Levelling-up and Regeneration Bill (Twelfth sitting)

Tim Farron Excerpts

Committee stage
Tuesday 12th July 2022 Public Bill Committees

[Alex Norris (Nottingham North) (Lab/Co-op)]

It is a pleasure to serve with you in the Chair, Mr Hollobone, and to serve with new members of the Committee. Perhaps it should be of concern that your predecessor, the hon. Member for Wellingborough (Mr Bone), sat in the Chair for a number of our sessions, but the idea of just one more seemed less preferable than entering Government. That may be a sign of what is to come between now and the end of September. In all seriousness, we welcome the Ministers to their place and we look forward to working with them.

I thank the hon. Member for Harborough and the right hon. Member for Pudsey for their efforts and communications with the shadow ministerial team inside and outside Committee. They worked very collegiately, which we appreciated, and I think that has been reflected in the quality of the debate so far, and the good spirits. We are here to disagree on points of substance, but are able to do so in good humour, and I know that that will continue with the new Ministers. I also thank the Whip, the hon. Member for Derbyshire Dales (Miss Dines), for enabling us to work together. I am sad that the new Ministers have missed out on those weeks of debate, which were largely composed of speeches from me. I am happy to start again if they wish—or perhaps not; those who have heard them seem to be moving further and further away, so perhaps I should take that as my cue to move on.

I am glad that the Minister is choosing to address the clause stand part debate, because it is an important part of the legislative process. When law is put on to the statute book, Ministers ought to make a case for it, so we appreciate his contribution. Given today’s development, I hope that the Minister may be able to offer one more. The continued absence of an impact assessment needs to be addressed. According to the Minister’s own words, the Bill is an important piece of legislation that will help to level up the country. At the moment, we do not have much of a base to build that case on, so we would be keen to see the impact assessment. I hope that the Minister will respond to that point.

Clause 72 is important because we are currently in a severe housing crisis, with a lack of supply of affordable homes for young people and no opportunities for families to get on the property ladder. Coupled with that, long-term empty dwellings are sat idly by, serving no purpose. It is right that the Government want to act, and we support the clause. However, we feel that it is a missed opportunity and that even the Bill will not give local authorities sufficient tools to get a grip of the situation and protect their local communities. We should have gone further with a power to levy a greater empty homes premium and to close the loophole through which properties are pushed into the business rates category—or slid into it—to avoid council tax. The Government should revisit that issue. I know that the Minister will have a full inbox, so he does not need to look far for inspiration. The Welsh Government seem streets ahead of the UK Government with their current policies. It is not a matter on which to divide the Committee, but I hope that the Minister will revisit the issue at a later stage, because we certainly will.

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a great pleasure to serve under your oversight and chairmanship, Mr Hollobone, and I offer a huge welcome to the new Ministers. I also pay tribute to the right hon. Member for Pudsey and the hon. Member for Harborough. The debate in Committee has indeed been consensual, collegiate and courteous, and I am sure that is how it will continue. It is a privilege to be on the Opposition side of the room and to join in the important endeavour of scrutinising this important Bill.

When it comes to communities like mine, it is worth bearing in mind that long-term empty dwellings—properties that are not used at all—are a challenge. In my district of South Lakeland, we have something in the region of 900 to 1,000 of such properties at any given time. It is likely that there are between seven and 10 times as many properties not lived in, but classified as second homes. If the Government are committed to retrieving properties that are out of permanent usage, and which are effectively displacing local people and the local workforce, empty homes are important, but not nearly as important as tackling the excessive second home ownership problem in communities such as the lakes and the dales. We look forward to discussing those issues when we consider later amendments today.

[Mr Jones]

First, I thank the hon. Member for Nottingham North for his very kind welcome. I look forward to working with him and his fellow shadow Minister, the hon. Member for Greenwich and Woolwich, in a good spirit. I suspect that we may not agree on everything as the Bill goes through the House, but I am confident that we will work together with a good spirit, both in Committee and outside.

In response to a couple of the points that have been made, I know that the impact assessment has been a concern. It will be provided shortly, and I would certainly expect that to be the case before the conclusion of the Committee’s proceedings. I hope that we will provide it as soon as we can.

On Wales, we have already given councils the power to apply a 300% premium to properties that have been empty for more than 10 years. That is part of our stepped approach to increasing the level of premium the longer the property remains empty. What we propose strikes the right balance between providing an incentive to bring empty properties back into use while recognising more challenging cases in which owners are taking action to have property suitable for accommodation within that time frame.

I thank the hon. Member for Westmorland and Lonsdale for his kind welcome. I do not disagree with his point about the challenges in many areas, especially those that have a strong tourist economy. I am sure that we will debate those challenges when we come to the next set of amendments. It is good to hear his comments, and that the ministerial team are thinking about that issue.

Question put and agreed to.

Clause 72 accordingly ordered to stand part of the Bill.

Clause 73

Dwellings occupied periodically: England

--- Later in debate ---

[Tim Farron]

I also agree that the amendments are helpful, and I urge the Government to seriously consider them. There is no doubt in my mind that although the housing crisis is one of supply, the supply that we have is distorted. We live in a strange world in which property is seen more as an investment than places for people to live and have homes. That is the way the market is, but if the market is broken, surely we have to intervene.

Levelling up is an interesting phrase and concept—one that I personally believe in—but we have to understand carefully what drives the absence of opportunity that we are trying to tackle. Housing, more than any other issue that the Government will consider through the Bill, is the cornerstone. There are challenges in every part of our country, so there will need to be an acknowledgment that the market is distorted and broken, and that it will therefore need radical intervention if we are to make best use of the properties we have and maximise opportunities for everybody, in every part of this country.

Empty dwellings—as distinct from second homes and holiday lets—are a challenge. I mentioned that they are a big problem in my community, although not as big a problem as second homes and holiday lets. Properties are empty for a range of reasons, some of which are perfectly understandable, others less so. Having time limits is wise, as is ensuring that homes are effectively monitored. Using fiscal measures—fines, taxation and so on—to encourage people and focus their minds to make the best use of the property they own is also wise.

I encourage Ministers to make the available tools easier to use. They include empty dwelling management orders, which basically allow local authorities to requisition an empty home and turn it into a social rented property. I have seen that work in my own community, but it is hard to do. Such orders are valuable, because a property can be brought back into usage—it effectively becomes a social rented property under the control of the local authority for seven years—but they are most useful because they act as a warning shot to other landlords and show what might happen to them if they do not make good use of their properties. The problem is that the process is lengthy, laborious, expensive and difficult. I encourage Ministers to look carefully at beefing up that existing provision by ensuring that councils can use it more readily.

We want to build more genuinely affordable homes for people, but it is just as important that we made good use of properties that already exist by turning them into formal homes. That is a no-brainer, really. As far as I am aware, empty dwelling management orders are not addressed in the Bill, but I would love it if the Government considered beefing them up and making them more easily accessible, which would draw more homes back into use for local communities.

[Mr Jones]

I thank the hon. Member for York Central for her kind welcome to the Committee. It sounds as though I am likely to hear a great deal about York Central—somewhere I am not a stranger to, having been there to present a high streets award to Bishy Road some years ago, in the dim and distant past when I was last a Minister in this Department.

The Government’s proposal for a second homes premium makes clear the situations in which a council may quite properly apply a premium. Those situations are, first, that a property is substantially furnished—distinguishing it from empty property dwellings that may more properly be subject to the empty homes premium—and secondly, that there must be no resident of the property. For the purposes of council tax, a resident is someone who has their sole or main residence in the dwelling. In that case, the resident would pay the council tax normally due on that dwelling as essentially it would be their main home. They would not be subject to a premium as it is their sole or main residence.

Owners of second homes may well occupy those properties during the course of the year, and how much use they make of them will vary depending on circumstances. It may be that the hon. Member’s amendment is to enable the premium to be applied only when the homeowner does not use the property for more than six months a year. If that is the case, it might be helpful to set out how councils already determine what is and is not a second home.

Councils already make judgments as to whether an individual’s property is their sole or main residence and, by default, what might be a second home. That is because they want to be satisfied that any discounts or exemptions are applied correctly and to the right property. In making a judgment on whether a property is a sole or main residence, councils will reflect on legislation and case law and take into account a range of factors including where the person is registered with a doctor, where they are registered to vote and the occupancy of the property.

Given those established processes for assessing what is a second home, I do not believe that a further restriction on the definition of properties that may be subject to a premium is needed. In addition, the assessment of whether a property is a second home will take into account a number of factors and not just the period of occupation. A reference to the number of days may well preclude treatment of the property as a second home when other factors suggest that, in effect, it is being used as a second home. The amendment could result in a reduction in the number of second homes liable for the premium.

Amendment 80 would mean that, where the property has a tenant for more than six months, the premium would not apply. Council tax is usually paid by the occupants of the property and, in cases where a tenant is occupying the property as their sole or main residence, the tenant would be liable for that council tax, not the property owner. Therefore, no premium would be due.

The premium is not aimed at properties that are let out to a tenant as they will be somebody’s sole or main residence. It is right that a second homes premium should not apply to such properties. With those clarifications, I hope the hon. Member will agree to withdraw her amendment.

--- Later in debate ---

[Tim Farron]

This, too, is a welcome amendment. It is also a reminder to us all that if we are to take the radical action needed to make the best use of the properties we have in this country, so that we can underpin communities, particularly those such as mine in the Lakes and the Dales in Cumbria, we will have to be wise in ensuring that the radical measures in the Bill are actually enforced. For example, I can think of countless properties in Cumbria with a local occupancy clause on them that are currently being advertised as Airbnbs. I see that the Yorkshire Dales National Park Authority recently made great strides forward, making it clear that new properties to be built within the national park must all be for 100% permanent occupancy. I do not think the authority has the power to enforce that, but the fact that it is showing that leadership is something we should massively welcome.

There will be a whole industry built around trying to create loopholes and get around any mechanisms—those either already in the Bill or that might come into it—to control excessive second home ownership, numbers of holiday lets and the presence of unused, empty properties, so we must be savvy and wise, and prevent that. Not all of that will be about the right legislation; it will also be about the right commitment to funding.

The Government talk about funding levelling up and putting money into projects that may involve construction, and so on. That is absolutely right. It is a great use of money—and will probably cost less money—to invest better in planning departments and to make sure we have the quality and the numbers of people to get out there and police the regulations that already exist and those we hope will come in through the Bill.

There is no point having the power in theory to maintain a permanent population in our towns and villages if we cannot enforce that. At the moment, the evidence before our eyes, certainly in Cumbria, is that we are unable to ensure adequate enforcement. The Government must invest, and it would be a wise investment, as it would rescue many homes for local communities to underpin the local workforce.

[Mr Jones]

I thank the hon. Member for York Central for the thought that has gone in to her amendment. I am sure we all agree about the importance of ensuring that people play by the rules and provide accurate information to allow councils to issue the correct council tax bills, and also that when people do not do the right thing, councils can take the appropriate steps.

The proposed amendments would require the Secretary of State to make regulations to create new offences, punishable by a fine, in relation to the submission of occupancy information. I completely understand the objectives of such a measure. However, I assure the hon. Member that existing powers already enable councils to take appropriate action where there is evidence that the individual has taken steps to avoid payment of the premium. The Local Government Finance Act 1992 already provides powers for councils to issue penalties to a person who fails to provide information requested to identify who is liable for council tax on a dwelling, or knowingly supplies information that is inaccurate. In addition, where false representation is made dishonestly for gain, the Fraud Act 2006 may well apply.

I share the hon. Member’s concerns about ensuring that evidence of wrongdoing is tackled and that councils have appropriate powers, and I have described those that already exist. However, if we do become aware of evidence of an underlying problem that cannot be covered by the powers that I have set out, the Secretary of State does have powers to make regulations to create powers for councils to require information and to create offences for a failure to provide information or for providing false information. We have already used those powers in connection with information for local council tax support schemes. We would be able to use them again if evidence were provided that the application of the premium was being frustrated by misinformation that could not be tackled by the existing powers. I trust that, with the assurances that I have described, the hon. Member for York Central will withdraw her amendment.

--- Later in debate ---

[Alex Norris]

I congratulate my hon. Friend on these amendments. There is a certain amount of prescience to them, given when they were tabled. When we debated clause 72, the previous Minister, the hon. Member for Harborough, raised a concern that some of my amendments would inadvertently sweep up families that were suffering bereavement, and these amendments are a prescient way of avoiding that.

For all the reasons my hon. Friend the Member for York Central set out, we recognise that sorting estates, untangling and consolidating finances, applying for probate, and even selling a property, can be a long and arduous process that is set against and alongside the grief that families feel when they lose someone. That makes it really hard, and then, as my hon. Friend said, we have to factor in distance and work responsibilities, and I would add caring responsibilities, so it is right that we build as much compassion and understanding into the system as possible. It feels like the two years is a good way of doing that. I note that it is an “at least” period, so there could be plenty of room for understanding from the local authority if, say, at the end of two years, the property had not been sold yet, or was sold subject to contract—certainly if there is a chain, it can take a long time. There is plenty of room in the amendment to ensure that families that have suffered are not caught up in ways that are unfair, unkind and not how the Bill is designed.

On amendment 84, last Tuesday the then Minister raised a similar concern about dilapidated properties that are being done up. Again, this amendment, which was tabled before that debate, is prescient in that regard. It is again an “at least” provision, which means that local authorities could be thoughtful about delays to work because of all sorts of things, including planning concerns and the weather—significant events that can set development back—and the long process of sale. These amendments would put on the face of the Bill some understanding, humanity and common sense, and would ensure that the balance is struck and that the Bill does what it is seeking to do.

[Tim Farron]

These are important amendments for my communities. In dozens of villages in Cumbria, more than half the properties are not lived in, and the damage to the local community and the local economy is immense. We have already talked about that, and we will continue to do so as we go through the Bill.

A proportion of the empty homes—a minority—are not holiday lets or second homes, but are empty and simply not used, and a proportion of those are empty for entirely understandable reasons. It is important for us to state that, because I would not like anybody to get from the things I say—I am sure this is the case for other members of the Committee—that we are not seeking anything other than opportunities for our communities to ensure there is a full-time, vibrant population. It is not about going after people, being envious of them or seeking to be beastly about them. It is important that we get the tone right.

--- Later in debate ---

[Alex Norris]

We have covered much of the debate through the very good amendments, so I do not intend to detain the Committee for long, but I want to clarify one point with the Minister. As he has said, the clause inserts proposed new sections 11C and 11D in the Local Government Finance Act 1992. Proposed new section 11D(1) states:

“The Secretary of State may by regulations prescribe one or more classes of dwelling in relation to which a billing authority may not make a determination under section 11C.”

It basically says that the powers we have debated and all the very good reasons for them actually do not apply if the Secretary of State decides they do not want them to. That is a concern we have had in previous debates: this is localism, but only where local communities get the answer right.

It is welcome that the Minister has said the measures will be consulted on before being used, but the Government must have a sense of what properties they have in mind, otherwise there would not be much of a case to reserve the power. I am keen to know how that power will be used or certainly what the Minister had in mind when asking for it. I do not think it is enough for us to detain the Committee because we think the clause is important in general, but that specific point needs to be addressed. There is not much of a case for the provision if it is a power that can only be filled out by consultation. I wonder then: why ask for it at all?

[Tim Farron]

I thought the Minister outlined very well the impact of excessive second home ownership on communities such as mine. There is no doubt whatsoever about the consequences of excessive second home ownership in the Lake district, the Yorkshire dales and other parts of the country, where, as he says, the reduction in the permanent population means a smaller school roll, with schools potentially at risk. These places lose their bus services, pubs and corner shops, and all the services are frittered away because of the lack of a permanent population. I am afraid that the radical situation, which he rightly outlined, is not being radically addressed.

The Minister outlined the positives of the council tax premium. If we analyse it, however, it gets to probably a very small minority of those people we call second homeowners—people who, basically, very rarely make use of those properties. People need to be quite rich to have a second home from which they do not benefit financially through renting it out, or that they do not bother using very often. This might catch 5% of second homeowners, but they are the ones who can afford it, so it will not have much impact on them. I do not think it will do what the Minister says it will do. It does not provide the opportunity to do what we will seek to do in other parts of the Bill, which is to enforce—by using the law, and planning law in particular—a move away from excessive second homeownership. But more on that later.

In many ways, what the Minister has just said has been the best articulation I have heard from a Government Front Bencher of the impact of excessive second home ownership on communities such as mine. I thank him for that, but the action proposed does not address the findings of the analysis, and that is what we will push the Government to do.