Private Landlords and Letting and Managing Agents (Regulation) Bill

Philip Davies Excerpts

Friday 25th October 2013 Commons Chamber

[Sir Alan Meale (Mansfield) (Lab)]

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

It is a pleasure and an honour to present the Bill. Members may ask why I have presented this particular Bill. It is because of my concern about the need to reform the private rented sector so that it works for all, not just the few who are currently abusing the system. That is sorely needed for the following reasons.

In England, there are now more than 9 million people, including more than 1 million families with children, renting privately. Those are two truly amazing figures. I say at the outset that I believe the private rented sector has an important role to play in meeting housing need. Indeed, it is an essential ingredient in doing so. Yet today in Britain, as a result of the biggest housing crisis in a generation, more and more people are being locked out of home ownership because of rising costs and are instead looking to find their home in the private rented sector. They do that at a time when, as Members will know, the housing crisis continues to worsen considerably. The situation is caused by a number of factors, not least our growing population. So far during this Parliament, home completions are at their lowest level since the 1920s when Stanley Baldwin was in No. 10 Downing street and King George V was sitting on the throne.

We are now approaching winter. Homelessness and rough sleeping are on the up, and have risen by a third since the 2010 general election. I pay tribute to many organisations such as Shelter, Framework, which is in my area, and others who work tirelessly to ease the plight of people caught in that situation. Needless to say, such organisations should be supported in their important works, which cover a range of issues.

As the housing situation worsens, people continue to struggle deeply to own their own properties, with average house prices now eight times wage levels. It takes more than 20 years for low and middle-income families with children to save enough for a deposit. Last but not least, rents are ever rising in the private rented sector, and are now moving to unaffordable levels, with many young people not even earning enough to pay their rent.

[Philip Davies (Shipley) (Con)]

I agree with the hon. Gentleman about rents being high, but does he accept that if landlords were forced to pay to be on a register, as he envisages in the Bill, the only possible consequence of that would be for rents to go up even faster?

[Sir Alan Meale]

I will deal with that point later.

On people’s inability to pay rent, last weekend The Observer revealed that rents are at an all-time high, with the average private sector tenant now paying £757 a month. I outline that because the situation is likely to worsen considerably. According to the Office for National Statistics, property prices up to August 2013 rose on average by 3.8%, with the average UK home now costing £247,000. For young people with families who need a 5% deposit, that equates to around £12,350—more than some of them earn.

As we know, most people dream of owning their own home, and like Members across the Chamber, I want people to realise that dream. Today, however, more people are finding themselves in the private rented sector for longer than in years gone by. I want a strong and thriving private sector, but evidence shows that too many tenants are being ripped off by unscrupulous letting agents, and hit by extra rip-off fees that they did not know they would face and cannot afford. People are plagued by rogue landlords and poor standards.

My Bill proposes, first, to tackle those problems head on by establishing a mandatory national register of private landlords. Secondly, it would liberalise selective licensing schemes so that local councils do not have to go through so much red tape if they see the need for such a scheme in their area. Thirdly, it would introduce greater regulation of private sector letting and management agents, and fourthly it would require all tenancy agreements entered into with private landlords to take the form of a written agreement.

My Bill seeks those things because at the moment the private rented sector is not the market it should be or needs to be. What is wrong with the current lettings market? Evidence shows that too many tenants are being ripped off by unscrupulous letting agents who fail to protect them, while also charging exorbitant and opaque fees. As evidence from the House of Commons Library shows, and as the Government have admitted, there is currently no overarching statutory regulation of private sector letting or management agencies in England, or any legal requirement for them to belong to a trade association.

--- Later in debate ---

[Philip Davies (Shipley) (Con)]

Let me begin by referring Members to my entry in the Register of Members’ Financial Interests. I let a property in London. As a result of the changes that were made in the arrangements for Members’ expenses, I am now accidentally but technically a landlord, as are many of my colleagues. However, I also rent a property, so, as both landlord and tenant, I see both sides of the coin. I should point out, for good measure, that managing agents are involved as well. I am not entirely sure where that leaves us in relation to my interests, but I thought it worth putting on the record.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The hon. Gentleman is being very open about his own dealings. Does not the fact that he, by accident, has ended up as a private landlord constitute good evidence of the need for regulation?

[Philip Davies]

It does not surprise me that the hon. Gentleman has drawn that conclusion, but I, as a Conservative, have drawn the opposite conclusion, and I hope to explain why at some point in my speech.

I must apologise to you, Mr. Speaker, to the hon. Member for Mansfield (Sir Alan Meale), and to the Minister, the shadow Minister, and all other Members who will participate in the debate. I am afraid that I may have to leave early. I have no idea how long the debate will last, and I may well be here for its entirety, but it is equally possible that I shall not. I am hosting a lunch in one of the Dining Rooms. If I do have to leave before the end of the debate, no discourtesy is intended.

I congratulate the hon. Member for Mansfield on presenting the Bill. As he knows, I am a great admirer of his: in fact, I might even be so bold as to consider him a friend of mine. He may not see it in those terms, but I certainly do. He is a good man, and he has a long track record of bringing important issues to the House and representing his constituents in Mansfield to great effect. I have absolutely no doubt about the sincerity of his case, and I commend him for that. We tend to agree on matters relating to horse racing, and perhaps we would have been better off sticking to that subject today—we could have secured cross-party agreement—but the hon. Gentleman knows as well as I do that when we leave the subject of horse racing our views tend to diverge, quite widely on occasion, and this, I am afraid, is one of those occasions. He will also know, however, that my opposition to the Bill is not directed at him personally, and that my admiration for him has not been diminished by the fact that I happen to disagree with him on this issue.

One problem has, I think, affected us all. I know that the Procedure Committee is considering making changes to the private Member’s Bill system—most of which are not desirable in my book—but, as far as I am aware, this Bill was printed only yesterday. It has been very difficult for some of us to understand all its complexities, given that we have been allowed such a short period before being invited to analyse and scrutinise it, although I am sure that if I have misunderstood any aspects of it, the hon. Member for Mansfield will pull me up. Moreover, I am not aware of the existence of any explanatory notes. The hon. Gentleman may say that none are needed because the Bill is self-explanatory, but I feel that some explanation of the Estate Agents Act 1979, and other related legislation covered by the Bill, might have helped. It might be handy in future for Bills to be accompanied by some form of briefing for Members to read beforehand. That would enable us to know exactly where we stood.

[Sir Alan Meale]

The delay in the printing of the Bill was due to the fact that negotiations had been proceeding for some months with a variety of organisations and individuals to establish how we could best persuade the Government of the need for such a Bill. I have already mentioned a range of those organisations and individuals. Indeed, we approached the Department for Communities and Local Government itself to establish whether it felt able to accept any of the proposals in the Bill. As the hon. Gentleman knows, a Bill should be printed up to two days before a debate on it takes place, but there was never any thought of our trying to keep this Bill secret from Members. The delay was caused by the fact that we were trying to negotiate at the last minute.

[Philip Davies]

I am sure that the whole House is grateful to the hon. Gentleman for that helpful clarification. I intended no criticism of him; I was simply making the point that if I had misunderstood any aspects of the Bill, I would perhaps be forgiven because we had been given such a short time in which to look at the detail beforehand. I know the hon. Gentleman well, and I knew that there would be a good reason for the delay. I certainly knew that he would not want to hide his light under a bushel. He has never done that in the past, and I had no reason to believe that he was trying to do it on this occasion.

There seems to be some kind of dispute among us about the amount of legislation and regulation that currently applies to the private rented sector. The hon. Gentleman used the word “unregulated”, and I thought I even heard him use the term “wild west”. However, what concerns me is not a wild-west-style lack of regulation in the sector, but the possibility that there is too much regulation. According to industry experts, there may well be more than 100 pieces of legislation and more than 400 regulations governing the private rented sector. I think that would sound like an awful lot of legislation to most people, and it certainly does to me. If all that does not satisfy those who want to control and regulate everything, I am not entirely sure that this extra piece of legislation is likely to satisfy them either.

The problem is that the left in politics always want to regulate something. They always want to interfere in something. They cannot help themselves: it is their natural state of being. They will not be happy until everything is regulated, or, in some cases, strangled to death, if they do not much like the industry concerned. I wonder why on earth, in 2013, we suddenly need a national register of landlords and the regulation of letting agents. This sector has been going strong for years, and we do not seem to have encountered massive problems. I understand the points that the hon. Member for Mansfield has made, but the Bill seems to me to be a sledgehammer to crack a nut. The hon. Gentleman himself said at the end of his speech that he wanted to tackle only the small minority of people who were causing a problem. It strikes me as bizarre to assume that the best way of tackling a very small number of people who, in the hon. Gentleman’s view, are causing a problem is to impose mass regulation on everyone, regardless of whether—even in his view—they are good landlords.

[Sir Alan Meale]

As the hon. Gentleman knows, I am not a great one for red tape, and regulation is not really my scene. The term “wild west” was actually used by the Royal Institution of Chartered Surveyors, and the Association of Residential Letting Agents also supports the Bill. Last but not least, I refer the hon. Gentleman to the numbers involved. In England alone, there are 4,000 unregistered letting agents, and a huge number of people have expressed dissatisfaction with the treatment that they have received. The hon. Gentleman should note all the comments that have been made by organisations such as Which? and Shelter. We may be talking about a minority, but it is a significant, indeed a large, minority. I want to regulate it, and to professionalise the market so that it operates better for the people whom we serve.

[Philip Davies]

I understand that the bodies concerned have that view, and there may be a reason why they hold that view, but if Opposition Members think 100 pieces of statutory legislation and 400 regulations amount to a wild-west situation, I shudder to think what they have in mind for proper regulation of the sector, because it seems to me to be excessive as it is.

In a report for the Residential Landlords Association, Professor Ball noted:

“Housing in general and landlord-tenant relations specifically are subject to a wide-variety of housing, health and safety, planning, social policy, and environmental legislation. This has all developed in a haphazard, uncoordinated manner over many decades. Once in place, repeal is rare. Moreover, the cost-effectiveness of many requirements was never assessed when the measures were implemented nor have recent ones been reassessed after several years in place.”

That goes to the heart of the subject. The sector’s wide-ranging set of rules, regulations and legislation, which has developed in a piecemeal and haphazard fashion, is difficult for landlords to deal with, and a much more simplified set of regulations may well be better.

The Communities and Local Government Committee did a report on the private rented sector recently and its very first recommendation was entitled “Simplifying Regulation”. It said:

“We recommend that the Government conduct a wide-ranging review to consolidate legislation…with the aim of producing a much simpler and more straightforward set of regulations that landlords and tenants can easily understand.”

That seems to me to be a sensible suggestion. What it recommends flies in the face of what the hon. Member for Mansfield is seeking to do, which is make things more onerous, more complicated and add yet another layer of regulations on landlords.

[Mr Nuttall]

While I think the Government are generally on the right track in respect of regulating the private rented sector, in their response to that report they have indicated that they are not sympathetic to the idea of simplifying the regulations that govern the sector. Is my hon. Friend as disappointed as I am about that?

[Philip Davies]

My hon. Friend makes a good point, and we look forward to hearing from the Minister where the Government stand on all this—which side of the fence they are on, and whether they merely wish to maintain the status quo.

I should say that I welcome the Minister to his position—it was a terrible oversight that I did not do so at the start of my speech. We congratulate him and we all have extremely high hopes for him. He might not be on my particular wing of the coalition but he is a good man and we have not given up hope in him yet. We hope he is going to prove his mettle today with a robust libertarian speech—we can but hope. [Interruption.] He says “liberal” but in my experience the Liberal Democrats is one of the most illiberal parties in Parliament. We have high hopes that he will prove us wrong today, however. My hon. Friend the Member for Bury North (Mr Nuttall) is right, and I hope the Minister will be able to offer him some comfort.

Professor Ball also made the point that much simplification could be achieved without legislation through the encouragement of common and overlapping positive practices among local authorities and through the setting up of websites dedicated to simplifying the burden of compliance, and that improving the performance of regulatory agents in achieving commonly agreed goals is as important as less bureaucracy.

As Professor Ball makes clear, therefore, an awful lot can be done to improve what we have in place at the moment. When regulation that is in place fails, the conclusion that many draw, particularly on the other side of the House, is that more regulation is needed. Actually, when regulation has been introduced and it has failed, that is an argument against more regulation, and it offers up the possibility that we should be doing something different.

The Select Committee report also states:

“The first step towards promoting awareness and understanding”

of the rights and responsibilities of parties in the private rented sector

“must be to have in place a clear and easy-to-understand regulatory framework…Professor Martin Partington, a former Law Commissioner, stated that housing law was ‘but one example of many policies being developed over decades, being implemented through myriad legislative enactments, leaving a mass of often unnecessary, certainly over complex legislation that does not work efficiently’.

The complexity of the regulation led some of those providing evidence to call for a simplification of the law.”

That evidence from a variety of sources is pretty striking, yet this Bill seeks to go in exactly the opposite direction. It proposes more laws and regulation, which will only make the problems that the Select Committee identified even worse.

I do not know about the hon. Member for Mansfield—or you, Mr Speaker—but the people with housing concerns who come to my surgery rarely complain about the private rented sector. Almost everybody who comes to my advice surgery to complain about housing is complaining —time after time—about social housing providers. In terms of the experience of tenants, that is where the biggest problem lies.

[Mr Slaughter]

I think the hon. Gentleman should get out more in his constituency. I am sure it has a private rented sector, although it may not be as big as in some London constituencies, and the conditions in that sector are far worse than in the social housing sector. I suspect that if he does not get complaints, it is because people think they can get redress through him if not directly through their social landlords, whereas those with private landlords are often banging on a closed door.

[Philip Davies]

I am grateful for the hon. Gentleman’s advice, but I am not entirely sure when he became such an expert on the Shipley constituency. Perhaps he is spending more time there than in his own constituency because he seems to know what the issues are in my constituency better than I do, and I will have a chat with him in the Tea Room later to seek his advice about what the people of Shipley, Bingley, Baildon and other nearby villages have been telling him.

[Sir Alan Meale]

I well appreciate the avenue the hon. Gentleman is going down, but he must accept that there are rogue landlords out there. Just a short while ago, he and I—he in particular—helped to raise considerable funds after people died in a fire in Malton in North Yorkshire. They died in that property because the landlord was a terrible landlord. There was no escape route and we raised the money to rebuild that property and make sure all the fire escapes and everything else were built into it. These rogue landlords do exist. Some 73% of people are dissatisfied with letting agents, and so on. The Bill seeks not to burden us with bureaucracy, but to shed a light on this area and ensure that the basic, decent things are done so that people can have a good home.

[Philip Davies]

I am glad that the hon. Gentleman has highlighted another area where we have worked together: raising money for the part of North Yorkshire where that sad event took place. The point I was making was not a matter of opinion, however; it was a matter of fact. The vast majority of complaints I get in my constituency about landlords are about social housing providers, not private sector providers. I was offering that up not as an opinion but as a fact. We should perhaps focus on what social housing providers are doing incorrectly.

There is one respect in which I have a lot of sympathy with the hon. Member for Mansfield, and that is on his point about antisocial behaviour; he is on to something there. Again, this is from personal experience—from speaking to people in my constituency, including those who come to see me at my surgery. Getting antisocial behaviour dealt with by a social housing provider may well be a far-too-long—incredibly long—and tortuous process, but I have evidence to suggest that social housing providers take the issue seriously, as do the local police. In my constituency, there has been some terrible antisocial behaviour by tenants in the private rented sector, but the problem is that as long as a tenant pays the rent and keeps the house in a decent manner, the landlord, who may live in another part of the country, or a different country, is not really that bothered about the tenant’s antisocial behaviour in the local community. There is an issue about landlords’ responsibility for dealing with their tenants’ antisocial behaviour, and for helping the local community by being inclined to help have tenants evicted, if there is evidence to suggest that they are causing a menace.

[Jacob Rees-Mogg]

(North East Somerset): I am grateful to my honourable and almost dirigiste Friend for giving way. I wonder whether it occurs to him that it is easier for private landlords to remove antisocial tenants, because under assured shorthold tenancies it is relatively easy to remove people. It is therefore swifter in the private than in the public sector.

[Philip Davies]

I absolutely agree, as ever, with my hon. Friend. If private sector landlords are minded to evict a tenant, it is easier for them to do so; he is right. Perhaps he has put his finger on what would help social housing providers to evict problem tenants quicker: less regulation, rather than more regulation. The situation that I am referring to—I do not know whether the hon. Member for Mansfield has this in mind—is one where the private landlord has no interest in evicting the person causing the problem, because that person is paying the rent on time and is not causing havoc in the house. The landlord is quite happy; why would they go through the hassle of trying to find a new tenant to replace someone from whom they are getting a steady income?

[Jacob Rees-Mogg]

The vision is of an antisocial tenant who causes a nightmare for his neighbours, but the one thing he does properly is pay his rent and look after the house. That is not likely to be true in most cases. People who are antisocial in their behaviour are antisocial generally, not just to their neighbours, so in most cases the landlord is likely to have a strong incentive to act. To legislate for the exception is a mistake that my hon. Friend normally guards against.

[Philip Davies]

My hon. Friend is right; I do not disagree with anything that he said. The point I was making is that the hon. Member for Mansfield is on to something, and there is a potential issue here. I say that only because the issue has arisen, and been raised with me, in my constituency; that is why I am aware that this can be a problem.

[Mr Slaughter]

I am with the hon. Gentleman on this; it is a very common problem. It occurs where, for example, local authority properties have been sold and are then rented out regularly for maximum income. Often there is nuisance; it could be leaks, noise—anything. However, the rent is paid, perhaps by housing benefit. Severe nuisance is caused, and that is because the landlord is a bad landlord—a landlord who is not living up to his obligations. That is exactly the type of landlord the Bill is designed to address.

[Philip Davies]

What the hon. Gentleman says may be right. The issue that flows from that is: what should be done? My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) is very wise, as ever, in guarding against introducing knee-jerk legislation to deal with what may be a minor issue. I am not suggesting that I know the answer to the problem; I am merely highlighting the fact that I have found this to be an issue in my constituency, so I believe that the hon. Member for Mansfield is on to something. As to whether his Bill is the right vehicle for dealing with it, I have grave doubts about that. It is not a Bill that I could support. I am merely acknowledging, in the spirit of consensus that I hate so much, that on this particular point, his suggestion has something to recommend it.

Regulating is clearly something that Opposition Members are itching to get on with, as we might expect. Only last week, the hon. Member for Islington North (Jeremy Corbyn) proposed a ten-minute rule Bill

“to provide for the regulation of letting agents; to protect tenants’ deposits; to require the enforcement of environmental and energy-efficiency standards in private-sector rented accommodation; to amend the law on secure tenancies; to provide for fair rent to be applicable to all rented accommodation; to require landlords not to discriminate against people in receipt of state benefits; to require local authorities to establish a private rented sector office; and for connected purposes.”

The Bill proposed by the hon. Member for Mansfield is not quite as bad as the one proposed by the hon. Member for Islington North, as we all might expect. Still, we can see the general direction in which Opposition Members are trying to go.

Then there is the Letting Agents (Competition, Choice and Standards) Bill, which was introduced as a ten-minute rule Bill on 2 July this year by the right hon. Member for Wentworth and Dearne (John Healey). I think that we should all acknowledge that he is an expert in this field; he was a Housing Minister in the last Government, and he is also the director of my local social housing provider, Incommunities. His Bill was

“to establish a national mandatory licensing scheme for letting and managing agents, with established standards and redress for landlords, tenants and leaseholders, and prohibition of letting and management agent fees; to enable local authorities to administer and enforce the scheme; to require that tenants, landlords and leaseholders have written agreements; and to empower local authorities, either alone or in partnership, to trade as letting and managing agents.”

That is three Bills not just in this Parliament but this year, covering pretty much the same ground, with nuances here and there. They have their differences, but they have one thing in common: they all involve more regulation for the sector.

[Mr Slaughter]

What is wrong with written tenancy agreements? They give certainty; they mean less litigation; they mean that landlords’ and tenants’ rights are clear; and they mean less money for lawyers—and I say that as a housing lawyer. Why would that be an increase in regulation, rather than a way of cutting through bureaucracy and the wasting of money?

[Philip Davies]

The hon. Gentleman has shown the true face of the Labour party. He cannot understand that a requirement on somebody is more legislation and more regulation. He seems to think that requiring someone to do something that they are not currently required to do does not mean more regulation and legislation. Of course it does. I am not aware that anybody has said they think that written agreements are a bad thing. The hon. Gentleman falls into the typical socialist trap of thinking that just because he believes that something is a good idea, we must impose it on everybody, regardless of whether they think that it a good idea and want it. In effect, he thinks that he knows best what everybody should do, and that he should impose his view of the world on absolutely everybody. He is clearly a socialist, so of course he believes that. I am not a socialist, so I do not.

[Jacob Rees-Mogg]

Is it not the case that if we enforce written agreements, we give more jobs to lawyers—we have enough lawyers in this country already—and increase the expense for the people participating in an agreement, who may be great friends and may feel that they do not need reams of legal protection?

[Philip Davies]

I have great sympathy for my hon. Friend’s view. I agree. I am not sure whether the hon. Member for Hammersmith (Mr Slaughter) wishes at this point to declare his profession in the legal world or otherwise. He is welcome to do so.

[Mr Slaughter]

I have already done so. The point I was making is that tenancy agreements would mean less work for lawyers. Lawyers make money where there is uncertainty. The example of friends who think they can make an oral agreement is exactly the sort of case that often leads to the worst type of litigation because there is no clarity and it is all a matter of interpretation, implied terms and what was said and done at any particular time. A written agreement is a way to clarity and simplicity in these matters. It means less money spent and less time in court. I do not know why the hon. Gentleman cannot see that.

[Philip Davies]

I have the disadvantage in this debate of not being a lawyer. Some people might say that it was an advantage not to be a lawyer in this place, but on this narrow point it may well be a disadvantage. I certainly concede the hon. Gentleman’s expertise in this field, but as a layman, I am not aware that written agreements are always clear or that there is no need for solicitors or lawyers to be involved in anything covered by a written agreement. Virtually every written agreement at some point leads to some kind of confusion and dispute, and the lawyers are there, as ever, to pick up the pieces. I do not accept the hon. Gentleman’s assertion that just because we have a written agreement, we do not need any lawyers to be involved. It is quite the reverse, I often find.

[Mr Nuttall]

One of the objectives of the Bill is to try to create a regime that protects tenants. An unintended consequence of a requirement for every tenancy agreement to be in writing is that there is a danger of an increase in sham tenancy agreements, where unscrupulous landlords may require the tenant to sign a written agreement which sets out less onerous obligations on the landlord than would be required under law.

[Philip Davies]

My hon. Friend makes a very good point. People who are itching to get on with such regulation ought to bear it in mind that that may have unintended consequences which end up leaving those they are trying to help in a worse position than they would otherwise be in. We should all bear that in mind.

My hon. Friend also hits on a more general point. When regulations and legislation are imposed on landlords, it is the good ones who tend to be penalised. Good landlords seek to do everything that is expected of them and go out of their way to meet all their obligations, no matter how onerous. They are not the ones causing a problem, whereas landlords who do not have the same moral scruples are encouraged to operate outside the law. They have already shown that they are not keen on doing the right thing. Why would they all of a sudden be keen on doing something because the Labour party has insisted that they do it? The world does not work like that. We could end up with tenants being in a far worse position.

[Mr Slaughter]

I want to be sure that I have understood the hon. Gentleman. He is saying that the reason for not imposing terms on landlords is that they might then invent contracts which give less power than statute would give, which would be void in any event because landlords would not be able to derogate in that way. If that is the hon. Gentleman’s best argument, it would probably be better for him to give up now.

--- Later in debate ---

[Philip Davies]

The hon. Gentleman is entitled to his opinion, but he has not yet come up with an argument that I have been persuaded by. It seems that I have not come up with one that he is persuaded by, and neither of us is surprised by that state of affairs. We can move on knowing that the status quo has been maintained. I agree with very little that he ever says, and he agrees with little that I ever say. That is because he is a socialist and I am not. That is the essence of democracy. I hope the people of Shipley will continue to resist the advances of socialism that the hon. Gentleman wishes to inflict upon us, even though he seems to know more about the Shipley constituency than I do.

With reference to the interest taken by the hon. Member for Mansfield in the subject, I looked at the database of early-day motions on the Parliament website, which I commend to everybody as a great resource. I do not know whether the hon. Gentleman is aware that he signed 1,787 early-day motions during the 2010-12 Session. That goes to show what an assiduous Member he is, as we who know him well are aware.

[Sir Alan Meale]

The hon. Gentleman no doubt realises that some of those early-day motions were tabled by him. What is wrong with signing an early-day motion? It is a notice board, a window of opinion, which other Members use as he does. That shows activity in this place.

[Philip Davies]

rose—

[Mr Speaker]

Order. We cannot have a Second Reading debate on the merits or otherwise of early-day motions. Although the signing proclivities of the hon. Member for Mansfield (Sir Alan Meale) may be a matter of some interest, it is not obvious that they are a source of illumination as regards the Bill, upon which I know the hon. Member for Shipley (Philip Davies) intends, with whatever reference to early-day motions, to focus his remarks.

[Philip Davies]

You are right, Mr Speaker. I certainly would not have mentioned early-day motions if they were not relevant to the Bill, as I hope you appreciate. The hon. Member for Mansfield misunderstood my point. I was commending him for signing so many early-day motions. It is a sign of how active he is as a Member of Parliament and I am grateful for the support that he has given me in the past.

The point that I was coming on to, which I hope Mr Speaker will agree is relevant, is that one early-day motion that appeared to escape the hon. Gentleman’s notice was No. 233, which was entitled “Regulation of the private rented sector”. It was tabled by the hon. Member for Edmonton (Mr Love) and had a great deal of support from the usual suspects, like the hon. Member for Islington North. It stated that the House

“notes with concern the Government’s decision to abandon plans for a national register of landlords and further regulation of the private rented sector; recognises that the private rented sector plays a significant role in supporting the housing market in the UK; believes that rogue landlords and letting agents continue to pose a threat to consumers in the private rented sector; further notes the statistic from the Office of Fair Trading that the number of complaints against rogue landlords and letting agents is on the rise; and calls on the Government to bring forward proposals immediately to create a national register of landlords and to propose further regulation of landlords and letting agents in the private rented sector.”

In relation to the views of the hon. Member for Mansfield, it seems to me that that early-day motion was very much on the money, but it was not among those that he signed. Perhaps he can tell us whether he just did not notice that one—so many are tabled that we cannot notice all of them, and I certainly miss them from time to time, as I am sure we all do—or whether his interest in the subject has been sparked more recently, whereas early-day motion 233 was tabled earlier in this Parliament. It was interesting to note that he had not signed it, given that it seems highly relevant to what he is trying to impose on us today.

Clause 1 would establish a mandatory national register of private landlords. That raises a number of questions about the purpose of such a register. What would it be used for? Who would use it? What would be achieved by such a register? Who would administer it? In subsection (2), a duty is

“placed on all private sector residential landlords to sign up to the Register, and to pay an annual registration fee and provide all the information prescribed in regulations by the Secretary of State as required in the Register.”

I have many concerns about that. The payment of an annual registration fee, which appears to be dictated by whoever is appointed or by the Secretary of State himself, seems to open up landlords to an unlimited cost.

What control will there be over the registration fee? The hon. Gentleman made it clear in his speech that he did not see such a fee resulting in any cost to the taxpayer, which must mean that he expects the whole cost to be covered by the landlord, presumably through their registration fee. However, as we all know, with any kind of bureaucracy we always end up with a narrow focus. I think the hon. Gentleman himself referred to envisaging a light touch, but such measures seldom end up as light touch. They always end up with some empire building and more and more costs being added. At the end of the day, the landlord will pick up the tab. If the Bill were to be enacted, not only would they be picking up a tab, they would be picking up an unlimited tab, because the fees will be out of their control.

[Jacob Rees-Mogg]

I am grateful to my hon. Friend for giving way once again. He has been prodigiously generous. Does it occur to him, as it does to me, that this is another socialist tax?

[Philip Davies]

My hon. Friend is right. He pre-empts what I was going to say; I was going to make that very point. This is absolutely a tax on private landlords. The hon. Gentleman said that there would be no cost to the taxpayer, but that will not necessarily be the case. If a landlord is expected to pay a fee—in many cases, my cynicism leads me to suspect, perhaps an ever-increasing fee—the likely scenario is that that fee would be passed on to the tenant through higher rents. That will be how the landlord recoups the money to pay for it.

Obviously, many rents are paid by the taxpayer through housing benefit. I have no doubt that the hon. Gentleman intends that there will be no cost to the taxpayer as a result of this Bill, but he cannot guarantee that, and I would argue the exact opposite. The likely scenario is that this will lead to an increase in costs to the taxpayer through higher housing benefit payments.

[Sir Alan Meale]

Does the hon. Gentleman accept that, after the consultation process, the Secretary of State will determine what such a register should hold and what the fee should be, so he will have a handle on this and be able to control it? There is no question that it will cost the taxpayer money in any way, shape or form.

[Philip Davies]

I hear what the hon. Gentleman says, but I am simply not persuaded. There will be a cost to somebody, and it seems inevitable that some of that will be passed on to the tenant—and the taxpayer pays for an awful lot of tenancies. I have no doubt that were the hon. Gentleman the relevant Housing Minister at the time, the fee would be small, but heaven knows what the fee might end up being if the hon. Member for Islington North got his hands on the levers of power. I have every faith in the hon. Member for Mansfield as an individual, but he cannot guarantee who will be holding the post in the future and what the consequence of that may be.

[Jacob Rees-Mogg]

It occurs to me that the fee must mean a reduction in the tax take, even if it is not added to the rent, because the fee, in the normal course of events, would be tax deductable. Assuming that the landlord is making a profit on his letting, that would come out of the tax payable to HMRC.

[Philip Davies]

As ever on these occasions my hon. Friend makes an excellent point. Therefore, we can determine quite clearly that whatever is envisaged there will be a cost one way or the other to the Exchequer.

Who will monitor the register? How will it be monitored? How will it be determined when someone becomes a new private landlord and who will ensure that that particular landlord signs up? I am not entirely sure that I can envisage how that will happen in practice. How will existing landlords be made aware that they have to sign up? How will the process of registration of all these private landlords be carried out? What about private landlords who are foreign nationals, and who own a property in the UK but do not live here? How will we go about getting them on the register? How will they be made aware that they have got to be registered? How will they be made to sign up and pay their registration fee? I simply do not understand how having a register will help the landlord. I do not understand how it will help the private sector tenant either. What incentive will there be for landlords to sign up? If we have a mass refusal of landlords to sign up, what will be done to get them to sign up? We can argue whether the concept is desirable, but it seems filled with practical issues.

If we are to go down this route, surely the hon. Gentleman would accept that there has to some kind of incentive for the landlord to sign up. There has to be some benefit for them in signing up, and the best way to ensure that is to make signing up a free choice, not to mandate people to do it. The only effect it will have on landlords is to ensure that they have the additional task of renewing their registration every year and that they pay for it out of their own pockets. As my hon. Friend so wisely suggested, this is no more than a tax. It is a tax for letting out one’s house for others to live in. I am not sure whether that qualifies it to be called a bedroom tax, but given that most people who live in these houses will be occupying a bedroom, and given that the cost is likely to be passed on to them, we can safely say that this is the Labour party’s attempt to impose a bedroom tax on the public. It introduced the spare room subsidy when it was in government, and it now seems to be trying to introduce a new tax on people.

The Bill will drive up not only rents but property prices, which are extortionate everywhere, but particularly in London. As rents go up to compensate for the cost of the register, property prices will be driven up even further.

[Sir Alan Meale]

Will the Bill not also reduce rents? What about the £350 a week for a shed in Newham? What about the 11 models who were asked to pay £400 each to share a small terraced house? What about a recent report of people having been rented out a walk-in freezer? These are all situations where people pay large amounts of money and the Bill would mean a reduction for them rather than an increase.

[Philip Davies]

I do not doubt the hon. Gentleman’s intention; I just do not see how the Bill would work like that. The problem with the Labour party generally is that it thinks people live their lives in a particular way and that no matter what it throws at them, they will continue to live in exactly the same way and just pay the levies and taxes and burdens that it imposes on them. The real world does not work like that. There is no doubt that if the renting out of property becomes too onerous and too expensive, a considerable number of people will leave the market. They just will not bother being involved in the private rented sector. I can say with some considerable certainty that that will lead not to a reduction in rents in places such as London, but to an increase in rents, because there will be fewer rental properties to go round. That is the great flaw in this socialist ideal of imposing extra regulation and charges on people. People will not stand there and take them. They will change their circumstances so as not to be bogged down by them all. There is absolutely no doubt that if the scenario envisaged by the hon. Gentleman in his Bill were to be put in place, it would lead only to a reduction in the number of private sector landlords. That can only drive up rents, and will probably drive up property prices as well, as those who are involved feel that they can get a better return on their investment. That would be not only what I would call an unintended consequence of what the hon. Gentleman seeks to achieve, but a certainty.

Another point to bear in mind is that landlords come in many guises. Often they own only one property or a small number of them. Sometimes they are accidental landlords, as I am, who either inherited properties or were trying to do something worth while by investing in property for future pension provision. They are not all big commercial landlords making vast amounts of money from renting out their properties.

If we look at efforts to keep the private housing market under control from an historical point of view, we find measures such as the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915, which introduced rent controls that restricted rents to their August 1914 levels to prevent landlords from profiteering during the war years, when demand for housing exceeded supply. Although that was intended as a temporary measure, rent control in general continued to be applied to rental agreements until 1989.

The private rented sector made up nine tenths of the housing stock in 1915, but it had declined to one tenth by 1991. It is important to reflect on the reasons for that decline in the intervening years. I suggest that rent control was one of the factors, because it reduced possible rent returns. My point is that if we introduce a system that delivers a worse return for landlords, they will just not bother letting out their properties and we will end up with less housing provision.

[Mr Slaughter]

Does the hon. Gentleman not think that the growth in owner-occupation, which was a result of rising living standards, the growth in social housing, which guaranteed decent-quality accommodation at affordable rents, and indeed the low standards in parts of the private rented sector might be reasons why the sector became less desirable and declined? I wish I could see the world through his glasses, but I do not think that many people do so.

[Philip Davies]

As it happens, the hon. Gentleman is right. I was going to say that obviously other factors were involved in the decline of the private rented sector. I am not so blind, in my intellectual dogma, that I do not see that other factors were involved, because clearly they were. Rising prosperity and the right to buy, for example, made it easier for people to buy their own homes. My point is that one of those factors was rent control. I suggest that if the hon. Gentleman cannot see past his ideological dogma and realise that rent control was also a factor, he is the one with the problem, not me.

[Susan Elan Jones (Clwyd South) (Lab)]

Following the hon. Gentleman’s argument, does he not think that the Government’s intention effectively to get landlords to police the immigration status of their tenants will also reduce the amount of private rented accommodation available?

[Philip Davies]

I am quite happy to be sidelined by the hon. Lady on that point. As it happens, I am very sceptical about that measure in the Immigration Bill. We are talking about what should and should not be the responsibility of landlords, and I have grave concerns that we are effectively making them the United Kingdom’s border police force. If the Government got their finger out and had proper border controls in this country, we would not have to put the onus on landlords, so I have a great deal of sympathy with what she says. I see that one of our distinguished Government Whips is in his place, so I will make it clear now, if I have not already—I probably have—that with regard to that particular provision my support cannot be guaranteed. That probably does not come as a great surprise, but I make that declaration now. I am grateful to the hon. Lady for allowing me to make the Whips Office aware of my reservations about that measure in the Immigration Bill, which is otherwise excellent.

Efforts were made during the course of the 20th century to stimulate the private rented sector by restricting rent control, for example through the Leasehold Reform Act 1967, which allowed previously controlled rents to be based on gross property values; through the Rent Act 1965, which introduced regulated tenancies; and through the Housing Act 1988, which deregulated rents on new lettings after 15 January 1989. Those measures were all designed to encourage investment in the private rented sector by increasing potential returns from rental income. That is because successive Governments—some of those Acts were passed by Labour Governments—realised that the best way to stimulate the private rented sector was by creating an environment in which landlords were likely to get a better return on their investment. It seems blindingly obvious to me.

The hon. Member for Mansfield said in his speech that he understood that the private rented sector was very important and that he supported it, but history shows that making terms and conditions too onerous leads to a reduction in the sector. It is only by making renting out properties more attractive to landlords that we can increase provision. There is a shortage of suitable housing in this country, so we ought to be making it easier to rent out properties to people who want them. That must be one of the solutions to our housing problems. The Bill would only make a bad situation even worse.

[Mr Nuttall]

We have heard a lot already this morning about the increase in the number of complaints arising from the private rented sector, which is one of the rationales behind the Bill, but given the enormous explosion in the number of people in the private rented sector over the past 15 years—from around 2 million in 1999 to 3.843 million in 2011-12—is it any wonder there has been an increase in the number of complaints?

[Philip Davies]

My hon. Friend is absolutely right. It is obvious that the larger the sector, the more complaints will be generated. I argue that the increase in the sector is a good thing. That might be one point on which we and Opposition Members have a difference of opinion; I see the increase in the private rented sector as a force for good, not bad.

A 2010 survey that looked at the number and type of people who are private landlords found that 89% were private individual landlords, 5% were company landlords and 6% were other organisation landlords. Those landlords were responsible for 71%, 15% and 14% respectively of all dwellings in the private rented sector. More than three quarters—78%—of all landlords owned only a single dwelling for rent, comprising 40% of the total private rented housing stock. It found that 22% of those landlords had let properties for three years or less, and two thirds—69%—had let properties for less than 10 years. Almost four fifths of all landlords in the sector earned less than a quarter of their income from letting properties in the private rented sector, and only 8% were full-time landlords.

Those statistics are important, because this kind of Bill seems to be of the opinion that the landlords we are talking about are all massive corporations that are effectively building massive profits by being bad landlords. That does not fit the facts. People in the sector may have ended up renting out property for accidental reasons; they are trying to do their best and do not expect to be bogged down with pages and pages of regulation. As we have heard, most—almost four fifths—have full-time jobs as well. A number of them may well not be making any money from renting out their property anyway.

There is a misconception behind the Bill and all the similar Bills that we have seen this year from Labour Members. It is that there are huge numbers of people making vast profits at the expense of their tenants. That does not fit the facts.

[Sir Alan Meale]

The hon. Gentleman will have heard me talk specifically about amateur landlords as he describes them. The organisations that some amateur landlords are involved in greatly support the Bill because it would give them the opportunity to learn more. They are not in it for the short-term grab of a large profit; they want the long-term return. Like him, they may have ended up being landlords through inheritance or whatever. They are not inherently bad people, but very good people. The Bill is to protect them and the long-term return on their capital. Regulation is not bad, but good—it brings properties up to the mark and stops rogue landlords giving the others a bad name.

[Philip Davies]

I am pleased that we agree on the main thrust—that the vast majority in the sector are good people trying to do the right thing, with no intention of being bad to their tenants. That is where I am coming from, and I am delighted that it is where the hon. Gentleman is coming from as well. We differ on the best way to help those people do what they are doing. I do not think that piling on extra regulation and cost is the way. He does. That is our genuine disagreement.

The consequences of such regulation would be terrible for some of those landlords. The good people, to whom the hon. Gentleman referred, might well have to sell their properties because they cannot afford the extra costs and regulation—perhaps to one of the unscrupulous landlords whom he is trying to stamp out. That would be another terrible unintended consequence of what he is trying to do. The good people are probably, by definition, not making as big a return as those who are not so good. Such a transfer of property would not be to the hon. Gentleman’s or the tenant’s advantage.

In February this year, the Office of Fair Trading concluded that the demand for rental properties was increasing. In 2010-11, the lettings market accounted for 16.5% of all housing in England, which equates to 3.6 million households. As my hon. Friend the Member for Bury North mentioned, that represents an increase from 2 million in 1999.

Government figures suggest that the number of households in England will grow by an average of 232,000 a year until 2033. There is also a general trend of increasing rental in Scotland, Wales and Northern Ireland. Meanwhile, mortgage lending has decreased following the financial crisis, so demand for properties to let may be outstripping supply. That is why it is essential that we do nothing that could lead to a reduction in the supply of private rented accommodation—all that will do is stop people having their own homes to live in.

The results of a National Landlords Association tenants survey of September last year showed that just under 37% of respondents stated that they intended to remain in private rented housing as their long-term housing solution; it seems that they are perfectly happy with their situations. Some 42% responded that they had lived in their current private rented property for more than four years, compared with only 20% who said that they had lived there for less than one year. Again, that is evidence that people are satisfied.

[Mary Macleod (Brentford and Isleworth) (Con)]

Does my hon. Friend agree that, at a time when many are struggling to get on the housing ladder, it is important that we encourage as many private rental landlords as possible to rent out properties, so that there is more choice? Availability is limited, especially in cities such as London.

[Philip Davies]

My hon. Friend is absolutely right. She knows a great deal more than me about the problems facing people in her constituency and the rest of London. As ever, she is a great champion of their needs. She clearly recognises that the last thing we want to do is choke off the private rented sector, which is what the Bill would do.

Last year, the Department for Communities and Local Government published a guide for local authorities called “Dealing with Rogue Landlords”. It illustrated many of the remedies already available to deal with what the hon. Member for Mansfield accepted was the small number of problem landlords. The document set out a wide range of powers to tackle the problems associated with criminal landlords. Those powers were enhanced by the Localism Act 2011.

There is other relevant legislation. The Housing Act 2004 allows for a housing health and safety rating system, an evidence-based system used to assess housing conditions in all residential property. That set a minimum standard for all residential properties, ensuring that they are safe and habitable. It comprises an assessment of the presence and severity of 29 hazards, including excess cold.

As a result of the 2004 Act, local authorities have a duty to take enforcement action to secure necessary improvements where those serious hazards are present. They also have the discretionary power to intervene where less serious category 2 hazards are present. To determine the most appropriate form of action, local authorities can consider the extent of the vulnerability of the persons in the accommodation.

The local authority can carry out an assessment of the home and look at the likelihood of an incident arising from the condition of the property and what the harmful outcomes may be. That seems an incredibly useful tool for what the hon. Gentleman refers to as “dealing with rogue landlords.” There is mandatory licensing of houses in multiple occupation. There is already a statutory duty on local authorities to license larger, higher-risk houses in multiple occupation of three or more storeys housing five or more unrelated persons.

Private landlords must be deemed fit and proper persons if they are to be granted a licence by the local authority. Breach of a licence condition is already an offence, subject to a fine of up to £5,000. Letting or managing a property without a licence is a criminal offence subject to a maximum fine of £20,000. There is also the additional licensing of houses in multiple occupation. Poor conditions and bad management practices can be dealt with by local authorities, which can introduce schemes subject to local consultation. There is also selective licensing—a discretionary power to license all privately rented properties in a designated area deemed to suffer from low housing demand and/or significant and persistent antisocial behaviour.

Furthermore, local authorities are required to provide a robust evidence base for introducing a scheme, and once they have introduced it they have substantial powers. There are special interim management orders to take over the management of individual privately rented properties that give rise to significant problems if landlords do not take action themselves. Local authorities can require approval from a residential property tribunal to do that, but the power is there if there are terrible landlords. There are planning contravention notices for when there may have been a breach of planning control. There are temporary stop notices, enforcement notices, stop notices, breach of conditions notices and injunctions that can be obtained from the High Court to restrain any breach. There are also powers of entry and article 4 directions. The Proceeds of Crime Act 2002 can be utilised if landlords have been using proceeds of crime in relation to local housing, and it allows specific financial investigation powers for the public sector. Lots of assets have been recovered from people using that tool.

We already have lots of legislation and regulation on the statute book that can help to deal with what the hon. Gentleman would call rogue landlords and the kinds of activities they undertake. In fact, the Department should be commended for its document, which gave people a very clear guide as to exactly what powers local authorities have. Perhaps local authorities have been unaware of what powers they have to deal with rogue landlords in the private sector. A better starting point than more legislation might be to ensure that local authorities are using the powers they already have in existing legislation to deal with the issues that he is trying to deal with.

On the register and the registrar, I do not know whether the hon. Gentleman has any idea of how much registration would cost and how much the registrar who is administering all this would be paid. Would it be a full-time or part-time role? How would the person be selected for the post? Would the role be advertised to the general public? Would it be a Government appointment? Would the landlords themselves, who were paying into this scheme, be able to appoint the person they wanted to run it? It cannot be a political post; it would need to be independent. How long would the role last for? All sorts of questions about the nitty-gritty of some of the things in the Bill need to be considered.

[Sir Alan Meale]

Does the hon. Gentleman realise that if we approve this measure, that matter would be for the Department? The Government would go out to consultation and talk to landlords and their organisations about such a thing.

[Philip Davies]

I am pleased with that clarification of how it would work. The hon. Gentleman clearly has far more trust in the Government than I do in believing they would come up with a scheme that would be acceptable. I would not wish to give them that kind of unlimited power and have no control over how they then used it.

There are already existing bodies in place, including the National Landlords Association and the Residential Landlords Association. The NLA advocates landlords accreditation as an alternative to licensing. It says:

“Accreditation is a practical solution to improving the private rented sector. Landlords provide a service to tenants and should be evaluated about what they know about the sector.”

The association requires all landlords to complete a certain level of development and to keep their knowledge of the sector up to date to remain accredited. Accreditation is backed up by a complaints process that tenants can use if they feel that their landlord is not abiding by the law. That offers a clear distinction whereby a landlord understands his or obligations. It already works with 32 local authorities as exclusive accreditation partners, and all bar three authorities in England and Wales recognise its scheme. In 2012, there were 28 complaints about members of the NLA, but no complaints about its accredited members. If the hon. Gentleman wants to go down this route, perhaps he could look at what is already in place and build on the existing work that is being done by the NLA, which seems to be working well.

[Mr Nuttall]

Does my hon. Friend share my concern that if a national registration and regulation scheme were introduced, all the individual schemes that the various landlords associations have would wither on the vine and we would just have a nationalised system rather than a system of several very good schemes?

[Philip Davies]

My hon. Friend is absolutely right. There would be no point in still being part of those schemes. Who is to say that the nationalised scheme, as he puts it, would be any better than them anyway? The numbers suggest that they seem to be working particularly well, and we should be encouraging them rather than discouraging them.

The hon. Gentleman may well say that accreditation is no substitute for proper enforcement against rogue operators, and I think the National Landlords Association would say the same, but we should reflect on the work that it does. We also have the Residential Landlords Association, which says:

“We remain unconvinced by calls for a national registration scheme since those landlords that genuinely cause the problems will not make themselves known under any system.”

We should bear that in mind. It continues:

“A policy is therefore needed which ensures that local authorities are freed up to search for and ban from the sector those operating under the radar whilst enabling the majority of good landlords to operate under an industry run accreditation scheme.”

That is the nub of where the hon. Gentleman and I disagree. He is trying to impose something on everybody to deal with a small number of people who are causing a problem; in my view, we should focus on the small number of people who are causing the problem and tackle them under all the existing laws and regulations. If he wants to enhance those powers, he can come back and put the case for that, but let us not target absolutely everybody with this scheme.

[Andy Sawford (Corby) (Lab/Co-op)]

I am surprised that the hon. Gentleman cites the Residential Landlords Association as being against the measures. It clearly told the Communities and Local Government Committee in its written evidence, and supported it in its oral evidence—I was at the session—that it is very much in favour of compulsory control of letting agents. It said that it is concerned

“that the local authority landlord and letting accreditation schemes are extremely light-touch in terms of consumer protection”.

It praised the Welsh legislative proposals to regulate letting agents and landlords and urged the Committee to propose that to the Government. I am therefore very surprised at what the hon. Gentleman says.

[Philip Davies]

I can only suggest that the shadow Minister speaks to the association and clears up any misunderstanding. I can do no better than to quote its exact words, which I repeat so that there is no doubt:

“We remain unconvinced by calls for a national registration scheme since those landlords that genuinely cause the problems will not make themselves known under any system.”

That is a perfectly clear statement by the Residential Landlords Association. If he thinks that its view is different, then perhaps he should take that up with it to clarify its position. I do not speak for it and am not trying to do so; I am merely quoting what it has said.

The Select Committee’s recent report also dealt with the issue of alternatives to the current licensing regime. It referred to a case in Leeds, saying:

“Leeds City Council decided against further discretionary licensing and has introduced a neighbourhood approach which was ‘seen as more flexible than licensing’…This approach targeted ‘neighbourhoods on a street by street basis addressing the area as a whole and dealing with standards in the private rented sector’”.

That more flexible approach has a lot to commend it. You will know Leeds city council well, Mr Deputy Speaker. It is not my local authority, but I believe it is Labour-run, and that is what it believes works for it. The Committee’s report says that Blackpool council has developed a similar area-based approach.

When the previous Government consulted on this suggestion and reported back in early 2010, the main concerns were listed in the consultation document that contained all the responses. Those concerns were valid then and are still valid now. The first main concern was that a better understanding was needed of likely costs. In particular, it was thought that linking other services to the register would increase costs, and it was suggested that they should be deferred until the register was up and running smoothly. Given that the Bill makes no mention of what the costs would be, that uncertainty will still be a factor that people are concerned about.

The second main concern was the objective of the register; there was a lack of common understanding of its purpose. It was not clear whether it was a comprehensive list of private rented properties and landlords or an attempt to enforce better behaviour. The same doubts still apply today. What on earth is the point of the register and what use is it to anybody?

The other concern was enforcement. It was said that more detailed consideration was needed of how enforcement and policing of the register would work in practice, and linked to this there would need to be clear central guidance on the criteria and process for striking a landlord off the register.

The Bill does not seem to address the concern about how enforcement and policing of the register would work in practice. That takes us back to square one, without any progress having been made on the position under the previous Labour Government in early 2010.

Clause 1(3) does not make it clear whether private residential landlords are individuals or individuals representing a company. I am sure the hon. Member for Mansfield would not want his Bill to encourage people to set up a company, rather than be individual landlords, in order to get around any regulations. I do not know whether he has a view on landlords of commercial properties. Would this be a register for private landlords with residential properties, but not for those with commercial properties? That would be a strange state of affairs.

I am anxious that other Members may wish to contribute and I do not want to take up all the time myself. Even though so many parts of the Bill need to be queried, I feel I should leave some of the other concerns to other Members.

I think that foreign landlords who own properties in the UK are good for the UK. I like to see inward investment in the UK, which we should always encourage. I am not entirely sure how the Bill would affect foreign landlords or how they would be made accountable to it. Has the hon. Gentleman given any thought to the effect it would have on foreign landlords? The flat I rent in London has a foreign landlord, as far as I can recall from the tenancy agreement, and I am sure that such a situation is quite widespread in London.

Foreign landlords have capital that they can invest in any part of the world. They are not tied in any way to the United Kingdom. Many of them may not even live here and for all I know some may well never have visited the United Kingdom, but they have made an investment here. In such a scenario, more red tape, more regulation and less return for an investment may lead to foreign landlords going to other parts of the world where they feel they can get a better return on their investment. That is what capital does. It would be a shame if we were to turn investment from the UK as a result of Bills such as this. I do not see any upside to it and have lots of doubts about it.

[Mr Nuttall]

Is my hon. Friend as concerned as I am about the potential risk of a foreign landlord falling foul of the Bill and finding themselves with a criminal record if they fail to register, because they would then be liable to a fine?

[Philip Davies]

My hon. Friend makes a good point that I was hoping to come on to. How would somebody come off the register? How would a landlord pay? Does the hon. Member for Mansfield envisage a landlord paying his money out on a pro rata basis? Would it be based on the number of houses? Would it be the rental income that determined the fee? There are all sorts of different scenarios that would cause particular issues for people and that may be grotesquely unfair in individual cases.

As my hon. Friend the Member for Bury North says, failure to register would be not just a civil offence, but a criminal offence: a person who is not on the register will have committed a criminal offence. Do we really want to use criminal law in that way? I would venture that it is not an appropriate use of the criminal law. There is much uncertainty about how the provision would be enforced and how people would know about it.

What about people who become landlords by accident when they inherit a property in which there is an existing tenant? Where would such a person stand? If their parent has died I am sure the hon. Member for Mansfield would accept that they would have an awful lot more on their mind than whether they were part of a registration scheme that they do not even know exists, because they have never been a landlord before. Is it really the hon. Gentleman’s intention that a person whose parent has just died and who is trying to deal with their affairs and organise a funeral should be found guilty of a criminal offence because they have not registered as a landlord on his register? I do not doubt the hon. Gentleman’s intentions or his sincerity, but I think the Bill is not only unworkable, but potentially unjust. To make such people criminals would be completely wrong.

[Andy Sawford]

I understand the hon. Gentleman’s point about the circumstances in which someone might find themselves if they ended up owning a property that used to belong to a deceased relative—most likely a parent—but it would only be at such a time as they felt able to turn their attention to letting out that property that they would then need to consider the appropriate steps they should take in order to be a responsible landlord. It is only then that they would be in a position to think about what to do with the property, not in the immediate aftermath of losing a family member. It is a scare suggestion to say that the measure would force them to take immediate steps.

[Philip Davies]

I think the shadow Minister and I are talking at cross-purposes. I am not referring to a person who decides to immediately rent out a house in which a deceased parent used to live. I totally accept the hon. Gentleman’s point about that. It is self-evident. I am referring to a person whose parent was a landlord of another property that the child inherits on their death and in which a tenant is already in place. If the landlord of the property is the person who must be registered, I do not know how people who have just died would get off the register. They can’t say, “I’ve just died,” to get themselves off it. How on earth could their child be expected to know that they had to register when they have never been involved in renting out properties before? They would find themselves, at an instant, the landlord of a property without knowing the circumstances involved. That is the sort of situation to which I am referring, which I think the hon. Gentleman would accept is slightly different from his suggestion.

[Andy Sawford]

I thank the hon. Gentleman for his clarification. I understand that he is making a slightly different point. Of course, many responsibilities fall to someone on losing a loved one and they can be very important, including thinking about the obligations they owe to people living in a rented property that they have inherited. The well-being of the tenants has to be their concern, even in a very difficult situation.

[Philip Davies]

Of course. The shadow Minister states the blindingly obvious. Who is to say, however, whether that person would have any ill will towards the people renting the property? Presumably, they would just carry on with the arrangements already in place, but without registering on a national register of landlords.

This is the difference between Government Members and the Opposition: they think that not registering on a state-sponsored register makes someone a bad landlord, but I do not accept that premise. I think that what makes someone a good landlord is whether they are treating their tenant well, irrespective of whether they are on a register. It is how they look after their tenant that determines whether they are a good landlord. Someone who is not on a register might be a very good landlord, but, equally, someone who is on the register might be a very bad landlord. The hon. Gentleman seems to be under the impression that being on the register would determine whether someone is a good landlord, but I am afraid I do not share that view. The hon. Gentleman seems to support a Bill that would criminalise people who had no idea about the obligation being thrust on them by the socialists opposite. We have to be careful about introducing legislation left, right and centre—in this case, left—and we must remind ourselves that laws have consequences. A criminal sanction is serious. We do not want decent people falling foul of the law by accident and receiving a criminal conviction. As I mentioned earlier, four-fifths of private landlords are part-time landlords, with just one or a small number of properties from which they earn less than a quarter of their income. We should tread carefully.

The Minister will outline the Government’s position, but my understanding, which he will either make clear or refute, is that they have concerns about the Bill. I am therefore delighted to find myself agreeing wholeheartedly —this is a red letter day for me—with the Government. I state with confidence that the Government are opposed to the Bill, because their website is clear about why they have chosen not to introduce further legislation:

“The private rented sector is already governed by a well-established legal framework and we will not introduce any further regulations. This will ensure the sector is free to grow in response to market conditions.”

The website goes on to state:

“In the past over-regulation drove landlords out of the rental market. We don't want to introduce any measures which would form a barrier to potential landlords considering renting out their properties. Over regulation would reduce the number of properties to rent and wouldn't help tenants or landlords.”

I could not have put it better myself. I find myself in total agreement with the Government website.

I am conscious that I am in danger of taking up more than my fair share of time. It would be unfair of me to dominate proceedings and I hope that Members do not think that I am doing so.

A report by Professor Michael Ball for the Property Ombudsman, entitled “Regulating Residential Letting Agents: the issues and the options” and published in October 2012, looked at the issue of the number of letting agents and the number that belong to a professional body. This is relevant to the Bill. The report states:

“The extent to which agents belong to the various professional bodies is unknown because there are no reliable figures on the size of the lettings industry. A government report in 2009 estimated that there were roughly 8,000 lettings agents…In the same year, the Office of Fair Trading offered a larger estimate of at least 15,000 letting agency businesses in the UK as a whole...In terms of the individual offices of member firms, The Property Ombudsman reported 9,523 registered lettings offices in September, 2012; as compared to 11,853 for sales…A recent survey found that 85% of agents belong to a professional body, which may indicate that the number of agents outside of the current voluntary schemes though significant is not overwhelmingly large compared to those participating.”

That information can only lead us to two conclusions.

First, the Government and their related authorities have absolutely no idea how many letting agency businesses there are. If we are to have a regulatory and registration system, a starting point might be to know how many there are. The gap between the Office of Fair Trading’s estimate, 15,000, and the Government’s estimate, 8,000, is a big one. How on earth are we going to enforce this great regime if we do not even know how many there are or where they are? At a stroke, the information presented by Professor Michael Ball makes the Bill unworkable.

Secondly, the survey found that 85% of agents—the ones that are known about—belonged to a professional body, indicating that there is not an issue in this sector that needs to be dealt with. They are already aligned to a professional body that insists on many of the standards that the hon. Member for Mansfield wants them to follow.

[Jacob Rees-Mogg]

Does my hon. Friend agree that a voluntary association is much better than a compulsory one, because it acts as a kitemark? If everybody has to do it we cannot distinguish between those who are good and have volunteered to register, and those who simply have do it as a matter of compulsion.

[Philip Davies]

My hon. Friend makes a powerful point. I suspect that both of us would have no issue with people having their own standards of excellence that they could advertise, and the Government and the hon. Member for Mansfield saying, “If you want to be with a good landlord, you should look for those who advertise with this particular crest, kitemark or standard.” By definition, that would encourage more and more landlords—they would lose out on tenants if they did not join—to reach that standard. I agree that that is a far better way of driving up standards than forcing people to sign up to something that they might not follow.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

I thank the hon. Gentleman for giving way, because it me a chance to stand up and straighten my legs after listening to him for nearly an hour and three quarters. He asked about the number of letting agents and speculated that the Government were not entirely sure. Among the welter of statistics available—I will be quoting some of them later—I am told that we only have an estimate of the number of letting agents. The estimates, based on information from Which?, vary from 12,000 to 17,000.

[Philip Davies]

I am grateful to the Minister. I apologise if I do not get to hear his speech—as I said, I may have to leave early—but I will certainly read it in Hansard. The figures I quoted were from his Department in 2009—I am not casting aspersions on him or the current Administration—and showed a gap of 7,000. The Minister’s figures still show a gap of 5,000, and that makes this scheme unworkable. I am grateful to him for sharing the level of uncertainty concerning the number of firms that would be involved.

There are other bodies that offer schemes, not just the ones I have mentioned. The UK Association of Letting Agents’ scheme is, like others, wide ranging and covers market appraisal, instructions, terms of business fees, charges and termination of client agreements, marketing and advertising, viewing and access to premises, offers, letting tenancy agreements, rent collection, property management, all that is expected of the tenant and landlord, and termination of tenancies. All those things are in place. As my hon. Friend the Member for North East Somerset said, why reinvent the wheel when such schemes are working well? Let us try to get more competition into the marketplace to encourage more landlords to sign up to such schemes. That is bound to have more success than a state-imposed solution.

When the last Government consulted on regulating letting agents, many concerns were raised about how a letting and management agent would be defined. I am not sure what view other Members have on that. Some landlords manage properties for other landlords. Sometimes family members manage properties. Those people are not official letting agents, but they are, in effect, operating as letting and managing agents. Would they be covered by this regulation? Would the consequence of the Bill be to send some of that work underground? People might not employ a professional body or registered company, but get other people to do these things under the radar. They might get friends from around the corner—perhaps even unsavoury people from around the corner—to operate things on their behalf to get around the regulatory system.

Another concern that was raised when the last Government considered this matter was what property condition standards would be used to decide whether somewhere was a decent home. Category 1 and category 2 hazards are already enshrined in legislation. Does the hon. Member for Mansfield have something different in mind? Who will determine what is an acceptable standard of property to be let? Which regulatory body will offer its expertise on what definition should be used?

The former Under-Secretary of State, Department for Communities and Local Government, Baroness Hanham, stated in reply to a parliamentary question from Lord Browne of Ladyton:

“Letting and managing agents are already subject to consumer protection legislation. Consumer protection legislation covers issues such as giving false or misleading information, not acting with the standard of care and skill that is in accordance with honest market practice and claiming falsely to be a member of a professional body or approved redress scheme. For tenants or landlords who are charged unfair or unreasonable fees by an agent, this means that they are able to report this to their local trading standards officer or to the Office of Fair Trading which has both civil and criminal enforcement powers… Disproportionate regulation on the private rented sector would push up rents and reduce the choice and availability of accommodation on offer to tenants.”—[Official Report, House of Lords, 15 October 2012; Vol. 739, c. WA444-45.]

That sums up the situation perfectly. The Bill would have a negative impact on the private rented sector and reduce the number of houses being let. It would bring no benefit because there is ample legislation in place to deal with the concerns.

The hon. Member for Mansfield mentioned Shelter. Even Shelter’s website provides plenty of advice on what people should do if they want to complain about a letting agent. I will not go through all that advice now, because that would take up time unnecessarily, which I do not want to do, but I urge people to look at the website. There is one section entitled “Complaining to the letting agent”, which gives detailed information on how to complain to a letting agent. It is an excellent document. There is also a section on “Complaining to the Property Ombudsman”, which explains how to do that.

We have not talked much about the property ombudsman, but I hope other Members will do so. The website states that that scheme

“provides a free, independent service for resolving disputes between letting agents and their customers. Many letting agents are members; those that are must display the ombudsman’s logo on windows, advertising and stationery.”

That brings us back to the point that was made by my hon. Friend the Member for North East Somerset. We should encourage more letting agents to sign up to that scheme and encourage people to rent from letting agents that are part of it.

[Mr Nuttall]

The property ombudsman’s annual report for 2012 made it clear that the number of offices that were registered for lettings, as opposed to sales, was 9,748. Almost 10,000 offices across the country are covered by that scheme.

[Philip Davies]

My hon. Friend makes a good point. That just goes to show that an awful lot of good work is being done in this sector. Perhaps a good starting point for us would be to encourage more of that good work and to make people more aware of the schemes that are in place. I confess that before I looked at the Bill, I was not aware of some of the schemes that are in place to help my constituents, should they have a problem. If nothing else, I am extremely grateful to the hon. Member for Mansfield for forcing me to look at this area to see what is in place. I hope that as a result I will be able to offer my constituents a better service and make them aware of the situation. On that basis alone, we should be grateful to him for drawing our attention to what is already happening, sometimes without any fanfare or advertisement.

As I said earlier, if I am wrong I hope the hon. Gentleman will correct me, but it seems that the Bill would not apply to landlords who sub-let a room in their property. That poses the question why they would be exempt when nobody else would be. What do he and the Labour party think about such landlords? Do they believe they tend to be good or bad landlords? Is there any evidence either way?

I will come to a conclusion, because I am anxious that I may be taking up time that other Members wish to use, and I am sure others have better points to make than me. As with so much proposed legislation, the Bill is full of more bureaucracy and more interference by politicians, and it provides more evidence of the need to be seen to be doing something, which is the prevailing culture in politics at the moment. I always say that if a politician is faced with a problem, their solution will always incorporate two ingredients, the first of which is being seen to be doing something. I long for the day when a Minister will stand up and say, “That’s got nothing to do with us, it’s for people to sort out for themselves”, but so far I have been disappointed.

[Jacob Rees-Mogg]

Has my hon. Friend noticed that at his suggestion that a Minister might conceivably say that something was not his business, the Minister fled, so frightening was that thought to those who sit on the Treasury Bench?

[Philip Davies]

Maybe the Minister has taken my advice and decided that it has nothing to do with him, so he will not stay for the remainder of the debate. Maybe it is another red letter day for me, but I doubt it.

The second part of a politician’s solution when faced with a problem is to do something that does not seem to cause offence to anybody. The Bill falls in that category—it would make it look as though we were doing something, and it would not really offend any of our constituents. It is a naked attempt to please people. At Prayers, I am always struck by the fact that we pray that we will not do things through a desire for power or a desire to please, which tend to be the two traps that politicians most often fall into. I fear that the Bill shows a desire to please. It is full of good intentions but would not be very good in practice.

If we carry on at this rate, none of us will be able to breathe without breaking some regulation or law in the near future. Many points in the Bill could be dealt with by the free market and a voluntary scheme, as my hon. Friend the Member for North East Somerset suggested. Where people rent is a consumer choice issue, after all, and it is best left in that sphere.

As I said at the beginning, by force of accident I am both a landlord and a tenant, and I use a managing agent. As a customer I am quite capable of going to a reputable one, and I think I can be trusted to do that. There is plenty of evidence that there is already an abundance of remedies and laws to protect tenants from rogue landlords and landlords from rogue managing agents. I do not doubt that rogue landlords and managing agents exist—they clearly do, and that is not in dispute. What is in dispute is whether the Bill will help or hinder people, and I think it will do the latter.

Many practical issues could affect the workings of the Bill’s provisions. Some I have mentioned relate to what happens when a landlord changes their name or dies, when a landlord resides in the property that is being rented out, when a couple get divorced or when a property is bought as part of a self-invested personal pension. What about the fact that some properties and landlords are already part of a licensing scheme? Would we, as my hon. Friend the Member for Bury North suggested, force them out of a scheme that is working well to make them part of the one in the Bill, or would we allow them to stay part of their voluntary scheme? There are all sorts of practical problems with the Bill, which would make people criminals who should not be. As we know, ignorance of the law is no defence, so that is the inevitable consequence.

As a friend of mine who is a property litigation partner at Seddons law firm in London and dealt with landlords and tenants daily said to me, there is so much legislation in this area of law that creating more runs the serious risk of putting people off becoming landlords or even carrying on as landlords. The most likely consequence is the unintended one that with fewer landlords, there would probably be fewer properties for tenants to rent, which would end up helping nobody, least of all those looking for somewhere to live. It seems to me that there is too much legislation in this area, not too little, and that the Bill would unnecessarily add to that legislative mountain.

--- Later in debate ---

[Andy Sawford]

As I understand it, there are 70 laws that apply in some way to this sector, providing some form of protection. As I said at the outset, however, I fully agree with my hon. Friend the Member for Mansfield that we need to simplify existing regulation and provide better regulation. We should not be confused by the proliferation of regulation over time and think that it automatically provides protection. All the evidence from my surgeries and that presented to the Select Committee suggests that it simply does not provide protection.

As I say, there are now 4,000 managing and lettings agents that are entirely unregulated, and they do not even belong to voluntary bodies, so they are not encouraged to adopt the responsible approach to letting and management practice that, of course, characterises many letting agents. Although not all landlords use letting agents, nearly 1.4 million landlords and 3.6 million private rented sector households in England—huge numbers of tenants and landlords—are currently unprotected.

It is a peculiarity of current policy that although estate agents, who hold very little money on behalf of their clients, are regulated, letting agents, who hold significant sums on behalf of landlords and tenants, are not. There are very low satisfaction levels and very few safeguards in the sector. Citizens Advice found that 73% of the tenants it surveyed were dissatisfied with the service provided by their letting agents and reported that a significant number of people have difficulties contacting agents and saw serious delays in getting repairs. Although it is good to hear about the near nirvana that exists in Shipley, I have to say that that is not the experience across the country, and it is certainly not the experience of my constituents or, indeed, those of my hon. Friend the Member for Hammersmith (Mr Slaughter).

The report “Renting roulette” by Which? saw letting agents ranked second from bottom across 50 consumer markets. There are cases of agencies, even large and well-established businesses, running into difficulties because they have no client money protection, with both landlords’ and tenants’ money being lost. In some instances, this has not prevented owners of companies that have gone out of business while holding their clients’ money from subsequently resuming their activities—often as phoenix companies, as the Select Committee heard.

Few safeguards are in place to protect tenants, landlords or reputable agents from being undercut by unscrupulous counterparts. That is why I agree with some of the conclusions reached by the Office of Fair Trading that this market is not working properly. It is still possible to set up a letting or management agency with no qualifications whatever. There is no need to conform to requirements as to conduct or to provide mandatory safeguards for the consumer, and the Government have only recently moved—it is a welcome move, under pressure from the Labour party—to oblige letting agents to register with a redress scheme, whereby awards can be made against agents for quantifiable financial loss to clients.

Let me now deal with the issue of rip-off fees and variable charges, which have rightly been highlighted and which I hope the Bill will do something to address. A survey of letting agents found that 94% imposed charges on tenants in addition to the tenancy deposit and rent, or rent in advance. It also found a huge variation in the size of the charges. The charge for checking references ranged from £10 to £275. The charge for renewing a tenancy ranged from £12 to £220. In some cases, additional charges for a tenancy amounted to more than £600.

According to a survey conducted by Which? in October last year, the average holding deposit was one week’s rent amounting to £400, the average administration fee was between £120 and £420, and the average deposit administration fee was up to £29. The deposit could be anything between one month’s and six weeks’ rent. On average, one month’s rent was payable in advance. Credit reference checks were charged at between £43 and £90, and check-in fees were up to £60. That is a huge variation. How can it be justifiable for one letting agent to charge £220 to check references, when another can do it for £10? Surely that should not be presented as a separate fee. Other countries, even including Scotland, provide much clearer protections and stronger regulation to deal with such variable and unfair fees.

Some tenants are being charged up to £29 to renew a tenancy, and up to £120 just to check out of a property. It is clearly an absolute rip-off, and not to support the welcome and important measures in the Bill would be to allow that rip-off to continue. I cannot support the laissez-faire attitude that has been advocated by the hon. Member for Shipley. Indeed, it seems to me not just to be laissez-faire, but to represent a lack of care for all the people who are being grossly ripped off all over the country.

There are three principal areas of concern when it comes to rip-off fees and charges levied by unscrupulous letting agencies. As I have said, there is a substantial disparity between the fees charged by different agents for similar services, with no apparent difference in the quality of the services received. I have challenged organisations, even those that seek to extol good practice in the sector, to justify the charging of such variable fees by their members, and they have been unable to provide any such justification. That is why an increasing number of them now support measures such as those contained in the Bill.

For middle-income households moving into the private rented sector, fees and charges often constitute a significant up-front cost. At a time when the country is experiencing a huge cost-of-living crisis, caused in Downing street—living standards have fallen in 39 of the 40 months for which the Prime Minister has been in office—it is a huge ask, and often very difficult, for families to meet such costs. Too often, the charges are hidden in the small print. People are exploited by unfair fees that they were unaware that they would face. Letting agents should be required to publish information about their fees, properly and fairly, up front and very clearly, so that tenants know what they are getting into, and landlords know what they will be asked to pay to the letting agency.

Let me now say something about individual landlords, and those who hold a number of properties directly rather than through letting agencies. Of course there are many responsible landlords, and many of them are members of the organisations that have been mentioned today. I have interacted with those organisations, and I know that they seek to do a good job in ensuring that standards are met. They are aware that trying to ensure that tenants in the private rented sector are treated fairly is not only morally right, but good business. It must be acknowledged, however, that there are also many rogue landlords out there, and that they undermine responsible landlords by preying on vulnerable tenants. The reputation of the many responsible landlords and the good service that they provide are undermined by a large number of landlords who fail to offer good standards to their tenants, and by a small number of criminal landlords who deliberately prey on the vulnerable and exploit the current lack of proper, fair, effective regulation.

Shelter found that more than 85,000 complaints were made against landlords in 2011-12. Clearly none of them were made in Shipley, but I am sure that many were made in every other constituency in the country. Some 62% of them related to serious and life-threatening hazards, such as dangerous gas and electrics and severe damp, and of course while the measures would impose some burdens on individuals who might, for example, find themselves to be accidental landlords, we have to balance our consideration for the circumstances in which people find themselves as landlords against those very serious complaints from around the country, many thousands of them relating to serious and life-threatening hazards.

[Philip Davies]

Is the hon. Gentleman suggesting that having a register of everybody will in itself mean there will be no rogue landlords? Is it his view that wherever there is a register for an industry there are no rogue practitioners?

[Andy Sawford]

Sadly, I feel there will still be rogue practitioners in the industry, but we will take a great step forward today in protecting people if we support these measures; we will increasingly marginalise those rogue landlords. We will make those practices ever more unacceptable and I hope we can go further towards ensuring there are prosecutions and enforcement against rogue landlords.