cannot support the regulations. We wish the Committee to divide on the motion.

Question put.

Domestic Violence Refuges

Debate between Marcus Jones and Teresa Pearce

Wednesday 11th May 2016 Westminster Hall

[Mr Jones]

I thank the hon. Lady for that intervention. I know from her speech that she has significant experience of this area. To give her a bit more assurance, the funding that we are putting out is to cover a two-year period, which gives more time in the way that she mentioned.

I want to talk about a subject that many hon. Members mentioned—the future of refuges and the supported housing sector. My Department and the Department for Work and Pensions commissioned a major evidence review of supported housing to give a better picture of its scope, scale and cost. It will report shortly, and we will continue to work with and listen to providers to develop a long-term, sustainable funding regime for this sector.

[Teresa Pearce]

Will the Minister expand on what “shortly” means? Is it like when the Whips say, “Vote shortly”? When the Government say “shortly”, it can sometimes mean quite a long time. Is it weeks or months? What is it?

[Mr Jones]

We all do what the Whips tell us when they say “shortly”. I will have to leave the hon. Lady with the word “shortly”, but I assure her that we take this issue very seriously and that we will come forward with a long-term, sustainable funding regime. We have been absolutely clear that we want the most vulnerable to be supported through the welfare reforms, so we are deferring the application of the local housing allowance cap to supported housing for an additional year so we have more time to get this right.

At the start of my speech, I said that we want to make ending violence against women and girls everyone’s business. The Government have to lead by example. The Department for Communities and Local Government is working with the Home Office, the Department of Health, the Cabinet Office and the Treasury to ensure that no woman is turned away from the help that she needs. The point that the hon. Member for Bristol West (Thangam Debbonaire) made is very important. We are certainly looking at that across the relevant Departments to ensure that no woman in the position that she mentioned is turned away.

We rely on the knowledge, the expertise and the critical friendship of many organisations. We are talking to the providers of refuges and services for the survivors of domestic abuse as we develop our policy. We are also talking to the Local Government Association and local authorities to understand how we can support their work. I sincerely hope that together we can all seize the opportunity to make a real difference to the lives of women living in fear of abuse.

Oral Answers to Questions

Debate between Marcus Jones and Teresa Pearce

Monday 21st March 2016 Commons Chamber

[Mr Jones]

I was delighted to hear my hon. Friend welcome the changes that were made in the Budget to support the homeless and rough sleepers, and I was also pleased to hear about the work that is being done by Julian House and the Genesis Trust. I can assure him that we will work with the homelessness sector and local authorities to design the £110,000 million to help people who are on the streets to come off the streets.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Last Wednesday the Chancellor announced money to support the homeless and reduce rough sleeping, but the Treasury has said that it is not extra money, but money from the Department for Communities and Local Government’s existing capital budget, which was announced in the autumn statement. So we have an ever growing national crisis of homelessness, no solution at all to the root causes, and no extra money. Is this not yet another example of a deeply unfair Budget from a deeply flawed Chancellor?

[Mr Jones]

I think that the hon. Lady is misguided: some of that money is extra money. She has, however, drawn attention to the fact that we are working very closely with my right hon. Friend the Chancellor and the Treasury to put right the mess that her party left when it was in government.

Housing and Planning Bill

Debate between Marcus Jones and Teresa Pearce

Tuesday 12th January 2016 Commons Chamber

[Mr Jones]

I will give way later in my comments. This is the final group before we send this Bill to the other place. A small number of landlords and property agents do not manage their lettings or properties properly, sometimes exploiting their tenants and the public purse through renting out overcrowded accommodation. New clause 62 deals with the contravention of an overcrowding notice under section 139 of the Housing Act 2004. The maximum fine currently allowed is set at level four, which is £2,500. The amendment, which affects premises in England only, would remove the restriction on the fine that may be imposed. The landlords and property agents who let overcrowded properties will therefore face the same penalties as those who let out substandard and unsafe properties.

Amendments 27 to 30 revise schedule 6 to the Bill to increase the maximum amount of civil penalty that can be imposed as an alternative to prosecution for the following offences: failure to comply with an improvement notice; failure to obtain a licence for a licensable house of multiple occupation or to comply with HMO licence conditions; and failure to obtain a licence for a property subject to selective licensing, or to comply with licensed conditions. The maximum penalty for those offences will now stand at £30,000. The amendments also increase the civil penalty to £30,000 for contravening an overcrowding notice. Once again, that is in line with the civil penalties for other housing offences under the Housing Act 2004.

In addition, the offence of failing to comply with management regulations in respect of a house in multiple occupation has also been added to the list of offences that can attract civil penalties as well as an alternative to prosecution.

We have listened to the debate that has taken place as the Bill has progressed through the House. In Committee, Members expressed concern that £5,000 was not much of a disincentive for a rogue landlord to continue to operate as they could easily recoup that sum in a relatively short period of time through unlawfully continuing to rent out properties, and we absolutely agree with that. A potential fine of up to £30,000 will significantly negate any economic advantage a rogue landlord might seek to achieve through breaching a banning order. The amendments tabled during this part of our debate will help to create a fairer housing market and to see unscrupulous landlords driven from the sector.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I rise to speak to new clauses 52 to 54 and amendments 154, 99 and 67.

New clause 52 follows on from the private Member’s Bill of my hon. Friend the Member for Westminster North (Ms Buck), which sought a similar aim, and from the discussions in Committee. It seeks to put into legislation a duty on all private sector landlords to ensure that, when they let their properties, they are fit for human habitation.

The majority of landlords let property that is, and remains, in a decent standard. Many go out of their way to ensure that even the slightest safety hazard is sorted out quickly and efficiently, which makes it even more distressing when we see reports of homes that are unfit for human habitation being let at often obscene prices. A quarter of a million properties in the private rented sector are estimated to have a category 1 hazard. According to a major report by Shelter, following a YouGov survey, 61% of tenants were found to have experienced mould, damp, leaking roofs or windows, electrical hazards, animal infestations or a gas leak in the previous 12 months.

Housing and Planning Bill

Debate between Marcus Jones and Teresa Pearce

Tuesday 5th January 2016 Commons Chamber

[Mr Jones]

I thank my hon. Friend for his comments. He is absolutely right. It is important that we raise the level of civil penalty to £30,000, because a smaller fine may not be significant enough for landlords who own numerous properties and who flout the law to think seriously about their behaviour and provide good quality, private sector rented accommodation for their tenants.

Amendments 17 and 18 provide that a person who has had two or more relevant civil penalties imposed on them in the previous 12 months may be entered on the database of rogue landlords and property agents. Amendment 26 would amend clause 53, consequential to Government amendment 17. As the Bill is drafted, it is possible for a person to be entered on the database only if they have been convicted of a banning order offence. Consequently, any person who has had a number of civil penalties imposed on them as an alternative to prosecution in relation to such offences may not be entered on the database. We seek to remove that anomaly with these amendments. We recognise that a civil penalty is likely to be imposed rather than a prosecution in a court for less serious offences. That is why two or more civil penalties have to be imposed, as opposed to a single criminal conviction.

Amendment 19 provides that regulations made about information to be included on the database may include the details of the civil penalties a person has incurred. Amendment 20 makes provision for an entry on the database to be removed or reduced by the local housing authority when the entry was made because the person had incurred civil penalties. That mirrors the existing provisions that deal with the removal or variation of database entries for people who have been convicted of criminal offences. Amendment 21 provides that the duration of an entry on the database may be reduced to less than two years by the local housing authority in certain circumstances.

Amendment 22 provides that the Secretary of State may provide information held on the database in an anonymised form to any person with an interest in private sector housing for statistical and research purposes.

In Committee, the Bill was amended to make it a criminal offence to breach a banning order imposed under chapter 2 of part 2. Changes were also made to ensure that chapter 4 applies to the offence of breach of a banning order in the same way as it applies to other offences. Amendments 23, 24 and 25 are minor and consequential on the introduction of the banning order offence.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I will speak to new clauses 55 and 56 and amendments 49, 47 and 48.

New clause 55 would require local authorities to put in place a scheme to license and provide for the accreditation of private sector landlords in their area. Private rented housing is an important part of the housing sector. Nine million people rent privately and the sector is growing. In the past, the private rented sector was often a place for young people to find short-term solutions to their housing needs, perhaps while studying or establishing their careers. Now, almost half of those who rent are over 35 and they need security and stability. Many people are stuck in the private sector, unable to secure any of the declining amount of affordable social housing or to save for a deposit to buy their own home owing to the ever-rising rents.

Most landlords are effective and efficient in letting their property. They provide good properties and support their tenants. Many landlords are already accredited through independent or local authority schemes and some are licensed as they provide houses in multiple occupation. However, there are a few rogue landlords, as we call them, who bring down the name of the private rented sector and the reputation of all landlords. Such rogue landlords often provide substandard accommodation at extortionate prices, sometimes intimidate tenants and often cannot be reached until the rent is due.

The accreditation of landlords has been a feature of the private rented sector for more than 15 years. A local authority-led accreditation and licensing scheme would allow all private landlords to meet set standards. As it would be administered locally, it would give councils the power to establish the scheme that best suited their local housing need. Some local authorities might have particular difficulties with private landlords in respect of housing standards and want to address those through the scheme. Others might have no real problem, but might want to better understand the housing need in the local area and to monitor standards. An accreditation and licensing scheme would also support other measures in the Bill, such as the database of rogue landlords and banning orders. A local authority-led accreditation and licensing scheme would undoubtedly drive up standards across the private rented sector—something we all want—and bring the select few rogue landlords up to the standards of the many good landlords across the country.

--- Later in debate ---

[Teresa Pearce]

Local authorities have the powers but they do not have the resources. Many local authorities have very few officers who are able to police the system, but resourcing that is an argument for a different day. We discussed in Committee whether the fines that were brought in should be ring-fenced for that purpose, but that measure was not accepted.

[Mr Marcus Jones]

Does the hon. Lady accept that the civil penalties that local authorities can impose on rogue landlords will be received by the local authority that takes action against the landlord? Does she also accept that things such as housing benefit payments can be reclaimed by local authorities where rogue landlords have not fulfilled their duties under the new rent repayment order regime in the Bill?

[Teresa Pearce]

I do accept those facts, and in Committee there was much in this section of the Bill that we agreed on. Amendments were tabled that the Minister took away and has now agreed to, which I welcome. New clause 55 is just to ask whether accreditation and licensing by local authorities would create a more professional private rented sector.

New clause 56 would give the Secretary of State the power to introduce a pilot scheme that would see the housing ombudsman extend its cover in London to the private sector. It would require a report from the Secretary of State following the pilot scheme and give the Secretary of State the power to extend the powers of the housing ombudsman to the private sector nationwide after that pilot.

Housing and Planning Bill (Seventeenth sitting)

Debate between Marcus Jones and Teresa Pearce

Thursday 10th December 2015 Public Bill Committees

[Teresa Pearce]

I completely accept what the hon. Gentleman says.

Insecurity in housing affects not only individuals—tenants or landlords—but our whole society. There is a small school in my area that is in a fairly settled part of my constituency, and yet staff there told me that they had a whole class of pupils—30 pupils—that had churned in and out since September. It really affects the way that teachers can make progress with a class when there are new children coming in and out all the time, and the staff put that churn down to the private rented sector.

There is also a doctors’ surgery in my constituency that has 14,000 patients, and every year 4,000 of those patients move on and move to a different practice. A third of patients coming and going makes it nigh-on impossible for the doctors to deal with long-term health issues. They cannot run campaigns on diabetes, obesity or smoking with any success, because a third of their patients are constantly churning in and out. Many of the patients are living in bad conditions with mould and damp, and suffering from asthma, which puts more pressure on GP services.

Also, more secure tenancies and housing will allow families to become more settled, which I believe would help the local economy. Many employers, small and large, that I go to see tell me that they have a problem with recruitment, and it is because of the insecurity in the housing sector.

New clause 22 is designed to encourage longer-term tenancies and to make them much more common, so that both landlords and tenants have more stability. It is important to note that that should not penalise responsible landlords who may need to evict tenants, perhaps because their own financial position has changed or perhaps because they are unhappy with the way the tenant is treating the property. These are legitimate circumstances in which landlords should still be able to evict tenants by providing proper notice.

Measures to increase long-term tenancies are supported not only by me personally but across the industry. In particular, I will highlight some of the written evidence that the Residential Landlords Association gave to the Committee. The RLA wrote:

“We believe that reforms are needed to encourage a culture of long termism within the private rented sector which would play a significant part in stabilising rents for tenants.”

It also wrote:

“Too often letting agents base their business models on short term tenancies, charging fees (and thereby increasing rents) when they are renewed.”

It continued:

“The evidence shows that where tenants stay in their properties for longer periods, landlords are reluctant to increase rents, at least beyond inflation…Landlords often want to offer longer tenancies…Many landlords are prevented from voluntarily providing for tenancies longer than a year by mortgage lenders and the owners of blocks of flats”,

including the freehold owners of blocks of flats. Those were the words of the RLA.

I raised this issue in the most recent Department for Communities and Local Government oral questions with the Minister, and I hope that I might hear more today about what conversations are being had with mortgage providers. I know that the Nationwide now does not have a clause in buy-to-let mortgages whereby it will not allow lettings for longer than a year. However, other lenders have not been as enlightened, so I would be interested to know whether Ministers have had any discussions with the Treasury regarding this issue.

Finally, it is worth noting that many other countries already have longer-term tenancies. I accept that in some other countries in Europe there is not the same attitude towards home ownership that we have in this country, and that renting is a much more normal way of life there. However, in countries such as Germany, Switzerland and Belgium, long-term contracts and more flexibility give tenants the chance to plan for the future. In Germany, leases are usually signed for an unlimited period of time, and in France, where one in five people rent, longer leases are always available.

I am sure that Members from all parties have been contacted in the past by tenants who are struggling because they cannot find stable housing. I think we all agree that we want stability in housing, and longer-term tenancies could be a way of securing that stability. So we hope that we find some common ground with the Minister, and I am very interested to hear the Government thinking regarding longer tenancies becoming more of a norm than they are at the moment.

[Mr Jones]

Let me make it clear that this Government are committed to building a bigger and better private rented sector, which provides security and stability. We have taken action to support the supply and quality of private rented accommodation by resisting unnecessary and unhelpful regulation, while cracking down on the worst practices of some rogue landlords. Our model tenancy agreement, which was introduced in September 2014, promotes longer tenancies for landlords and tenants who vote to sign up to them.

However, there is no one-size-fits-all approach to tenancy length. Many landlords are looking to rent out a property for the longer term, but there will be some for whom letting a property is a short-term plan and who need the property back at some point, perhaps even for their own family to live in. Although I understand the spirit in which the amendment has been tabled, I think it would be counter-productive and would overburden the market with restrictive red tape, stifling investment and the supply of rented housing at a time when we most need to encourage it. That would not help tenants or landlords.

[Mr Jones]

The hon. Gentleman gives me a very good opportunity to segue into explaining that before assured shorthold tenancies were introduced by the Housing Act 1988, the private rental market was in severe decline. Lifetime tenancies and regulated rents meant that being a landlord was simply not commercially viable for many property owners. Since 1988, however, the private rented sector has grown steadily, increasing from just over 9% of the market in 1988 to 19% today. Landlords, and in many cases tenants, welcome the flexibility of the current assured shorthold tenancy regime, which does not lock the parties into long-term commitments and promotes mobility. Without the certainty that landlords can seek repossession when required, many, I am sure, would be reluctant to let their properties. I believe that the current framework strikes the right balance between the rights of landlords and tenants. With those points in mind, I hope that the hon. Lady will withdraw her amendment.

[Teresa Pearce]

I am interested in what the Minister said, but he has not responded to the point about the artificial barriers to some landlords, who want the choice to have either a short let or a longer let, but who are restricted by the freeholder—often the local authority—or the mortgage lender. Perhaps he would like to answer that or write to me about it at some future point.

[Mr Jones]

I will certainly undertake to write to the hon. Lady on that, but I also say that in reality, figures show that the length of time that somebody takes a tenancy from a landlord is, on average, three and a half years.

[Teresa Pearce]

That is not the case in my constituency, I assure him; that is very rare.

I believe that longer tenancies are a very good idea. It is interesting that in the heated debate we had this morning, tenancies of two to five years were meant to be the right thing for social tenants, but for private rented tenants, there is resistance to it. However, given that the Minister is going to write to me regarding the particular issue I am concerned about, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 24

Local Authorities and Development Control Services

“(1) A local planning authority may set a charging regime in relation to their development control services to allow for the cost of providing the development control service to be recouped.

(2) Such a charging regime will be subject to statutory consultation.”—(Helen Hayes.)

Brought up, and read the First time.

--- Later in debate ---

[Teresa Pearce]

I completely agree with my hon. Friend. We are talking about people who are receiving taxpayers’ money, taking it as income and not paying tax on it. We should do whatever we can to tackle those people, because they are exactly the same group of people who will not be carrying out electrical safety checks on the properties they rent out and who are cramming people into bedrooms that are too small. They are exactly the rogue landlords that this Bill seeks to ban, so we should also be ensuring that they are not profiting from this.

This is a probing new clause to raise the issue for consideration by the Committee. I look forward to the Minister’s response, and I hope that something can be done to ensure that every citizen of this country who gets income pays the right amount of tax on that income.

[Mr Jones]

The new clause would place an additional requirement on each local authority to collect information about housing benefit paid to landlords and to disclose that information to Her Majesty’s Revenue and Customs on a quarterly basis. Local authorities are already accountable to the Department for Work and Pensions for their housing benefit expenditure as part of the subsidy scheme, which is subject to an annual audit. For claimants in social housing, housing benefit is often paid directly to the landlord, although that is starting to change with the roll-out of universal credit, which pays benefits directly to the claimant in most cases. For claimants in the private rented sector, housing benefit is not, for the most part, paid directly to private landlords but is paid to the claimant, who is then responsible for the rent, so any reporting would only provide a partial picture.

Universal credit, which is replacing housing benefit for working-age claimants, is currently being rolled out across the country and is not administered by local authorities, which means that the proposal would become of diminishing relevance in the medium to short term. On that basis, I urge the hon. Lady to withdraw her motion.

[Teresa Pearce]

I understand what the Minister says about the roll-out of universal credit but, at present, every local authority has a payroll department and has to make annual reports of payments made outside of the payroll to contractors and people like that. The proposal is not that onerous on councils, but I accept that it might not fix the problem, so I ask the Minister to go away and consider what would fix the problem. There clearly is an issue, and I would like to think that the Government will consider it and try to find some way of ensuring that such people are not avoiding their due taxes. In the spirit of accepting that he may do that, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 29

Accreditation and licensing for private landlords

“Local authorities shall be required to operate an accreditation and licensing scheme for private landlords.”—(Dr Blackman-Woods.)

This amendment would require local authorities in England and Wales to put in place a scheme to license and provide for the accreditation of private sector landlords in their area.

Brought up, and read the First time.

Housing and Planning Bill (Sixteenth sitting)

Debate between Marcus Jones and Teresa Pearce

Thursday 10th December 2015 Public Bill Committees

[Mr Jones]

I assure the hon. Gentleman that it will be published before the Bill goes to the Lords.

On the right to buy, the answer is yes, the tenant will still be able to exercise their right to buy. They must have had three years in social housing to be eligible. That is the same for flexible tenancies. Part of the purpose of the review at the end of the tenancy is to consider whether a person can exercise the right to buy if they are eligible to do so.

[Teresa Pearce]

Will the Minister explain something? If somebody has less than a three-year tenancy, they will not have the right to buy. If they have a two-year tenancy, then a break and then another two-year tenancy, they will not have the right to buy. Is it possible that some local authorities will not grant longer tenancies as a way of not extending the right to buy to some tenants? Has the Minister looked at that to see whether it is a possible loophole?

[Mr Jones]

I am trying to think carefully about the hon. Lady’s logic. I think that the circumstances she mentioned would apply to people who have a lifetime tenancy. If a person does two years and, by their own volition, whether they are on a lifetime tenancy or a fixed tenancy, moves into private rented accommodation and then comes back to the local authority for rehousing, they would not have built up the three years that makes them eligible to take on the right to buy.

This issue has come up several times. The hon. Lady is saying that the local authority moves them out of the property after two years, but at the end of the two-year fixed tenancy, the situation is reviewed and the people’s circumstances are taken into account. I cannot see that this policy will stop people being able to take up right to buy.

The provisions also align the succession rights of introductory and demoted tenants with those of secure tenants. Spouses, civil partners and those living together as a married couple will have a statutory right to succeed and the landlord will be able to grant additional succession rights in the tenancy agreement. None of the changes will apply where the tenant died before the Bill comes into force. I therefore hope that hon. Members will take the measures in the spirit in which they are intended and accept them.

--- Later in debate ---

[Mr Jones]

I have heard the comments of Opposition Members, including the hon. Member for City of Durham. The hon. Lady seems to be most surprised that the Government are introducing these measures, but I am surprised that she is surprised. In August 2010 the Prime Minister first mentioned that the Government of the day were thinking of such provisions—the hon. Member for Bootle even highlighted that in his earlier intervention—and that was followed by the Localism Act 2011, which took the proposals further, and by the Chancellor’s announcement in this year’s summer Budget. The Labour party should not be surprised.

[Teresa Pearce]

I hear what the Minister is saying, but given that the measure has been in the pipeline since 2010, why was it not in the Bill?

[Mr Jones]

Obviously it will be in the Bill now.

--- Later in debate ---

[Teresa Pearce]

Why was it not in the Bill?

[Mr Jones]

Because we want to get such things right. We believe that we have now put a good package together—

Housing and Planning Bill (Twelfth sitting)

Debate between Marcus Jones and Teresa Pearce

Thursday 3rd December 2015 Public Bill Committees

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

It is a pleasure to serve under your chairmanship, Mr Gray. This has been a wide-ranging debate, and a number of points have been raised that I am confident will be covered when we consider other amendments to the clause. I will therefore keep narrowly to the amendments in question, which seek to include a substantial amount of detail in the Bill on who the policy should and should not apply to. That is unnecessary as we have the power to make regulations for that purpose if they are required.

I assure the hon. Member for City of Durham that we are giving careful thought to how the policy should treat certain benefits, including the state pension, housing benefit, and employment and support allowance. With regard to carers, as I said before, exemptions can be made and we will consider carers carefully. We recognise that, in certain circumstances, exemptions may well be needed, and we are thinking through that process carefully. We will provide more detail as we approach the making of the regulations and will continue to engage with the sector as we develop the policy.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

When having those deliberations about what should and should not be included in household income, will the Minister consider whether disability living allowance and personal independence payments should be excluded? There are additional costs for people with disabilities. Will he take that on board and consider giving some reassurance that DLA and PIP will not be included in household income?

[Mr Jones]

As I have made clear, we are considering carefully the circumstances in which the measure will apply to certain tenants. I note what the hon. Lady says, and we will take those comments into account in our deliberations before making regulations.

Housing and Planning Bill (Ninth sitting)

Debate between Marcus Jones and Teresa Pearce

Thursday 26th November 2015 Public Bill Committees

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I beg to move amendment 107, in clause 51, page 22, leave out lines 34 to 37.

This amendment removes subsections 4 and 5 of Clause 51 from the Bill which would remove the ability for a landlord to deliver the first of the two letters needed to evict a tenant suspected of abandoning the property before they have missed rent.

The purpose of the amendment is to get some clarification from the Government. I realise that they have their own amendment to improve this part of the Bill slightly, but we have moved our amendment because the Bill states:

“The first warning notice may be given even if the unpaid rent condition is not yet met”,

which appears to be against the spirit of what the Minister was saying this morning.

If a warning notice may be given without the unpaid rent condition being met, a warning notice could be given when the tenant has done nothing wrong. We were a little confused about that and would welcome clarification and some reassurance about why the provision is in the Bill and what it is intended to do. As we said earlier, we are talking about only a few tenancies a year, but the measure seems to be outside the scope of what the Minister said earlier.

Will the Minister tell us something else? In discussion of earlier amendments, the Minister did not answer the question of what pressure or lobbying had happened. Why is the provision in the Bill? The problem is a small one, for a small number of people, so although I understand everything that has been said about the problems for landlords, I wondered whether there was another reason for the measure.

For example, in my area we have two local courts, both under severe pressure. One is very inefficient and people find it difficult to get their cases through the court, so I wondered whether the provision was in the Bill because of a problem with the court, or for another reason. The Minister did not really mention that earlier, so may we have some clarity on what subsection (4) is meant to do and why it is there?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

I hear what the hon. Lady says and her intentions are important, but I reassure her and the Committee that the amendment is unnecessary, because the case is already covered by the Bill as drafted.

The clauses are carefully drafted, but no doubt seem complex. The second warning notice cannot be served unless there is unpaid rent of at least eight consecutive weeks. Given that the second warning notice must be given at least two weeks and no more than four weeks after the first warning notice, in practice the first warning notice cannot be served unless there is unpaid rent of at least four consecutive weeks.

The hon. Lady is looking at me in a rather perplexed fashion, but I understand what she is saying and, if she reads my comments and compares them carefully with the two subsections that she is looking to the Committee to remove from the Bill, I am sure she will realise that no consequence of our measure will diminish the position of a tenant. As I have explained, we are keen to strengthen rather than diminish the position of tenants in the Bill.

The hon. Lady mentioned her two courts in connection with the reason for the provisions. The reason why we are introducing the provisions is to bring forward at the earliest practicable opportunity, in a way that protects tenants, a means to bring properties that have been abandoned back into use so that people may be housed in them. That is the purpose of the chapter. There is no ulterior motive to reduce the number of times that people go to court. I hope she accepts my explanation in the spirit in which it is intended and withdraws the amendment.

[Teresa Pearce]

I thank the Minister for his explanation. Without meaning to give offence, I will probably have to read back what he said to convince myself. It seems confusing that a warning notice may be given without the unpaid rent condition being met, but the Minister says that that would not happen. It is, however, complex and I am pleased about the third notice, which is an improvement. In that spirit, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 120, in clause 51, page 22, line 39, at end insert—

‘( ) The third warning notice must be given before the period of 5 days ending with the date specified in the warning notices under subsection (2)(b).’

See Member’s explanatory statement for amendment 118.

Amendment 121, in clause 51, page 22, line 39, at end insert—

‘( ) The Secretary of State may make regulations setting out the form that the third warning notice must take.’—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 118.

Clause 51, as amended, ordered to stand part of the Bill.

Clause 52

Reinstatement

Question proposed, That the clause stand part of the Bill.

[Mr Jones]

Sir Alan, given that we have debated the subject in general earlier, will it be acceptable—

Housing and Planning Bill (Eighth sitting)

Debate between Marcus Jones and Teresa Pearce

Thursday 26th November 2015 Public Bill Committees

[Mr Jones]

What the hon. Gentleman and several other Labour Members do not consider is that the measure is designed for a situation in which a property has been abandoned. It has not been put forward to allow landlords to try to fast-track the eviction of tenants who are living in a property or tenants who are paying their rent. It is important for the Committee to remember that.

Let me make another point about the section 21 process. To go back to my point about freeing up property that has been abandoned so that people can be housed, the section 21 process involves the landlord giving the tenant two months’ notice. After that, however, the landlord would need to go to court to obtain a possession order. On average, that process takes four months, which seems an excessive amount of time to get a property that has clearly been abandoned back into use.

[Teresa Pearce]

The Minister mentioned that the clause would mean that landlords did not have to obtain a possession order. However, under the Protection from Eviction Act 1977, a possession order is needed to recover possession. Will the clauses override that legislation?

[Mr Jones]

That is a very good point, and I will cover it in a moment when I come to the 1977 Act, which is very pertinent to a number of the questions Opposition Members have raised.

First, however, I want to cover some of the other questions that have been raised. There was a question about warning notices. If a notice is not served on a tenant in person, it must be left at or sent to the premises and to every other address the landlord has for that tenant. In addition, it must be sent to any email address the landlord has for the tenant. If the tenant did not receive the letters, a claim could be brought for unlawful eviction, and the landlord would need to prove that the letters had been properly delivered. We will come on later to Government amendments that will further strengthen the process.

--- Later in debate ---

[Teresa Pearce]

As a general point, when someone enters into a tenancy, that is a legal document that is binding on both sides. Is the Minister not at all concerned that these provisions will do away with having an independent legal mind looking at whether the contract has been broken? Is he concerned that a landlord will be able to decide whether a premises has been abandoned without someone independent looking at whether the underlying contract between the two parties still exists? I am not a lawyer, by the way.

[Mr Jones]

I agree with the hon. Lady that we should not get drawn into discussing that type of scenario. A tenant who has not paid their rent would, by implication, have already broken the terms of the tenancy, so the matter would not be as cut and dried as she suggests. Nevertheless, I appreciate her concern for tenants, which is why we have ensured that the abandonment provisions include measures that will create a significant process that any landlord who wants to recover their property under abandonment will have to follow properly. If they do not follow that process, there will be significant routes to rectify the position.

Later on, I am likely to make further comments demonstrating how, following the Bill’s publication, we are strengthening the tenant’s position further, but at this point, in the spirit of the comments I have made and the questions I have answered, I hope that the hon. Lady will withdraw the amendment.

[Teresa Pearce]

I thank the Minister for some of the reassurances he has given, but I still believe that having the local authority look at a claim of abandonment would be a good safety net in many ways. First, it would alert the local authority early on to the fact that someone was about to be evicted. Secondly, it would deter rogue landlords from using this route. Thirdly, it would mean that local authorities could get a better idea of what their private rented sector was like and whether there were not only rogue landlords but rogue tenants. It is important for local authorities to know that, so I will be pushing the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Mr Jones]

Clause 51 concerns the warning notices that must be given to the tenant and any named occupiers before a tenancy can be terminated under clause 49. Amendment 118 introduces a requirement for a third warning notice to be given before a tenancy can be ended. Amendment 119 provides that the third notice must be fixed to a conspicuous part of the property, such as the front door. Amendment 120 requires the notice to be given at least five days before the end of the warning period, after which the landlord can terminate the tenancy under clause 49. Amendment 121 provides that the Secretary of State may, by regulations, specify the contents of the third warning notice. That will ensure the tenant knows what they must do next if the tenancy has not been abandoned. Amendments 122 to 125 are consequential to the introduction of the third notice requirement.

Amendment 126 introduces a requirement in clause 53 that the landlord must serve the first and second warning notices on the tenant, care of any person who has agreed with the landlord to guarantee the performance of the tenancy. As that person is likely to be close to the tenant and have a direct interest in ensuring that the tenancy is maintained and the rent payments kept up to date, they ought to be able to contact and encourage the tenant to respond to the warning notice if the tenancy has not been abandoned.

These important amendments ensure, together with other requirements in clause 51, that the tenant is given the greatest possible opportunity to respond to the landlord to confirm that the property has not been abandoned before the landlord is able to bring the tenancy to an end.

Amendment 118 agreed to.

Amendment made: 119, in clause 51, page 22, line 24, at end insert—

“( ) The first two warning notices must be given to the tenant and any named occupier using one of the methods in section 53(1) or (2).

( ) The third warning notice must be given by fixing it to some conspicuous part of the premises to which the tenancy relates.”—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 118.

[Teresa Pearce]

I beg to move amendment 108, in clause 51, page 22, line 32, leave out “8” and insert “12”

This amendment would extend the minimum amount of time needed to pass from 8 to 12 weeks before a landlord is able to recover an abandoned premises.

[Teresa Pearce]

These are probing amendments. Let me put it on record that I think the amendments we just agreed are actually quite good. [Hon. Members: “Hear, hear.”] I still believe, however, that this whole part of the Bill is open to abuse. I hope that it will be reviewed at some point and that if such abuse occurs, regulations will be brought in. Clearly, I am not as optimistic as the Minister about the behaviour of some landlords, particularly the ones in my constituency who I have seen threaten and abuse tenants, and access properties at any time of the day or night. That sort of person will not look at the safeguards in this part of the Bill, but will see it as an opportunity to act in an even more irresponsible way than they already do.

Amendment 108 would extend the minimum period that would need to pass before a landlord is able to recover abandoned premises. Amendment 109 would extend the time period between the two letters—I believe it may now be three—that are needed to evict a tenant suspected of abandoning a premises. I am truly concerned about abuse of the provisions in this part of the Bill. Landlords could use the proposals to evict tenants simply by writing them letters. They could also use the measures to evict someone as an act of revenge. If a tenant moves into a property that is not fit to live in and asks for repairs, the landlord might think, “This tenant isn’t going to be easy, so I’ll use this process to try to get rid of them.”

We appreciate the need for landlords to be able to recover truly abandoned premises and the fact that tenancy agreements are a two-way street. I appreciate the Minister’s argument that if someone does not pay their rent, they have clearly already broken their tenancy agreement. I have seen instances of that: for example, someone in my area who had a property of her own got married and moved in with her husband. Rather than sell her property, she decided to let it out. For an entire year, the tenant paid no rent at all, but she still had to pay the mortgage on that property. I therefore completely understand that there are situations of that sort that need addressing. The measures in the Bill may make the situation easier for landlords in that sort of position, but my fear is they may also make it easier for rogue landlords.

I am pleased that the Minister has added a provision to the Bill that requires a third wave of letters for the process, but it is still important to safeguard against abuse. Extending the minimum amount of time that has to pass before a landlord is able to recover an abandoned premises will mean that those with legitimate reasons for absence will be able to respond. That will help to safeguard against potential abuse.

One concern about the proposals that has been raised with me is the possible pressure they will put on local housing authorities, which may have a duty to house tenants following eviction, even if only in emergency accommodation. Under the current system, when faced with someone who is about to be evicted, those local housing authorities have time to plan their resources, so that they know that if a resident is going to be evicted they will be able to house them adequately in emergency housing. Under the proposals in the Bill, residents could be evicted with haste, putting further pressure on already pressed local housing authorities. The amendments would insert a bit more time into the process for recovering abandoned premises, which would, I hope, ease the pressure on local housing authorities.

Amendment 109 would extend the time period between the letters. Currently it is two weeks and no more than four weeks; we propose extending it to four weeks and no more than eight. That would be advantageous for a number of reasons. It would safeguard against error. A landlord could use the measures to kick out a legitimate tenant who is away on business, in hospital or on holiday; extending the time period between the letters would mean that there was less chance of that happening. It would also safeguard against abuse. It would allow tenants more time to lodge a query with the landlord or seek housing advice. As there is no court involvement in the process, it would give the tenant more time to assess their options.

It is clear that the proposals in the Bill will have the power to affect all tenants in the private rental sector. All landlords will have these powers, open to abuse as they are, even though abandonment accounts for an estimated 1,750 occasions of tenancies ending a year. We hope that the rules will be got right, so that there are safeguards against abuse, and so that we allow landlords to recover abandoned premises where they need to, but do not allow them to evict tenants at their ease. That is the reason behind these probing amendments. I hope that the Minister will be able to give me some reassurance that those who could be abused will be protected by the law.

[Mr Jones]

The amendments seek to ensure that the minimum warning period before a landlord can recover an abandoned property would be 12 weeks and that a second warning notice would be served at least four weeks and no more than eight weeks after the service of the first.

I am happy to be able to reassure the hon. Lady and other members of the Committee that amendment 108 is unnecessary. It is already effectively the case under the Bill that the minimum period before a landlord can recover an abandoned property would be 12 weeks. The clauses are carefully drafted, but are complex, and, subject to Royal Assent, my Department will issue guidance for landlords to help them to understand the new process. It will therefore probably be helpful if I explain a little more to the Committee in that regard.

The process to recover an abandoned property takes at least 12 weeks because the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. This second warning notice must be served at least two weeks and no more than four weeks after the first warning notice. This means that in practice the first warning notice could not be served unless at least four weeks’ rent was unpaid.

The first warning notice must specify the date of recovery of the property, which is at least eight weeks after the date when that notice is given. Given that the tenant will already have been at least four weeks in arrears, that provides a total period of at least 12 weeks from when the rent was last paid to the tenancy being brought to an end.

Amendment 109 would make changes to clause 51(6), which states:

“The second warning notice must be given at least two weeks, and no more than 4 weeks, after the first warning notice.”

The abandonment procedure that the Bill is introducing is intended to allow a landlord to recover a property that has been abandoned without the need to obtain a court order. As I have explained, we have introduced a number of safeguards to ensure that a landlord could use the process only if a tenant had genuinely abandoned the property.

A landlord will be able to recover a property only when warning notices have been served on the tenant, and a copy of the first, second and third warning notices have been sent, care of any guarantor. It will not be possible in practice for the first warning notice to be served unless at least four consecutive weeks’ rent is unpaid; the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. The second warning notice will have to be given at least two weeks and no more than four weeks after the first warning notice.

It is clear that landlords will have to go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to the requirement for at least eight consecutive weeks’ rent to remain unpaid, they will also have to serve a series of notices on the tenant and, where applicable, any other named occupiers.

We have also sought to strike the right balance between ensuring that tenants are given adequate notice that the landlord believes the property may have been abandoned, with an opportunity to respond if they have not abandoned it, and ensuring that landlords do not have to wait an unreasonable time before being able to recover the property.

The requirement for a second warning notice to be served at least four weeks and no more than eight weeks after service of the first would introduce further delays into the process of recovering an abandoned property, depriving the landlord of an income and a family of the chance to occupy a property that would, by definition under the provisions in question, be empty. I hope that that explanation will help hon. Members and that the hon. Member for Erith and Thamesmead will agree to withdraw her amendment.

Housing and Planning Bill (Seventh sitting)

Debate between Marcus Jones and Teresa Pearce

Tuesday 24th November 2015 Public Bill Committees

[Mr Jones]

Clause 12 summarises the provisions in part 2 of the Bill. It explains that this part is about tackling rogue landlords and letting agents. The Government value the private rented sector. As I have said, it is an important part of our housing market, housing 4.4 million households in England. We want to support good landlords who provide decent, well maintained homes for people, and avoid unnecessary further regulation on them. Most private landlords provide a decent service to their tenants, but we know that there are a small number of landlords and letting agents who do not manage their lettings or properties properly, sometimes exploiting their tenants—and the public purse, through housing benefit—by renting out substandard, overcrowded and dangerous accommodation.

These landlords and letting agents often do not respond to legitimate complaints made by tenants. These are the rogues that this part applies to. We want to ensure that such rogues can be placed on a national database, so that local housing authorities in whose area they operate can identify them and their behaviours and standards can be properly monitored. We also want to ensure that the worst rogue offenders can be removed from the rental market altogether, through banning orders. Rogues who let out unsafe or unhealthy properties or engage in illegal practices such as violent entry, harassment or unlawful eviction of tenants will no longer be able to financially benefit from such activities. Part 2 extends the rent repayment order regime so that, in appropriate cases, tenants—and former tenants—can reclaim rent, and local authorities can reclaim housing benefit payments, from landlords who have engaged in those types of unacceptable activities.

The majority, good landlords, will not be affected by this part. However, they will benefit from it, since standards and compliance with the law across the sector will be set on a level playing field and good landlords who work hard for their tenants and comply with the law will cease to face unfair competition from the rogue landlords, who ignore the law and their obligations.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

We welcome this initiative on rogue landlords. I would like to ask the Minister a question. The impact assessment talks a lot about the very small number of rogue landlords. Although they are in the minority, do we have any information about how big that small number may be? It is easy to send out surveys to landlords and get them to send them back, but it is the good landlords who complete those surveys, and the rogue or criminal landlords do not engage at all. Further, given that the private rented sector is increasing, especially in cities, do we have any information about whether the increasing amount of private rented accommodation is increasing the number of rogue landlords? As the sector increases, does it get better, or do we have no evidence on that?

[Mr Jones]

I thank the hon. Lady for her questions. First, she mentions the number of rogue landlords and the impact assessment. We have looked at that very carefully and consider that about 10,500 rogue landlords may be operating. This Government is firmly on the side of good landlords and tenants and we want to drive those rogue landlords out of the system. That is what the proposed clauses in this part do.

On banning orders, which I shall come to in clause 13, we expect that about 600 will be applied for to the tribunal as a result of the measures that this Bill brings.

Question put and agreed to.

Clause 12, as amended, accordingly ordered to stand part of the Bill.

Clause 13

“Banning order” and “banning order offence”

Question proposed, That clause 13 stand part of the Bill.

--- Later in debate ---

[Mr Jones]

The hon. Gentleman must understand that this Government have done an awful lot to pass power into the hands of the individual, but ultimately, in this case, there is an issue of public law protection and of ensuring that rogue landlords are held to account. We feel that the best body to do so is the local authority, which will be able to take on rogue landlords to the benefit of the tenants wronged as a result.

Amendment 6 agreed to.

Amendments made: 7, in clause 14, page 9, line 13, after “order” insert “under subsection (1)”

This amendment removes the need for a notice of intended proceedings in cases where a local housing authority is obliged to apply for a banning order because of amendment 6. It would not make sense to invite a person to make representations in a case where the authority is obliged to make an application.

8, in clause 14, page 9, line 16, after “why,” insert—

“( ) stating the length of each proposed ban,”—(Mr. Marcus Jones.)

This amendment requires the length of each proposed ban to be stated in the notice of intended proceedings that a local housing authority has to give a person before applying for a banning order.

[Teresa Pearce]

I beg to move amendment 104, in clause 14, page 9, line 20, at end insert

“and must make all reasonable effort to consult with any affected tenant of the person the authority is intending to proceed against.”

This amendment would require local housing authorities to consult directly with any tenants of a landlord or a letting agent when making a banning order.

We want local housing authorities to make reasonable efforts to consult tenants directly, because we understand that there may be times when for some reason they cannot contact affected tenants. We are largely supportive of the measures to tackle rogue landlords in order to ensure safety and security for tenants in the sector and to penalise criminal landlords. In its written evidence, the charity Crisis said of banning orders:

“We believe that these could help drive up standards and protect vulnerable tenants.”

For banning orders to work, they must penalise and target the criminal landlords, who bring down the name of the private rented sector and the reputation of all landlords. The Residential Landlords Association said in its written evidence that

“landlords who wilfully breach their legal obligations should face the consequences.”

We must not lose sight of the reasons for applying a banning order—to protect existing and prospective tenants from the criminality of rogue landlords. Some tenants may have been on the receiving end of the original offence and will have plenty of information on someone’s fitness to remain a landlord. Some tenants will bring the local housing authority’s attention to a landlord and will have input through their representations. Tenants should have a voice. Without one, they are just bystanders to the process. As the proposals stand, local authorities do not have to seek the views of tenants.

--- Later in debate ---

[Teresa Pearce]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause, as amended, stand part of the Bill.

[Mr Jones]

Clause 14 explains that before a local housing authority applies to the first-tier tribunal for a banning order, it must give the person against whom it proposes to make the application a notice of intended proceedings. That notice must explain that the authority proposes to make the application and why. It must invite the person to make representations about the proposal and not less than 28 days must be given for doing so. The authority must consider any representations received in deciding whether to proceed with the application. The authority cannot make the application until the notice period has expired and it has considered the representations it has received, if any.

Subsection (5) places a time limit on making an application by providing that the notice of intended proceedings cannot be given any later than six months after the person’s conviction for the banning order offence to which the notice relates.

Question put and agreed to.

Clause 14, as amended, accordingly ordered to stand part of the Bill.

Clause 15

Making a banning order

Amendments made: 9, in clause 15, page 9, line 29, leave out “letting” and insert “property”

See Member’s explanatory statement for amendment 2.

Amendment 10, in clause 15, page 9, line 30, at end insert “(but see subsection (2A))”

See Member’s explanatory statement for amendment 11.

Amendment 11, in clause 15, page 9, line 32, at end insert—

‘(2A) Where an application is made under section 14(1A) against an officer of a body corporate, the First-tier Tribunal may make a banning order against the officer even if the condition in subsection (1)(b) is not met.”

This ensures that where a body corporate commits a banning order offence and an officer commits the same offence, an order can be made against the officer even though he or she was not a residential landlord etc at the time the offence was committed (i.e. because it was the company that was the landlord etc). The amendment is related to amendment 6.

Amendment 12, in clause 15, page 9, line 39, leave out “letting” and insert “property”—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 2.

Question proposed, That the clause, as amended, stand part of the Bill.

--- Later in debate ---

[Mr Jones]

Again, I hear what the hon. Gentleman says. He is bringing me back to the point that we discussed earlier when I set out quite clearly why the Government think that local authorities are the best placed to deal with this issue.

In London there may be numerous issues across different boroughs. We have a situation where those local authorities will be able to access the database of rogue landlords and therefore be able to get the information that goes across borough. It is incumbent on those local authorities not just to work in the best interests of people renting in the private sector in their borough, but to work with adjoining boroughs and pick up on the issues that also affect tenants in the borough in question, because landlords do not just operate on administrative boundaries; they operate on a wider basis. While I hear what the hon. Gentleman says, I think that the Bill is in a good place in this regard.

Question put and agreed to.

Clause 15, as amended, accordingly ordered to stand part of the Bill.

Clause 16

Duration and effect of banning order

[Teresa Pearce]

I beg to move amendment 112, in clause 16, page 10, line 3, leave out “6” and insert “12”

This amendment would ensure that a banning order lasts at least 12 months.

--- Later in debate ---

[Mr Jones]

Amendment 105 would require landlords and letting agents who are subject to a banning order to undertake local authority-approved training before a ban is lifted. This morning, Labour Members talked at length about clauses in the Bill placing new burdens on local authorities, but we will put aside the logistical issues for the moment.

The amendment focuses on the training of landlords and property agents. I am sure that the hon. Member for Erith and Thamesmead knows that a banning order is a serious step. A local authority will not seek a banning order, and the tribunal certainly will not grant one, if the landlord or property agent was simply ill-informed about their responsibilities. An order will be granted only after considering, as set out in clause 15(3),

“the seriousness of the offence of which the person has been convicted”

and any previous convictions for a banning order offence. The problem is not that the landlord is not aware of their responsibilities, but that they have already failed to meet them. I do not believe that accredited training will help with that.

The hon. Lady asked about training. A number of organisations, including the National Landlords Association and the Association of Residential Letting Agents, provide significant training for their members. I looked on the Association of Residential Letting Agents’ website earlier and it had clear advice and guidance on how to be a good and responsible landlord.

On amendment 112, clause 16 sets out a minimum term of six months for a banning order. Banning someone from acting as a landlord or property agent is a serious step. It is right that the tribunal have considerable discretion when making a banning order including over the length of the order, so as to take into account all of the relevant circumstances. The amendment would extend that minimum period to 12 months, removing the discretion of the tribunal to make a banning order for a shorter period. This chapter on banning orders seeks to impose stronger penalties on the worst offenders. I have heard the hon. Lady’s strength of feeling and I think that is shared by many members of the Committee.

[Teresa Pearce]

The legislation states a minimum of six months. Is a maximum period envisaged? Would the Minister consider that in certain circumstances it would be right for the court to give a much longer banning period than six months?

--- Later in debate ---

[Mr Jones]

I hear what the hon. Lady says and I hope that she takes my comments on the minimum period in the spirit of consensus intended. I reassure her that we will look at this very carefully on Report. On her point about the maximum time for the banning order, there is no maximum; actually, the ban could be for life. I hope that reassures the hon. Lady and that she is reassured about the minimum period of a banning order. On that basis and in the spirit of the good-natured debate we have had, I hope she will consider withdrawing the amendment.

[Teresa Pearce]

I am pleased to hear that the banning order is a minimum period and that it could be for life. We will have to examine it as it progresses to the courts to see how effective this is. Clearly we all want the same thing, which is to improve standards and rid the sector of the people who are exploiting tenants and often exploiting housing benefit as well.

To return to amendment 105 about accredited training, the Residential Landlords Association offers accredited training to its members, but the people we are considering here would not be part of that training. They would not be interested in that training; they are just interested in taking the money. So I understand what the Minister says but we are looking at clause 16, about duration and effect of banning order—what we want for the effect of banning order is not just to take people out of the sector for a while but for them to be changed characters if they are to come back. Some training or proof that they have improved their standards would be beneficial. However, given the reassurances from the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Teresa Pearce]

Thank you, Sir Alan. The current alternative, as proposed in the Bill, will be for one court case for the criminal conviction and then for the local housing authority to apply for a rent repayment order, requiring a whole new court case. That would lead to greater pressure not only on court time but on the time of local authorities that would have to complete the processes necessary to bring it to court. The court could have the power to provide for a rent repayment order when prosecuting a landlord or letting agent for a banning order offence and a housing-related offence.

In addition, that alternative would put further pressure on tenants, many of whom would be unable to seek redress for a rent repayment order through the financial hurdles they need to cross. In written evidence Crisis and the Housing Law Practitioners Association showed support for amendments that would give judges the power to issue a rent repayment order. Crisis noted the lack of claims made for rent repayment orders elsewhere in the sector and noted:

“Currently very few claims are made for RROs, largely because prosecutions are very low and tenants find it difficult to apply to the First Tier Tribunal to do so. Crisis would be supportive of amendments that would give judges the power to issue a RRO when they prosecute a landlord. This would help reduce costs/burdens to local authorities and tenants, who would have to make a claim to the First Tier Tribunal for a RRO following a successful prosecution.”

The Housing Law Practitioners Association suggested in written evidence that, in addition, courts

“should be given power to make a ‘banning order on conviction’. Civil restrictions flowing from criminal convictions are now a very common aspect of our law…It would provide a quick and simple route for those ‘clear’ cases where it is obvious that the landlord/agent should be banned, e.g. a conviction for unlawful eviction, violence against a tenant, fraud against the housing benefit authorities…It will also help to ensure that the residents of any local authority which is reluctant to exercise the new powers (perhaps because of budgetary constraints) receive some protection against rogue landlords”.

It is clear to Opposition Members that it would be beneficial for an amendment to allow courts to provide a rent repayment order when prosecuting for a banning order or housing-related offence. For those reasons, we would like the Minister to consider allowing courts to issue a rent repayment order at the same time as they are prosecuting.

[Mr Jones]

The amendment would insert a subsection that would enable the courts to make a rent repayment order against a landlord or property agent while a prosecution for a banning order offence is under way but prior to conviction.

Giving courts those powers presupposes guilt and undermines the presumption of innocence required for a fair trial. The amendment’s proposals also pose logistical challenges, in particular in the involvement of two distinct sentencing bodies. Rent repayment orders are civil sanctions issued by the first-tier tribunal and are issued on application by a local authority or the tenant. Magistrates courts deal with housing offences that are criminal. Since the magistrates courts do not deal with civil sanctions against rogue landlords and property agents, the amendment would burden them with a new and unnecessary responsibility. If the magistrates court did not convict, the court would also have wasted its time.

--- Later in debate ---

[Mr Jones]

I hear what the hon. Gentleman says. In that regard, as he knows, the magistrates court can hear the case. If the court decides that the person who has breached the banning order is guilty, it can impose a criminal sanction against the individual or individuals involved through a fine or, as I mentioned earlier in my comments, a prison sentence. We must draw a distinction between that and a civil penalty that can be applied for in the county court. At that point, as he knows, local authorities can bring the civil action to trial and obtain a rent repayment order.

The hon. Gentleman’s point is interesting and requires further consideration. I am thinking through the matter on my feet, but it requires more careful consideration, and I am certainly willing to listen to his comments and take them away from the Committee.

[Teresa Pearce]

This is more of a probing amendment, so I am happy to withdraw it, but I ask the Minister to keep a close eye on the issue. We do not want the fact that some people find it difficult to access the courts to mean that they do not get the justice that they deserve. For instance, a couple of my local courts are overcrowded with cases at the moment, and people are having to wait a very long time for an inefficient service. I would not want that to get in the way of what we are trying to achieve in the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to consider Government new clause 2—Revocation or variation of banning orders.

[Mr Jones]

I beg to move amendment 14, in clause 17, page 10, line 15, leave out

“that applied for the banning order”

and insert

“for the area in which the housing to which the conduct relates is situated”

This amendment changes which local housing authority may impose a financial penalty where a person breaches a banning order. At the moment the authority that originally applied for the banning order is responsible for imposing a penalty; the amendment will make the authority where the breach occurs responsible.

Amendment 14 allows a local housing authority in whose area a person is acting in breach of a banning order to apply for a civil financial penalty against the person. New clause 3 makes the breach of a banning order a criminal offence, so the imposition of a financial penalty is an alternative to prosecution, but the local authority cannot impose a civil penalty unless it is satisfied that the offence is being or has been committed.

A local housing authority cannot impose a civil penalty when the person has been convicted in court of a breach of a banning order or where a prosecution has begun in relation to the same conduct; and the prosecution may not be brought against the person who has had a civil penalty imposed against them in respect of the same conduct. Subject to a right of appeal, the financial penalty that can be imposed for a breach is at the discretion of the local housing authority subject to a maximum of £5,000.

Local housing authorities will be able to retain fines they receive as income. Under subsection (7), the Secretary of State may make regulations specifying how financial penalties recovered under the clause are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions, but we will discuss the details of how the income is to be applied with key interested bodies before making those regulations.

Schedule 1 sets out the procedures for imposing a financial penalty. The authority must serve a notice of intent on the person whom it intends to charge the penalty to. That notice must be served within six months of the authority having sufficient evidence of the breach, or, in the case of an ongoing breach, within the period of six months from when the breach last occurs.

The notice must specify the amount of penalty the authority proposes to charge, the reason for imposing the penalty, and that there is a right to make representations within 28 days. After the period for making representations has expired, the local housing authority must decide whether to impose the financial penalty and, if so, the amount. If it decides to impose a penalty, the authority must serve a final notice specifying the amount of penalty, the reason for imposing it, how it is to be paid, and by when. The final notice must also provide information about the right to appeal and the consequences of failing to pay. Payment must be made within 28 days of the service of the final notice unless there is an appeal against it.

Paragraph 10 of schedule 1 deals with appeals against a final notice. An appeal is to the first-tier tribunal and can be made against a decision to impose the penalty or against the amount and must be made within 28 days of the service of the final notice. If an appeal is made, the final notice is suspended until the tribunal makes a decision or the appeal is withdrawn. The tribunal may confirm, vary or cancel the final notice. Paragraph 11 provides that if a person fails to pay the penalty, the local authority can recover it through proceedings in the county court.

Finally, clause 17(9) enables the Secretary of State to issue guidance that local housing authorities must have regard to when imposing financial penalties for breaching banning orders.

Amendment 14 agreed to.

Amendments made: 15, in clause 17, page 10, line 17, leave out from “same” to end of line 20 and insert “conduct”

This amendment is consequential on NC3.

[Teresa Pearce]

I beg to move amendment 101, in clause 17, page 10, line 22, leave out

“, but must not be more than £5,000.”

This amendment would allow for an unlimited financial penalty for a breach of a banning order.

--- Later in debate ---

[Mr Jones]

I hear what the hon. Member for Erith and Thamesmead has said. In the spirit of co-operation, as was the case earlier, I also hear what the hon. Member for Harrow West has said, albeit he said it in a fashion that was not as subtle and conciliatory as that of the hon. Member for Erith and Thamesmead, who is on the Opposition Front Bench.

These amendments would increase the financial penalty for a breach of a banning order, either by making it unlimited or by raising the upper limit to £20,000. It is right that the breach of a banning order carries a strong penalty. This Committee has already considered Government amendments to make the breach of a banning order a criminal offence and, as we discussed earlier, a banning order—if taken to its ultimate conclusion—can end in a ban for life against a rogue landlord. However, these amendments would mean that a breach of a banning order could still result in a civil penalty as an alternative alongside the option of the criminal prosecution, which I mentioned earlier and which we discussed at greater length earlier.

I have certainly heard the strength of feeling from the Opposition Front Bench and from the hon. Member for Harrow West. We are considering this issue carefully. Obviously, we want penalties that are set high enough to ensure that they make a real difference and have the desired effect on rogue landlords. So, we hear the arguments that a limit of £5,000 may not be sufficient, and on the basis that we are willing to look at what the hon. Lady has put forward and consider it on Report, I hope Opposition Members will agree to withdraw the amendment and enable the Government to consider these points further, and the level of the penalty, before the Bill comes back on Report.

[Teresa Pearce]

Given what the Minister has said—I am taking him at his word—it seems that we may have some agreement here, and given that he seems to have intimated to the Committee that the Government will look at the level of the penalty and perhaps increase it, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 16, in clause 17, page 10, line 22, at end insert—

“( ) The responsible local housing authority may not impose a financial penalty in respect of any conduct amounting to an offence under section (Offence of breach of banning order) if—

(a) the person has been convicted of an offence under that section in respect of the conduct, or

(b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded.”

This amendment ensures that a person does not end up with a financial penalty as well as a conviction for the criminal offence created by NC3.—(Mr Marcus Jones.)

[Mr Thomas]

I beg to move amendment 94, in clause 17, page 10, line 27, leave out subsection (7).

This amendment would ensure local housing authorities would be able to retain any financial penalties recovered under Clause 17.

I hope that the Minister continues to feel in a sufficiently good mood to consider this amendment with enthusiasm. If he wanted to intervene on me very early on and say that it is indeed his intention that local housing authorities will be able to retain any financial penalties recovered under this clause, clearly I would not need to dwell any further on the case for the amendment. As he has stayed firmly in his seat, focusing on his notes, let me make the case a little further. Quite rightly, the Minister alluded to the fact that, as a result of this legislation, it would be incumbent on housing authorities to take action whenever they see a rogue landlord in action and can gather evidence of malpractice. I suggest to him and to the Committee that we have to live in the real world. In a case of declining budgets and cuts, local authorities on occasion have to make tough choices, and it may be that other parts of a housing authority’s responsibilities have to take precedent. Although some prosecutions may take place, there may be other prosecutions that might not go ahead, if additional resources are not available.

My amendment seeks to ensure that the resources that are recovered as a result of clause 17 go to the housing authority, so that they can be invested in action against rogue landlords, and so that there can be confidence that we will see progress in getting the Minister’s figure of 10,500 rogue landlords down to a better limit, more quickly. It cannot be that any of us would want to have such a large figure of rogue landlords operating, feeling that they can do so willy-nilly and that if they get taken to task by the courts, that will almost be by accident. I think the Minister said that he expected just 600 cases a year as a result of the new legislation. That suggests that it will take us a very long time before we can eliminate the full list of rogue landlords.

I give credit to the Government for wanting to bring forward legislation to deal with the issue, but I gently suggest that we need to make sure that those we are going to vest with legislative power to do more against rogue landlords have the resources available to them, so that they have the means to take action and use these powers. My humble amendment perhaps offers a small glint of light to hard-pressed housing authorities that there will be some additional resource that they might get as a result of their efforts to bring bad landlords to justice, which they can use to reinvest in taking further measures against other rogue landlords.

[Mr Jones]

The amendment, as drafted, would have the effect of removing the power to make regulations specifying how local authorities are to deal with fines received under this clause. I have looked at the clause put forward by the hon. Gentleman and I think there is a little confusion. He refers to “fines” within his clause, but I think he may mean civil penalties. That said, local housing authorities will be able to retain the penalties that they receive as income. Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under clause 17 are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with an authority’s private housing sector function, but we will discuss the details of how the income is to be applied with the key interested bodies before we make those regulations.

[Teresa Pearce]

Is the Minister saying that those penalties would be ring-fenced for the specific purpose of bringing the private rented sector up to a reasonable standard? Is that what he is intimating?

[Mr Jones]

We are saying that those penalties should go to the local authority. We want to consult with interested bodies, particularly the local authorities, in relation to how we make these regulations and how they work; whether we ring-fence or not and whether the money is put toward the private rented sector housing function of an authority or not.

As I have made clear, our intention is that the money that is recovered should be used. This is the basis on which we shall discuss this with interested parties: it should be used for the private rented sector housing function within the particular authority in question.