Clause 7 - Part 11 of the Housing Act 1985
Home Energy Conservation Bill
6:45 pm
[Mr. John Cummings in the Chair]
Mr. Sayeed: I am pleased that my hon. Friend the Member for Billericay tabled the amendment, not because I think that its provisions should necessarily be in the Bill, but because it is important that we highlight the issues and obtain assurances from the Minister that the guidance or model provisions that will be produced encompass
''the provision, siting and maintenance''
of proper smoke-detecting systems.
An issue arises from problems such as that at Yarl's Wood. I looked at the definition in clause 5 of what would not be covered and noticed that although prisons and bail hostels would be covered, it does not say anything about detention centres. Clause 5(2)(a) uses the words:
''whose purpose is not primarily that of providing accommodation''.
It would be interesting to know whether places such as Yarl's Wood would have been covered under the Bill. I do not know the answer; I should be grateful if the Minister would tell me.
I resist the suggestion that there should also be sprinkler systems, because I am not sure that the hon. Member for Nottingham, South understands the cost of having an integrated sprinkler system in a house. It is horrendously expensive. My hon. Friend the Member for Billericay proposed that details relating to the provision, siting and maintenance of smoke alarms should be included, not necessarily in the Bill but certainly in some document associated with the legislation. That is worthy of support.
Mr. Meacher: I think that there is general agreement about the desirability of ensuring that proper fire alarm systems are in place. The amendment would further clarify the fire safety requirements in the Bill, as my hon. Friend the Member for Nottingham, South and the hon. Member for Mid-Bedfordshire have noted. There is no dispute between any of us about the dangers that fire presents.
Yarl's Wood has been mentioned, and I would have to seek clarification about whether it would be covered by the legislation. We must ask whether it should be. Increasing fire safety goes to the very heart of what the Bill is trying to achieve—providing better quality and safer accommodation for many of the most vulnerable in our society. We must ask what is the best way of doing that, and whether the provision should be in the Bill.
The approach originally proposed by my hon. Friend the Member for Brighton, Kemptown was useful because it set out the conditions with which a property must comply before being registrable. It was also envisaged that the detail of the requirements would be specified by the registration scheme. That is generally the approach that we favour. We now propose to provide that detail through regulations made under revised section 348 of the 1985 Act. We will come to that later when considering Government new clause 4.
We recognise the importance of properly sited and functioning smoke alarm systems in ensuring
improved safety. I take on board the point that my hon. Friend the Member for Nottingham, South made about sprinkler systems. It is all very well being told that there is a fire, which you may—although perhaps not always—be able to escape. Having access to sprinkler systems is just as essential. When we introduce proposals for the regulations, we will certainly consider what my hon. Friend has said. We have given the commitment that we are convinced of the importance of the issue, but we do not think it right to include the provisions in the Bill. We prefer to include them through regulations that I shall discuss under new clause 4. I hope that the hon. Member for Billericay is satisfied and will withdraw his amendment.
Mr. Baron: I am happy to withdraw the amendment as long as the Minister assures me that the matter will be included in the regulations so that the registration requirements place a clear onus on HMO landlords to ensure that smoke detectors are fitted in HMO buildings to reduce fire risk.
Mr. Meacher: I am happy to give that assurance.
Mr. Baron: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Bacon: I beg to move amendment No. 45, in page 4, line 28, at end insert—
'(3) Where the costs of refurbishing an HMO to a standard which meets the requirements of a scheme introduced under subsection (1) is equal to or exceeds 50 per cent. of the annual rental income of that HMO, the owner shall, within two years of the Secretary of State making an order under subsection (1), have the right to convert the HMO to single occupancy and to obtain planning permission for that purpose.'.
The Chairman: With this it will be convenient to take amendment No. 46, in page 4, line 28, at end insert—
'(3) Where the costs of refurbishing an HMO to a standard which meets the requirements of a scheme introduced under subsection (1) is equal to or exceeds 50 per cent. of the annual rental income of that HMO, the owner shall, within two years of the Secretary of State making an order subsection (1), have the right to convert the HMO to single occupancy and there shall be a presumption in favour of planning permission being granted for that purpose.'.
Mr. Bacon: The purpose of the amendments is to deal with circumstances in which an HMO does not meet the required standard and in order for it to do so money needs to be spent on refurbishing the property. Nothing is wrong with that: if Parliament decrees that in order to be an HMO an HMO must meet certain defined standards, it is entirely right that people who want to be in the HMO business should either meet those standards, however prescribed, or not be in the business.
The amendment is not intended to make exemptions or special protections for landlords who want to be in the HMO business. Nor does it deal with the question of what is or is not an HMO, which is dealt with elsewhere in the Bill. It is intended to allow a landlord who cannot meet the terms required of an HMO and wants to exit the HMO business to be able to do so.
My hon. Friend the Member for Mid-Bedfordshire referred earlier to circumstances in which a landlord might, because of a local authority's unwillingness to grant planning permission, be unable to convert an HMO property to single occupancy status, or to sell it for single occupancy, because some local authorities take the attitude once an HMO, always an HMO. There are several reasons why that should not stand, and it is with that that the amendment is designed to deal.
Landlords may for several reasons feel that they cannot comply with the costs involved. The income stream from the property may be used up in servicing the debt for the property or in other ways. If landlords feel that they are unable to comply with the regime that the HMO licensing requires, they should be able to withdraw from it. The criterion that I suggest in the amendment is that, when the cost of refurbishing an HMO to the standard that meets the requirements of a scheme introduced by the Secretary of State equals or exceeds 50 per cent. of the HMOs annual rental income, the owner of the property shall, within two years of the Secretary of State's making an order to create such a scheme, have the right to obtain planning permission to convert the HMO to single occupancy. The landlord would not necessarily have to incur the costs of undertaking that conversion, as the HMO could be sold with planning permission to convert to single occupancy. That would have the benefit that HMOs could be returned to single family use, which I hope that the hon. Member for Leeds, North-West, in particular, would welcome.
I deliberately included a time limit. Although I have reservations about the attitude of local authorities to planning matters on a much wider scale, the Committee is not the place to exhibit them. It is right that a landlord have a window of opportunity to decide to exit the HMO business and obtain planning permission for that purpose. I hope that the amendment, which I drafted with the help of the Public Bill Office, will meet with the Committee's approval.
Mr. Sayeed: My hon. Friend was courteous enough to discuss the two amendments with me. The amendment that refers to the right to convert is the primary one, and the fallback one mentions a presumption in favour of conversion. He has tabled them because there is a problem, especially with some older properties with severely controlled rents. The consequence of that control is that landlords do not find the venture especially profitable, to put the matter as politely as possible. The age of some of the properties is such that the maintenance cost is fairly high. Even if no premium is paid for any loans made to purchase the properties, the maintenance cost is nevertheless only slightly less than the rental income.
Other problems can occur to add to that situation, and often do with older properties, which can incur severe damage and high costs. With some such properties, the landlords are often not rich people and do not have multiple properties. They will often not be able to afford high conversion costs in order to fulfil the proper HMO requirements. They will
therefore be caught in a deeply cleft stick, as they will not be able to afford to do what they need to and cannot afford to borrow because they cannot service the debt, yet they will not be permitted to let. Given that there are controlled tenancies in many instances, they could not get rid of the tenants anyway.
What can such a landlord do? Unless we can answer that question, one of the amendments, preferably amendment No. 45, should have sympathetic consideration by the Committee.
Mr. Meacher: I am happy to respond in terms of sympathetic consideration. I acknowledge the problem, but the solutions proposed by the hon. Member for South Norfolk are not appropriate, and I will say why.
The amendments seek to give additional rights to landlords faced with costs in excess of half the annual rental income of their property. That is a serious issue. The hon. Gentleman proposes that such landlords have the right to convert their property back to single occupancy, on the basis that planning permission will be granted—that is the stronger case, as the hon. Member for Mid-Bedfordshire said—or that there will be a presumption that planning permission will be granted, which is the weaker case. My ministerial colleagues at the Department for Transport, Local Government and the Regions would not support a presumption in primary legislation or a policy that planning permission would be granted in such circumstances.
Where an applicant requires planning permission to convert an HMO to single occupancy, the local planning authority must consider the application in accordance with the development plan for the area, having regard to national planning policy guidelines and any other material considerations. If permission is refused, the applicant has the right of appeal to the Secretary of State. I recognise that there is a problem. There is another way of dealing with the matter. We are well aware of the need to balance the health and safety of occupants of HMOs with the need not to require excessive works. The standard that we shall prescribe will endeavour to balance those two factors. We would expect local authorities to act reasonably in enforcing requirements to undertake certain steps. In particular, they should prioritise the steps on a risk assessment basis and require only essential health and safety works to be undertaken before granting registration. We would expect other, less significant, steps to be carried out within a reasonable period following registration with the proviso that the continued registration of the HMO was subject to the carrying out of the works within that period.
If a landlord is concerned that the conditions of registration, including any requirement to undertake steps to render the house suitable for occupation, are unreasonable, he will have a right of appeal to the county court.
I hope that that satisfies the hon. Member for South Norfolk that the problem is recognised. We believe that it can be resolved in the way that I have indicated, but we cannot accept his proposal and I would ask him to withdraw the amendment.
Mr. Bacon: It does not surprise me that the Minister's colleagues are unable to accept a plan to create these changes to planning law. It is part of my purpose during my parliamentary career to drive a coach and horses through English planning law, but I accept that this is not necessarily the right place in which to do it. The Minister mentioned development plans. I have a healthy suspicion of development plans because we have, on the borders of my constituency, the new Norfolk and Norwich university hospital, now the nation's largest PFI hospital. The Government managed to spend £229 million of public money on that without ensuring, despite all the expert planners who were on hand, that there was a road so that patients and people who work there could get to the hospital. That was in apparent defiance of every planning policy guideline that I have been able to read on the internet. In light of what the Minister has said about his recognition that there is a serious concern, and in particular because he has stressed that only essential health and safety requirements will be required to be met before a licence is granted, I beg, albeit with reluctance, to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chairman: With this it will be convenient to discuss new clause 4—Control provisions—
'(1) Section 348 of the Housing Act 1985 (control provisions: decisions on applications and appeals) is amended as follows.
(2) In paragraph (c) of subsection (1)—
(a) for ''works'' there is substituted ''steps'', and
(b) for ''executed'' there is substituted ''taken''.
(3) After that subsection there is inserted—
''(1A) A house is not to be regarded as suitable for such occupation as would be permitted if the application were granted unless it meets such standards as may be prescribed in regulations made by the Secretary of State.
(1B) The standards that may be prescribed in the regulations include—
(a) safety standards,
(b) energy efficiency standards, and
(c) standards relating to the fixtures, fittings and furnishings in the house.
(1C) The Secretary of State may make regulations prescribing what matters are to be taken into account in determining whether a standard of a prescribed description has been met.
(1D) Any power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.''.
(4) In subsections (2)(b) and (3)(b), for ''execution of works'' there is substituted ''taking of steps''.
(5) In section 348A of the Housing Act 1985(1)(b) (control provisions: other decisions and appeals), for ''works are executed'' there is substituted ''steps are taken''.'
Mr. Meacher: Clause 7(1) is not needed because new clause 2 provides that the new clause that it proposes must be brought into effect within two months of Royal Assent. That means that there is a guaranteed timetable for the introduction of registration. We still hope to introduce full HMO licensing proposals next year but, if we cannot, licensing under another name will take effect
automatically, in the form of a mandatory extension of the current voluntary system of HMO registration ''with control provisions'', with the improvements achieved by or under the Bill.
Clause 7(2) is also no longer needed because new clause 4 will enable the Secretary of State to prescribe standards that must be met if registration is to be granted. That will be done under new subsections (lA) to (1D) inserted into section 348 of the Housing Act 1985. We intend to use the power to produce exactly the same result as clause 7(2) would have done—in particular to ensure that energy efficiency targets are met and that adequate fire and other safety standards are upheld. It would be undesirable to try to make detailed provision in the Bill—for instance about gas and electricity certificates—given that the latter do not exist in the same way that the former do. There is also scope to deal with issues other than just safety and energy efficiency in relation to furnishings, fixtures and fittings. That is, in part, a response to concerns about the security of occupants' possessions in HMOs.
The effect of new clause 4 is to amend section 348 of the 1985 Act to enable the Secretary of State to make regulations, to prescribe safety and energy efficiency standards, and to insist that those standards are met satisfactorily as a condition of registration. Local authorities will be able to insist that required works are executed satisfactorily.
Mr. Sayeed: I wish to make one very short contribution. Will the Minister explain why proposed new subsection 3(1B) of new clause 4 states that the
''standards that may be prescribed in the regulations include safety standards, energy efficiency standards, and standards relating to the fixtures, fittings and furnishings in the house.''?
Can he explain why ''may'' appears, rather than ''will''?
Mr. Meacher: Again, it would be wise for me to consult those who drafted the Bill. I understand the hon. Gentleman's point perfectly well. He wants to ensure that important safety, energy efficiency and other standards ''shall'', rather than ''may'', be prescribed in the regulations. I understand the point, but I would like to consult other hon. Members. I assure the hon. Gentleman that he will get an answer.
Question put and negatived.
Clause 7 disagreed to.