Older People's Housing Taskforce

Matthew Pennycook Excerpts

Tuesday 26th November 2024 Written Statements

[The Minister for Housing and Planning (Matthew Pennycook)]

The Government have today published the report of the older people’s housing taskforce. Copies will also be deposited in the House Library.

Concluding in May 2024, the older people’s housing taskforce undertook an assessment of public and private specialised and supported older people’s housing, with a particular focus on the private market for those on middle incomes, and explored options for the provision of greater choice, quality and security of housing for older people. There is rightly significant national interest in the taskforce’s findings.

I would like to offer my sincere thanks to the chair of the taskforce, Professor Julienne Meyer, and all its members for producing such a comprehensive, detailed and well-researched report. I would also like to express my gratitude to the many stakeholders who contributed to the work of the taskforce.

The Government recognise the importance of increased supply and improving the housing options for older people in later life, and we will give careful consideration to the many recommendations set out in the report.

Providing a range of safe, suitable housing for older people in later life helps them live independently, safely and well, for longer. It can enhance the wellbeing of our senior citizens and reduce demand on adult social care services and the national health service. The Government have committed to building 1.5 million new homes over the next five years, including those to meet the needs of older people, and we will consider this issue further as we develop our long-term housing strategy.

We are determined to create a more diverse housing market; one that delivers homes quickly and responds to the needs of a range of communities. Through the recent consultation on proposed reforms to the national planning policy framework, we tested proposals to promote the delivery of mixed-use sites, including housing designed for specific groups such as older people. We have also indicated our intention to consider further planning policy changes in the future as we move to produce a more streamlined and accessible suite of policies, and we will ensure that considerations around older people’s housing inform our approach.

We are also working with the Planning Advisory Service to meet the recommendation of the taskforce for guidance to provide more clarity on how planning use classes apply to specialist older people’s housing.

As the report also makes clear, older people’s housing has not been immune to the challenges faced by other residential leaseholders across the country. The Government remain fully committed to providing homeowners with greater rights, powers and protections over their homes by quickly implementing the provisions of the Leasehold and Freehold Reform Act 2024.

We will also take further steps over the Parliament to bring the feudal leasehold system to an end, including reinvigorating commonhold by modernising the legal framework as well as restricting the sale of new leasehold flats. We will consult on the best way to achieve this, and consider the needs of all parts of the housing market as we do this, including older people’s housing.

The Government are committed to helping older people to live comfortably and independently at home for as long as possible. The Minister for Care, my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock), and I thank the taskforce for their important contribution to this agenda.

[HCWS249]

Leasehold and Commonhold Reform

Matthew Pennycook Excerpts

Thursday 21st November 2024 Written Statements

[The Minister for Housing and Planning (Matthew Pennycook)]

Millions of homeowners across the country will remember with fondness the sense of satisfaction, pride and security they felt when completing the purchase of their first home. Given a free choice, an overwhelming majority of families would prefer to own their own home, and home ownership remains indelibly associated in the minds of many with security, control, freedom and hope.

Yet, for far too many leaseholders, the reality of home ownership has fallen woefully short of the dream—their lives marked by an intermittent, if not constant, struggle with punitive and escalating ground rents; unjustified permissions and administration fees; unreasonable or extortionate charges; and onerous conditions imposed with little or no consultation. This is not what home ownership should entail.

Over the course of this Parliament, the Government are determined to honour the commitments made in our manifesto and do what is necessary to finally bring the feudal leasehold system to an end. Given that millions of leaseholders and residential freeholders are currently suffering as a result of unfair and unreasonable practices, we appreciate fully the need to act urgently to provide them with relief. However, we are also cognisant of the significant complexity of the task and the importance of taking the necessary time to ensure that reforms are watertight.

With both of these imperatives in mind, I am today updating the House on the steps the Government intend to take to implement those reforms to the leasehold system already in statute and to progress the wider set of reforms necessary to end the feudal leasehold system for good.

Leasehold and Freehold Reform Act 2024

The previous Government’s Leasehold and Freehold Reform Act 2024 was passed in the wash-up period prior to the Dissolution of the last Parliament. In enacting only a select number of Law Commission recommendations relating to enfranchisement and the right to manage, the Act has rendered the process of holistic and coherent leasehold and commonhold reform more challenging.

However, while limited in nature, the Act did introduce a necessary set of reforms that will provide immediate relief to those leaseholders and residential freeholders subject to unfair and unreasonable practices. As set out in the King’s Speech, it is therefore the Government’s intention to act as quickly as possible to provide homeowners with greater rights, powers and protections over their homes by implementing its various provisions.

However, we must balance speed with care if we are to ensure that the measures brought into force are to the lasting benefit of leaseholders and residential freeholders. The risk of acting with undue haste is not merely a hypothetical one. On assuming office in July, the Deputy Prime Minister and I were informed that the 2024 Act contains a small number of specific but serious flaws which would prevent certain provisions from operating as intended and that need to be rectified via primary legislation.

These serious flaws include a loophole which means that the Act goes far beyond the intended reforms to valuation and that undermines the integrity of the amended scheme. In addition we must correct an omission that would deny tens of thousands of shared ownership leaseholders the right to extend their lease with their direct landlord, given that the providers in question do not have sufficiently long leases to grant 990-year extensions.

This Government will not make the same mistakes as the last when it comes to reforming what is, without question, an incredibly complicated area of property law. While we intend to continue to work at pace, we will take the time necessary to ensure the reforms we pass are fit for purpose.

That is not to say that progress has not already been made. A number of the Act’s provisions came into force on 24 July relating variously to legal costs associated with the remediation of unsafe buildings, the work of professional insolvency practitioners, and removing the remedy where homeowners risk losing their home entirely because of failure to pay an income-supporting rent charge after 40 days.

On 31 October, the Government activated further building safety measures. These help clarify that remediation contribution orders and remediation orders—which require developers and other relevant persons to pay for or fix defects—can be made in respect of interim measures, known as “relevant steps”, such as waking watches and simultaneous evacuation alarms. They also clarify that costs of alternative accommodation, when leaseholders have been displaced from their homes on building safety grounds, and expert reports, can be recovered through remediation contribution orders.

Commencing the remaining provisions in the Act will require an extensive programme of detailed secondary legislation. While we appreciate fully the scepticism that leaseholders feel about yet more consultations, in some cases they will be necessary to determine precisely how certain measures are to be implemented effectively. To our frustration, we will not be able to bring other important measures into force, including the new valuation process, until we have fixed the small number of specific but serious flaws in the 2024 Act through primary legislation. Switching on the Act in full will therefore take time, but it is important that we get it right if we are to avoid the mistakes made by the previous Government.

A good example of why appropriate secondary legislation must be prepared and scrutinised before even seemingly simple measures in the Act are commenced is section 49. This section provides for an increase in the non-residential floorspace limit for right to manage claims from 25% to 50%. This will broaden access to this right for a significant number of leaseholders by allowing those in mixed-use buildings where up to 50% of the floorspace is non-residential to make right to manage claims.

However, the way existing right to manage company voting rights operate means that in some buildings with higher percentages of non-residential floorspace, freeholders not leaseholders will be able to control the right to manage company with more votes. For this reason we must amend right to manage company voting rights via secondary legislation in parallel with commencing section 49. If we do not do so, and simply activate section 49, new claims for the right to manage could result in these companies being set up only for the building’s existing freeholders to have total control over them. This would be contrary to the intention behind the Act. While we appreciate that leaseholders will be frustrated at having to wait for secondary legislation, this Government will not commence the Act in a half-baked or incoherent way that could risk detriment to leaseholders.

With a view to effectively implementing the Act as quickly as possible, the Government’s intended sequencing for bringing the provisions of the 2024 Act into force is as follows.

We intend to commence the Act’s provision to remove the two-year rule in January next year. This will mean that leaseholders will no longer have to wait two years after purchasing their property before exercising rights to extend their lease or buy their freehold, giving more leaseholders control over their properties from the outset.

We will bring the Act’s right to manage provisions —expanding access and reforming its costs and voting rights—into force as a coherent package at the same time, in spring 2025, meaning more leaseholders in mixed-use buildings can take over management from their freeholders, and leaseholders making claims will, in most cases, no longer have to pay their freeholder’s costs.

We understand that for many leaseholders the cost of living will be their primary immediate worry. For too long, leaseholders have borne the brunt of opaque and excessive costs being passed on to them. We will go out to consultation very shortly on the detail of the Act’s ban on buildings insurance remuneration such as commissions for landlords, property managing agents and freeholders being charged through the service charge and their replacement with transparent and fair fees.

Next year, we will look to consult on the Act’s provisions on service charges and on legal costs, bringing these measures into force as quickly as possible thereafter. Once implemented, leaseholders will be able to more easily challenge service charges they consider unreasonable and landlords will be required to apply to the relevant court or tribunal for approval before they can pass legal costs from such challenges back to leaseholders.

The Act includes measures that will make it cheaper for leaseholders to enfranchise—buy their freehold or extend their lease—giving them security over their property in the long term. Next summer we will consult on the valuation rates used to calculate the cost of enfranchisement premiums. Parliament will then need to approve the secondary legislation that sets out the detail, as well as fixing the Act’s serious flaws in further primary legislation, before implementing the package.

The Government remain committed to protecting residential freeholders on private and mixed-tenure housing estates from unfair charges. Next year we will consult on implementing the Act’s new consumer protection provisions for the up to 1.75 million homes that are subject to these charges, and bring these measures into force as quickly as possible thereafter. These include ensuring that homeowners who pay an estate management charge have better access to information they need to understand what they are paying for, the right to challenge the reasonableness at the first-tier tribunal (in England), and to go to the tribunal to appoint a substitute manager.

It is important that landlords, agents and other key actors in the sector are aware of their responsibilities. As such, we will continue to work closely with delivery partners and stakeholders as we implement the Act, and look to future reform. We also look forward to working closely with the Welsh Government to bring about these much-needed reforms across England and Wales.

It is also vital that as many residential leaseholders and freeholders understand and take advantage of the reforms as they are implemented. The Leasehold Advisory Service will have a crucial role to play in that regard and we will set out further detail in due course about how we believe it can most effectively do so.

Further reform of the leasehold system

While we must fix the Leasehold and Freehold Reform Act and implement its provisions as soon as possible, we have always been clear that the Act does not go far enough. It overlooked a number of Law Commission recommendations relating to leasehold enfranchisement, enacted only eight relating to the right to manage and contained none relating to commonhold.

Moreover, it left untouched serious problems such as unregulated and unaffordable ground rents; the poor quality of service provided by some managing agents; the threat of forfeiture as a means of ensuring compliance with a lease agreement; and the prevalence of “fleecehold” private and mixed-tenure housing estates.

As part of our commitment to finally bring the feudal leasehold system to an end in this Parliament, the Government are determined to take action to address Law Commission recommendations omitted from the 2024 Act, to resolve a range of problems that legislation failed to grapple with, and to enact key pledges in our manifesto that it did not even engage with, such as making commonhold the default tenure.

In the King’s Speech, the Government made clear we would publish an ambitious new draft Leasehold and Commonhold Reform Bill in this parliamentary Session that would be subject to broad consultation and additional parliamentary scrutiny. Our intention is that it will be published in the second half of next year.

A central focus of the Bill will be reinvigorating commonhold through the introduction of a comprehensive new legal framework. To set out our thinking in advance of the Bill and invite consultation and discussion about how we finally transition away from leasehold, we will publish a White Paper on reforms to commonhold early next year.

Alongside setting out our plans for a comprehensive new legal framework for commonhold, we will take decisive first steps to making commonhold the default tenure by the end of the Parliament. To that end, we will consult next year on the best approach to banning new leasehold flats so this can work effectively alongside a robust ban on leasehold houses. We will seek input from industry and consumers on other fundamental points such as potential exemptions for legitimate use and how to minimise disruption to housing supply. We will also engage on the conversion of existing flats to commonhold.

The draft Bill will also consider a number of vital reforms to the existing leasehold system. The Government remain firmly committed to its manifesto commitment to tackle unregulated and unaffordable ground rents, and we will deliver this in legislation. We will remove the disproportionate and draconian threat of forfeiture as a means of ensuring compliance with a lease agreement. And we will consult on new reforms to the section 20 “major works” procedure that leaseholders must go through when they face large bills for such works.

We also intend to act to protect leaseholders from abuse and poor service at the hands of unscrupulous managing agents. The previous Government committed to regulate the property agent sector in 2018, even asking a working group chaired by the esteemed Lord Best to advise them how to do it. Yet, over multiple years they failed to take any action.

Managing agents play a key role in the maintenance of multi-occupancy buildings and freehold estates, and their importance will only increase as we transition toward a commonhold future, and so we are looking again at Lord Best’s 2019 report on regulating the property agent sector, particularly in light of the recommendations in the final Grenfell inquiry report. As part of our response to that report, I can confirm that we will strengthen regulation of managing agents to drive up the standard of their service. As a minimum, this should include mandatory professional qualifications which set a new basic standard that managing agents will be required to meet. We will consult on this matter next year.

Finally, we are determined to end the injustice of “fleecehold” entirely and we will consult next year on legislative and policy options to reduce the prevalence of private estate management arrangements, which are the root cause of the problems experienced by many residential freeholders.

[HCWS244]

Council Tax

Matthew Pennycook Excerpts

Thursday 14th November 2024 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

(Urgent question): To ask the Secretary of State for Housing, Communities and Local Government if she will make a statement on the Government’s policy on council tax referendum thresholds in 2025-26.

[The Minister for Housing and Planning (Matthew Pennycook)]

Since the 2012-13 financial year, local authorities, fire authorities, and police and crime commissioners have been required to determine whether the amount of council tax they plan to raise is excessive. The Secretary of State sets thresholds on excessiveness and knows the referendum principles for different classes of authority. Since 2016-17, those thresholds have also included a social care precept, providing higher thresholds for authorities with social care responsibilities.

Decisions on the council tax levels to set, or whether to hold a referendum to go beyond the referendum principles, sit with councils. But the Government have been clear that we expect the threshold to be maintained at the current level, set by the previous Government. The Office for Budget Responsibility forecast of the last Government assumed that council tax would increase by a 3% core, plus an additional 2% for local authorities with adult social care responsibilities for the entirety of the forecast period. We will set out further details in the local government finance settlement in the new year.

Beyond that, we are determined to support local government and undo the mess that has been created over the past 14 years. That is why at the Budget we announced over £4 billion in new local government funding, including an additional £1.3 billion in the local government finance settlement. That, as the hon. Gentleman will be well aware, has been warmly welcomed by the sector.

[David Simmonds]

Council tax funds about £20.5 billion of expenditure in England on social care, which is 61% of all council funding. It is therefore of huge interest to our constituents. The Prime Minister and Ministers have repeatedly told the House that we need to wait for the spending review and the local government finance settlement to know what will happen with the referendum limit, including at the Dispatch Box yesterday when the Prime Minister told my right hon. Friend the Leader of the Opposition to wait. Shortly afterwards, the press were told that the 5% limit would remain in place.

Answers to parliamentary questions show that the Government are expecting spending power to increase by £3.7 billion, funded by grants of £1.3 billion. That demonstrates that the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances. In addition to that, the County Councils Network has highlighted its concerns that although we have not yet had a formal statement in the House, there are proposals to change the way in which funding is allocated, further depriving local authorities in urban, suburban and rural areas of the funding that they need.

I would like to put two questions to the Minister. First, will he promise the House that funding allocations through the grant mechanism will follow the cost pressures on local authorities and not any other form of indexation or formula, to ensure that places facing the highest costs receive the funding that they need? Next, while nobody would want to see the referendum limits scrapped simply to bail out central Government, the announcement of the 5% constrains local authorities when it comes to their fundraising. Will the Minister tell the House whether it will be our high streets through increased business rates or whether significant cuts to other council services will be needed to fill the Government’s £2.4 billion black hole?

[Matthew Pennycook]

I thank the hon. Gentleman for his questions. Let me take them in turn. The Government are committed to a fair funding settlement for local government. We will set out further details in the usual way in the upcoming local government finance settlement, which will be presented to Parliament.

On the £2.4 billion figure, I am afraid that we simply do not recognise it. I assume that the hon. Gentleman, in his calculations, failed to take account of the over £300 million raised from business rates and £300 million in additional new houses coming along. Yes, it is right that £1.8 billion will be raised through council tax in 2025-26, but, as I made clear, that is because the Government are clear that we are maintaining the previous Government’s policy on council tax, in line with the OBR forecast made in March 2024.

The question for the Opposition is: are they saying that the cap should be abolished, as the Conservative Local Government Association group’s “Rebuilding the Road to Victory” document called for all caps to be removed, or are they saying that the limit should be reduced, which would be contrary to the policy in place when the now Leader of the Opposition was the local government Minister?

[Mr Speaker]

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

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

It is worth remembering why a number of our local authorities are facing this decision and the tight financial situation: the funding crisis over the past 14 years, forcing a number of local authorities to make those difficult decisions. A number of our areas are facing major in-year cost pressures from things such as temporary accommodation and special educational needs and disabilities provision. Does the Minister agree that we need to accelerate the house building plan in order to get local authorities back on a level playing field, so that our local residents do not see that cost increase in their council tax bills?

[Matthew Pennycook]

I thank the Chair of the Select Committee for that question. She is absolutely right; after 14 years of the previous Government’s record in office, local government is on its knees. We have a system on the verge of collapse. We had multiple years when in-year spending pressures were ignored. The headroom that we have provided through the Budget—more than £4 billion in new local government funding, which I referenced earlier—will allow us to start to turn that system around and to get ahead of some of the challenges we are facing, whether the pressures on adult social care, children’s services or homelessness costs as a result of temporary accommodation. That is why our house building programme—within my specific remit of responsibility—and, in particular, the increase in social and affordable housing supply that we are committed to, is so important.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Mr Lee Dillon (Newbury) (LD)]

The Liberal Democrats are deeply concerned that people are simply paying more council tax for fewer services. That is quite clearly the result of Conservative tax cuts and their failure to tackle social care. As a former council leader, I know that the burden on councils has increased to such an extent that they are forced to make impossible choices. The burden and the costs that councils of all colours have to shoulder as a result of the Conservative Government’s policies must be reviewed. Will the Minister ensure that councils do not have to close libraries, cut bus routes and reduce road repairs in order to meet the growing demands of the most vulnerable members of our community? Despite the announcement in the Budget, will the Minister recognise the LGA analysis that councils face a £6.9 billion shortfall because of inflation, increased wage demands and demand pressures on local services?

[Matthew Pennycook]

The Government certainly recognise the pressures on local authorities and the burdens placed on households as a result of 14 years in which local government was run down. We are determined to turn that situation around, as I have said, by providing the headroom that local authorities need to get ahead of some of the challenges that they have faced for many years. That is why the more than £4 billion in new local government funding announced at the Budget, including an additional £1.3 million in the local government finance settlement, has been so warmly welcomed. That brings the total real-terms increase in core spending to around 3.2%. We remain committed to the 5% referendum cap—we believe that is the right threshold. To protect the most vulnerable, we are also committed to the single-person discount and local council tax support schemes, under which, as I am sure the hon. Gentleman is aware, more than 8 million households do not pay a full council tax bill.

[Mr Clive Betts (Sheffield South East) (Lab)]

I really do not know how the Opposition spokesperson, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), can stand there and talk about cuts and shortfalls with a straight face. We know where responsibility lies—and on the Lib Dem Benches as well. [Interruption.]

--- Later in debate ---

[Matthew Pennycook]

I thank my hon. Friend for that point, and I will relay it to the Local Government Minister. On the general principle, we are determined to rebuild local government from the ground up. That is why we are providing multi-year funding settlements to councils and removing a number of ringfences, and are committed, as I said, to fair funding. On his general point about the Opposition, I completely agree. It reminds me of a phrase my nan used to use: “More front than Harrods,” she used to say. That is what Opposition Members have.

[John Glen (Salisbury) (Con)]

Will the Minister rule out additional council tax bands being among any changes that the Government make?

[Matthew Pennycook]

I say to the right hon. Gentleman that we are not talking about council tax bands in this urgent question; we are talking about the thresholds that remain in place. We are committed to those thresholds. As I am sure you would expect, Mr Speaker, we will set out more details about the local government finance settlement at the appropriate point next year, in the usual way.

[Karl Turner (Kingston upon Hull East) (Lab)]

Areas like Hull city council were savaged by the previous Government when it came to funding—absolutely savaged, to the point where they were almost on their knees. Will my hon. Friend the Minister tell the House what the Government are doing for areas of high deprivation like Hull?

[Matthew Pennycook]

My hon. Friend is absolutely right. The damage done to local government over the 14 years in which the Conservatives were in office is profound. We have inherited, as I said, a system on the verge of collapse. We are absolutely committed, as part of rebuilding that system from the ground up, to a fair funding settlement. As I say, the Minister for Local Government will announce more details in the upcoming local government finance settlement in the new year.

[Bob Blackman (Harrow East) (Con)]

Local authorities across the country will welcome multi-year settlements, so they can plan for the future. However, does the Minister have any plans whatever for a revaluation of properties, given that properties were originally valued back in 1992, when council tax began? The hon. Member for Sheffield South East (Mr Betts) and I produced a Select Committee report on what could be done to ensure that councils need not be strictly neutral in terms of finance, and could revalue properties to bring valuations up to date.

[Matthew Pennycook]

The hon. Gentleman tempts me to discuss the local government finance settlement ahead of it being formally presented to the House. I am afraid I cannot do that, but the Government have heard his point, and I will ensure that it is passed on to the Local Government Minister.

[Tristan Osborne (Chatham and Aylesford) (Lab)]

As a councillor, I saw 14 years of austerity and cuts to local government, and a 93% cut equivalent for my council in Medway. The opposition, the Medway Conservative group, recently stated that it would not only scrap the recent council tax cap, but introduce a local income tax on residents. Does the Minister agree that there needs to be consistency on this issue, whereas the Opposition’s approach is to say, in one case, “Scrap the cap,” and in another, “Keep it”?

[Matthew Pennycook]

My hon. Friend is absolutely right and we still have not had an answer: we do not know the Opposition’s position on thresholds. [Interruption.] We are in government, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) chunters from a sedentary position, and we have confirmed that when it comes to thresholds, we intend to maintain the position as it was under the previous Government, and as baked into the Office for Budget Responsibility forecast for the spending period. The Opposition really do have to answer this question: are they saying that the thresholds should be removed or increased, or are they saying that they should be reduced and core services cut?

[Mr Speaker]

Unfortunately, it is not for the Opposition to answer the questions—they are in opposition.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The Chancellor and the International Monetary Fund are known to favour ending council tax and replacing it with a wider property tax. The Welsh Labour Government tried to revalue all the properties in Wales for council tax purposes. Can the Government rule out doing either of those things?

[Matthew Pennycook]

I am not going to get into speculating about more fundamental reform of the council tax system. As I have in a number of my responses to this urgent question, the Government will set out their position on the thresholds, and on other matters in respect of the local government finance settlement, at the appropriate point early in the new year.

[Rachael Maskell (York Central) (Lab/Co-op)]

York is the lowest-funded unitary authority in the country, but has one of the highest costs of living. That puts real pressure on it. We are also among the poorest-funded for health, fire and police services. When the Minister looks at the funding formula for local government, will he look at the presumptions made, to ensure more equity in the way it is put together?

[Matthew Pennycook]

As I have said repeatedly— I commit to it again—we are determined to ensure that there is a fair funding settlement for local government, and as I have said, more details will be forthcoming in the settlement early next year.

[James Wild (North West Norfolk) (Con)]

Labour used to say that it would freeze council tax. Can the Minister now confirm that its policy is actually to put council tax up because of the flawed, broken promise on national insurance?

[Matthew Pennycook]

No, that is not the case. We are maintaining the policy of the previous Government, which, as per the OBR forecast, estimated that £1.8 billion will be raised through council tax. The position of the Government is that it will maintain the thresholds. If the hon. Gentleman thinks differently, he should tell House what his position is on thresholds: should they be reduced or increased?

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I am pleased about the support for first and second-tier councils and the commitment to fair funding, which will make a real difference in, for instance, Cornwall. However, in unitary authorities such as ours, where a great many services have been shared, larger town councils have had to step up and take the strain, but have not had the grants and other measures that have been available to those first and second-tier councils. Could the appropriate Minister meet me to discuss the position of larger town councils in Cornwall?

[Matthew Pennycook]

I am more than happy to commit the Local Government Minister to a meeting with my hon. Friend.

[Mr Richard Holden (Basildon and Billericay) (Con)]

During Prime Minister’s questions yesterday, the Government accepted that they were giving councils a maximum of £600 million, but the Local Government Association has said that there is £2.4 billion worth of pressure. Does the Minister accept that councils will have to increase their tax by about £1.8 billion to fill the gap between what the Government are offering them and what they need to provide local services?

[Matthew Pennycook]

As I have made clear, we do not recognise the £2.4 billion figure. It fails to take into account increases that I have already mentioned, such as the £300 million increase in business rates income and the £300 million increase in income from new, additional houses. The hon. Gentleman is absolutely right that we expect council tax to raise £1.8 billion in 2025-26, but that is in line with the previous Government’s spending plans and baked into the OBR forecast as of March 2024.

[Darren Paffey (Southampton Itchen) (Lab)]

As a former deputy council leader, I am somewhat amazed by the collective amnesia of Conservative Members. The hon. Member for Ruislip, Northwood and Pinner (David Simmonds) spoke of what “constrains” local government spending power. Does my hon. Friend agree that it is 60% cuts, such as those that Southampton city council has suffered for 14 years, that have really reduced that spending power, and does he agree that rather than faux outrage, what we need is an apology?

[Matthew Pennycook]

I absolutely agree with my hon. Friend. We deserve an apology, but I doubt that we will get one. Before 2010, it was vanishingly rare for councils to fall into serious financial difficulty. Since then, nine councils have been affected in just 14 years. There is a pattern here. For too long, the Conservative Government not only failed to carry out their duty to local government, but hollowed out frontline services and crashed the economy. We are turning that around with the support that we are providing to local government in the Budget. We will set out more details in the local government settlement early next year, as I have mentioned.

[Jim Shannon (Strangford) (DUP)]

As the Minister will know, although we do not have council tax per se in Northern Ireland, the pressures on our family finances are on a par with those on the UK mainland. The Government need to be clear about just how much further the finances of average families will be stretched, because this is a very worrying trend. What extra help can families, especially disabled families, expect to receive this year?

[Matthew Pennycook]

I thank the hon. Gentleman for his question, which relates to an earlier one. I think that, in the urgent question, the Opposition failed to account for the various other sources of support that we are providing for families. We are continuing the household support fund—that is £1 billion. There is a £1 billion uplift for special educational needs. There is UK shared prosperity funding of £900 million—the list goes on, but if the hon. Gentleman wishes to discuss the specific conditions in Northern Ireland further, I am more than happy to pass on that request to the Local Government Minister.

[Rachel Hopkins (Luton South and South Bedfordshire) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests: I am a vice-president of the Local Government Association; Opposition Front Benchers might want to reflect on that.

My hon. Friend mentioned front; I could talk about the Opposition’s brass neck in talking about concerns about the pressures that local councils face. Does he agree that 14 years of Conservative austerity, initially with the Liberal Democrats, devastated the ability of many councils, including Luton council, to provide much- needed services to families in our constituencies?

[Matthew Pennycook]

I have been a local councillor, as have many Members of this House. The hon. Member for Ruislip, Northwood and Pinner (David Simmonds) has been a council leader, so he will know what has happened to the system over the past 14 years. The Opposition continue to claim that there is a multibillion-pound black hole in local council budgets. When asked how they would fix it, however, they said, “It’s not for us to do; we’re in opposition. It’s for the Government.” It is a classic policy of having no plan to fix the mess. They have provided no clarity on their position on thresholds, and failed to take responsibility for what they did over 14 years in government.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

My Conservative-controlled council in the London borough of Bexley had to apply for a capitalisation order three years ago and make 15% of our staff redundant. Despite that, it still overspent its budget every month for over two years, and is currently overspending on the safety valve agreement made with the previous Government. In addition, the Conservative leader of the council, in responding to a question from me last year, accepted that she was part of the LGA Conservative group executive that published a manifesto last year asking their own Government to remove caps on council tax. Given that, does my hon. Friend agree that it is rank hypocrisy for the Conservative party to complain now about black holes in council finances?

[Matthew Pennycook]

I absolutely do, and the Government are determined to extract from the Opposition some clarity on their position on thresholds. Do they agree with the LGA Conservative group, which has called for the caps on council tax to be removed? Do they want those caps to be reduced? We are still none the wiser. Hopefully, we can find out in the weeks and months to come.

[Jim Dickson (Dartford) (Lab)]

As a member of a council for more than 30 years—like other Members of this House, I am still one—I have to say that, in the last few years, I have not met a single councillor from any political party across the local government family who does not believe that local government finance is in its worst state for decades. The latest LGA figures indicate that in Labour authorities, council tax is £276 lower than in Conservative authorities. Does the Minister agree that this shows that Labour councils, the Labour party and the Labour Government provide better value for money?

[Matthew Pennycook]

My hon. Friend is absolutely right. Labour councils charge less on average than Tory councils, and the councils with the lowest rates of council tax are all Labour. Council tax bills in Labour councils are on average £345 less than in Tory councils. When it comes to local government financing and council tax pressures, people are right to vote Labour. It will ensure that their council tax is lower than if they were under a Conservative local authority.

[Emily Darlington (Milton Keynes Central) (Lab)]

I am a former local government leader. Does the Minister agree that we should thank local authority leaders, especially Labour leaders such as Pete Marland at Milton Keynes city council, for keeping services during 14 years of austerity? Milton Keynes city council has kept weekly bin collections, kept children’s centres open and reduced rough sleeping, while keeping council tax lower than in its neighbouring Tory authorities. Does the Minister agree that instead of using local authority leaders to make cheap political points, the Conservative party should thank them and apologise for 14 years of austerity?

[Matthew Pennycook]

My hon. Friend makes a good point. I extend the Government’s appreciation to all local government leaders—I mean that in a cross-party spirit—for what they have done to keep services going despite the pressures that they have faced over the past 14 years, when the previous Government ran down local government. We should thank local government leaders, and this Government do. We want to consult them on how we rebuild the system after 14 years of pressure, and we would be more than happy to work across the Chamber and have a mature, cross-party conversation about we fix this mess. That will not happen if the political game-playing from the Opposition continues.

Housing Design and Quality

Matthew Pennycook Excerpts

Tuesday 12th November 2024 Written Statements

[The Minister for Housing and Planning (Matthew Pennycook)]

The Government are committed to building 1.5 million new homes over the next five years, but we have also been clear that increasing house building rates cannot mean units at any cost. We want exemplary development to be the norm not the exception so that more communities feel the benefits of new development and welcome it. As we act to boost housing supply, we are therefore determined to take steps to improve the design and quality of the homes and neighbourhoods being built.

These guiding principles are woven into the fabric of the reforms we have initiated over recent months. The new towns taskforce, for example, has been asked to ensure that quality and design are integral to its agenda, and it has been explicitly tasked with setting out clear principles and standards for new large-scale communities to ensure they are well-connected, sustainable, well-designed, and attractive. Our proposed reforms to the national planning policy framework also highlighted the Government’s ongoing commitment to well-designed homes and places, and retaining the objective of creating high-quality, beautiful, and sustainable buildings and places.

My Department intends to update the national design guide and national model design code in spring next year, and we will continue to bolster design skills and capacity through the £46 million package of capacity and capability support provided to local planning authorities. This will be used to fund the recruitment and training of 300 graduate and apprentice planners, along with the £1 million funding to public practice for the recruitment of planners, architects and urban designers.

Together, this framework provides a clear basis for the delivery of more high-quality, well-designed homes. To help support this delivery, in particular as we progress our consideration of large-scale sites and large-scale new communities, I intend to establish quarterly steering boards on design and placemaking, ensuring that our work is guided by those with relevant professional and practical expertise.

It was announced in July 2023 that the Office for Place, previously a small team in the then Department for Levelling Up, Housing and Communities, would become an arm’s length body to be based in Stoke-on-Trent. Work to establish the Office has continued since then. I would like to offer my sincere thanks to the interim board, led by Nicholas Boys Smith as chair, and the Office for Place team for their exemplary work on this important issue. In putting design and quality at the heart of the housing supply agenda and establishing the principles of design coding and embedding them in practice across the planning and development sectors, Nicholas and the team have made a significant contribution.

Alongside spending decisions taken at the Budget and the re-setting of departmental budgets, the Deputy Prime Minister and I have, however, concluded that support to improve the quality and design of new homes and places can be more efficiently and effectively delivered by the Department itself. The Office for Place will therefore be closed down and the expertise of its staff redeployed within the Ministry for Housing, Communities and Local Government, across the country. I would like to reassure the House that this will not impact on wider Government commitments to Stoke-on-Trent, including the award of £19.8 million for their levelling up partnerships programme.

In taking the decision to wind up the Office for Place, the Government are not downgrading the importance of good design and placemaking, or the role of design coding in improving the quality of development. Rather, by drawing expertise and responsibility back into MHCLG, I want the pursuit of good design and placemaking to be a fully integrated consideration as the Government reform the planning system, roll out digital local plans and provide support to local authorities and strategic planning authorities. I also believe that embedding this work within MHCLG will allow experience to be better reflected in decision-making, as well as integrated within an existing delivery team in Homes England already focused on design and placemaking.

It will also ensure continuity of current Office for Place key activities, including support for pathfinder authorities who received a share of £1 million to produce exemplar design codes, alongside work on digital design codes and funding to support local and regional urban design best practice and skills.

The Government regard improving the design and quality of the homes and neighbourhoods we will build over the coming years as conducive to, rather than in tension with, our ambition to significantly increase housing supply, and we have put in place the necessary policy and delivery framework to ensure we deliver on both objectives.

[HCWS209]

Renters' Rights Bill (Seventh sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 5th November 2024 Public Bill Committees

[The Chair]

With this it will be convenient to consider clauses 85 to 86 stand part.

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to continue our proceedings with you in the Chair, Mr Betts. We now turn to clauses 84 to 86, which deal with access to the data collected on the database and the circumstances in which that may be shared.

Let me start by speaking to clause 84. One of the central objectives of the database is to provide tenants and prospective tenants with the data to allow them to make informed decisions about which landlords to rent from. For that reason, the clause gives the Government a regulation-making power to make certain information on the database visible to the public.

For the database to be a success, it is crucial that tenants have access to key information about a landlord and a rental property. The information that the Government plan to make available to the public will include details of the landlord, details of other parties involved in the management or ownership of the property, and information about the rental property. The Government also intend to use the database to make landlords’ unspent housing-related offences or penalties visible to the public. Tenants will be able to make a judgment about whether to rent from a landlord, and good landlords will be distinguished from the minority of landlords who commit offences.

Information about spent offences will continue to remain visible to local authorities until those offences must be removed from the database, as described under clause 87. That will help local authorities to devise their enforcement approaches. However, spent offences will not be visible to the public. The Government will make information from the database public only if that is necessary and proportionate to meeting the aims of the database. We are committed to providing tenants with the information they need to make sound decisions about renting, but we are determined to respect landlords’ rights to privacy and to follow data protection and human rights legislation.

The clause also gives authorities such as local housing authorities, which have an interest in enforcing property standards, unlimited access to the information on the database. That will ensure they have access to the data necessary for them to carry out their enforcement activities.

Clause 85 outlines circumstances in which restricted data may be shared. The database will contain information that could be useful to various third parties. Although it could be useful, it remains essential that the information is protected in such a way as to respect the privacy of landlords and to ensure that the data is disclosed only for the intended purpose. Under clause 84, access to information will already be possible for relevant enforcement authorities, and regulations made under clause 85 can be used to extend that access to restricted information to other important third parties. That could be another Department or other third parties, such as the police service and the fire service.

The Government remain committed to protecting the privacy of landlords, as I said, and will ensure that any data disclosed is disclosed only for the specific purposes outlined in clause 85 and in full compliance with data protection legislation. The clause contains limitations to ensure that restricted information is disclosed to third parties only when necessary—for example, to help to fulfil statutory requirements and functions, or to facilitate compliance with the rule of law.

The Government have yet to confirm which organisations will have access to that information. We believe that certain elements of the information contained in the database may be useful to other Departments and other external agencies, as I said. Should the database operator or other persons breach the restricted data disclosure restrictions imposed by clause 85, they could be guilty of an offence punishable by a fine.

Clause 86 outlines the circumstances in which data can be used by certain public bodies that are granted access. The clause restricts the use of database information by those bodies to housing-specific functions. I will list the agencies in turn, for the benefit of the Committee: local housing authorities may use information from the database only in relation to their functions concerning housing, residential landlords and residential tenancies; local weights and measures authorities will be able to use the information from the database only for purposes related to their enforcement of housing standards; the mayoral combined authorities and the Greater London Authority may use information only in connection to their housing-related functions; and, if the Government nominate a lead enforcement authority—we will discuss that in more detail in respect of a later clause—it will be allowed to use information from the database only in relation to its functions as a lead enforcement authority, and the provision of the landlord legislation for which it is responsible.

Clause 86 will mean that although those agencies will have access to the information collected by the database, they will be able to use the data only where necessary and connected to their work related to housing. That will provide for better intelligence gathering on the private rented sector, enhancing enforcement activities and driving up standards, while also ensuring the privacy of landlords. I commend the clauses to the Committee.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. We spent some time on the use of the database in the previous Committee sitting, and the Opposition are satisfied with the Government’s direction of travel.

I have a question for the Minister in respect of his comments about those who will have access to the data and the purposes for which it is used. He spoke specifically about local authorities having the ability to access the data only for the performance of their housing functions. Predictive analytics are in quite widespread use in local authorities, largely based on the gathering of data from a number of sources—for example, the Ofsted databases that contain indicators relating to children, which might include the potential for a household to be made homeless, which would then trigger a requirement for a local authority to intervene.

It would be helpful if the Minister could clarify, perhaps in writing subsequent to this morning’s sitting, how housing functions will be defined so as not to inhibit the entirely commendable use of predictive analytics to identify households where there might be a risk that would trigger the local authority to intervene. How would that interact where elements of the service were provided by, for example, children’s trusts as a third party to the local authority, in order to ensure that the good work that is already being done to prevent households with children or vulnerable people from becoming homeless, and then requiring the intervention of a local authority, continues, and so that earlier intervention can forestall the level of risk?

[Matthew Pennycook]

I thank the shadow Minister for that question. To reassure him, any access to restricted information that is not displayed publicly through the database must be shown to facilitate compliance with a legal requirement, a rule of law or, as I said, the performance of a specific statutory function. I understand and recognise his point—namely, what are the limits? What is the definition of what a housing function is? What are the limits of what that applies to where statutory services are—I hope I have taken the shadow Minister’s meaning correctly—not strictly housing related but shade into housing-related issues? I will happily provide him some specific detail on that point through correspondence.

Question put and agreed to.

Clause 84 accordingly ordered to stand part of the Bill.

Clauses 85 to 87 ordered to stand part of the Bill.

Clause 88

Restriction on gaining possession

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

[The Chair]

With this it will be convenient to consider clauses 89 and 90 stand part.

[Matthew Pennycook]

Clauses 88, 89 and 90 introduce a restriction on repossession for unregistered properties and new offences and financial penalties in relation to the database.

Clause 88 prohibits landlords from gaining a possession order for a property unless they have registered themselves and their property on the database. A comprehensive record is essential for the database to be of use to tenants —in the way I described in relation to the previous clauses—and to local authorities and central Government. This approach will incentivise landlords to register on the database, thereby empowering renters to make informed choices about where they live. However, the Government recognise the importance of tackling antisocial behaviour. It will therefore be possible for a possession order to be granted under grounds 7A or 14 if the matter relates to antisocial behaviour, even if a landlord and their property are not registered on the database.

The Government can, through regulations, amend the person to whom or circumstances in which the restriction on granting a possession order applies. This will allow the legislation to evolve to match the changing needs of the database and ensure that the possession restriction targets the right landlords.

Clause 89 allows local authorities to levy financial penalties on individuals who fail to comply with the database provisions. A transformative database will equip local authorities and tenants with the intelligence needed to make informed choices in the private rented sector. A strong enforcement framework will be crucial in maintaining the database’s integrity and ensuring that it serves its intended purpose. The clause grants local authorities powers to tailor penalties for non-compliance, and outlines a transparent and proportionate system for increasing penalties in cases where initial measures fail to achieve such compliance.

Clause 89 also allows local authorities to impose fines of up to £7,000 on persons who breach the restrictions in clause 80 regarding the marketing, advertising or letting of properties. Repeat offenders who commit similar breaches within five years, or continue to engage in unlawful behaviour, may face fines of up to £40,000, under clause 90. To further safeguard the integrity of the database, local housing authorities will have the power to impose fines of up to £40,000 on anyone who knowingly or recklessly submits false or misleading information to the database operator. Those fine levels will act as a powerful deterrent for landlords and agents, thereby ensuring high levels of compliance with the database provisions. The Secretary of State can amend the level of fines to reflect inflation; this power will ensure the continued effectiveness and relevance of our enforcement measures.

We understand that the database is a new service for local authorities, and we are designing the service to be as streamlined as possible. Our research indicates that a dependable source of information on the private rented sector will improve the efficiency of local authority enforcement practices. The clause mandates local authorities to have regard to guidance on financial penalties issued by the Secretary of State. The power will enable the Government to assist local authorities to fulfil their new responsibilities.

The success of the private rented sector database hinges on landlords and property agents fulfilling their new duties. Clause 90 will establish new offences for continued or repeated breaches of the requirements relating to the restrictions on the marketing, advertising and letting of a property imposed by clause 80. Those who continually or repeatedly breach the requirements within a five-year period are liable to an unlimited fine, following a successful prosecution.

Furthermore, clause 90 will establish a new offence where a person knowingly or recklessly provides false or misleading information to the database operator. Again, those who breach that requirement will face an unlimited fine on conviction. To ensure accountability in the private rented sector, we have extended liability for the offences to include corporate bodies. That will deter non-compliance and promote responsible behaviour among corporate entities and their representatives.

To combat these illegal practices, the Government will make regulations under the Housing and Planning Act 2016 to categorise the new offences established under clause 90 as banning order offences, which must be recorded on the database. As a result, depending on the decision of the local housing authority, landlords, agents or others convicted of such offences may be subject to a banning order.

The stringent penalties outlined in the clause will serve as a powerful disincentive for those who do not comply with the requirements of the database. By ensuring greater compliance, we will equip local authorities and tenants with essential information, while also enabling reputable landlords to differentiate themselves from those who do not, or refuse to, meet the required standards.

[David Simmonds]

Again, the Opposition support the measures, and I welcome the Minister’s words in introducing them.

On the restrictions around gaining possession, I have a brief question concerning the potential interaction between the database and planning law—for example, where a landlord has been registered and is letting a property that has not been authorised in planning terms. That is quite common on caravan sites, where the land might be illegally occupied, with a complex set of transactions leading up to that situation. The most vulnerable individuals and households are often accommodated in that type of property, which is sometimes of very poor quality. A local authority, therefore, needs to go down the appropriate enforcement path, in planning terms, to end the potentially illegal or unlawful use of that land.

Because planning law permits unlawful use to be rendered lawful by the seeking of retrospective permission, there is a potential risk to a tenant occupying such a property, if the local authority undertakes different courses of enforcement action simultaneously against a banned bad landlord and against a landowner or developer who has created a property that is not fit for occupation but is part of a rented-out property portfolio. I would like confirmation that those circumstances have been considered. Constituents of mine have been in that situation. I do not want to find that the most vulnerable and marginal households cannot benefit from the rights that the legislation intends to create.

[Matthew Pennycook]

I thank the shadow Minister for that question. I will give him the opportunity to clarify, if he feels that would be helpful. If I have understood him correctly, he is asking what would happen where there is an unauthorised development and potential planning enforcement in place, but the landlord is required under the new system to register with the database. Would they essentially be allowed to register with the database and comply with the requirements in the Bill, were they subject to a form of planning enforcement?

[David Simmonds]

Yes.

[Matthew Pennycook]

I will take that away and write to the shadow Minister. It is a good, detailed, specific question. We need to consider how various elements of local authority enforcement action relate to the Bill and how the Bill interacts with other requirements.

[Carla Denyer (Bristol Central) (Green)]

It has just occurred to me that the same question might apply to houses in multiple occupation, in areas where section 4 is applied. When the Minister looks into it, will he include that as well?

[Matthew Pennycook]

I am more than happy to include that in my correspondence with the Committee.

[David Simmonds]

I am grateful to the Minister for his response. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) held a Westminster Hall debate on the topic of unauthorised development, but there are also issues with authorised development in places where there may be conflicts in planning law. For example, somebody occupying a caravan or temporary structure on land where they are subject to planning enforcement, but where they have a legal contract with a landlord, is in an especially vulnerable position. We want to ensure that they are not at risk of having their rights taken away as a result of ambiguities in the legislation. I am grateful to the Minister for looking into that.

[Matthew Pennycook]

Let me, hopefully, bring the exchanges on this matter to a close. I have taken away from this a very valid point. Under the provisions in the clause, if landlords correct a matter of non-compliance, vis-à-vis the requirements in the Bill, the possession process will be allowed to continue. Hon. Members have asked a reasonable question about whether, in circumstances where planning enforcement is still a live issue, it impacts in any way, and that can also apply in respect of HMOs. I commit to coming back to the Committee with fulsome detail on the subject.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Clauses 89 and 90 ordered to stand part of the Bill.

Clause 91

Power to direct database operator and local housing authorities

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

[The Chair]

With this it will be convenient to consider clauses 92 to 94 stand part.

[Matthew Pennycook]

Clauses 91 to 94 deal with the power to direct the database operator, amendments to the Housing and Planning Act 2016, provisions for joint landlords and the interpretation of chapter 3.

The Government are aware that in order to achieve the aims of the database—to raise standards in the sector—we may need to direct the database operator or local authorities in respect of how they carry out certain functions in relation to the database. Clause 91 allows the Government to give the database operator or local housing authority instructions on how they exercise their functions. This may include giving instructions to local housing authorities on how to investigate and enforce property standards. The power will provide an agile database that can respond to the changing needs of the sector.

To ensure that local authorities can build a complete picture of enforcement activities, it is essential that banning orders and banning offences are recorded in one location. Clause 92 will require local authorities to record banning orders and banning order offences in respect of landlords on the private rented sector database once it has come into force. The clause amends section 28 of the Housing and Planning Act 2016 to signpost people to the new PRS database established under the Bill.

The purpose of clause 93 is simply to ensure that we have the ability to streamline the process for joint landlords in order, where possible, to avoid the duplication of entries. We anticipate creating a single sign-up process for joint landlords, with one lead landlord registering on behalf of others.

To help the understanding and aid the interpretation of the proposed legislation concerning the database, clause 94 defines certain key terms used in the legislation, or signposts readers to definitions elsewhere. Those terms are “database”, “lead enforcement authority”, “the landlord legislation”, “relevant banning order”, “relevant banning order offence” and “unique identifier”. I hope the Committee will have no issue with these simple, straightforward clauses.

[David Simmonds]

Once again, we support the clauses, but I have a question for the Minister. A little later, we will debate the allocated enforcement authority—which local authority has the power to undertake the enforcement. It will be a challenge for areas of England with two-tier councils where the housing authority is the district council, because the county council also has certain responsibilities that it must fulfil. For example, under the Children Act 1989, the county council has a duty to house somebody who is at risk of homelessness even if they have no recourse to public funds, because of the risk to children of being made homeless. Were the council not able to access the database because it was not the enforcement authority for that area, it would not be able to undertake the same level of due diligence.

I want the Committee to be confident that when the allocation of powers and duties is undertaken, the process will be sufficiently comprehensive for all the parts of the local government system that could have duties triggered under various parts of this legislation to have equality of access to the database to enable them to discharge their functions properly.

[Matthew Pennycook]

I thank the shadow Minister for posing that question. I am confident that the provisions are comprehensive enough to deal with those sorts of eventualities. I think we will discuss the matter in a bit more detail when we come to the clauses that relate to the lead enforcement authority and who has particular responsibilities in certain scenarios envisioned in the Bill. If I have not answered the shadow Minister’s question, I will be happy to respond again at that point.

Question put and agreed to.

Clause 91 accordingly ordered to stand part of the Bill.

Clauses 92 to 94 ordered to stand part of the Bill.

Clause 95

Financial assistance by Secretary of State

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

[The Chair]

With this it will be convenient to consider clauses 96 and 97 stand part.

[Matthew Pennycook]

The clauses cover financial assistance provided by the Secretary of State to the PRS ombudsman and database, rent repayment orders and the interpretation of part 2.

On clause 95, we intend the private rented sector database and ombudsman to be self-funded through landlords’ registration or membership fees. However, clause 95 gives the Secretary of State the ability to give financial assistance to a person carrying out functions related to the PRS ombudsman or database provisions. Assistance will be granted in the event of an emergency, unforeseen circumstances or to cover enforcement shortfalls in particular circumstances.

Clause 96 concerns rent repayment orders. As members of the Committee will know, an RRO is an order made in the first-tier tribunal requiring a landlord to repay a specified amount of rent, either to the tenant or to the local housing authority, for a range of specified offences. The amount owed under an RRO is enforceable as if it were a debt in the county court. To grant an RRO, it is not necessary for the landlord or agent to have been convicted, but a tribunal must be satisfied beyond reasonable doubt that one of the offences has been committed. Presently, an RRO can require the repayment of a maximum sum of 12 months’ rent.

Rent repayment orders were introduced by the Housing Act 2004 and extended through section 40 of the Housing and Planning Act 2016 to cover a wider range of offences. RROs are an accessible, informal and relatively straightforward means by which tenants can obtain redress in the form of financial compensation, without having to rely on another body in instances where a landlord or his or her agent has committed an offence. For that reason—as you know better than anyone, Mr Betts—they have proved an extremely effective means for tenants and local authorities to hold to account landlords who fail to meet their obligations. RROs empower tenants to take effective action against unscrupulous landlords, but they also act as a powerful deterrent to errant landlords.

The previous Government’s Renters (Reform) Bill brought a number of continuing or repeat breaches or offences within the purview of rent repayment orders. In our view, it did not go far enough. We made the case at the time—ultimately without success, it must be said —that RROs should be a more significant feature of the Bill. I am therefore pleased that our Renters’ Rights Bill significantly expands rent repayment orders.

At this point, it would be remiss of me not to pay tribute to the late Simon Mullings, who unexpectedly died recently while on holiday in Scotland. Spike, as he was known by many, was a real enlarger of life and a real force for good in the sector, helping a great many families in need. His work on RROs, not least in the Rakusen v. Jepsen case, which went to the UK Supreme Court, and the exchanges we had in relation to the Renters (Reform) Bill in the last Parliament heavily influenced our approach to the legislation before us. He is sorely missed, and I thought it was right for me to make special mention of him, given how he has influenced the clauses we are discussing.

Clause 96 makes a series of important measures that strengthen rent repayment orders. First, it expands rent repayment orders to new offences across the Bill, including those in relation to tenancy reform, the ombudsman and the database. That ensures robust tenant-led enforcement of the new measures and supports better compliance with the new system. Secondly, the clause ensures that for all the listed offences, the tribunal must issue the maximum rent repayment order amount where the landlord has been convicted of, or received a financial penalty for, that offence or has committed the same offence previously. The intention is that rent repayment orders will provide an even stronger deterrent against offending and reoffending. Finally, clause 96 makes it easier for tenants and local authorities to apply for rent repayment orders, by doubling the maximum period in which an application can be made from the current 12 months to two years.

Clause 97 explains what activities constitute marketing a property to let and what comprises letting agency work. Landlords, letting agents and other persons will be prohibited from marketing residential properties to let, unless the landlord has registered with the private rented sector database and ombudsman scheme. Renters will benefit from knowing that a landlord has registered with the database, and tenants should be able to seek redress for issues that occur during the pre-letting period. We will retain the flexibility to narrow the definition of letting agency work by regulations in the future, if that is needed.

I commend the clauses to the Committee.

Question put and agreed to.

Clause 95 accordingly ordered to stand part of the Bill.

Clauses 96 and 97 ordered to stand part of the Bill.

Clause 98

Decent homes standard

[Mr Gideon Amos (Taunton and Wellington) (LD)]

I beg to move amendment 72, in clause 98, page 117, line 20, at end insert—

“(ia) the availability of which is secured by the Secretary of State under paragraph 9 of Schedule 10 of the Immigration Act 2016, or sections 4 or 95 of the Immigration and Asylum Act 1999;

(ib) that is provided by the Ministry of Defence for use by service personnel; or”.

This amendment would extend the Decent Homes Standard to accommodation provided to people on immigration bail and to that provided by the Ministry of Defence to service personnel.

--- Later in debate ---

[Mr Amos]

It is a pleasure to serve under your chairmanship, Mr Betts, particularly as I know your expertise in this policy area. Amendment 72 would apply the proposed decent homes standard both to accommodation for refugees and people seeking asylum, and to accommodation provided by the Ministry of Defence for serving personnel. As I stated on Second Reading, it would be perverse, now that we have a decent homes standard for social housing and this Bill proposes a decent homes standard for the private rented sector, to leave our serving military personnel as one of the only groups not benefiting from decent living accommodation.

In debate on the Renters (Reform) Bill, my hon. Friend the Member for Twickenham (Munira Wilson), speaking on behalf of our hon. Friend the Member for North Shropshire (Helen Morgan), spoke about RAF Shawbury and Tern Hill barracks in north Shropshire, where the service accommodation was plagued by black mould, rat infestations and chronic overcrowding, meaning that individuals who have put their lives on the line for our country are not necessarily guaranteed a warm and safe place to live in return. I agree with the words of my hon. Friend the Member for Twickenham:

“That is no way to treat people who have put their lives on the line to serve this country…they deserve better.”—[Official Report, 24 April 2024; Vol. 748, c. 1004.]

I am grateful to the Minister for advising the House on Second Reading of this Bill that

“the MOD is reviewing its target standards so that we can drive up the quality of that accommodation separately from the Bill.”—[Official Report, 9 October 2024; Vol. 754, c. 412.],

but this is a long-running issue, and no doubt any Government at any time on any day in any month would say that they were “reviewing” the situation. Frankly, that is not going far enough.

Next week, of course, we will be commemorating those who sacrificed everything for our country. It would be appropriate, would it not, for the Government to take the opportunity under this Bill to commit to giving service personnel a decent homes standard for the public buildings in which they live? I have to say that the Government’s current position is a bit disappointing. I hope that the Minister will update that position, the more so because it falls short of the position taken by the previous Conservative Government, which is something of a surprise from where I am on the Liberal Democrat Benches. I hope very much that the Minister will update the position.

As the hon. Member for Ruislip, Northwood and Pinner will no doubt remember, the former Minister and then Member for Redcar, Jacob Young, in response to the equivalent amendment proposed to the Renters (Reform) Bill by my hon. Friends, made the commitment on Report that the Conservative Government would

“ensure that service accommodation meets the decent homes standard”.

However, he also said:

“Service…accommodation has unique features…including a significant portion being located on secure military sites where there will be issues around security and access for inspections.”

Therefore, like the Minister today, he recognised the unique challenges. However, he said that with

“the appropriate monitoring and reporting arrangements”,

the Government

“intend to ensure that service accommodation meets the decent homes standard”.—[Official Report, 24 April 2024; Vol. 748, c. 1029.]

Can it really be the case that the new Government are backtracking on the commitment of the last Government when it comes to decent homes for our serving military personnel? I certainly hope not.

In earlier sittings, this Minister emphasised that the exact nature of the standard would be subject to consultation, and clause 98(4) makes provision for exactly that consultation. I do not suggest that private rented housing would necessarily have poorer standards than the decent homes standard that applies to social housing. However, it is clear in clause 98 that the Government intend to develop a distinct standard appropriate to the private rented sector. What greater opportunity is there for the clause to ensure that the Government also develop a distinct decent homes standard that would be appropriate for the MOD conditions described earlier?

Finally, there is no doubt that tenants taking refuge here from war or other disasters in their own countries, who are awaiting determination of their asylum applications and many of whom have served our military and British forces in theatres of war such as Afghanistan, should also be in decent homes. Incidentally, the Liberal Democrats believe that asylum seekers should be working for that accommodation, so that they can earn for themselves and pay for it, but that does not take away from the fact that those families should not be in poor accommodation and should have decent homes.

I strongly urge the Minister, and the Committee as a whole, to recognise that the Bill provides a legislative opportunity, one that may not come again in this Parliament, to do right by those who should have decent homes. I urge the Committee to support the amendment and finally bring a long-running campaign to a successful conclusion, such that military accommodation will meet the decent homes standard.

[Matthew Pennycook]

We now move to part 3 of the Bill, concerning the decent homes standard. As members of the Committee will be aware, the private rented sector has the worst conditions of any housing tenure. More than one in five privately rented homes fail to meet the current decent homes standard, which sets a minimum standard for social housing. That equates to around a million homes. We are determined to tackle the blight of poor-quality homes and to ensure that tenants have the safe and decent homes they deserve. To do that, we will apply a decent homes standard to privately rented homes for the first time.

Clause 98 allows regulations to be made setting out the decent homes standard requirements that private rented homes must meet. As the hon. Member for Taunton and Wellington just mentioned, the Government will be consulting on the content of that standard, and we will set out the details of our proposals in due course. We want as many private rented sector tenants as possible to benefit from the decent homes standard. It will therefore apply to the vast majority of privately rented dwellings and houses in multiple occupation that are let under tenancies, as well as privately rented supported housing occupied both under tenancies and licences.

It is our intention that as much privately rented temporary homelessness accommodation as possible is covered by the decent homes standard too, but we need to avoid reducing the supply of such housing. Clause 98 therefore allows, following a consultation, temporary accommodation to be brought within scope of the standard through regulations. We are committed to engaging with the sector to assess the potential impacts and to ensure that our approach strikes the right balance.

Schedule 4 establishes a robust but proportionate enforcement framework for the decent homes standard. Local councils already have a wide range of powers to take action when properties contain hazards. Schedule 4 will allow those enforcement powers also to be used where private rented homes fail to meet decent homes standard requirements. It also gives councils a new power to issue financial penalties of up to £7,000 where the most dangerous hazards are found, as well as taking other enforcement action. That will provide a strong incentive for landlords to ensure that their properties are safe.

In most instances, the landlord who lets out the property to the tenants will be responsible for ensuring that it meets the decent homes standard. To reflect that, the schedule provides that the landlord will be subject to enforcement by default. However, some circumstances are more complex, such as leasehold properties and where rent-to-rent arrangements are being used. The schedule gives councils the flexibility in such situations to take enforcement action against the appropriate person. The schedule also allows for the fact that there will be legitimate reasons why some properties will not be able to meet all elements of the standard—for example, if a property is a listed building and consent to make alterations has been refused. Local councils will be able to take a pragmatic approach to enforcement in such cases. We will publish statutory guidance to support them in dealing with such issues in a way that is fair for both tenants and landlords.

We have tabled a number of minor Government amendments to ensure that clause 98 and schedule 4 work as intended. It is important that local authorities can take enforcement action against the person responsible for failures to meet quality standards. The amendments will ensure that the appropriate person can always be subject to enforcement action in respect of health and safety hazards in temporary homelessness accommodation.

--- Later in debate ---

[Carla Denyer]

I rise to support amendment 72, tabled by the hon. Member for Taunton and Wellington, who made a compelling case for the need to provide adequate housing for those who serve us in the armed forces. I want to pick up on the reassurance that the Minister attempted to offer us on the existing regulatory regime for asylum accommodation, which he believes is sufficient. There is a two-word answer to whether it is sufficient: Bibby Stockholm. Would the Bibby Stockholm meet the decent homes standard? No, it clearly would not, and the Bill is an opportunity to fix that.

[Matthew Pennycook]

I will respond briefly, partly because a number of the issues raised are outside my ministerial responsibility. I commit to replying in writing to the points raised in relation to the responsibilities of the Home Office and the Department for Education, to give the Committee more clarity. Some of those details will come out when we consult. Everyone is assuming that we are talking about the decent homes standard as if it exists—it does not exist. We need to consult on what those specific standards will be and introduce the regulations.

The powers we have given ourselves in the measures will ensure that the standard can be extended to temporary accommodation, and to other types of housing provision where needed. I will happily come back on the point that the hon. Member for Bristol Central raised about the provision of asylum accommodation.

[Mr Amos]

The hon. Member for Ruislip, Northwood and Pinner believes that the commitment from the last Government that the decent homes standard will be applied to Ministry of Defence housing still stands, but the Minister says that the decent homes standard will not apply to MOD homes and instead that the MOD has it under review.

[Mr Amos]

That is not consistent with what Jacob Young said in 2023, as recorded in Hansard, namely that the intention was to extend the decent homes standard to cover Ministry of Defence accommodation. That is the intention of the amendment. That is why I tabled it and why my hon. Friend the Member for North Shropshire tabled it in the last parliamentary Session. We are hearing that someone in the MOD has it under review. At the moment, that is not a huge reassurance. The whole subject of MOD housing and the need for serving personnel to benefit from it has been omitted.

The Minister mentioned the difficulty of enforcing the decent homes standard because MOD accommodation is behind the wire, but according to him we know that 96% of MOD accommodation would meet the standard. That work has been done, surveys have been carried out and the information is being freely exchanged, so clearly it is not that difficult to inspect the accommodation and understand what standard it meets. All accommodation on MOD bases can be easily accessed with the permission of the officer commanding the base. All sorts of inspections are carried out on MOD bases.

I accept that the Government are supportive of the principle of improving the standard of asylum seeker accommodation, but as with MOD housing, the fact that it is under review is not much of an assurance. I therefore will not withdraw the amendment.

[Matthew Pennycook]

Unless the hon. Gentleman is pressing his amendment simply to make a political point, I ask him gently: what outcomes are we seeking? He wants to bring MOD accommodation up to the decent homes standard. I have made it very clear to him that the MOD has been benchmarking minimum housing standards to the decent homes standard since 2016, and the shadow Minister has made the same point. The MOD inspects its properties. It knows what that standard is. It reports that 96% of its accommodation meets that standard.

The MOD also has a higher standard, the MOD-developed decent homes-plus standard, to which it benchmarks its accommodation. It found that 84.4% of its accommodation meets that standard. So we know that the MOD is already inspecting and monitoring its standards. The MOD has made it very clear under the present Government that it is reviewing how it takes forward those standards and—this is important to the point about outcomes—that in driving up standards in its accommodation, it is seeking an equivalent standard that we will introduce for the private sector through the Bill.

I gently say to the hon. Gentleman that we share the same objective; it is about how that is achieved. I have tried to give him the reassurance that the MOD is not just brushing off the review; it is absolutely committed to driving up standards through its particular route, given some of the challenges it faces. I have a barracks in my constituency, and it is not that easy for local authority enforcement officers to just make an appointment to visit it and inspect. It is for the MOD to take this forward, and it is absolutely committed to doing so. If the hon. Gentleman’s point is simply about how we achieve the same objective, I am very confident that the MOD should be the one to do it through the specific route it has outlined, rather than by bringing military accommodation into the Bill, which could have all manner of unintended consequences.

[David Simmonds]

The Minister said earlier that there is a requirement for a consultation on the decent homes standard. It is important to recognise that a decent homes standard already exists, and in fact has existed since the previous Labour Government, which introduced it for social housing. The MOD is benchmarking its accommodation to that existing social housing decent homes standard, which includes things such as the state of repair of the property and its thermal insulation—the property needs to be sufficiently warm for safe occupation. Those criteria already exist and are already in use. Where there is an element of doubt is on the specific decent homes standard that the new Government would apply to the private rented sector. But there is already a decent homes standard, which is in use in the Ministry of Defence now.

[Matthew Pennycook]

I give way to the hon. Member for Taunton and Wellington.

--- Later in debate ---

[Matthew Pennycook]

We have been in office for a little over 120 days, so the hon. Gentleman will forgive us for not publishing information about every action that we are taking. I will make him this offer: I will take his point away to MOD Ministers who we are in conversation with, and if I cannot give him further assurances through written correspondence about the process that the MOD intends to take forward, including in response to his specific point about timelines, he is more than welcome to push the amendment at a later stage. However, at this stage I urge him to accept that we think there are good reasons why this is not the legislative vehicle to take the amendment forward. The objective is shared; from our point of view, this is about the means by which it is most appropriately achieved.

[Mr Amos]

Given the assurance that the Minister has generously given, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 24, in clause 98, page 118, line 27, at end insert—

“(ba) a building or part of a building constructed or adapted for use as a house in multiple occupation if—

(i) it is for the time being only occupied by persons who form a single household, and

(ii) the accommodation which those persons occupy is let under a relevant tenancy or is supported exempt accommodation,

except where the accommodation which those persons occupy is social housing and the landlord under the tenancy, or the provider of the supported exempt accommodation, is a registered provider of social housing,”.

This expands the definition of “qualifying residential premises”—and therefore expands the scope of the power in new section 2A inserted by this clause—so as to catch HMO accommodation which is occupied by only one household (and therefore does not count as an HMO because it is not actually in multiple occupation).

Amendment 25, in clause 98, page 118, line 34, after “(b)” insert “, (ba)”.—(Matthew Pennycook.)

This is consequential on Amendment 24.

Clause 98, as amended, ordered to stand part of the Bill.

Schedule 4

Decent homes standard

Amendments made: 26, in schedule 4, page 186, line 4, leave out sub-paragraph (3) and insert—

“(3) After subsection (8) insert—

‘9) But unoccupied HMO accommodation is “qualifying residential premises” for the purposes of this Part only to the extent provided for by section 2B(1)(ba).’”

This is consequential on Amendment 24.

Amendment 27, in schedule 4, page 202, line 5, leave out from second “premises” to “, and” in line 6 and insert “other than—

(i) homelessness accommodation (see paragraph B1), or

(ii) common parts (see paragraph 4)”.

This excludes homelessness accommodation from the scope of the new paragraph A1. Instead it is dealt with by the new paragraph B1 inserted by Amendment 29. (Common parts are already excluded from new paragraph A1.)

Amendment 28, in schedule 4, page 202, line 11, leave out from beginning to second “the” in line 13 and insert—

“(1A) Sub-paragraph (2) applies in relation to the premises if they are—

(a) a dwelling or HMO let under a relevant tenancy,

(b) an HMO where at least one unit of accommodation which forms part of the HMO is let under a relevant tenancy, or

(c) a building or a part of a building constructed or adapted for use as a house in multiple occupation if—

(i) it is for the time being only occupied by persons who form a single household, and

(ii) the accommodation which those persons occupy is let under a relevant tenancy.”

This is consequential on Amendment 24.

Amendment 29, in schedule 4, page 202, line 31, leave out paragraph (b) and insert—

“(4) In this paragraph—

“common parts” means common parts that are qualifying residential premises by virtue of section 2B(1)(d);

“homelessness accommodation” means accommodation in England—

(a) the availability of which is secured under Part 7 of the Housing Act 1996 (homelessness), and

(b) which is residential premises, whether by virtue of paragraph (e) or another paragraph of section 1(4).

Service of improvement notices: homelessness accommodation (whether or not it is qualifying residential premises)

(1) This paragraph applies where the specified premises in the case of an improvement notice are homelessness accommodation (which has the same meaning here as in paragraph A1).

(2) The notice must be served on any person—

(a) who has an estate or interest in the premises, and

(b) who, in the opinion of the local housing authority, ought to take the action specified in the notice.

(3) This paragraph applies instead of paragraph 1, 2 or 3 (in a case where that paragraph would otherwise apply to the improvement notice).”

The definitions are consequential on Amendment 27. The new paragraph B1 provides for the service of all improvement notices relating to homelessness accommodation (and replaces the current provision which only catches notices about requirements under regulations under section 2A).

Amendment 30, in schedule 4, page 203, line 5, leave out “let under a relevant tenancy, or” and insert “a dwelling or HMO let under a relevant tenancy,”.

This is consequential on Amendment 24.

Amendment 31, in schedule 4, page 203, line 8, at end insert “or

(c) are a building or a part of a building constructed or adapted for use as a house in multiple occupation—

(i) that is for the time being only occupied by persons who form a single household, and

(ii) where the accommodation which those persons occupy is let under a relevant tenancy,”.

This is consequential on Amendment 24.

Amendment 32, in schedule 4, page 203, line 12, after “tenancy.” insert—

“(2B) Where—

(a) sub-paragraph (2A) does not apply in relation to the specified premises,

(b) the specified premises consist of or include the whole or any part of a building containing homelessness accommodation, and

(c) the person providing the homelessness accommodation—

(i) is a tenant of that accommodation under a tenancy which has an unexpired term of 3 years or less (the “short tenancy”), and

(ii) accordingly is not an owner in relation to the homelessness accommodation (see section 262(7)(b)),

the authority must also serve copies of the order on any person who, to their knowledge, is a tenant under the short tenancy, a landlord under the short tenancy, or a superior landlord in relation to the short tenancy, and who is not otherwise required to be served with a copy of the notice under this paragraph.

(2C) In sub-paragraph (2B) “homelessness accommodation” means accommodation in England—

(a) the availability of which is secured under Part 7 of the Housing Act 1996 (homelessness), and

(b) which is residential premises, whether by virtue of paragraph (e) or another paragraph of section 1(4).”

This requires copies of a prohibition notice to be given where homelessness accommodation is provided by a person who is a tenant of the accommodation under a lease with an unexpired term of 3 years or less.

Amendment 33, in schedule 4, page 203, line 13, leave out “after “(2)” insert “or (2A)”” and insert “for “sub-paragraph (2)” substitute “this paragraph””.

This is consequential on Amendment 32.

Amendment 34, in schedule 4, page 203, line 28, leave out “let under a relevant tenancy, or” and insert “a dwelling or HMO let under a relevant tenancy,”.

This is consequential on Amendment 24.

Amendment 35, in schedule 4, page 203, line 31, at end insert “or

(c) are a building or a part of a building constructed or adapted for use as a house in multiple occupation—

(i) that is for the time being only occupied by persons who form a single household, and

(ii) where the accommodation which those persons occupy is let under a relevant tenancy,”.

This is consequential on Amendment 24.

Amendment 36, in schedule 4, page 203, line 35, after “tenancy.” insert—

“(2B) Where—

(a) sub-paragraph (2A) does not apply in relation to the specified premises,

(b) the specified premises consist of or include the whole or any part of a building containing homelessness accommodation, and

(c) the person providing the homelessness accommodation—

(i) is a tenant of that accommodation under a tenancy which has an unexpired term of 3 years or less (the “short tenancy”), and

(ii) accordingly is not an owner in relation to the homelessness accommodation (see section 262(7)(b)),

the authority must also serve copies of the order on any person who, to their knowledge, is a tenant under the short tenancy, a landlord under the short tenancy, or a superior landlord in relation to the short tenancy, and who is not otherwise required to be served with a copy of the notice under this paragraph.

(2C) In sub-paragraph (2B) “homelessness accommodation” means accommodation in England—

(a) the availability of which is secured under Part 7 of the Housing Act 1996 (homelessness), and

(b) which is residential premises, whether by virtue of paragraph (e) or another paragraph of section 1(4).”

This requires copies of a prohibition notice to be given where homelessness accommodation is provided by a person who is a tenant of the accommodation under a lease with an unexpired term of 3 years or less.

Amendment 37, in schedule 4, page 203, line 36, leave out “or (2A)” and insert “, (2A) or (2B)”.

This is consequential on Amendment 36.

Amendment 38, in schedule 4, page 203, line 37, leave out “after “(2)” insert “, (2A)”” and insert “for “sub-paragraph (2) or (3)” substitute “this paragraph””.

This is consequential on Amendment 36.

Amendment 39, in schedule 4, page 204, line 4, leave out “let under a relevant tenancy, or” and insert “a dwelling or HMO let under a relevant tenancy,”.

This is consequential on Amendment 24.

Amendment 40, in schedule 4, page 204, line 7, at end insert “or

(iii) are a building or a part of a building constructed or adapted for use as a house in multiple occupation that is for the time being only occupied by persons who form a single household and where the accommodation which those persons occupy is let under a relevant tenancy,”.—(Matthew Pennycook.)

This is consequential on Amendment 24.

Schedule 4, as amended, agreed to.

Clause 99

Financial penalties

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

[The Chair]

With this it will be convenient to consider schedule 5.

[Matthew Pennycook]

These provisions deal with financial penalties. Schedule 5 sets out the process for a local housing authority to impose a financial penalty on a person and applies to clauses 39, 56, 64 and 89. Foremost, schedule 5 stipulates that, before imposing a financial penalty, a local housing authority must issue a notice of intent setting out its reasons for issuing the fine. Landlords then have 28 days to make written representations to the local authority—I have discussed this point outside of Committee with the hon. Member for Broadland and Fakenham. Following that period of representations, the local authority must decide whether to impose a penalty. If it decides to issue a penalty, the local housing authority must then issue a final notice detailing the fine to be paid by the landlords, who will be able to appeal a decision to impose a penalty or the amount of the penalty by bringing an appeal to the first-tier tribunal within 28 days. The process in the schedule follows the precedent of the Tenant Fees Act 2019 and is similar to the process in the Housing and Planning Act 2016.

Clause 99 applies the schedule 5 procedures and rules for imposing, appealing, recovering or applying the proceeds of a financial penalty related to the anti-discrimination provisions, rental bidding, landlord redress schemes and the private rented sector database. I commend the provisions to the Committee.

Question put and agreed to.

Clause 99 accordingly ordered to stand part of the Bill.

Schedule 5 agreed to.

Clause 100

Rent repayment orders: liability of landlords and superior landlords

[Carla Denyer]

I beg to move amendment 41, in clause 100, page 120, line 9, leave out from “order)” to the end of line 12 and insert—

“—

(a) in subsection (1), omit “, beyond reasonable doubt,”;

(b) at the end of subsection (3), insert—

“(d) section 46A (where an order is made against more than one landlord or there has been a previous order”;

(c) after subsection (3), insert—

“(4) Where the application for a rent repayment order relates to an offence under sections 1(2), (3) or 3(A) of the Protection from Eviction Act 1977, the First-tier Tribunal must be satisfied, on the balance of probabilities, that the offence has been committed.

(5) Where the application for a rent repayment order relates to any other offence to which this Chapter applies, the First-tier Tribunal must be satisfied, beyond reasonable doubt, that the offence has been committed.”””

This amendment would apply the civil standard of proof for Rent Repayment Orders pursued on the basis of a Protection from Eviction Act 1977 offence.

[Carla Denyer]

The amendment is related to amendment 44, which I spoke to a few days ago, and to the serious issue of illegal evictions. Amendment 41 would apply the civil standard of proof for rent repayment orders, known as RROs, which are pursued on the basis of the Protection from Eviction Act 1977 offence, known as PFEA—I apologise; there will be acronyms. RROs are extremely difficult for renters to bring under the PFEA offence, due to the criminal standard of proof. As the Minister himself pointed out in our discussions on illegal discrimination, it is notoriously difficult for tenants to prove landlords’ culpability to a criminal standard of proof.

As I understand it, RROs for PFEA offences require a landlord who has committed an offence listed in the 1977 legislation to repay rent that has been paid in respect of a tenancy or licence. RROs are brought in the first-tier property tribunal, often as compensation by self-represented applicants who seek to reclaim rent they have paid to their landlord. Importantly, legal aid is not available for RRO claims, so tenants are almost always on their own. Currently, RRO claims require a criminal standard of proof. That is inappropriate because an RRO is not a criminal prosecution. It does not follow criminal procedural rules, or result in a criminal sentence or a criminal record if the defendant is convicted. As things stand, PFEA RROs are an anomaly. A civil claim in a civil court for illegal eviction or harassment applies the civil standard, despite the fact that civil claims typically attract much higher penalties in the form of civil damages. It is therefore logical and consistent to apply the civil standard of proof to PFEA RROs, in line with the rest of civil law.

What is more, RROs are intended to be accessible to lay applicants, but although that may be so for licensing offences, it is far from the case for PFEA offences. Lay applicants—I would include myself in that category, because I would also make the following mistake—might understandably focus on proving one aspect of the offence, for example the locks being changed, rather than a separate part of the offence, for example by proving the intention of the landlord. To a non-lawyer, that might seem an insignificant distinction, but intention carries substantial legal weight.

Often, these offences are not just difficult but impossible to prove to a criminal standard. Often, if a landlord changes the locks, they do it when the tenant is not at home. Illegal eviction and harassment occur in the privacy of renters’ homes, often without witnesses or evidence. The criminal burden for PFEA RROs places an extra and often insurmountable burden on lay applicants to prove their case at tribunal. It has a chilling effect because it prevents many claims from being brought in the first place, as the evidence to meet that standard is simply not available. Under the current standard, therefore, renters cannot apply for RROs as they cannot prove their case beyond reasonable doubt, even when it is clear that an offence has occurred and that only the landlord would be motivated to commit it. That error weakens enforcement and access to justice, and it undermines the purpose of RRO legislation.

The incredibly low number of RROs and PFEA eviction offences demonstrates that the system is not working. Safer Renting—also known as Cambridge House—and the University of York have conducted research estimating that, over the two-year period from January 2021 to December 2022, there were at least 16,089 illegal evictions, and that number is almost certainly an undercount. Meanwhile, data gathered from the organisation Marks Out of Tenancy—founded in my constituency, as it happens—shows that in the same period, from 2021 to 2022, there were just 31 RROs in which a PFEA ground was successful. That is 31 out of more than 16,000. The system simply is not working.

I appreciate that the statistics that I have referred to might be explained by several things, but the standard of proof is certainly part of the problem and could be part of the solution. In fact, given that we are getting rid of section 21 evictions, I fear that failing to apply the civil standard of proof will risk creating the unintended consequence that illegal evictions will soar, as landlords find a way around the protections introduced by the Bill. I hope that, on that basis, the Minister will consider my amendment.

[Matthew Pennycook]

I will begin by addressing clauses 100 and 101, and I will then turn to amendment 41, which was tabled by the hon. Member for Bristol Central.

Clauses 100 and 101 make provision about the application of rent repayment orders to superior landlords and to company directors. To be most effective, tenants and local authorities need to be able to seek a rent repayment order against any landlord in the chain who has committed an offence. We are seeing a rise in so called rent-to-rent arrangements, which are often used by criminal landlords to mask illegal and exploitative practices and escape enforcement action. Clause 100 provides that superior landlords in such arrangements can be subject to rent repayment orders; that is currently not possible. With this important clause, we are ensuring that superior landlords cannot avoid their responsibilities. Rent repayment orders need to act as a sufficient deterrent to criminal landlords. Some criminal landlords see financial penalties simply as a cost of doing business. Clause 100 therefore doubles the maximum amount payable under a rent repayment order from 12 months to two years, making the deterrent effect significantly stronger.

Clause 101 will enable rent repayment orders to be made against directors and other similar officers of landlord bodies corporate that have committed a listed offence. Currently, if a tenant pursues a rent repayment order against a sham rent-to-rent or landlord company, the company can escape the penalty by virtue of having few or no assets or by simply dissolving. The clause will prevent this practice, for example by ensuring that, where certain conditions are met, individual directors of such companies can have a rent repayment order made against them. The clause ensures that rent repayment orders can be used effectively to tackle unscrupulous landlord companies and sham rent-to-rent companies.

Amendment 41 concerns an issue that the Government have previously considered and that I continue to keep under close review, namely what might be done to address the fact that proving illegal eviction and harassment to a criminal standard is, without doubt, extremely challenging and the prevalence of rent repayment orders in this area relative to other offences is low as a result.

As I have said before during our proceedings, the Government are clear that illegal eviction and harassment are serious criminal offences that cause significant harm and distress. Perpetrators must be robustly punished. It is right that the Housing and Planning Act 2016 extended repayment orders to cover these offences and that this Bill takes steps in other areas, including expanded civil penalties, to bear down on them.

Amendment 41, for which the hon. Member for Bristol Central made the case eloquently, would reduce from criminal to civil the standard of proof that needs to be met for rent repayment orders to be awarded in relation to unlawful eviction and harassment. To be candid with the hon. Lady and to explain my thought process, my concern about her amendment is primarily about the implications that it could have for the integrity of the rent repayment order regime as a whole. RROs are a mechanism designed to provide redress and act as a deterrent in relation specifically to criminal offences. As such, I fear that lowering the standard of proof for individual offences, as proposed in her amendment, runs the risk of weakening the link between the culpability of the landlord and the making of a rent repayment order. If the tribunal does not need to prove beyond reasonable doubt that the landlord committed an offence, we could see a weakening of that link.

I am absolutely committed to ensuring that rent repayment orders are effective across all the listed offences. I feel that that has to be balanced against the need to maintain the coherence, efficacy and fairness of a regime that is, as I hope she will acknowledge, in most instances working extremely well and that we want to strengthen. As we introduce the strengthened rent repayment orders in the Bill, I am mindful that we do not want to inadvertently damage the functioning of that regime, which we need to build upon.

Although I am more than happy to continue a dialogue with the hon. Member for Bristol Central on the matter, I kindly ask her to withdraw her amendment. We would have to resist it if she pushed it to a vote, and I would like that not to happen. We keep this area under review, and I would like to keep the conversation going.

[Carla Denyer]

I have a follow-up question. If the Minister desires to keep the criminal standard of proof for RROs, will he consider speaking to his colleagues about amending legal aid, so that it is at least available to tenants who would otherwise need to represent themselves in criminal courts?

[Matthew Pennycook]

I hope that the hon. Lady will appreciate that I cannot, as a Ministry of Housing, Communities and Local Government Minister, give her that commitment in Committee today, but we are having conversations across all Departments. This is an issue that the Government have considered, and I keep it under review. I recognise the challenge that the hon. Lady rightly poses, and which we have considered, which is that rent repayment order prevalence in this area is far too low.

As I have said, I worry about the unintended consequences of making what would amount to quite a significant change to the RRO regime. We want to strengthen it, because it is working and has worked incredibly well—particularly since the changes made in the 2016 Act—in providing effective tenant redress and acting as a deterrent. I am mindful about accepting significant changes in Committee, but I keep the matter under review. I will have those conversations, and my Department’s officials have had conversations across Government on this and many other areas.

--- Later in debate ---

[The Chair]

With this it will be convenient to consider clause 103 stand part.

[Matthew Pennycook]

I will be fairly brief on these two clauses. Licensing requirements are a fundamental part of ensuring that HMOs and other rented properties are safe and well managed. Clause 102 ensures that superior landlords can be liable for the offences of failing to ensure that a property is properly licensed.

In a situation in which a correct licence is not in place for a property, local authorities and tenants need the ability to take enforcement action against the person, or persons, responsible for failing to obtain a licence. The measure ensures that superior landlords can be held to account where they are responsible. Building on our discussion of a previous clause, that is critical to tackling sham rent-to-rent arrangements. It is important that superior landlords who could not have known that the property was being let as an HMO—for example, freeholders of a large block of flats with long leases—are protected. Clause 102 provides additional defences to make sure that that is the case.

Clause 103 seeks to ensure that both landlords and superior landlords can, where appropriate, be served with improvement notices requiring the removal of hazards. The provisions in the Housing Act 2004 do not allow improvement notices to be served on landlords or superior landlords in rent-to-rent arrangements in all circumstances. Clause 103 addresses that anomaly by giving local councils the ability to serve improvement notices on landlords and superior landlords, based on who should take the remedial action required. It will also ensure that tenants can pursue rent repayment orders against such landlords if they fail to comply with improvement notices. I commend the clauses to the Committee.

Question put and agreed to.

Clause 102 accordingly ordered to stand part of the Bill.

Clause 103 ordered to stand part of the Bill.

Clause 104

Enforcement by local housing authorities: general duty

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

[The Chair]

With this it will be convenient to consider clauses 105 to 110 stand part.

[Matthew Pennycook]

We expect that the vast majority of landlords will do the right thing and meet their new legal responsibilities, but there will be a minority who fail to do so. That is why, for this package of reforms to be effective and achieve its aims, consistent and effective enforcement by local authorities is absolutely necessary.

Clause 104 places a duty on every local housing authority in England to enforce the new measures in their areas. We expect local authorities to take a proactive approach to enforcing these reforms and give this area the priority that it deserves. Equally, we want councils to have flexibility and take action in a way that best addresses local problems and priorities. The duty is broadly framed to allow that to happen.

We recognise that different types of enforcement will be more suited to different cases. When considering enforcement, local authorities will be able to issue a civil penalty as an alternative to criminal prosecution for an offence, allowing them to decide the most effective method of enforcement in each case. Clause 104 also empowers county councils that are not local housing authorities to take enforcement action, and it enables local authorities to take enforcement action outside their own local authority areas.

Clauses 105 and 106 set out the notification requirements where local authorities take enforcement action outside their own boundaries, or where a county council that is not a local housing authority takes enforcement action.

Clause 107 places a duty on local authorities to supply information to the Secretary of State, as required, on the exercise of their functions under the measures created or amended by the Bill. Regular and robust data from local authorities will be vital to understanding the impact of our reforms and the action taken by local authorities. We will work with local authorities to agree a data reporting framework that is rational, proportionate and helpful to both local and central Government, and in line with similar data collections.

Clause 108 allows the Secretary of State to appoint a lead enforcement authority for the purposes of any provisions in the landlord legislation, which include many of the provisions in the Bill.

Clauses 109 and 110 outline the functions of the lead enforcement authority, which include: overseeing the operation of the provisions in the legislation for which it is responsible; providing guidance, advice and information to local authorities; and, where necessary, enforcing the provisions. We are carefully considering whether having a lead enforcement authority for any of the provisions in the landlord legislation will be beneficial, and we will continue to engage with local authorities and other stakeholders to shape our plans. I commend the clauses to the Committee.

[David Simmonds]

Although the Opposition are supportive of the clauses, it is important to clarify a few things. First, the aim of clause 104 is clearly to ensure that a very high standard is met in the private rented sector. Many local authorities will take action themselves to ensure that the standard is met in a property—particularly in respect of social housing—if the landlord fails to do so. The powers under this legislation do not go as far as that; they extend to imposing a financial penalty or instituting proceedings against a person for that offence. Renters may expect that the local authority will effectively take possession of a property to remedy a problem giving rise to a breach—for example, a breach of the decent homes standard at the property—and it is important to recognise their expectations.

I will ask the Minister a question about clause 110. Local authorities will generally find it more efficient to enforce the decent homes standard as a single function, rather than having separate private rented sector and social housing functions, both of which effectively do the same work. The financing of the social housing element would normally come through the housing revenue account, which, like a number of other local authority revenue accounts, is ringfenced—something I know you are familiar with, Mr Betts—meaning that resources raised through that account cannot be applied to another purpose. Clearly, we would not wish to allow a degree of inefficiency to creep in by creating duplication.

It would be helpful if the Minister could say whether the guidance provided to local authorities will clarify that there is no objection, in respect of the private rented sector, to a sharing of services that are funded partially through the housing revenue account and partially through the regime introduced by the legislation. I know that this issue has been significant in different types of funding provided to local authorities for particular functions.

[Matthew Pennycook]

I will be fairly brief, because I am more than happy to go away and check whether this is an error on my part rather than that of the shadow Minister, but we have to be very clear which provisions in the Bill these enforcement powers relate to. Clause 104 sets out that every local housing authority has a duty to enforce the landlord legislation in its area, which covers chapters 3 and 6 of part 1 of the Bill, part 2 of the Bill, sections 1 and 1A of the Protection from Eviction Act 1977, and chapter 1 of part 1 of the Housing Act 1988.

We will consult on it, so further detail will come forward, but, to put it simply, enforcement of the decent homes standard will come via a different track. Nothing in the enforcement provisions will interfere in the housing health and safety rating system, or the enforcement of Awaab’s law or the decent homes standard to come.

I am more than happy to go away and check, and I will write to the shadow Minister if I have misunderstood his question. To reassure him, though, I think we are talking about enforcement against specific parts of landlord legislation under the Bill.

Question put and agreed to.

Clause 104 accordingly ordered to stand part of the Bill.

Clauses 105 to 110 ordered to stand part of the Bill.

Clause 111

Power of local housing authority to require information from relevant person

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

[The Chair]

With this it will be convenient to consider clauses 112 to 133 stand part.

[Matthew Pennycook]

The Committee will forgive me for talking at some length to ensure that we fully set out the rationale for this large group of clauses. The group of clauses provides new investigatory powers to local housing authorities to tackle non-compliant landlords. The measures aim to enhance compliance and accountability among landlords.

Clause 111 gives local housing authorities the power to require information from landlords, licensors, agents and marketers. The information will be for the purpose of exercising the local housing authority’s functions under specific new provisions introduced by the Bill or in other specified legislations. Clause 111 also contains provisions that enable housing authorities to more effectively enforce financial penalties. It also provides safeguards to ensure that the powers are not misused.

Clauses 112, 113 and 114 provide the power to require information from persons other than the landlord or agent. That includes information from banks, accountants and client money protection schemes. This information will support prosecution and help in setting appropriate levels of civil penalties, which should take rental income and the landlord’s financial position into account. To ensure that the power is used proportionately, local housing authorities can only use it when they reasonably suspect that a relevant breach or offence has occurred.

Clauses 115 to 122 and clause 130 give local housing authorities the power to enter the business premises of landlords. There is a power to enter business premises without a warrant and a power of entry under warrant. Local housing authorities will be able to use the powers to enter business premises if they require the production of documents or to seize and detain documents for the purpose of ascertaining whether there has been compliance with the rented accommodation legislation and whether documents are required as evidence in proceedings. A local housing authority officer will need to reasonably suspect a breach of, or an offence under, rented accommodation legislation before they can exercise the power to require the production of documents or to seize and detain them.

In many instances, the evidence will likely be on a landlord’s business premises. That evidence includes tenancy agreements, bank statements, letters and communications. Following entry, local housing authorities will be able to require a relevant person on the premises to produce documentation. An officer of a local housing authority may seize and detain such documentation if they consider that it may be needed as evidence in proceedings for breaches of, or offences under, rented accommodation legislation.

This set of clauses contains safeguards to prevent them from being misused. For example, unless certain circumstances apply, local housing authorities must give at least 24 hours’ written notice prior to entry into business premises without a warrant. They will not be able to use that power where the premises are used wholly or mainly as residential accommodation. The clauses allow for relevant persons who have had their documents seized and detained to request access under supervision when appropriate, and all such documents will only be detained for as long as required.

Clauses 123 to 127 will give local housing authorities the power to enter residential premises without a warrant if they have a reasonable suspicion that the premises contain evidence that a relevant breach or offence has taken place. For entry into residential premises, with and without a warrant, the powers will apply only for the limited purposes of investigating specific breaches or offences relating to the private rented sector database or illegal evictions. Those breaches or offences are associated with serious potential harm and circumstances where physical evidence may be found on the premises.

The power of entry without a warrant will be available only where a specially authorised officer considers it necessary to enter the property to investigate whether there has been a relevant breach or offence. The power of entry with a warrant will be exercised only where a justice of the peace is satisfied that it is necessary for an officer to inspect the premises to investigate whether there has been a relevant breach or offence. The enforcement of the private rented sector database will sometimes require local authorities to enter the premises to establish whether the property needs to be registered. This will enable them to gather evidence to demonstrate that it is a residential tenancy, such as photographs of locks on bedroom doors or tenancy agreements.

Local housing authorities will also be able to use the powers to enter residential premises to investigate suspected illegal evictions, for example by checking whether locks have been changed or whether areas in the property have been blocked off. For the power of entry without a warrant, a written notice period of at least 24 hours is required unless the right to notice has been waived. The power can be used only where a specially authorised officer reasonably suspects that the premises are subject to a residential tenancy and entry is necessary to investigate whether a relevant breach or offence has occurred. These safeguards are in place to ensure that the power is used only where necessary.

Clause 128 will create new offences in relation to the new investigatory powers in part 4, including new offences in relation to requiring information from a relevant person, or any person, and the powers of entry into business and residential premises. The clause introduces a set of offences of obstructing an officer, failing to comply with requests, failing to provide other information or assistance if reasonably required by the officer for the purposes of exercising the powers, and providing false or misleading information.

The clause also introduces an offence with an unlimited fine for anyone falsely purporting to be a housing officer acting under the investigatory powers chapter. This is to protect landlords and tenants from anyone falsely trying to gain access to their property or obtain private information. It also makes it clear that a person is not committing an offence if they refuse to answer any question or give any information that might incriminate them.

--- Later in debate ---

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I apologise for being rather slow on the uptake, but may I take the Minister back to clause 124, “Duties where occupiers are on residential premises entered without warrant”? Subsection (1) states:

“If an officer of a local housing authority enters premises under section 123(1) and finds one or more occupiers on the premises”—

in other words, if there are people there—

“the officer must produce evidence of the officer’s identity and special authorisation to that occupier or (if there is more than one) to at least one of them.”

That is very sensible—it means that the person must demonstrate who they are to the people in the premises—but subsection (2) states:

“An officer need not comply with subsection (1) if it is not reasonably practicable to do so.”

If we have already identified that an officer is entering premises that are occupied, what are the circumstances in which it would not be reasonably practicable for him to identify himself?

[Matthew Pennycook]

That is a very reasonable question. If the hon. Member will allow me, I will come back to him via written correspondence. In drafting the clause— I am raking my memory for our discussions about it—we thought that there would be certain circumstances in which the reasonability test might not need to be met. Some of the clauses have been developed following exchanges with local authorities. I will come back to the hon. Member on the specific point about whether we have met the test for it being necessary to include the subsection in the Bill.

[Jerome Mayhew]

The difficulty is that the Minister is asking us to support the wording of the Bill now, not subsequently to a letter being received. It is hard to support a clause that suggests on the face of it that an officer could come in and decide that it is not reasonably practicable to show their authority to somebody who is in occupation of their own residence. This is not an office building; it is where people live. I invite the Minister, who has his officials with him, to provide a more substantive answer in his next comments, because it is difficult for someone like me to support the clause as drafted.

[Matthew Pennycook]

I will happily try to do so: I will take away the point and try to get the hon. Member some reassurance in short order. I reassure him that we have drafted the clauses carefully, following extensive dialogue with local authorities and local authority stakeholders. We do not take the power lightly. If I understand him correctly, he is putting to me the reasonable point that such a power would never be necessary. If, in the course of our ongoing exchanges, I can give him an example in which it might be necessary, perhaps he will be reassured.

Question put and agreed to.

Clause 111 accordingly ordered to stand part of the Bill.

Clauses 112 to 133 ordered to stand part of the Bill.

Clause 134

Interpretation

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

[Chair]

With this it will be convenient to consider clauses 135 to 141 stand part.

--- Later in debate ---

[Matthew Pennycook]

I turn to part 5, on general provisions.

Clause 134 sets out the meaning of three terms used in the Bill: “lease”, “local housing authority” and “the 1988 Act”. Clause 135 sets out the Bill’s application to the Crown. Clause 136 sets out its application to Parliament.

Clause 137 clarifies various aspects of powers to make secondary legislation under the Bill. In particular, it contains a power to make consequential, supplementary, incidental, transitional or saving provision. It also clarifies which powers in the Bill will be subject to the affirmative or the negative procedure where exercised.

Clause 138 contains a power that will allow the Welsh Ministers to make consequential amendments arising from part 1 of the Bill. Clause 139 contains a power that will allow the Scottish Ministers to make consequential amendments arising as a result of chapter 5 of part 1 of the Bill, which makes provision to address rental discrimination in Scotland.

Clause 140 will give the Secretary of State the power to make consequential amendments arising from the Bill, such as by removing now defunct terms from other legislation. This is necessary to ensure that existing legislation continues to function as intended once the Bill has passed into law.

Clause 141 provides that the Bill’s extent, for the most part, is England and Wales. Housing is within the devolved legislative competence of the legislature in Wales, and in practice the application of the majority of the clauses will be to England only. A small number of changes will apply in England and Wales to address remaining aspects of the tenancy system in Wales that are still dependent on English law. Chapter 4 of part 1 applies the rental discrimination measure in Wales. Similarly, chapter 5 of part 1 extends only to Scotland and applies the rental discrimination measure in Scotland. I commend the clauses to the Committee.

Question put and agreed to.

Clause 134 accordingly ordered to stand part of the Bill.

Clauses 135 to 141 ordered to stand part of the Bill.

Clause 142

Commencement

[David Simmonds]

I beg to move amendment 45, in clause 142, page 150, line 26, leave out from “subject to” to end of line 27 and insert—

“—

(a) the publication of an economic impact assessment in relation to the bill, which must include the impact of abolishing fixed term assured tenancies on the student housing market; and

(b) subsections (2) to (6).”

[David Simmonds]

Amendments 45 and 64 would require the Government to give broader consideration to the economic assessment required to understand the full implications of the Bill. A lot of the evidence that we have heard on the Bill, and on the Renters (Reform) Bill in the last Parliament, concerns impact on supply, especially on the supply of accommodation for particular categories of tenant. Those categories include people in the student housing market, to which both amendments refer.

We are all aware that for local authorities and other public bodies such as transport authorities, the ability to predict and plan the need for student accommodation in particular locations is very significant. Transport for London and other transport authorities in major cities plan bus routes and other public transport based on the need for students to get to and from the places where they receive their education. The same is true in respect of retirement homes and so on.

This is a matter not merely of general political interest, but of practical interest for the public bodies whose responsibilities will be affected by the Bill. Although we recognise that a substantial amount of the Bill was already envisaged under the previous Government and has been through a significant process of scrutiny, we do not fully understand what the impact will be on supply, particularly on the supply of homes required by students. We have heard a great deal of evidence about the economic significance of students for our towns and cities, as well as for our university sector. The Opposition regard that as very important. I am interested to hear what the Minister has to say about our amendments and the clauses to which they relate.

[Matthew Pennycook]

I will speak briefly to the clauses in the group and then discuss the shadow Minister’s two amendments.

Clause 142 provides how and when the provisions in the Bill will be brought into force. This Government have made it clear on multiple occasions that we are determined to end the scourge of section 21 evictions as soon as possible. I think it has now been more than five years since the previous Government promised private renters across the country that section 21 evictions would be abolished. Renters have waited far too long for a Government to take action. We are determined to act for them to end the insecurity that they face, including the risk of homelessness, and—this is a point I have tried to stress throughout our discussions—to give good landlords certainty about what change means.

The clause provides the mechanism for ending section 21 once and for all for private tenancies. The new tenancy system for the private rented sector that is set out in chapter 1 of part 1 will come into force in a single stage for all assured tenancies. On that date, the new tenancy system will apply to all private tenancies. Existing tenancies will convert to the new system; any new tenancies signed on or after that date will also be governed by the new rules. This will give all private tenants the same security immediately: that will be the effect of clause 142(8). I reassure the Committee that we will work closely with all parts of the sector to ensure a smooth transition to the new system and that we are committed to providing sufficient notice ahead of implementation.

Beyond tenancy reform, the clause sets out how and when other provisions in the Bill will be brought into force. Some provisions, such as the investigatory powers in part 4, will come into force automatically two months after Royal Assent.

Clause 143 provides that the commencement of chapter 1 of part 1 will not have an impact on the continuation of existing tenancies. The Bill will apply to those tenancies, but they will not be treated as new tenancies. For example, although the landlord will not be able to use a section 21 notice in relation to such tenancies, the protected period during which the moving and selling grounds cannot be used will count from when the tenancy first began.

Schedule 6 will ensure a smooth conversion for existing tenancies to the new tenancy system by making specific provision to avoid unnecessary cliff edges, for example by maintaining the validity of rent increases and notices served prior to implementation. This will ensure that landlords and tenants are clear about which legal framework applies before and after the transition.

Clause 144 provides clarity about what happens when a fixed-term assured tenancy expires and becomes a statutory periodic tenancy. This will ensure that the periodic tenancy will be treated as continuous, meaning that any provisions in the Bill that apply from when the tenancy began will count from the beginning of the original tenancy rather than from when the statutory periodic tenancy arose.

Clause 145 will give the Secretary of State the power to make regulations that have transitional or saving provision in connection with the coming into force of any provision of the Bill. It will give powers to Welsh and Scottish Ministers to make transitional or saving provision in connection with the coming into force of chapters 4 and 5 respectively of part 1, which apply the rental discrimination measures in Wales and Scotland. The clause will also give the Secretary of State power to make provision concerning pre-application instruments that the Secretary of State considers will not operate effectively as a result of the Bill. It is standard and appropriate for the Secretary of State to have the power to make transitional or saving provisions; this is important to facilitate an orderly implementation of the new regime and to ensure that agreements and private legal instruments that were entered into prior to the Bill continue to operate as intended under the new regime.

Clause 146, as I think is self-evident, provides that the short title of the Act will be the Renters’ Rights Act 2024.

I turn to the shadow Minister’s amendments 45 and 64. Amendment 45, as he made clear, would require the publication of an economic impact assessment for the Bill, including an assessment of the impact of abolishing fixed-term assured tenancies on the student housing market, before its provisions are commenced. Amendment 64 would do the same, but would also make the publication of any assessment by the Lord Chancellor of the operation of possession proceedings for rented properties a prerequisite for commencing the provisions of the Bill.

I say gently to the shadow Minister that I have tried this trick before in a previous role, and I do not for one second condemn him for doing so, but we are committed to robustly monitoring and evaluating the private rented sector reform programme and the implications of the Bill. Our approach builds on the Department’s existing long-term housing sector monitoring work, and we will conduct our processes, impact and value-for-money evaluation in line with the Department’s published evaluation strategy. We will publish the evaluation findings in a timely manner that is consistent with our policy for the publication of research. Further data on the operation of possession proceedings for rented properties, to which amendment 64 refers, is already published and will continue to be published quarterly by the Ministry of Justice.

We are committed to ending the scourge of section 21. The sector and particularly tenants have waited too long for these changes to come into effect. We are therefore not minded to tie implementation to any additional requirements of the type that the shadow Minister mentions. I do not begrudge his trying, but I ask him to withdraw his amendment.

[David Simmonds]

I will have to accept the Minister’s gentle rebuff, but we have heard from the housing sector and from student organisations that these are very important issues. We recently debated rough sleeping in Westminster Hall; one challenge that emerged is that we did not count the number of rough sleepers until 2010, so it is very hard fully to understand what was going on. That is a lesson in the importance of doing the research and having impact assessments: they are a key part of the evidence that the Committee needs to consider to understand the direction of travel and whether it will do the job intended. However, I take the Minister’s point.

[Matthew Pennycook]

May I briefly intervene? I do not want to deprive the hon. Member for Broadland and Fakenham of an answer to his question about clause 124. I am told that the power is in place for very limited exceptions, in particular where an agent might face aggression from an occupier of a property and is therefore unable to show identification. The powers mirror the provisions in the Consumer Rights Act 2015 that apply to trading standards officers. It is a very limited exception for those circumstances. I hope that that provides some clarification and reassurance.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 142 ordered to stand part of the Bill.

Clause 143 ordered to stand part of the Bill.

Schedule 6 agreed to.

Clauses 144 to 146 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

Renters' Rights Bill (Eighth sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 5th November 2024 Public Bill Committees

[Mr Gideon Amos (Taunton and Wellington) (LD)]

It is a pleasure to serve under your chairmanship, Sir Roger. I add the support of the Liberal Democrats for the intent of the new clause. Clearly, tenants should not be penalised for having to move frequently, and we are interested in the Minister’s response on the subject.

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to serve with you in the Chair, Sir Roger. I thank the hon. Member for Bristol Central for moving the new clause tabled by my hon. Friend the Member for Walthamstow (Ms Creasy), and I thank the shadow Minister and the hon. Member for Taunton and Wellington for their contributions.

The Government absolutely agree that unwanted private rental moves are not only stressful but extremely expensive in terms of both the unrecoverable costs associated with moving home and the significant up-front costs of moving into a new property, including tenancy deposits. That is why one of the Bill’s main objectives is to remove the threat of arbitrary evictions and increase tenant security.

Under the new tenancy system a small proportion of tenants will still find themselves evicted through no fault of their own in circumstances where the landlord has good reason to regain possession of the property—for example, if the landlord or a close family member wishes to live in it as their only or principal home. I therefore recognise the worthy intentions behind the new clause—namely, to ensure that tenants’ credit scores are not adversely affected by unwanted moves resulting from the use of such possession grounds.

However, I am not convinced that the new clause, which would require the FCA to issue guidance on how possession orders specifically should be reflected in an individual’s credit score, is necessary, because tenants’ credit scores are not adversely affected by evictions under ground 8 possessions. Credit reference agencies do not receive information about possession orders from the courts, and as a result possession orders are not recorded on people’s credit reports and do not negatively affect their credit scores.

I acknowledge that there is a distinct, but related, issue in respect of the impact on credit scores of changes of address in general, on which it is worth noting two things. First, the methodology that underpins credit scores is not uniform across different credit reference agencies. Experian, TransUnion and Equifax, for example, each have their own distinctive approaches to credit scores, including in how they reflect changes of address. Secondly, almost all lenders review a person’s credit report when assessing an application for credit, and a change of address would still be recorded on those reports.

Whether it is feasible and sensible to seek to have the FCA attempt to ensure that credit reference agencies treat moves resulting from the use of certain possession grounds set out in schedule 1 differently from changes of address more generally is an entirely valid question, albeit one somewhat distinct from that posed by the specific wording of the new clause. As things stand, I am not entirely convinced that it would be, but I will happily seek to ensure that Treasury Ministers engage directly with the FCA on this matter, including on the review cited by the hon. Member for Bristol Central. However, for the reasons I have stated, I will not be able to accept the new clause and ask the hon. Lady to withdraw it.

[Carla Denyer]

I and thank the Minister for his consideration and beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Review of the impact of the Act on the housing market

“(1) The Secretary of State must publish an annual report outlining the impact of the provisions of this Act on the housing market in the UK.

(2) A report under this section must include the impact of this Act on—

(a) the availability of homes in the private rental sector;

(b) rents charged under tenancies;

(c) house prices; and

(d) requests for social housing.

(3) A report under this section must be laid before Parliament.”—(David Simmonds.)

Brought up, and read the First time.

--- Later in debate ---

[The Chair]

Just so that the Committee understands the procedure, because the new clauses are grouped, new clause 7 will not be moved now, but if the hon. Member for Taunton and Wellington wishes to move it when we come to it, then he may do so without further debate.

[Matthew Pennycook]

I am afraid I will have to resist all three new clauses. Although I will try to limit it, I fear that I may be somewhat repetitive in doing so, because the Government’s logic in each instance is similar.

As the hon. Member for Ruislip, Northwood and Pinner has made clear, new clause 2 would introduce a legal requirement for the Government to publish an annual review of the impact of the Bill’s reforms on the availability of homes. In particular, it would require an assessment to be made on the availability of homes in the private rental sector, rents charged under tenancies, house prices and requests for social housing. As per our previous discussion, I recognise that the underlying rationale for the measure is an interest in the practical difference the legislation will make over the coming years. I reassure the Committee that this is an interest I share, which is why we are committed to robustly monitoring and evaluating the private rented sector reform programme introduced by the Bill.

I will not detail the Government’s general approach to monitoring and evaluation, but suffice it to say that we believe that setting an arbitrary deadline for the work in law—as the new clause would require—would be an unnecessary step, and there is a risk that it would detract from evaluation and prevent us from conducting as robust an assessment as possible. However, given the interest in the Bill’s impact, I wish to reassure the Committee that we do not expect the Bill to have a destabilising effect on the rental market. This Government value the contribution made by responsible landlords who provide quality homes to their tenants. We will continue to work with good landlords and their representative associations throughout implementation.

New clause 3 would introduce a legal requirement for the Government to appoint an independent person to prepare a report on the impact of the reforms to the tenancy system and the grounds for possession. We are committed to robustly monitoring and evaluating the impact of our reform programme in line with the Department’s evaluation strategy; however, setting an arbitrary deadline in law for that work is unnecessary and, again, may detract from the quality of evaluation and prevent us from conducting as robust an assessment as possible.

New clause 7, tabled by the hon. Member for Taunton and Wellington, would introduce a legal requirement for the Government to publish a review of the extent to which the abolition of fixed terms and assured shorthold tenancies and the changes to leasehold covenants lead to landlords leaving the private rented sector to provide short-term lets within two years of the Bill passing. It is important to state that this Government value the contribution made by responsible landlords who provide quality homes to their tenants, and believe they must enjoy robust grounds for possession where there is good reason to take their property back. As such, good landlords have nothing to fear from our reforms and should be in no rush to change legitimate business models, as I have said repeatedly.

The private rented sector has doubled in size since the early 2000s. There is no evidence of an exodus since reform was put on the table by the previous Government. Our proposals will ensure that landlords have the confidence and support they need to continue to invest and operate in the sector.

[Mr Amos]

Will the Minister comment on whether, and how soon, the Government are likely to introduce a use class, which the previous Government committed to?

[Matthew Pennycook]

I will come to the specific proposals under consideration for short-term lets and holiday lets. The use class was consulted on as one of a number of measures that the previous Government introduced. I will touch on that specific point shortly.

I will preface this with a point that I think all Committee members appreciate. The Government are very alive to the fact that there are many parts of the country—coastal, rural and some urban constituencies—where excessive concentrations of short-term lets and holiday homes are having detrimental impacts, not least on the ability of local people to buy their own homes or, in many cases now, rent their own homes. I have stated this on many occasions in the House since being appointed, but I will say it again: that is the reason why we will progress with abolishing the furnished holiday lets tax regime, and with the introduction of a registration scheme for short-term lets. That will give local authorities access to valuable data on them.

Those measures were committed to by the previous Government, and we will take them forward. However, as I said a number of times in the previous Parliament, we do not think they go far enough and we are considering what additional powers we might give to local authorities to enable them to better respond to the pressures they face as a result of the excessive concentrations of short-term lets and holiday homes. I hope to say more on that in due course.

In respect of this Bill, we are committed to robustly monitoring and evaluating the impact of our reform programme in line with the Government’s evaluation strategy. However, setting an arbitrary deadline in law for this work is unnecessary and may detract from our efforts in that regard. On that basis, I encourage Members not to press their new clauses.

[David Simmonds]

Given the Minister’s response, I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 4

Assessment of operation of possession process

“(1) The Lord Chancellor must prepare an assessment of the operation of the process by which—

(a) on applications made by landlords, the county court is able to make orders for the possession of dwellings in England that are let under assured and regulated tenancies, and

(b) such orders are enforced.

(2) The Lord Chancellor must publish the assessment at such time, and in such manner, as the Lord Chancellor thinks appropriate.

(3) In this section—

‘assured tenancy’ means an assured tenancy within the meaning of the 1988 Act;

‘dwelling’ means a building or part of a building which is occupied or intended to be occupied as a separate dwelling;

‘regulated tenancy’ means a regulated tenancy within the meaning of the Rent Act 1977.”—(David Simmonds.)

Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

At risk of rehearsing the debate we have already had, the new clause seeks to address the assessment of the possessions process. In evidence to the Committee a degree of concern was expressed on the part of landlords that the backlog in the courts may make it difficult to secure possession when that is necessary. Governments of all parties, including the previous Government, have put in place measures seeking to address that. We know that they are beginning to bear fruit, but it is important in maintaining the confidence of landlords both to come to the market and to remain in the market that they know it is possible to secure a court hearing, should one be necessary to gain access to the property. The new clause seeks to ensure that an assessment of that process is carried out.

[Matthew Pennycook]

New clause 4 would require the Lord Chancellor to prepare an assessment of the operation of the process by which the county court is able to make possession orders for rented properties and by which such orders are enforced. The assessment would be published at such time and in such a manner as the Lord Chancellor saw fit.

Hon. Members who followed the debates in the last Parliament will recall that the previous Government introduced a similar clause to their own Renters (Reform) Bill in the late stages of that Bill’s progress, via a Government amendment, together with a clause that prevented the Secretary of State from laying regulations to bring tenancy reforms into force for existing tenancies until after the Lord Chancellor’s amendment had been published. This Government have been clear that we will not follow a similar approach. We do not consider it reasonable that the implementation of our reforms should be constrained by such an assessment, not least an assessment of the kind proposed in the new clause, which is extremely broad and undefined.

The hon. Member for Ruislip, Northwood and Pinner tabled amendment 64, which would delay commencement until the Lord Chancellor has carried out and published the proposed assessment. I reaffirm that we have no intention of delaying these urgent and necessary reforms while awaiting an unnecessary assessment of the possession process against what is an unspecific metric. We will instead move ahead with tenancy reform as quickly as possible, but in conjunction with an extensive parallel workstream with colleagues from the Ministry of Justice and His Majesty’s Courts and Tribunals Service to ensure that the courts are ready at the point of implementation.

In any case, the assessment required by new clause 4 is entirely unnecessary and unhelpful, because data on the operation of possession proceedings for rented properties is already published by the Ministry of Justice on a quarterly basis, and will continue to be. Court rules specify that possession claims requiring a hearing should be listed between four weeks and eight weeks of receipt.

The Committee may be interested to know that figures for April to June 2024 show that claim to order median timeliness is 8.1 weeks, suggesting that—I am not necessarily attributing this to the shadow Minister—some of the more alarmist statements about the readiness of the county court system may have more to do with fundamental opposition to the abolition of section 21 and the current tenancy regime than they are an impartial assessment of court performance.

The proposed assessment would provide no obvious additional insight or benefit to any interested parties, in our view, and would merely detract from the vital work of the courts and tribunals by subjecting them to a nugatory additional process. All our focus is on ensuring that HMCTS is ready to stand up the new system at the point of commencement, and that should be our focus in the coming weeks and months. On that basis, I kindly ask the hon. Gentleman to withdraw his new clause.

--- Later in debate ---

[Carla Denyer]

New clause 9 would head in the opposite direction from new clause 5. It is about removing unnecessary barriers to the use of licensing schemes to improve housing standards. The new clause would do two things. First, it would increase the maximum duration of discretionary licensing schemes from five years to 10. Secondly, it would enable local authorities operating selective licensing schemes to use licensing conditions to improve housing conditions.

Licensing can be an effective way to improve housing standards for at least three reasons. First, it is proactive. It provides a means for local authorities to inspect privately rented housing using enforceable conditions and to identify and resolve problems without the need for tenants to have complained, and it provides that proactive regulation in a locally tailored form. It makes major contributions to area-based issues such as crime, antisocial behaviour and waste management, and it brings together a range of bodies to focus additional support services—for example, for landlords and tenants, improving public health and reducing burdens on the NHS. There are a huge number of wins, and I have experienced that at first hand with licensing schemes in my local authority.

Secondly, licensing is self-funding. It means that the market pays for its own regulation, which is a good principle, rather than relying on the taxpayer. It provides a sustainable and predictable source of income that enables local authorities to maintain staffing levels and support the training of new officers.

Thirdly, licensing is targeted. It enables local authorities to target regulation where that is most needed, so that the worst landlords and the most vulnerable tenants get the most attention and landlord costs can be minimised in other areas.

The problem, however, is that local authorities have to implement licensing schemes with their hands tied behind their backs, because previous Governments have made various decisions that have placed unnecessary and irrational barriers in their way. Given that licensing schemes are expensive and time-consuming for local authorities to initially introduce, it does not make sense to restrict the period over which they can act to only five years.

New clause 9 would amend sections 60 and 84 of the Housing Act 2004 to increase the maximum duration of discretionary licensing schemes, which includes both selective licensing schemes and additional—sorry, jargon again—for HMOs from five to 10 years. That would allow local authorities to advertise for longer-term posts for officers and to include training of new staff in those schemes. It would also provide more time for local partnerships formed through such schemes to become embedded and effective.

The new clause also addresses another issue, which was highlighted by the Chartered Institute of Environmental Health during oral evidence. That respected body pointed out that it does not make any sense to have the current peculiar disconnect in the 2004 Act, whereby local authorities can introduce selective licensing schemes to address poor housing conditions, but they cannot include a directly enforceable requirement relating to the housing condition as a condition of the licence—so they do not have the tools to do what they are set up to do. The new clause would therefore amend section 90 of the 2004 Act to enable local authorities to use licence conditions to improve housing conditions directly.

I stress that the new clause does not cover all that needs to be done to remove barriers to licensing. For example, I also urge the Minister to commit the Government to removing the Secretary of State’s ability to veto selective licensing schemes covering more than 20% of the local authority area.

[Matthew Pennycook]

indicated assent.

--- Later in debate ---

[Matthew Pennycook]

As we have heard, new clause 5 seeks to abolish selective licensing. This would remove the ability of local authorities to set up a selective licensing scheme of any size in their area. In contrast, new clause 9 seeks to extend selective and additional licensing of houses in multiple occupation by allowing local authorities to increase the maximum duration of schemes from five to 10 years. It also seeks to allow local authorities to use licence conditions under selective licensing to improve housing conditions, as the hon. Member for Bristol Central made clear.

This Government support selective licensing. It allows local authorities to proactively and more intensively target specific issues in private rented properties, where it is needed most. That includes tackling poor housing conditions and antisocial behaviour. If we abolish selective licensing, local authorities will lose a crucial tool in taking effective enforcement action against landlords who flout the rules. However, I take the shadow Minister’s point, and I reiterate that it is important that the selective licensing system, and the system introduced by the Bill, operate effectively alongside each other. That is very much our intention.

However, we recognise that licensing imposes a burden on landlords. Correspondingly, we think a maximum duration of five years for discretionary licence schemes strikes the right balance for the following reasons. It gives local authorities time to realise improvements while ensuring that landlords are not by default subject to increased regulation for prolonged periods. Of course, licensing in any given area may be part of a longer-term strategy. That is why, where a scheme has expired and there is still a case for licensing, local authorities may simply introduce a new scheme to drive further improvements. The duration that the hon. Member for Bristol Central is seeking selective licensing schemes to cover can be achieved in any given local authority area, if the local authority simply extends matters through a new scheme. We think that a five-year timeframe gives an opportunity to review the effectiveness of individual discretionary licensing schemes and ensure that they are proportionate in achieving their aims.

The broad intention of the hon. Lady’s new clause is to improve housing conditions. Let me be clear again that every private renter, not just those in licensed properties, has the right to a good-quality home. That is why, through the Bill, we are introducing a decent homes standard and applying Awaab’s law to the sector to tackle the blight of poor-quality homes.

Our reforms will establish a level playing field across the sector, ensuring that all renters and local authorities, not just those in areas with licensing schemes, can challenge and enforce against dangerous conditions. I will not address the hon. Lady’s specific point on the Secretary of State’s veto, because it is somewhat outside the scope of the Bill, but I take that on board. On the chartered institute, I will say nothing more at this stage other than that we will continue to review the use of selective licensing as we develop the database and other measures in the Bill. On that basis, I ask the hon. Members not to press their new clauses.

[David Simmonds]

We remain a little concerned that where selective licensing schemes are in operation alongside the measures introduced by the legislation, a degree of ambiguity and potential confusion is created, especially for some landlords who may seek to evade responsibility. Two schemes of a similar nature will be in place, with potentially different fees and standards in operation. However, I accept the numbers on the Committee, so I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

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[Carla Denyer]

I support new clause 8, and I would also like to speak in favour of new clause 14, tabled in the name of the hon. Member for Leeds Central and Headingley (Alex Sobel). New clause 14 seeks to address an injustice around guarantors for students. In this speech, I cite heavily evidence provided by the National Union of Students and individual student union officers in my home city of Bristol, all of whom are very concerned about this injustice.

The widespread landlord practice of demanding that tenants provide a guarantor is discriminatory, especially in this situation. Tenants are asked to put someone forward, normally a parent or relative, who owns a house in the UK and/or earns an income typically above the national average. The guarantor is asked to guarantee to pay the rent should the tenant default, and to pay for any damage to the property should the tenant be unable to do so.

Although for some, this is just an inconvenience, for tenants who are from deprived socioeconomic backgrounds, who are estranged from their families, who have a background in care or who are coming to the UK, such as international students from abroad, it can be a huge barrier to securing a home. The practice can push those unable to find a suitable guarantor into unsustainable debt, because they are forced to pay either months of rent up front or for costly guarantor schemes run by private companies. Others are forced into hostels or sofa surfing, and can even be made homeless.

The stats are stark: 13% of students experience homelessness during their studies, and that figure rises to 29% for international students. This issue has a detrimental impact on the lives of student renters and their ability to focus on their studies. It is imperative that we address the issue to ensure fair and equitable access to housing for all tenants, including students, allowing them to flourish in their education.

Landlords have several other means available to protect themselves against potential losses, including tenant referencing, rent guarantee insurance and deposit protection schemes, all of which make guarantor schemes unnecessary. I am not pushing for a vote today, but I ask the Minister to have a dialogue—if he is not doing so already—with the hon. Member for Leeds Central and Headingley, who tabled the new clause, and the NUS, with a view to including the changes in the next version of the Bill. Finally, I should mention that I have joined the all-party parliamentary group for students.

[Matthew Pennycook]

I thank my hon. Friend the Member for Filton and Bradley Stoke for speaking to the new clause tabled by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), whom I commend for her work in this area, not just in this Parliament but in the previous one. She has been prodigious in pursuing this issue on behalf of her constituents, and I have reflected further on the points that she made on Second Reading.

The Government agree that it is unacceptable for bereaved guarantors to be held liable for unpaid rent where the only reason for it is the sad death of a tenant. Guarantor arrangements are not usually intended to protect landlords against the risk of financial loss caused by the death of their tenant; rather, they are used by landlords to reduce the financial risk of letting to a tenant who, for example, may have no previous residency in the UK and consequently no references from former landlords, or who might not successfully pass credit checks.

Although we understand that few landlords would use guarantor agreements to pursue debts that occur after a tenant’s death, we do know that sadly some do. This is an unacceptable practice that compounds the grief that families face after unexpected bereavements. I hope my hon. Friend the Member for Filton and Bradley Stoke will be reassured to hear that the Government have been considering this issue closely and in detail. We take it very seriously, and I am extremely sympathetic to the issues raised. I hope to be able to say more on Report about the matter and about the new clause tabled by my hon. Friend the Member for Dulwich and West Norwood.

I thank the hon. Member for Bristol Central for speaking to new clause 14, tabled in the name of my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel). I am grateful to my hon. Friend for his work on this issue, and for his engagement with me and on the Bill more generally. The Government understand that obtaining a guarantor may be difficult for some prospective tenants, and I absolutely sympathise with those who are in that situation. For some tenants, the requirement can, as the hon. Member for Bristol Central made clear, effectively block access to the private rented sector.

The Government are clear that landlords should consider a tenant’s individual circumstances when negotiating rental contracts. I have been concerned to hear anecdotally about some landlords insisting that all tenants provide a guarantor, regardless of individual circumstances. That said, and ever mindful of the unintended consequences of weighing in without thought, I am aware that the use of guarantors can give landlords confidence to provide tenancies to individuals who otherwise may struggle to gain accommodation. That might include those with a history of rent arrears or with no previous rental history, those who are moving out of home for the first time and foreign students. As such, I am concerned that the wording of the new clause may inadvertently make it harder for those tenants to find a place to live, despite the honourable intentions behind it.

I recognise the importance of getting the balance right between barriers and enablers to accessing the private rented sector. I will continue to engage with hon. Members more broadly and with wider stakeholders, but in particular with my hon. Friend the Member for Leeds Central and Headingley, who has diligently pursued the matter. For the reasons I have given, however, I respectfully ask my hon. Friend the Member for Filton and Bradley Stoke to withdraw the new clause.

[Claire Hazelgrove]

I beg to ask leave to withdraw the new clause.

Clause, by leave, withdrawn.

New Clause 10

Home Adaptations

“(1) The Housing Act 1988 is amended as follows.

(2) After section 16 insert—

‘16A Home adaptations

(1) It is an implied term of every assured tenancy to which this section applies that a landlord shall give permission for adaptations where a local council has carried out a Home Assessment and recommends adaptations which constitute reasonable adjustments under the Equality Act 2010. Tenants have the right to appeal a landlord’s refusal to adapt a property.

(2) This section applies to every assured tenancy other than a tenancy of social housing, within the meaning of Part 2 of the Housing and Regeneration Act 2008.’” —(Carla Denyer.)

This new clause would ensure that landlords give permission for home adaptations where a Home Assessment has been carried out.

Brought up, and read the First time.

--- Later in debate ---

I tabled the new clause in the spirit of debate and discussion, aware of how many disabled people are affected by poor-quality housing in the private rented sector. I know that the Minister cares about the issue, and I hope that he can speak to ways to dramatically improve the situation for the disabled people who need it.

[Matthew Pennycook]

I very much sympathise with the intent behind the new clause, but I am afraid I will have to disappoint the hon. Lady by saying that I do not think it is necessary, and I will set out why. The Government strongly agree that landlords should not unreasonably refuse disability adaptations. As she rightly says, there is already a requirement in law that they do not. The Equality Act 2010 provides that landlords cannot unreasonably refuse a request for reasonable adjustments to be made for the purposes of a disabled person using their home. Where consent has been sought and is refused, the burden is on the landlord to show why their refusal or any conditions are reasonable.

The hon. Lady said that the Bill does nothing to target the problem that she outlines, but I think it takes a series of steps that will support disabled renters to challenge unreasonable refusals without fear of retaliatory eviction—I am talking about the general overhaul of the tenancy system, which should provide them with more confidence in that area. In addition, when the new PRS landlord ombudsman is established, tenants may be able to make a complaint to it if they think that the landlord should have given permission for disability adaptations but has unreasonably refused to do so. That is another means of redress that will be introduced through the Bill.

Notwithstanding the hon. Lady’s point about a postcode lottery—we could rehearse for many hours the pressures on local authorities’ budgets—where a tenant has applied for a disabled facilities grant, local councils have the power to override the requirement for tenants to have the landlord’s permission to make adaptations, and to award the grant without permission if they believe that permission was withheld unreasonably. For those reasons, although I will reflect on the point that she made and although I sympathise with the intent, the new clause is unnecessary and I kindly ask her to withdraw it.

[Carla Denyer]

I will be honest: I am not convinced that the new clause is unnecessary, but I can do the maths so will not seek to divide the Committee. I beg to ask leave to withdraw the new clause.

Clause, by leave, withdrawn.

New Clause 11

Rent controls

“(1) The Secretary of State must establish a body to be known as the Independent Living Rent Body within 12 months of the date of Royal Assent to this Act.

(2) The ‘proposed rent’ referred to in section 55(2) must be no more than an amount set by the Independent Living Rent Body.

(3) The amount referred to in subsection (2) must be calculated as a function of property size, quality, local incomes, location, and such other criteria as the Independent Living Rent Body sees fit.”—(Carla Denyer.)

Brought up, and read the First time.

--- Later in debate ---

I want to see us create a fair system of rent controls, carefully introduced with local flexibility, aimed at bringing down rents relative to incomes and acknowledging that that must come alongside a suite of policies to address the housing crisis more broadly, including a major increase in social housing and real support for community-led housing. Let us interrogate the assumptions on all sides of this issue, because we must take urgent action on affordability one way or another, and this is one proposal for how to do so.

[Matthew Pennycook]

The hon. Lady’s new clause, which she has set out clearly, seeks to require the Government to establish an independent body to set the maximum rent at which a landlord could advertise a property in writing, under clause 55, which I remind Committee members requires a landlord or a person acting on their behalf to state a specific and proposed rental amount in a written advertisement or offer for a proposed letting. Although I very much recognise the concerns in relation to rising rents generally and extortionate within-tenancy rent increases in particular—I do not think anyone on the Committee dismisses those concerns, particularly in parts of the country with hot rental markets, as referenced by my hon. Friend the Member for Cities of London and Westminster—I do not believe the approach proposed in the new clause is necessary or proportionate.

I understand from the hon. Member for Bristol Central that her new clause is intended to provoke debate, and I am more than happy to debate it. However, I must confess that when I was considering the new clause’s specific wording, I struggled somewhat to ascertain how the new independent body would operate. I think she has given us a bit more clarity on her thinking, but I am still a little unsure. I will therefore put the two options in my mind that it might reasonably take.

It could mean that every landlord and letting agent in England would need to engage with the body proposed by the hon. Lady to set a maximum starting rent for every property they seek to advertise on every occasion that they require a new tenant. I think that is what she was driving at when she said that it would have to take into account specific factors relating to each property. We are debating the specific measure rather than a general point but if that is the case, the costs of administrating such an arrangement, which would have to apply to the approximately 950,000 new lets that occur each year, would be likely to be enormous. In my view, it would almost certainly have an impact on the time that landlords and tenants take to agree a rental price.

If, as the hon. Member for Bristol Central touched on later in her remarks, the body would simply be required to set maximum rents on the basis of broad principles and therefore not account fully for variation in the market, it would in effect be overseeing a form of rent control. The Government believe that would impact negatively on tenants as well as landlords, as a result of reduced supply, discouraged investment and declining property sales, as I have set out in detail previously.

I gently push back on the hon. Lady’s assertion that I am just asserting such a point; I have given the Committee extensive references to some of the negative impacts of various forms of rent control in other countries. There are academic studies on countries such as Sweden and Germany, and from cities such as San Francisco and Ontario, which show that rent regulation can have those precise effects. I was in Rome at the G7 yesterday, discussing this very matter with the German Housing Minister, who acknowledged that while there are benefits to the system in Germany, it has had an impact on supply in places. It could have a detrimental impact on tenants if we introduce it into our system here.

I am more than happy to debate. I think we will debate the issue throughout the Bill’s remaining stages in this place, and I am sure it will be a source of debate in the other place and again when it returns to us. I do not want to test your patience or the Committee’s, Sir Roger, by repeating the long discussion we have already had about rent control. I simply reiterate that the Government are confident that the Bill strikes the right balance when it comes to addressing, in particular, unreasonable within-tenancy rent increases. We do not believe the establishment of a body along the lines that the hon. Lady proposes would be beneficial to tenants or landlords.

I have made the point, and will do again, that the legislation is not the Government’s only answer to affordability pressures in the private rented sector. The hon. Lady referenced the Government’s intention to deliver the biggest increase in social and affordable housing in a generation. I appreciate the urgency with which that needs to take place. She is more than welcome to clarify the point, but I hope she commends the additional £500 million of funding in the recent Budget, the top up to the affordable homes programme this year and the action we are taking on right-to-buys, giving local councils 100% retention of discounts from sales. There will be more to come, not least when we set out further Government investment in the spending review next year.

On the basis of all the points I have made, I ask the hon. Lady to withdraw new clause 11. I do not think it will be the last time we debate the matter as part of the Bill or more widely across the Parliament.

[Carla Denyer]

I certainly welcome additional funding for social housing, and I know that many local authorities do too, although I suspect that most if not all would also say that they need more than that. In terms of what exact model of rent controls we are talking about and how the independent living rent body works it out, I am deliberately not attached to exactly how to do that.

As I mentioned, there are 17 European countries that have some form of rent controls; they are all tailored to specific circumstances and some have worked better than others. My point is that we should not rule out an entire category of available tools on the basis of looking at a few examples that have not worked. I would rather we look at how we could make it work or, if not, at what the Government are going to do instead to tackle affordability in the private rented sector, given that the positive measures on social housing are unlikely to bring down rents in that sector by anything like the necessary amount.

As it is clear that the Minister will not support new clause 11, I suggest he should at least consider the merits of setting up a living rent commission to undertake work to inform evidence-based decision making about what we can do on the issue. When I was a Bristol city councillor, I was the co-proposer with a Labour councillor of commissioning a local version of that work to look at how rent controls could theoretically work in Bristol if the Government gave the council the necessary powers. We took that route specifically because we were aware that several options were available, so we first needed research on how it might work and how to avoid unintended consequences. I would love the Government to commission an equivalent study at a national level so that we can make informed decisions in future.

[Matthew Pennycook]

I am afraid I cannot give the hon. Lady that commitment. She somewhat downplays the amount of thinking that has gone into this legislation by my officials, me and my colleagues as to the appropriate and necessary measures. We think the measures strike the right balance. This legislation is not the only intervention we are making on affordability pressures in the private rented sector. As I have said, I am more than happy to continue the debate with the hon. Lady in the remaining stages of the Bill.

[Carla Denyer]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Matthew Pennycook]

May I take this opportunity, Sir Roger, to put on the record my thanks to you and to the other Chairs of the Bill Committee? Several Committee members are new to the process, and you and the other Chairs have done an incredibly effective job, with patience and generosity, of helping everyone to navigate the process.

I thank our exemplary Clerks, the Hansard Reporters, and the Doorkeepers for overseeing our proceedings. I also thank my officials and private office team, who have supported me and worked tirelessly over a short time to bring forward the Bill that we have debated in recent weeks.

Finally, I thank all hon. Members, including the shadow Minister, the hon. Member for Taunton and Wellington and the hon. Member for Bristol Central for the spirited and constructive dialogue we have had. I value all the contributions and the challenges that have been made. I know that we are united in wanting to deliver the best legislation that we can for all our constituents.

As we end this stage of scrutiny and prepare for Report stage, I hope we can all agree that these important reforms will finally provide certainty for the sector and deliver meaningful change to millions of renters and landlords. I look forward to further engagement with all hon. Members as the Bill progresses through its remaining stages.

[David Simmonds]

I share the Minister’s sentiments. I will pay him the highest compliment that I can: at times, he could have been a Conservative in the way he addressed the issues that I raised. I add my thanks to the officials, as I know that the Minister’s swift responses would not have been possible without their diligent work behind the scenes; I am enormously grateful that issues have been dealt with in such detail. I also add my thanks to Committee members for their sensible and sound contributions. I am sure the debate will continue, but we have carried out an efficient piece of work.

Housing and Regeneration: London

Matthew Pennycook Excerpts

Thursday 31st October 2024 Written Statements

Maximising housing delivery around Euston

[The Minister for Housing and Planning (Matthew Pennycook)]

Since the construction of Britain’s first inter-city rail link between London and Birmingham, Euston has been not just a bustling London neighbourhood but a gateway to the west midlands, north-west England, north Wales and Scotland.

However, as in many of London’s neighbourhoods, the need for housing in the area around Euston station far outstrips supply, resulting in higher housing costs, rising levels of overcrowding and workforce pressures. To meet the challenges and grasp the opportunities facing this important part of our capital city, bold action is required.

The Government are already taking forward plans for a much-improved Euston station, and my Department is committed to supporting the delivery of significant numbers of new homes alongside this project. To progress that work, the Ministry of Housing, Communities and Local Government has established the Euston housing delivery group in partnership with the London Borough of Camden. This group will advise Ministers and local leaders on an ambitious housing and regeneration initiative for Euston, assessing the shape and scale of the opportunity for growth in the area, and acting as a driving force for new investment in the area.

My Department will work with local leaders and communities to ensure that the redevelopment of Euston is an example of exemplary place-making. Housing delivery and commercial development will be backed by the necessary social infrastructure and amenities to create thriving new communities and bolster existing ones. Ready access to primary healthcare, spaces in primary and secondary schools, and access to open green spaces for communities will be central to our vision.

Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people. That is why it is this Government’s No. 1 mission. Regenerating Euston, at the heart of our capital city, will both contribute to meeting housing need locally, and support economic growth nationally by releasing the productive potential of this historic neighbourhood.

The Euston housing delivery group

As announced in the Budget, I am appointing Bek Seeley to chair the Euston housing delivery group. The group will:

Assess the scale of opportunity for housing growth and regeneration beyond the existing Euston station site.

Identify the infrastructure, services, and green space required to unlock maximum housing delivery.

Consider how these housing opportunities can be delivered across Euston, working alongside with the Department for Transport, the Greater London Authority, and the London Borough of Camden.

Advise central Government and local leaders on an ambitious housing and regeneration scheme, as well as the routes to deliver it.

Bek has worked in the public and private sectors, has held a range of operational and commercial roles in economic development, infrastructure, built environment and public services, and has overseen major housing projects in London, Birmingham and Manchester.

The delivery group will be made up of industry experts in urban design, architecture, affordable housing delivery and financing large-scale projects. Their core focus will be to develop a trailblazing regeneration scheme, which will unlock more investment in Euston and drive growth, benefiting the local community and the whole nation.

We will continue to update Parliament on the work of the delivery group.

[HCWS182]

Renters' Rights Bill (Fifth sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 31st October 2024 Public Bill Committees

[The Chair]

With this it will be convenient to discuss the following:

Clauses 33 to 38 stand part.

Amendment 78, in clause 39, page 47, line 3, at end insert—

“(6A) On recovering a financial penalty imposed under this section, a local housing authority shall pay 20% of the recovered penalty to the person who was the subject of the discrimination.

(6B) Where the person who was the subject of the discrimination complains to the relevant landlord redress scheme about the same discriminatory behaviour, the scheme provider shall take into account any sum paid or payable to that person under subsection (6A) in assessing any further award of compensation which the relevant person is directed to pay to that person under the scheme.”

This amendment provides a mechanism for a complainant to receive a portion of the financial penalty imposed by a local housing authority as compensation for being discriminated against.

Clauses 39 to 41 stand part.

Amendment 79, in schedule 5, page 207, line 31, leave out—

“Where” and insert “Subject to section 39(6A), where”.

See Amendment 78.

[Matthew Pennycook]

It is an absolute pleasure, Mr Betts, to continue our consideration of the Bill with you in the Chair, not least because you will have extensive knowledge of what we are talking about as we proceed through the clauses.

Before we proceed to the substantive matter, I draw the Committee’s attention to the letter that I sent the Chair this morning, responding to the various technical questions put to me in the previous sitting. I hope that Members find my responses useful. I look forward to continuing this co-operative approach as we debate the remaining clauses.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I put on the record my thanks to the Minister for the prompt and detailed response to the points made. We had a brief discussion this morning about a small omission involving, for example, school caretakers or NHS staff who are provided with accommodation on site as part of their employment. I am grateful that the Minister has undertaken to respond to that, too, in due course.

--- Later in debate ---

[Matthew Pennycook]

I will indeed respond to that specific point in the extensive future correspondence that I expect to have with the shadow Minister, given his form in previous sittings.

Having considered assured tenancies and tenancies that cannot be assured tenancies in our third and fourth sittings on Tuesday, we now turn to chapter 3 of part 1 of the Bill, which concerns discrimination in the rental market in England. The Government are determined to make it unlawful for landlords and agents acting on their behalf to engage in discriminatory conduct against tenants with children or those in receipt of benefits. The case for prohibiting such conduct is indisputable.

Not only should all renters be treated fairly in their search for a place to call home as a point of principle, but the changing nature of the private rented sector, and the fact that it now contains increasing numbers of families and those in receipt of housing support, make it imperative that the Government act in this area. Individuals in receipt of benefits or who have children should have the opportunity to be considered for a tenancy on their own circumstances, rather than rejected straight away under a blanket policy.

The problem that this part of the Bill attempts to resolve is that a blanket ban of the kind we are considering is already contrary to the Property Ombudsman’s code of practice, and already almost certainly unlawful by virtue of the premises provisions in the Equality Act 2010, which provide for a prohibition against discrimination in the letting, managing or dispensing of premises. However, despite a number of court rulings confirming that rejecting a tenant’s application because of benefit status or family circumstances is a breach, proving discrimination is incredibly difficult. As a result, despite a growing body of case law, it remains fairly common for landlords to refuse to allow benefit claimants or those with children to view an affordable property, or to consider them as a potential tenant, and for properties to be advertised with restrictions such as “No DSS”, “No benefits” and “No kids”.

Discriminatory conduct of this kind is constantly evolving and is therefore difficult to adapt to. For example, following landmark rulings that a “No DSS” policy is unlawful as it indirectly discriminates, explicit “No DSS” adverts morphed into more subtle forms of messaging with the same intent, such as specifying “Working professionals only”. The question is, therefore, how we best ensure that the underlying discrimination in this area does not occur in practice.

During consideration of the previous Government’s Renters (Reform) Bill, I challenged the then Minister, the former Member for Redcar, to specify through regulations behaviour that for the purposes of the Equality Act 2010 should be considered unlawful discrimination unless the contrary is shown. In other words, my suggestion to the Minister at the time was that the onus should be placed on landlords to convince a court that a ban had no discriminatory impact. In developing the Renters’ Rights Bill I considered carefully whether that approach would be the most effective way to try to bear down on the problem of discriminatory conduct against tenants with children or who receive benefits. I ultimately concluded that it would not, both because it would have entailed a complex reform of the Equality Act, and because it would require tenants themselves to bring costly civil litigation to seek redress.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The Minister identified other legislation that already make discrimination illegal, and went on to make the point that proving discrimination is very difficult, so my question is twofold. First, if we have already outlawed that kind of behaviour, why do we need further legislation to do exactly the same thing? Secondly, if we do require further legislation, how is the evidential burden going to be passed more easily under this clause than has been the experience under previous provisions?

[Matthew Pennycook]

I thank the hon. Gentleman for his two reasonable questions; I will come on to answer them both in my remarks. If he feels that I have not sufficiently explained the matter, I am more than happy to give way to him again, but I will address both those points. The first I have already touched on: despite it almost certainly being unlawful under the Equality Act, discriminatory conduct of the kind that we are trying to bear down on happens fairly routinely, so it is evident to the Government that the existing legislation does not allow us to bear down on the problem effectively in practice. We think the Bill’s provisions will allow us to do so. I will pick up the hon. Gentleman’s point about the evidential burden and how local authorities make that judgment in due course.

In contrast to the approach on which I challenged the then Minister in the previous Parliament, the advantage of the approach taken in the Bill is that, first, responsibility for enforcement lies with local authorities and not tenants, and secondly, breaches can be addressed relatively easily, in the English context, via a civil offence with a lower burden of proof than a criminal one.

Clauses 32 and 33 directly and expressly prohibit discriminatory bans and restrictions on the letting of private rented sector properties on the basis that children would live with or visit a person at the property, or to persons in receipt of benefits. They also prohibit any conduct that might otherwise effectively constitute such bans or restrictions. In other words, the provisions are intended to deal with both direct and more subtle forms of discrimination. It is important to note that landlords and agents will continue to have the final say on who they let their property to, and they will be able to continue to carry out referencing checks to make sure that tenancies are sustainable for both parties.

It is also the case, as clause 40 makes clear, that nothing in this chapter will prevent landlords from making a final decision based on an objective and fair assessment of whether the prospective tenant can afford the rent, nor will it force landlords into entering into unsustainable tenancies. The majority of landlords—those who already act fairly and conscientiously and treat applicants equally, assessing their suitability on a case-by-case basis—have absolutely nothing to fear as a result of the introduction of the new rental discrimination framework.

[Jerome Mayhew]

The Minister made reference to the burden of proof under the clause being the civil burden, and compared that to the Equality Act. I just had a quick look at that Act—I stand to be corrected because it was a very brief look—and the burden under that Act appears to be a civil burden and also one where the maxim res ipsa loquitur can be applied. If that is the case, what is the difference between the burden of proof in this clause and that of the Equality Act?

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[Matthew Pennycook]

If I have understood correctly, the hon. Gentleman is challenging me on the burden of proof. I will say two things: first, who is the actor in charge of enforcement? It is for local authorities to make a judgment on whether the burden of proof has been met. That is a key difference. On the legal point, I am more than happy to come back to the hon. Gentleman in terms of how the burden applies in this case and whether it is any different from the provisions under the Equality Act, but we are talking about the provisions of the Bill and the most practical way to bear down on the problem. It is a difficult one to bear down on, as he will appreciate.

Landlords and related parties will be exempt from the prohibitions if the prohibition was necessary for the landlord to fulfil a restrictive term in an existing insurance contract that prohibits occupation by children or if a prohibition was a proportionate means of achieving a legitimate aim. The example we chose in the explanatory notes was a landlord reasonably refusing to rent a small bedroom in a house in multiple occupation to a women with two teenage children, in order to adhere to overcrowding regulations. However, in general terms the clauses will bear down on rental discrimination by ensuring that prospective tenants are considered on an individual basis rather than on the basis of whether they have children or are in receipt of benefits. To reassure Opposition Members, the provisions broadly mirror those in the previous Government’s Renters (Reform) Bill.

Clauses 34 to 37 merely nullify any discriminatory clauses relating to children and benefits in tenancy agreements, superior leases, mortgage deeds and insurance policies by rendering them unenforceable. As with clauses 32 and 33, exemptions apply for a prohibition if it is a proportionate means of achieving a legitimate aim.

It should be noted that while the mortgage and lease provisions set out in clauses 35 and 36 are retrospective, the insurance provisions set out in clause 37 are not. We have taken this approach because insurance contracts are renewed with greater frequency than mortgages and leases, so will naturally be updated to reflect the new requirements without necessitating immediate action or impacting existing insurance rates.

The provisions in this chapter of the Bill make it clear that rental discrimination against families with children or people who receive benefits has no place in a fair and modern housing market. We recognise, however, that we may need to extend the new protections to additional cohorts, if required in future. Clause 38 allows us to do so by way of regulations, subject to the affirmative procedure and following a consultation, provided that any new protections remain consistent with the existing framework.

For example, I have received representations from my hon. Friend the Member for Doncaster Central (Sally Jameson) to extend the rental discrimination provisions to care leavers. The Government feel strongly that the protections provided for by this chapter should be extended to additional cohorts only if there is sufficient evidence to suggest that is required. We do not yet have such evidence in the case of care leavers, but I intend to keep the matter closely under review. If we do need to look to extend discrimination protections to care leavers, we will. The powers in clause 38 will allow us to do so, as well as to respond promptly to any new acts of unlawful discrimination that may emerge in future.

Clause 39 gives local housing authorities the power to impose a financial penalty of £7,000 on a person if on the balance of probability—this directly addresses the question earlier from the hon. Member for Broadland and Fakenham—the local authority is satisfied that there has been a breach of a rental discrimination measure in this chapter. The penalties will be compounding for continuous or repeated breaches.

In summary, although we appreciate the inherent challenges in legislating to tackle rental discrimination, I believe that the measures in this chapter, set alongside strong communication and clear guidance, will see us make measurable progress towards ending discriminatory conduct against tenants with children or those in receipt of benefits. I commend them to the Committee.

Amendments 78 and 79, tabled in the name of the hon. Member for Bristol Central, would ensure that prospective tenants who report rental discrimination could receive a share of any financial penalty imposed on the landlord or letting agent. My assumption—the hon. Lady may well correct me—is that the intent of the amendments is to create an incentive for prospective tenants to complain to the relevant local authority where they consider they may have been a victim of such discrimination. That is an entirely worthy objective, and we do want tenants who find themselves in such circumstances to make a complaint to the relevant local council. We have placed a duty on local authorities to enforce the provisions when they have sufficient evidence to act. However, I cannot accept the amendments, for the following reasons. First, the idea of giving prospective tenants a cut of the civil penalty is wrong in principle. They are penalties imposed by a public body for breaking the law, not a mechanism for compensation.

Secondly, I worry about the potential impact on local government. Allowing a proportion of any such penalty to be allocated as compensation would undermine the principle that all civil penalty income must be ringfenced for enforcement activity in the private rented sector. Moreover, we would expect local authorities, including the hon. Lady’s, to take issue with surrendering part of a receipt that may, in practice, already not be enough to cover the costs of pursuing enforcement action. The arrangements necessary to facilitate such compensation would also add to the administrative burden on local authorities. Financial incentives might also create the risk that prospective tenants complain when it is not warranted and press local councils to propose civil penalties when the evidence is lacking.

Thirdly, there are likely to be practical difficulties in identifying who has been the subject of discrimination— for example, in instances where more than one tenant is involved. There would also be an administrative burden if the compensation were to be paid in instalments.

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[David Simmonds]

The Opposition broadly support the clauses. I have some questions for the Minister, which are matters not of amendment but of clarification.

Clause 35 deals with tenancies where there may be restrictions on children either visiting or living in a property. There has been a significant increase in the number of retirement communities across the UK, and it is quite common for them to set out a condition— for example, that occupiers must be aged over 55. That housing supply is important, especially to encourage people who are under-occupying family homes to choose to move later in life to a retirement property that is designed and built specifically for that purpose. I seek assurance from the Government that while the clause effectively nullifies any restrictions on the ability for children to live in a property, bespoke retirement communities, constructed specifically with the needs of older people in mind, will not find it a problematic provision.

We support the Government’s position in clause 40, on taking income into account. It is clear that the purpose behind the previous voluntary codes, introduced under previous Conservative Governments, and under Labour Governments with the support of the Conservative Opposition, was to bear down on the practice of restricting benefit tenants from accessing private rented property. However, as the Minister clearly said, there is a requirement for referencing checks to be undertaken. Clause 40 specifically says that there will be no prohibition on taking income into account. There is clearly a risk of a loophole in the clause, given that the Bill does not clearly specify what is meant by referencing checks.

Landlords can use insurance to cover the risk of a loss of income where a tenant defaults on a rental payment. If the insurer says, “We consider the risk of anybody on benefits to be too high,” the landlord may say, “We do not directly discriminate, but our referencing check will always decline to provide insurance for an individual in those circumstances.” There is potentially the risk that benefit claimants will fall between two stools. Universal credit is flexible and provides a top-up on a person’s rental income, so they may eligible to receive the benefit but fall outside it for a period of time. We need to ensure that that is fully taken into account. I ask the Minister to clarify the position, perhaps in writing.

Finally, I have some points relating to the interaction of all the clauses. I previously raised the issue of people who have no recourse to public funds. They are not eligible to receive benefits but may be the beneficiary of an obligation on a local authority to provide support—for example, under the Children Act 1989 or previous housing legislation. It would be helpful to understand how the clauses will apply to that group of individuals. They are likely to be creditworthy and to apply for private rental on the basis that they have a job and an income. They are not eligible for the state benefits listed in the examples of benefits that are included. We therefore need to ensure that, so far as the Government intend, they fall within the ambit of the Bill.

There is a similar issue for care leavers, about which the Minister said he has received representations. The Children (Leaving Care) Act 2000 creates a set of obligations on local authorities to secure appropriate accommodation for care leavers as they enter adulthood. Although I understand the Government’s decision not to bring a specific category of care leavers within the scope of the legislation, those who are the beneficiaries of that obligation on behalf of somebody else will find themselves discriminated against not because of rights arising from their personal circumstances but because of the obligation to somebody else—in this case, that a statutory authority has to provide support for them.

Finally, we support the Government’s position on the amendments. Although I have complete sympathy with the point being raised, as the Minister does, there is clearly a risk that what is intended to be a matter of criminal law—discrimination against an individual, whereby a court can make an order for compensation—is mixed up with a civil penalty that is designed to ensure that landlords pay appropriately.

The Minister is correct, but he may need to provide total clarity for the sake of parliamentary proceedings that a local authority will use that civil penalty in the same way as would apply if it were dealing with an issue of fly-tipping, littering or environmental nuisance, as opposed to having to prove to a criminal standard that discrimination is taking place. As those two things are different, they need to be handled differently in the way that the legislation addresses them, as my hon. Friend the Member for Broadland and Fakenham alluded to.

[Matthew Pennycook]

Let me address that group of questions, which are well understood and well made. I will respond to each in turn.

I think the shadow Minister may have got the clause wrong, because clause 35 deals specifically with superior leases and ensuring they are not enforceable. However, I take his point about what is usually older people’s bespoke accommodation. I am sure that we would all welcome children visiting those sorts of accommodation. I will provide a specific written answer to confirm this position, but I would expect a provider to argue that refusing tenants living with children in such a block would be a proportionate means of achieving a legitimate aim and would therefore be appropriately accommodated within the legislation.

On clause 40, the Bill will allow landlords to check if a tenant has sufficient income to ensure that they can afford to pay for a tenancy and it is sustainable. The shadow Minister made the point again, as he did in the evidence sessions, about insurance and referencing checks. I will give him a specific answer as to whether particular referencing checks or insurance products will, as a matter of course—I think this was his point—rule out universal credit applicants as tenants who can afford to pay. I do not necessarily think that that should be the case, but if it is, I will give it due consideration.

[David Simmonds]

It is helpful to have this conversation with regard to insurance that covers the loss of rent and insurance that specifically requires the prohibition of a child living with tenants, as referred to by clause 35. Our concern is that although the Bill’s intention is to create a clear situation where there is no discrimination against a tenant with children who would be living with them or visiting them at the property, there is a risk of ambiguity if a landlord finds, for example, that they cannot gain any insurance or that the cost of insurance is prohibitive. They would then argue that they simply could not meet their obligations as a landlord if they were to allow tenants with children who live at or visit the property. We need to therefore bring clarity so that we do not leave a loophole through the insurance market that effectively nullifies the intended impact of the legislation.

[Matthew Pennycook]

I appreciate and understand that point, and the shadow Minister is right to say that we need to bring the requisite level of clarity in this area. He has asked a series of questions in Committee on insurance products more generally and I will attempt to give him a more comprehensive answer in writing so that we can draw a line under some of his concerns.

The shadow Minister asked specifically about no recourse to public funds and care leavers, which again is a specific subset of issues that he is right to raise. I will come back to him on those as well.

On civil penalties and whether they can be proved, we have taken a different approach in the Bill from Scotland and Wales where the situation is different. While they seek to enforce discriminatory provisions through a criminal offence, we have deliberately taken the civil route because of the lower burden of proof required for local authorities, and the ease with which they will therefore be able to take enforcement action against cases of discrimination where they have sufficient evidence.

[Jerome Mayhew]

rose—

[Matthew Pennycook]

If I have answered the shadow Minister’s point, the hon. Gentleman can come in.

[Jerome Mayhew]

The Minister will be aware that, although there is a civil burden of proof under English and Welsh law, the level to which the courts hold that burden of proof varies substantially, depending on the nature of the tariff or the consequence of that finding. Given that councillors will be seeking to impose what looks quite like a criminal fine under clause 39—a fine of many thousands of pounds—is it the Minister’s understanding that, although the burden of proof required is civil, it will be a high hurdle when applied by the courts?

[Matthew Pennycook]

I do not think I would make that particular point. To expand further, we have taken this particular approach because we think there is a benefit provided by the burden of proof that local authorities are required to meet. It is also the case that making breaches of rental discrimination provisions a single civil matter in England is in line with our wider discrimination legislation, in the way that it is not in Scotland and Wales—we will come on to discuss those points.

It is worth noting that, where there is evidence, local authorities can take enforcement action against either the landlord or the letting agent, or indeed both, if the letting agent has been party to the breach, and they can face multiple fines. They are civil fines at the £7,000 level rather than the criminal fines found elsewhere in the Bill, which have a much higher threshold of £40,000. I hope that answers the point made by the hon. Member for Broadland and Fakenham. Again, if he writes to me, I am happy to give him a more detailed answer.

I hope that I have reassured the shadow Minister as to why we have taken this approach and that we have considered its impact on different cohorts. It is important that the power provided for in clause 38 is there. We will take it forward only very specifically, as I have said, after consultation and through the affirmative procedure, but we want to have it so that the system can to adapt to any new instances of discrimination that arise. To go back to the point that my hon. Friend the Member for Doncaster Central has put to me fairly frequently, if sufficient evidence is brought to us that shows that certain cohorts, be it care leavers or anyone else, are facing the type of discrimination we want to bear down on through the Bill, we can more easily add them and cover them with that power.

[Carla Denyer (Bristol Central) (Green)]

I will quickly clarify the comments made about my amendment 78 by the shadow Minister, and then I will discuss my amendment and answer some of the Minister’s points. If I heard correctly, the shadow Minister said that he did not support the amendment because it mixes up compensation with criminal penalties, but my understanding of the conversation that we have just had is that the clause uses civil law rather than criminal law, so that point does not stand—or have I misunderstood something?

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[Carla Denyer]

I thank the hon. Lady for her question, which I will come to in a moment. I have considered the role of the ombudsman, but the point of amendment 78 is predominantly to incentivise tenants to engage with the enforcement of the local housing authority.

Given the seriousness and scale of discrimination, bold measures are required. Though I welcome the Bill’s intention to stamp out discrimination, the reforms will only be as effective as the enforcement that underpins them. Under the legislation, local authorities will remain dependent on prospective tenants reporting a breach in the first instance. Let us bear in mind that we are discussing discrimination before somebody becomes a tenant—it is discrimination in the advertising of a property—so the prospective tenant may well not have an incentive for pursuing it. Local authorities will be dependent on tenants reporting the breach in the first instance, maintaining a potentially lengthy co-operation with the local authority and assisting the inquiry all the way to its conclusion.

That is a real burden. A tenant who has been refused a tenancy will likely still be contending with the extremely pressing issue of where they are going to live—they may have just been served an eviction notice or they may have had to move out of their accommodation quickly for another reason. They are unlikely to have the time or energy to volunteer their services for free to the local authority in exchange for no benefit.

I want to address a point that the Minister made against the amendment. In the circumstances I mentioned, the chance of tenants falsely or speculatively submitting a complaint is pretty slim, because they will have pressures on their time. If the prospective tenant were to get a cut of the amount received by the local housing authority, that would be a good incentive for them to report discrimination to the local authority, and discriminatory landlords would begin to be rooted out.

[Matthew Pennycook]

Will the hon. Lady give way on the point she just made?

[Carla Denyer]

Can I get to my next point? I suspect that I am about to answer the Minister’s question.

[Matthew Pennycook]

If the hon. Lady answers it, I apologise. I want to make two points. First, I understand her concern about tenants not having an incentive to take a complaint to the local authority. We want tenants to make legitimate complaints about rental discrimination, and I think that can be encouraged through Government messaging and guidance.

Secondly, one of the four concerns I expressed was about the impact on local authorities. Has the hon. Lady spoken to her own local authority to determine how comfortable it feels about losing £1,400 out of every £7,000 fine for a breach under this provision?

[Carla Denyer]

I will plough on, because I was indeed going to come to that issue.

First, however, I will address one of the Minister’s other points on the convergence of penalty and compensation principles. I understand his purpose in pointing out that these are not normally combined, but there is a precedent. Sharing the proceeds of a civil penalty between public bodies and the person on the end of the wrongdoing is a departure from the norm but, as I understand it, under section 214 of the Housing Act 2004, if a landlord has failed to comply with the tenancy deposit protection regulations, a court can award a tenant a sum of between one and three times the deposit they paid.

While there is no question in that legislation of sharing an award with the local authority, it is nevertheless an example of the convergence of penalty and compensation principles in a single move. Although deposit protection rules do not give us a blueprint for the proposal I put forward in amendments 78 and 79, they demonstrate that an acknowledgment elsewhere in housing law of the importance, proportionality and justification of restitution for tenants, which also serves as a form of deterrent and admonition for rule breaking, all in one go.

The Minister may be aware that I tabled an amendment to increase civil penalties for exactly the reason that he has highlighted: if the local authority is to share the proceeds with the tenant, the total amount should be higher to ensure that it covers the cost of the local authority taking on the enforcement. That amendment was not selected for debate, so I will not shoehorn in my comments on the subject, but since the Minister specifically asked me about it, I will make the case for increasing the total civil penalty. I proposed that it be increased to £15,000 so as to not harm the local authority’s ability to undertake enforcement activity, as well as to properly reflect the time and expertise involved in the local authority pursuing such cases. I think that addresses the concerns the Minister raised.

In conclusion, the tenant is the linchpin upon which a discrimination case such as this depends. On that basis, I believe that some form of financial compensation for the person on the end of the illegal treatment is fair and proportionate. They can pursue a case with the housing ombudsman case as well, and there is an argument for taking into account whether the tenant has received something through the housing ombudsman in determining what they receive in my proposed scheme, or vice versa, but the function of the two tools is different.

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[Sam Carling (North West Cambridgeshire) (Lab)]

On the suggestion made by the hon. Member for Bristol Central, the civil penalty income is imposed by a public body as a punishment for breaking the law. There is a point of principle about whether it is right—whether there is a precedent—to give a contribution back to the tenant from that. It feels very unusual to me.

I have a brief question for the Minister; it may be that as a new Member of Parliament I am not used to this yet. Is it normal to specify the amount of the fine in primary legislation? Can that cause problems later in respect of needing to uprate it with inflation or anything like that?

[Matthew Pennycook]

On the point made by my hon. Friend the Member for North West Cambridgeshire, it is conventional to put the amount of the fine on the face of the Bill. There are provisions in the Bill that allow the Government to increase the fine to reflect the increase in inflation over time, so it is not a static, once-and-for-all £7,000 or £40,000 in the case of criminal offences.

On the point from the hon. Member for Bristol Central, I sympathise very much with the intent. We have to ensure that prospective tenants who face direct or more subtle forms of discrimination take a complaint to the local authority, but I have confidence that tenants will, and I have concerns about the approach she specifies. First, on a point of principle, the penalties are imposed by a public body for breaking the law. They are not a mechanism for compensation. It would be a departure from the norm, as she rightly appreciates.

My primary concern—I think the hon. Lady underestimates it even with the increased fee she proposes —is that there would be a significant impact on local authorities. They will take issue with losing 20% of the fine they can levy. I will check with her local authority after I leave the Committee as to whether they would be happy to lose that.

[Carla Denyer]

Will the Minister give way?

[Matthew Pennycook]

Let me develop this point; then the hon. Lady is more than welcome to come back on it. Even if the loss of 20% of the £7,000 were covered by an increased fine, there are good reasons why we do not think that the fine should be higher in the Bill. Setting that aside, we think there would be significant administrative burdens to overseeing a system that redistributes part of a fine issued and secured via the specified means through the local authority. Different arrangements would need to be put in place to facilitate that. Financial incentives might create the risk of tenants taking cases where there is not sufficient evidence to press local authorities to investigate.

We have already had extensive discussion on whether, through this Bill, local authorities will be able to effectively enforce, because of the resource pressures on them. We are committed to new burdens funding to ensure that they can. I think that putting additional administrative burdens on them in the way specified is the wrong approach. The hon. Lady did not address this point, but there are real practical difficulties in identifying who has been the subject of discrimination. In her example it is simple, with a single tenant, but in cases of multiple tenants, what is the proportion of the compensation to be paid?

I think the hon. Lady’s amendment references instalments and a subdivision of the amount compensated for. This would be an over-complication of the Bill’s provisions. I am confident that the provisions will work in the way intended and that tenants will take their cases to local authorities. There is a duty on local authorities to enforce the provisions. The approach I put to the previous Minister was to put the onus on tenants and to enforce through the Equality Act. We are taking that burden off tenants and placing it on local authorities, imposing on them a duty to investigate and take action in cases of such increases. For those reasons, I am afraid I cannot accept the hon. Lady’s amendments.

[Carla Denyer]

I have a few follow-up questions for the Minister based on what he just said. First, does he recognise that 20% of double the amount still leaves a significant increase for the local authority? He was talking about the local authority receiving a reduced amount, but losing 20% of double the amount still means a larger amount than previously.

[Matthew Pennycook]

If the hon. Lady will give way, I can address that point.

[Carla Denyer]

My next point relates, so the Minister can probably address them together.

Secondly, the Minister said there were good reasons why he had selected £7,000 specifically and not a few thousand above or below that. Will he expand on why £7,000 is the magic number?

Thirdly, I would like to understand the Minister’s view on how tenants will be incentivised to have the prolonged engagement with a local authority that would be necessary to see the process through to conclusion—with only a public information campaign?

[Matthew Pennycook]

First, what research has the hon. Lady done on the administrative burden on local authorities of subdividing the amounts of money they take in through breaches to give that 20%? It is easy to say, “Increase the amount and the 20% is covered,” but, as I have put to her, there would be significant additional administrative burdens from setting up the type of arrangements she wants to see.

Secondly, why does the hon. Lady think that under the arrangements in the Bill tenants will have to spend an inordinate amount of time co-operating with the local authority to enforce breaches? As I have said, the onus is on the local authority duty, under the legislation, to investigate. Tenants have to co-operate, but I do not see any circumstances where a huge amount of their time is spent on investigation and enforcement. That is for the local authority. Does the hon. Lady have any more insight on those two points?

[Carla Denyer]

I have not myself done the calculations and consultations on what that might take a local authority. However, the amendment is based on evidence provided by experts in the evidence gathering part of the Committee’s work. I am trying to get the written evidence up on my parliamentary laptop, which is not co-operating. Off the top of my head, I believe it was from Shelter—I will try to look in a moment, when I have sat down. I am sure Shelter has done the work, so I would be pleased to get back to the Minister on the details when I can lay my hands on them.

Apologies, but I have forgotten the second thing the Minister said.

[Matthew Pennycook]

I simply asked why the hon. Lady thinks the process set out in the Bill will require huge amounts of tenant energy and time to see the enforcement process through. As I said, there is a statutory duty on local authorities in the Bill to take the process through. We have put the onus on them, not tenants. I wonder why the hon. Lady assumes it will take lots of effort on the part of the tenants themselves to seek redress through the provisions that the Bill sets out.

[Carla Denyer]

Yes, I remember now that the Minister asked whether I expected the tenants to investigate. I do not expect the tenants themselves to investigate, but I expect that a level of ongoing engagement will be required, which would be onerous if they are trying to flat or house-hunt and move house at the same time. My experience as a councillor for nine years, and as an active citizen, is that it often requires several successive engagements with a local authority to get the desired outcome.

[Matthew Pennycook]

I will respond briefly because I have set out in some detail the Government’s view on the matter. If I can say so politely, there were a huge number of assumptions in there. There is an assumption that the tenant will have to spend inordinate amounts of time working with the local authority to enforce the provision. We do not want that to be the case. Tenants will have to engage, but the onus and duty is very much on local authorities to do the work.

The hon. Lady underestimates the amount of cost, time and resource that would fall on local authorities in terms of having to set up and administer a more complicated scheme to redistribute money. The ombudsman has powers in this area to investigate complaints. The provisions in the Bill are specifically targeted at ensuring that local authorities, through that civil offence procedure and that lower burden of proof, can take action to enforce. It is right that the fees set out in the Bill are ringfenced to local authorities to be able to enforce.

I sympathise with the objective that the hon. Lady is trying to achieve, and we want tenants to take cases to their local authorities, but her amendments are flawed. I do not think they are thought through, and they rest on a series of assumptions that I do not expect to see occur in practice. For that reason, we will resist them.

[Carla Denyer]

I will follow up with the Minister on the details.

[David Simmonds]

Not that they need it, but the Government have our support in their stance on this issue.

The hon. Member for Bristol Central raises an important point. From my experience in local authorities, I know it is often extremely complicated when they seek to allocate or judge issues of compensation on civil penalties. For example, similar legislation applies in respect of environmental nuisance, and we know it is incredibly difficult to identify who has been a victim, how to quantify the level of harm they have suffered and then how to allocate an appropriate level of compensation.

Given the good will the Minister has shown on the issue, I hope there is scope for some further discussion to ensure that if there is a pattern of egregious behaviour by a specific landlord who is clearly discriminating against particular groups of people—we recognise that particularly in London there is often a high level of demand, and a tenant may visit a dozen or more properties to secure a tenancy—there is a means of providing some form of restitution for the waste of that person’s time as a result of that discrimination.

[Matthew Pennycook]

Can I make a further point, which I have made before but is clearly not registering? This is where we need to take a step back and look at which different parts of the Bill do what. The ombudsman can review each complaint on a case-by-case basis. Complaints can be about discrimination and the ombudsman has the powers to put things right, including by ordering the landlord to pay compensation or correct the behaviour in question. It is not that we do not think there is a case for the suggestion—we will come to the significantly strengthened rent repayment orders that we have included in the Bill—but that this is not the place for it. Clause 39 is a quite simple provision to allow local authorities to issue fines for breaches and to be able to keep that money to fund further enforcement activity. For that reason, we cannot support the amendments.

Question put and agreed to.

Clause 32 accordingly ordered to stand part of the Bill.

Clauses 33 to 41 ordered to stand part of the Bill.

[The Chair]

I should explain to the Committee why we have not considered amendment 79 for a decision at this stage. Although it was been debated as part of the group, it relates to a later part of the Bill. If it does require a vote, that will be done at a later stage. The way we do things can sometimes be a bit confusing, but that is the explanation as to why that particular amendment was not considered.

Clause 42

Discrimination relating to children or benefits status: Welsh language

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

[The Chair]

With this it will be convenient to consider clauses 43 to 48 stand part.

[Matthew Pennycook]

I will be brief on this group of clauses, which simply provide for rental discrimination powers and prohibitions in Wales that mirror those in England, with minor adjustments made in order to fit them into existing housing offence enforcement procedures. The measures are broadly equivalent to chapter 3 of the Bill for England, which we have just discussed at length, with adjustments made to align with the existing Welsh enforcement framework.

As I have already mentioned, Wales is taking a criminal enforcement approach, while the same conduct is a civil breach in England. That reflects the private rented sector enforcement regime in Wales, where criminal offences are in line with other housing legislation. I commend the clauses to the Committee.

[David Simmonds]

As the Minister has outlined, this is a fairly straightforward translation. First, I presume the measures will require a legislative consent motion on the part of the Welsh Government, and ask the Minister to clarify that.

Secondly, in respect of the proceeds of the fines, it is clearly envisaged in England that it will be the local authority that carries out enforcement and that the revenue from the fines will finance that. If it is a criminal matter in Wales—a criminal enforcement regime—will the same rules apply? We briefly debated the issue of whether fines in a criminal matter would go into the consolidated fund, as is currently the case with criminal penalties, or directly to the local authority, in order to finance the enforcement regime; will the Minister clarify how the matter will be dealt with in Wales?

[Matthew Pennycook]

I thank the shadow Minister for those questions. There is a simple answer to the first: yes, it requires a legislative consent motion on the part of the Senedd to bring the measures into effect.

On the approach in Wales more broadly, as I said, it reflects the established private rented sector enforcement regime in Wales. There are a number of differences. The Welsh Government, and the Scottish Government, take the criminal offence path, rather than the civil one. What that means—this is one of the reasons why we determined to go with the civil offence approach in England—is that fines are capped at £1,000 in the Welsh and Scottish contexts, whereas under the approach in the Bill we can levy £7,000, and do so repeatedly if breaches are continuous and ongoing. That is why that is reflected.

On the consolidated fund point, as it applies to the Welsh Government, I am afraid I do not have the answer. I will more than happily get an answer to the hon. Gentleman in writing.

[David Simmonds]

What the Minister said in respect of the consolidated fund is very helpful. I posed the question because, under the Bill, we will create responsibilities for the local authority to be the enforcement body, which as I understand it will apply in Wales as well, but the decision to take the criminal route is a matter for the Senedd, which is not the local authority. Indeed, there is some tension in the relationship between the Senedd and local authorities. Clearly, if the income is going into a consolidated fund or to the Senedd, the risk is that the enforcement body given the duty under this legislation will not receive any of the financial income raised through enforcement action. I ask so that we are completely clear about where the legislation will stand in Wales once passed.

[Matthew Pennycook]

I understand that point and will get the shadow Minister a precise answer in writing. It is important for the Committee and the public to have clarity on precisely all the ways in which the enforcement is, and in some cases is not, aligned in the Welsh and English contexts. I will come back to him on that point.

Question put and agreed to.

Clause 42 accordingly ordered to stand part of the Bill.

Clauses 43 to 48 ordered to stand part of the Bill.

Clause 49

Discrimination relating to children or benefits status

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

[The Chair]

With this it will be convenient to discuss clauses 50 to 54 stand part.

[Matthew Pennycook]

I might pre-empt the shadow Minister by saying that in the written correspondence to which I have just committed, I will give him the same set of answers on the consolidated fund and the role of local authorities in the Scottish context.

Clauses 49 to 54 provide similar protections and prohibitions in Scotland regarding rental discrimination, albeit with different processes around the power to add protection to additional cohorts. That is different from the situation as it applies to Wales. Again, the measures are broadly equivalent to those for England in chapter 3, with adjustments made to align with the existing Scottish enforcement framework. In Scottish housing law, rental discrimination enforcement is in line with other criminal penalties, as it is in Wales. I commend the clauses to the Committee.

Question put and agreed to.

Clause 49 accordingly ordered to stand part of the Bill.

Clauses 50 to 54 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

Greater Cambridge

Matthew Pennycook Excerpts

Thursday 31st October 2024 Written Statements

[The Minister for Housing and Planning (Matthew Pennycook)]

I am today updating the House on the next steps the Government intend to take, in collaboration with local partners, to support ambitious and high-quality sustainable growth in Cambridge and its environs.

Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people. That is why it is this Government’s No. 1 mission. The economic growth of Cambridge has been a phenomenal success and the city’s strengths in knowledge-intensive businesses within its unique innovation ecosystem are well documented, with strong connections between investors, researchers, businesses and local government. We know that greater Cambridge has the potential to make an even greater contribution to the UK economy, and the Government are determined to make this happen.

While local partners in greater Cambridge share the Government’s ambitions, there remain significant barriers to further growth. It is essential that the Government help to remove them to overcome the issues that have held up planned development for essential housing and laboratory space. It is also vital that we take a collaborative approach to addressing the costs that have come with success, including housing affordability pressures, traffic and congestion, and air pollution. We know what can be achieved when local authorities, central Government and public bodies work in partnership to overcome these challenges. I want to sustain the constructive relationship I have established with local leaders and key partners over recent months.

The Cambridge Growth Company

The Deputy Prime Minister and I are determined to realise the full potential of greater Cambridge to the benefit of its existing communities and the UK economy. I am therefore appointing Peter Freeman to chair the Cambridge Growth Company, which will work with local partners to develop and start to deliver an ambitious plan for delivering high-quality sustainable growth in Cambridge and its environs.

Peter is a development and regeneration expert with a strong track record, working with private and public partners. He brings a wealth of experience in delivering complex mixed-use projects, including in his current role as chair of Homes England and through the renowned redevelopment of King’s Cross.

The growth company will focus on the following core activities:

Enable and accelerate developments which align with the Government’s ambitions for Cambridge, and unlocking development on stalled sites.

Develop the evidence base to support development of an infrastructure-first growth plan and a long-term delivery vehicle, working with experts to assess infrastructure requirements, including water and transport, and laying the foundations to establish a long-term delivery vehicle.

Identify solutions to complex constraints and support a cross-Government approach to unblock existing development, providing the right incentives for successful development in the long-term.

The work of the Cambridge Growth Company will be supported by £10 million of new funding committed at yesterday’s autumn Budget. This funding will be used to develop an ambitious plan for housing, transport and wider infrastructure, and for the water needed to support sustainable growth.

We will continue to update Parliament on the work of the Cambridge Growth Company.

[HCWS181]

Renters' Rights Bill (Sixth sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 31st October 2024 Public Bill Committees

[The Chair]

With this it will be convenient to consider clause 56 stand part.

[The Minister for Housing and Planning (Matthew Pennycook)]

It is an absolute pleasure—I genuinely mean that—to continue our proceedings with you in the Chair, Mrs Harris.

The clause will end the unfair practice of pitting renters against each other in bidding wars. Many members of the Committee will have come across that as councillors and as Members, and they do not need me to tell them about the severe impact on renters. Those of us who represent constituencies with particularly hot rental markets are all too familiar with the common story: a prospective tenant arranges a viewing and turns up in person, only to find themselves being asked to compete with other tenants on the spot. Their experience is not that of a viewing, but of a kerbside auction. The impact on renters of the practice is clear.

In other cases, the growth of social media and other platforms allows this practice to occur without prospective tenants even being in the same place. Renters who have applied for a property may find themselves being added to a WhatsApp group and asked to submit offers in front of each other. Again, the detrimental impact of that practice on renters cannot be overstated.

Rental bidding restricts tenants’ ability to make an informed choice about one of the most financially significant decisions they face. It is clearly an unfair practice, and one that, thankfully, only a minority of landlords make use of. The clause will end the practice for good. It will require landlords and letting agents to state a proposed rent in any written advertisement or offer. Landlords and letting agents will then be prohibited from asking for, encouraging or accepting bids above that price. That will improve the experience of prospective tenants across England and provide clarity to all involved in the lettings process.

I turn to clause 56, which sets the enforcement framework for breaches of the rental bidding measures set out in the previous clause. Once enacted, clause 56 will give local housing authorities the power to impose a financial penalty of up to £7,000 on persons who are in breach of the prohibitions. In addition, local authorities will be able to issue multiple civil penalties to any landlord or letting agent who repeatedly breaches the requirements set out in clause 55. In line with the new burdens doctrine, we will fully fund the cost of all additional duties on local government from enforcing the rental bidding prohibition. With that, I commend the clauses to the Committee.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I echo the Minister’s comments about it being a pleasure to serve with you in the Chair, Mrs Harris.

I will not take too long on this point. The measure has been the subject of some controversy. Clearly, there is a philosophical question about the ability of the owner of an asset to gain the best possible market return, but the Government are determined on the matter. I will, however, make some practical points.

The first is about how to address the situation where the property in question is the asset of an organisation whose directors have a fiduciary duty to maximise the return on it, as is common in the case of pension funds, investment trusts or other bodies that may invest in property. Clearly, there is an obligation in law on the directors to seek the maximum possible return, but this legislation will prohibit them from undertaking any form of bidding process.

The second is about a situation where an intermediary sits between the tenant and the owner of the property. Clauses 55 and 56 set out what is meant by a prospective landlord but, in pursuit of their fiduciary duty, the ultimate owners of an asset might seek bids from a prospective managing agent or other intermediary party. They might bid to secure the maximum possible rent on that group of properties, in turn letting them out individually to tenants at a higher level of rent. Both those situations potentially create a degree of conflict.

I agree entirely with the point about the egregious practices of some landlords. It seems to me, however, that we must consider the situations that I have highlighted so that the legislation does not inadvertently lead to trustees and directors of pension funds that invest in property being in breach of their duties, or to the establishment of a get-out by means of a managing agent who sits between the property owner and the tenant.

[Matthew Pennycook]

I thank the shadow Minister for those well-made questions. This is a specific problem that we are trying to target, and the majority of landlords do not engage in rental bidding. We are trying to stamp out the egregious practice of a minority of landlords who exploit the fact that, particularly in hot rental markets, there is a lack of supply vis-à-vis demand. Tenants can be pitted against each other in ways that ensure the rent of a tenancy escalates to a point beyond which many of them can afford, or which, if they can afford it, puts incredible financial strain on them.

Once these provisions are in force, we think landlords will—in much the same way as the tribunal might—determine what the market rent is in a given area and what they can expect to receive from their property, and then advertise the rent at that price. I have been asked how that would work. Will landlords not advertise a price below what they could otherwise expect? We cannot have it both ways. If a landlord can expect a certain price through a competition, that suggests that tenants can pay a slightly higher price and bid up. We expect landlords to look at the market price in a given area and advertise the property at that rent, and these provisions will ensure that they cannot encourage or invite bids over that amount.

On the specific cases that the shadow Minister raises, I would not expect organisations of the type he lists to be in breach of their fiduciary duties as a result of these provisions. I understand his point about intermediary agents, particularly in groups of property where they might look to get the best deal on any of those things. I will come back to him on that specific point in writing, because I understand the need to work through those hard edge cases, but we think that only a very small minority of landlords will be affected. This is not the usual practice across every part of the country. His points were well made, and I will come back to them.

Question put and agreed to.

Clause 55 accordingly ordered to stand part of the Bill.

Clause 56 ordered to stand part of the Bill.

Clause 57

Penalties for unlawful eviction or harassment of occupier

[Carla Denyer (Bristol Central) (Green)]

I beg to move amendment 44, in clause 57, page 79, line 31, after “section 1” insert—

“—

in subsection (4)(a), omit ‘the prescribed sum’ and insert ‘£60,000’;

(b)”.

This amendment increases the maximum fine for illegal evictions under the Protection from Eviction Act 1977 to £60,000.

[Carla Denyer]

I am sure we are all aware of the risk that the abolition of section 21 may lead to a rise in illegal evictions. The Renters’ Rights Bill needs measures to protect against that, and that is the purpose of amendment 44. Across the country, a segment of private landlords evade the courts and attempt to evict tenants themselves by taking actions that include changing locks, disposing of belongings, and even cutting off electricity and water supply and harassing tenants. Many illegal evictions take place in the shadow market, where landlords and letting agents deliberately breach the law to maximise rental profits. Many renters in the shadow market are on lower incomes in marginal employment, and they are unfamiliar with their rights.

In 2019, there were just 30 prosecutions of offences under the Protection from Eviction Act 1977 in the whole of England and Wales. Such a low prosecution rate allows criminal landlords to act with impunity. When sentencing, magistrates are also very lenient; fines of less than £1,000, community service and conditional discharge are common penalties for such behaviour. If the maximum fine is £40,000—as it currently is in the Bill—because of the nature of civil penalty notices, it is unlikely that the fine will ever reach that maximum unless the offence is particularly violent. So—and here is the rub—landlords may still take a calculated risk that they can save money by unlawfully evicting tenants, given the abolition of section 21. Even where illegal eviction is not violent, it is still a horrific crime, so it is appropriate that fines reflect that. I therefore propose a maximum fine of £60,000, to give space for appropriate fines to reflect the criminality and harm caused within that range.

The change would help to ensure that, for rogue landlords, illegal eviction is not the path of least resistance, as I fear it could otherwise be. Increasing the maximum will also give a strong indication to the courts that this is not just a technical breach, and that will hopefully therefore have a knock-on effect on sentences issued upon conviction.

These cases are particularly complicated and expensive for councils to pursue, and that brings us back to the point about the cost to councils that we discussed earlier, especially where landlords refer a case to the first-tier tribunal. If local authorities are bound to lose money even when they win the case, they will be hesitant to begin proceedings. Increasing the maximum fine will help them to have more confidence that they will not lose a substantial amount of money. That is particularly important in the context of 14 years of council funding cuts, as we all know, which mean that if councils stand to lose a lot, they are disincentivised to act.

[Matthew Pennycook]

As we move to the final set of clauses in part 1, we cover several miscellaneous issues. As we have heard, clause 57 concerns unlawful eviction and harassment of an occupier.

The Bill clarifies and expands grounds for possession so that landlords can take their property back when there is good reason for them to do so. Landlords must always follow correct court procedures to legally evict a tenant. There is no excuse for those who seek to gain possession in an unlawful way.

The Government are clear that illegal eviction, which can include harassing individuals to leave their home, is a criminal offence, and those who flout the rules and deprive tenants of a home in this way must be punished accordingly. Clause 57 amends the Protection from Eviction Act 1977 to strengthen local authorities’ powers to do so if they are satisfied beyond reasonable doubt that a person has committed such an offence.

At present, local authorities can only prosecute offenders. That can be a lengthy process, and the fines imposed can be low. Although local authorities will still be able to prosecute after these provisions come into force, for the first time they will be able to issue a financial penalty on landlords who evict their tenants illegally in lieu of such a prosecution. That fine will be up to £40,000. It will be an alternative route to criminal prosecution, and it may often be simpler and more cost-efficient for local authorities.

The schedule that accompanies this clause sets out the procedure that authorities must follow regarding financial penalties. That includes information on handling the imposition of financial penalties, appeals and enforcement, and how to use the proceeds of the penalties.

The provisions will ensure that local councils consistently punish the most egregious offences, while allowing them to take the context of individual cases into account. By strengthening the enforcement framework, we will deter unscrupulous landlords from flouting the rules, drive out bad actors from the sector and improve protections for tenants.

I thank the hon. Member for Bristol Central for tabling amendment 44. The Government accept that any attempt to force a tenant from their home unlawfully is unacceptable, and those who do so must be met with enforcement. However, in our view, the amendment is not required. It seeks to increase the fine for illegal eviction in the Protection from Eviction Act 1977 from £5,000 to £60,000, as the hon. Lady has just set out. However, the cap on magistrates’ court fines for these offences has already been removed by section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and the offences are punishable by a fine of any amount.

Through the Bill as a whole, we are taking strong action on illegal eviction. We are extending civil penalties and rent repayment orders, placing a new duty on councils to take enforcement action and enhancing their powers of investigation to make that easier. We consider that our approach to enforcement is a fair and proportionate one. We are taking a clear, escalatory approach to civil penalties with first time, less serious non-compliance subject to much lower maximum penalties than serious or repeat non-compliance. The Government believe that the £40,000 maximum penalty for illegal eviction will act as an effective deterrent and is consistent with other serious offences across the Bill. I point out that that is higher than under the previous Government’s Renters (Reform) Bill, in which the amount was set at £30,000. As such, in our view it will act as a greater deterrent.

As I have said, criminal prosecution of course remains available for illegal eviction, and local authorities may decide that is the right course of action for the most serious cases. In such cases, landlords can be sentenced to imprisonment or to an unlimited fine. I therefore ask the hon. Lady to withdraw the amendment.

[Carla Denyer]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 ordered to stand part of the Bill.

Clause 58

Abandoned premises under assured shorthold tenancies

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

[Matthew Pennycook]

One of the key objectives of the Bill is to give tenants greater security in their homes. It is imperative that landlords cannot evict their tenants without a valid ground for possession, and we want to ensure that none can circumvent the requirements of the Bill in respect of seeking possession. Part 3 of the Housing and Planning Act 2016 permits the landlord to recover abandoned properties let under an assured shorthold tenancy without a court order, provided that the tenant or tenants in question are in rent arrears and three warning notices have been served without receiving a response.

Although the Government recognise that genuine abandonment can cause problems not just for landlords but for the wider community, we do not believe that these historic provisions should remain on the statute book. They were criticised at the time of their introduction —I recall this, Mrs Harris; it was one of the first Bill Committees I sat on as a relatively new Member back in the 2015 to 2017 Parliament—for being a rogue landlords’ charter. It is not surprising that, as with a number of provisions of the 2016 Act, they were never brought into force.

Clause 58 repeals part 3 of the 2016 Act. As a result, where tenants abandon properties, landlords will need to demonstrate that they have a valid ground for possession under schedule 2 to the Housing Act 1988, as amended by this Bill. In unequivocal cases, implied surrender may also apply, such as when keys have been returned that the landlord has accepted, even if no notice has been provided. It is likely that when properties are abandoned, tenants are not paying rent, so the rent arrears grounds are available. Landlords may also be able to seek possession for breach of the tenancy agreement, if the agreement prohibits the property from being left unoccupied for long periods, or even the deterioration of property grounds. It is right that tenants have access to justice when they are at risk of losing their homes. Clause 58 ensures that provisions are removed from the statute book to make it coherent.

Question put and agreed to.

Clause 58 accordingly ordered to stand part of the Bill.

Clause 59

Remedying of hazards occurring in dwelling-houses in England

[Matthew Pennycook]

I beg to move amendment 22, in clause 59, page 84, line 23, leave out from “in” to end of line 25 and insert “section 13(1A), (1AA) or (1AB);”.

This adds a reference to the new subsection (1AA) which will be inserted into section 13 of the Landlord and Tenant Act 1985 by clause 30(3)(b)(ii).

[The Chair]

With this it will be convenient to discuss the following:

Clause stand part.

Clause 60 stand part.

[Matthew Pennycook]

The death of two-year-old Awaab Ishak, as many Members will know, was caused by prolonged exposure to mould in his social rented home in Greater Manchester. It was an avoidable tragedy that shames us as a nation, and it should never be repeated. I had the privilege of meeting Awaab’s family. Following a campaign by them, the Manchester Evening News and Shelter, the previous Government legislated to introduce Awaab’s law for social housing tenancies. I must credit the previous Government and the former Secretary of State, the then right hon. Member for Surrey Heath, for introducing that legislation. It was absolutely the right thing to do. We supported it in opposition, but it was only a welcome first step. This Government are clear that we need to go further and ensure that no tenant is forced to live in a home that places their health and safety at risk. That is why, in our manifesto, we committed to extending and applying Awaab’s law to the private rented sector.

Clause 59 will extend Awaab’s law to tenancies in the private rented sector. It will allow us to set legal requirements about how private landlords must tackle hazards in their properties, including setting clear timescales for repairs. It will ensure that those living in privately rented homes are empowered to challenge dangerous conditions, and that landlords cannot ignore their complaints. We recognise that there are important differences between private and social landlords, such as the average size of property portfolios, so we plan to consult on the detail of how we will apply Awaab’s law to the private rented sector. That will allow us to ensure that our approach works effectively for the sector, and that it is fair and proportionate for both tenants and landlords.

Clause 60 allows Awaab’s law to be applied to accommodation occupied under licence. A licence to occupy is used rather than a tenancy in certain circumstances, mainly for short-term arrangements or where there is no exclusive right of occupation. In general, it would be disproportionate to apply Awaab’s law to accommodation occupied under licence, such as when homeowners have a lodger staying in a spare room. However, there are cases where it may be appropriate to do so. For example, some temporary homelessness accommodation and supported housing is occupied under licence. We should explore whether vulnerable tenants of such accommodation should be subject to the protections provided by Awaab’s law as part of the consultation to which I have referred. Clause 60 will therefore allow us, as part of that wider consultation, to consider and consult on what types of accommodation occupied under licence should be in scope. It will then allow regulations to be made to bring such accommodation within scope.

Government amendment 22 is a minor and technical amendment that will ensure that Awaab’s law continues to apply to social rented properties let by private registered providers under tenancies of more than seven years. It is simple and straightforward.

[David Simmonds]

This measure was introduced by the previous Government. We supported it then, and we support it in opposition. Will the Minister reassure me that, as part of the consultation, he will include large public sector landlords, particularly the Ministry of Defence and the NHS? They have significant numbers of people in employment-related accommodation, and we are all aware that there has been a history of issues such as those that this legislation is specifically designed to tackle.

[Matthew Pennycook]

I hope I can give the shadow Minister some reassurance in that regard, taking Ministry of Defence accommodation as an example. Colleagues in the Ministry of Defence are clear that they want to mirror the same level of standards as we intend to apply across the sector, but the approach that we are taking through this Bill is not necessarily appropriate for the unique circumstances that surround Ministry of Defence accommodation. That is a good example of where a Department is taking forward its own work on standards separate from this Bill. I will get the shadow Minister a full written response that sets out exactly how such accommodation, which is not necessarily within the scope of this clause, aligns with not only Awaab’s law but the decent homes standard more generally.

Amendment 22 agreed to.

Clause 59, as amended, ordered to stand part of the Bill.

Clause 60 ordered to stand part of the Bill.

Clause 61

Meaning of “residential landlord”

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

[Matthew Pennycook]

We move on to part 2 of the Bill, which concerns landlord redress schemes and the private rented sector database. Clause 61 sets out the meaning of “residential landlord”, “relevant tenancy” and “dwelling” for the purpose of defining which tenancies fall within the scope of that database and ombudsman service.

Most private rented sector tenants have assured or regulated tenancies, and those arrangements are covered under this clause. Certain other tenures and dwellings are excluded by clause 61. That is because some tenures, such as licences, provide tenants with very different rights from assured tenancies, while some dwellings, such as non-permanent structures, are subject to different standards requirements from typical PRS properties. Landlords of social housing will also be excluded from the requirements.

We are aware that the private rented sector is dynamic and continues to evolve, and that is why we have included a power in this clause to amend the definition of “residential landlord”, “relevant tenancy” and “dwelling”. That power is required so that the legislation can keep pace with changes in the sector. It will give us the flexibility to extend landlord redress and the database to further tenures or dwellings, if that proves necessary. I commend the clause to the Committee.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62

Landlord redress schemes

[David Simmonds]

I beg to move amendment 65, in clause 62, page 89, line 25, after “residential landlord” insert—

“, whose property is not managed by an agent who is a member of an independent redress scheme approved by the Secretary of State,”.

This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 62 if their tenant does not already have access to one by virtue of the landlord using an agent who is a member of another approved independent redress scheme.

--- Later in debate ---

[David Simmonds]

We move on to the chapter on landlord redress schemes. The Opposition agree on the need for effective measures, but we need to make sure that those measures are functional in practice.

[Matthew Pennycook]

The private rented sector has lagged behind other housing tenures when it comes to access to redress. For example, tenants in social housing have long been able to escalate complaints through the housing ombudsman’s social landlord redress scheme. Private tenants have had, in comparison, severely limited options for resolving issues, in spite of the fact that they suffer from poorer housing standards on average. I believe that once tenants no longer have the threat of section 21 evictions hanging over them, they will finally feel able to challenge poor practice from landlords at the disreputable end of the market without the fear of retaliatory evictions.

The Bill introduces a new mandatory landlord ombudsman service, which will give tenants free access to redress if their landlord fails to resolve a legitimate complaint. The landlord ombudsman scheme will be a non-adversarial route for escalating complaints, and it will empower tenants to challenge landlords who provide a poor level of service or who behave inappropriately. The ombudsman will benefit landlords who are committed to providing a decent home and a good service. It will give them access to an impartial decision maker to resolve complaints in the quickest and most cost-effective way. This will help to maintain landlord-tenant relationships and therefore, we hope, sustain tenancies for longer.

Clause 62 allows the Secretary of State to make regulations to require landlords, as defined under clause 61, to be members of the private rented sector landlord ombudsman. The provisions in clause 62 will allow prospective, current and former tenants to raise complaints to the ombudsman. This is because things can go wrong for tenants at any point in the rental process, so tenants should be able to seek redress for issues that occur during the pre-letting period or at the end of a tenancy.

Clause 62 will allow the ombudsman to provide voluntary services as well as mandatory redress, which could include mediation services. As I think I said in the evidence sessions last week and on Second Reading, we are exploring options for introducing landlord-initiated mediation to complement the landlord ombudsman service. That is another example of how we are trying to take pressure off the courts and tribunals system.

Government amendment 23 to clause 62 will enable us to require landlords to register all their properties with the landlord ombudsman and keep that information up to date. That was always the intention, and the amendment clarifies that in the legislation. If a landlord chooses not to provide the correct information, they will be liable for enforcement as set out in clauses 64 and 65. That will ensure that landlords pay the correct fee, where fees are based on the size of their property portfolio.

Clause 63 allows the Secretary of State to set out in regulations the conditions that a private rented sector redress scheme must meet before it is approved or designated by Government. By putting conditions in regulations, we will set the framework for a high-quality redress service that can adapt to an ever-changing housing market. For example, to be approved, the scheme must include provision about accepting tenant complaints and requiring landlords to put things right. That could be achieved by making a repair or paying compensation. We will ensure that the ombudsman’s decisions are enforceable by requiring the scheme to set out a route of expulsion. That means that if a landlord does not comply with a redress order, they could be expelled from the scheme and liable for local authority enforcement.

The clause allows the Secretary of State to set out in regulations how a scheme will be approved or designated. In pursuit of a simple and effective user journey, we will set out in regulations in due course that only one scheme will be operational at any one time. It is crucial that the ombudsman is supported by a robust enforcement regime, so that all landlords understand the importance of abiding by the requirements to join the scheme and tenants can get the resolution that they deserve.

--- Later in debate ---

[David Simmonds]

It has been helpful to hear from the Minister in detail on those points. The intention of amendment 65 was to avoid a risk of double jeopardy for a landlord if they had a managing agent who was a member of the redress scheme, but if they were also required separately to be a member of the redress scheme by virtue of the fact that they were a landlord. The Minister has set out how he intends to deal with that in regulation.

I ask the Minister to clarify something—perhaps not today, but in due course. He mentioned examples of where damp and mould would be considered a landlord issue as opposed to a managing agent issue. We are all aware that certain blocks, which may be owned by an absentee landlord or someone who works abroad, are let and managed entirely by an agent who handles the day-to-day responsibility in return for payment and under a contract. We do not wish to exclude completely the possibility of redress through the agent, where the agent has been explicitly given responsibility for dealing with such things, by saying that that will always be a matter for the landlord. Will the Minister write to me to explain how that issue—most of us have seen it from time to time in our constituencies—will be dealt with, should it arise in practice?

[Matthew Pennycook]

I am more than happy to write to the shadow Minister to clarify that. If I have understood him properly, there are certain issues that we think are the landlord’s responsibility, and that is why our approach is the right one. To address his point directly, I will happily set out in some detail in written correspondence how that will operate when landlords are completely absent for the process, and the managing agent’s role in that situation vis-à-vis the new redress scheme.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Harris. The shadow Minister’s amendment refers to agents, such as managing agents, and their redress schemes. Managing agents are often also letting agents—they are the same kinds of companies. Can the Minister comment on the case for regulating those agents, for which this Bill provides an excellent opportunity? Members of the other place who are experts in housing have spoken to me about the need to do that. The Liberal Democrats would certainly support such a move, and I would be grateful if the Minister commented on it.

[Matthew Pennycook]

I suspect I know the noble Lord that the hon. Gentleman refers to. I have had many extensive conversations with the noble Lord about the matter, and I will continue to engage with him. We supported the implementation of the Lord Best review in opposition. We took the view that the Bill was not the appropriate place to consider those measures, but we intend to set out our approach to the regulation of managing agents, letting agents and estate agents in due course. If the hon. Gentleman wants a specific comment from me, I refer him to the answer I gave in oral questions a few a days ago on this point in response to one of his colleagues. We understand the necessity for regulation in this area, and I hope to have further discussions with him and others in due course.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 23, in clause 62, page 90, line 16, at end insert—

“(4A) Regulations under subsection (1) may require a person—

(a) to provide relevant property information to the administrator of a landlord redress scheme, on applying to become a member of the scheme;

(b) at any time after becoming a member of a landlord redress scheme, to notify the administrator of the scheme of any change to relevant property information previously provided by the person as soon as reasonably practicable, or within a period, as specified in the regulations.

(4B) For the purposes of subsection (4A), ‘relevant property information’ means such information as may be specified in the regulations relating to—

(a) any residential tenancy under which the person is the residential landlord;

(b) any dwelling which is proposed to be marketed for the purpose of creating a residential tenancy under which the person will be the residential landlord.”—(Matthew Pennycook.)

This enables regulations made under clause 62 (landlord redress schemes) to require a person on applying to join a landlord redress scheme to provide certain information about residential tenancies of which they are the landlord, or dwellings that will be marketed for the purpose of becoming residential tenancies of which they will be the landlord. There is also a separate duty to notify the scheme administrator of any changes to such information.

Clause 62, as amended, ordered to stand part of the Bill.

Clauses 63 to 71 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 72 ordered to stand part of the Bill.

Clause 73

The database

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

[The Chair]

With this it will be convenient to discuss the following:

Clauses 74 to 83 stand part.

Clause 87 stand part.

[Matthew Pennycook]

I turn to the private rented sector database provisions. Clauses 73 to 83 and clause 87 set the framework for establishing a database and the functions required for its operation and maintenance. The database has the potential to be transformative in the regulation of the sector, and I know there is a huge amount of interest across the Committee in that regard. The database will record the details of private landlords and their properties that are currently, or will be, let as a residential tenancy.

Clause 73 introduces the legal basis for the database to be created and maintained. The database will allow local authorities to build up a detailed picture of the private rented sector in their areas. It will support improvements in health and safety standards by increasing the intelligence available to local authorities. Landlords will be required to register on the database. The registration process will ensure that landlords are aware of their legal obligations and allow them to demonstrate their compliance.

Renters will be able to use the publicly available information to understand more about a landlord or a rental property. That information will increase renters’ confidence when deciding whether to rent a property. The information on the private rented sector database will support the Government in developing a richer understanding of the sector to inform future policy. The database will be key to the successful implementation and enforcement of the wider reforms legislated for in the Bill.

--- Later in debate ---

[David Simmonds]

I have a few questions and would be grateful for the Minister’s response. In this chapter of the Bill, the regulations will clearly do a lot of the heavy lifting on what the database is like and what the tenant and landlord experience will be. First, how will the proposed database interact with the existing selective licensing schemes that a number of local authorities have in place? In the regulations, will the Government draw on the learning from the existing schemes to inform the database’s operation? It is not entirely clear how it will interact, given the different regimes in Wales and Scotland that the Minister has announced. Again, I do not necessarily expect him to answer those questions straightaway, but it would be helpful to know, particularly given that a different enforcement regime will apply in Wales.

It is also not entirely clear what the Government’s thinking is about the geographical extent of the database and the way in which it will be designed. Given that designated local authorities will be enforcement bodies, will it operate in the same way as, for example, existing children’s social care databases? Will it be maintained by individual local authorities, but in a connected way so that we can extract data from it? Will there be a single national database or an England-wide database? I appreciate that the answers to some of those questions will result from the process of engaging with the market on who the provider will be. We know, from examples where such policies have been successful or gone badly wrong, that there are significant risks to the effectiveness of the Bill if we do not get this right. It would be helpful if the Minister could address those points, either now or later in writing.

[Matthew Pennycook]

I am grateful for the opportunity to provide some clarification, particularly on selective licensing, because I know that is a source of interest to many Members.

The Government are clear that selective licensing and the private rented sector database have different purposes. The database is not designed to replace selective licensing. Unlike the database, selective licensing schemes aim to target specific local issues in specific local geographies by enabling more intensive practical enforcement strategies. We believe that selective licensing is a valuable tool when used appropriately and combined with other measures. It enables local authorities to drive better outcomes for local residents, tenants and responsible landlords.

What is important, and what we are committed to doing, is ensuring that the use of selective licensing complements and is aligned with the new private rented sector database. There is some important work to do, which we are already engaged in, to refine the way the two systems will work together once they are both in force.

The shadow Minister asked me a reasonable question about the geographical extent of the database. I will come back to him on that specific point, particularly in respect of how it interacts with the rental discrimination provisions in the Bill, given our previous discussions on their application in Wales and Scotland.

[Mr Amos]

Clause 75 deals with the making of the database, and I want to raise the importance of its content. Had I been quicker off the mark and more used to the procedures, there would be an amendment before the Committee that I would speak in favour of, but it is absent—time ran away.

Will the Minister comment on the importance and potential real value of the database, depending on the information that it carries? The Liberal Democrats want to see the Bill include: the accessibility of the property for disabled people; whether enforcement action has been taken against the landlord; the energy performance certificate rating of the property, so that people have some idea of how expensive it will be to heat and live in; and, crucially, the rent that was paid in the first tenancy.

As I said the other day, we firmly believe that market rents are often inaccurately described and arrived at, by virtue of looking at advertisements. I appreciated the points the Minister made the other day in response, but none the less it remains the case. As I also said the other day, we believe that the cost of interest is the bigger driver of landlords’ costs, rather than inflation, and it should be a better proxy for limiting rent increases. Even without that, a database with the actual rents paid could be an enormously powerful tool for both renters and landlords, as well as the market generally. More information makes for a better marketplace and will hopefully improve the lot of landlords and tenants. We particularly wish to see all those features in the register and believe that would enhance the market.

The other day, in relation to whether the Bank of England rate was a relevant proxy for landlords’ costs, the shadow Minister said that the commercial interest paid by landlords was more important, but there is a relationship between the Bank of England base rate and the commercial rates of interest paid. It is the key driver of commercial rates of interest.

My main point is that having on the register the rent, including the level of the last increase in rent, would be a really important and powerful indicator. We wish to press for the details I have outlined to be on the register. If I had been quicker off the mark, there would be an amendment before the Committee.

[Matthew Pennycook]

I will say two quick things. I remember probing the previous Minister about this issue during the debate on the previous Government’s Bill, because I thought it was worth teasing out. In general, we did not want to be too prescriptive with what is on the face on the Bill in terms of the frameworks, because we need to strike a balance between the primary legislation and the flexibility for the details of the database to be developed in secondary legislation, so that we can respond to any evolutions in the sector and technology. We do not want to be too prescriptive on the face of the Bill.

In response to the call from the hon. Member for Taunton and Wellington for particular data to be included on the database, I draw his attention to my previous comments, which I think I made in the third or fourth sitting, about the potential for rents to be included. I am extremely sympathetic to that. Other information could potentially go on the database that might show patterns of behaviour on the part of landlords that would inform tenants’ choices. At a minimum, we want the database to include information about private landlords, the homes they rent out and how those homes are managed. I want debate with hon. Members about what goes on the database, but all the detail, as I am sure the hon. Gentleman will appreciate, will come forward in secondary legislation. At that point, the hon. Gentleman or his colleagues will be able to have a further debate and discussion on those matters.

[Mr Amos]

I am new to the procedures of Parliament, but I understand that some regulations are more easy to debate than others. Is the Minister saying that it will be possible for Liberal Democrat Members to debate the regulations when they come forward?

[Matthew Pennycook]

I am making no specific commitment, but such is the significance of the regulations—they will provide all the detail for how the service will work in future—it would not be a cursory debate.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clauses 74 to 83 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)