Mr Robert Syms (Poole, Conservative)

I beg to move amendment No. 266, in

clause 52, page 34, line 2, after 'the', insert 'appropriate national'.

Mr Peter Pike (Burnley, Labour)

With this it will be convenient to discuss the following:

Amendment No. 267, in

clause 52, page 34, line 13, leave out 'maximum'.

Amendment No. 268, in

clause 52, page 33, line 17, leave out subsection (7).

Amendment No. 273, in

clause 56, page 36, line 30, leave out 'local housing' and insert 'appropriate national'.

Mr Robert Syms (Poole, Conservative)

We need not dwell too long on this amendment, which continues a theme that we have started to develop. If an HMO owner has several properties in different local authorities, there should be a degree of uniformity across those areas not only in terms of regulation, but in the fees charged. Under the Bill, the authorities will prescribe the maximum: the amendment suggests that the Government or the National Assembly for Wales should set out in guidance what local authorities should charge, so that we do not have somebody paying substantially different fees in different districts, and not understanding why.

I have always generally favoured a degree of local discretion, so this is a probing amendment, designed to enable the Minister to put on the record his view of the charging regime. Many people involved in HMOs are concerned about the charges for the new regime that the Government are trying to implement.

Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)

The hon. Member for Poole saved himself towards the end of his contribution, when he said that the lead amendment is probing. We cannot support the amendments in the group because they would reduce the ability of local authorities to take decisions for themselves and because the Government or the Welsh Assembly would prescribe the level of the charge. The Bill as it stands states that regulations will specify the maximum fee, so there would be a degree of commonality even under the Government's approach, but the amendment removes the ability to set the maximum fee and would simply set the fee—a fixed fee.

I can see how different authorities, particularly on the south coast, might charge different amounts, but I suspect that they would not be that different. What concerns me is that there local housing authority of many different sizes and the scheme could place a disproportionate cost burden on some of them.

Economies of scale may enable authorities with many HMOs to pay for the cost of administering the scheme even if they set relatively low fees, but other authorities, particularly those in rural districts, will have a relatively small number of properties to license, so setting up the regime will cost proportionately more—before the Minister gets too excited, I should say that I suspect that South Shropshire district council will not have to license any properties.

Because the Government would set a national average figure, the burden will be passed on to the local council tax payer if the Bill is passed. I am sure that Conservative Members do not intend their amendment to result in yet another burden on council tax payers and yet another council tax increase.

Mr John Hayes (South Holland & The Deepings, Conservative)

The hon. Gentleman knows that Conservative members of the Committee have repeatedly stated that the costs that the Bill will inevitably impose on local councils should be properly reflected in the grants given to them. My hon. Friend the Member for Poole and I have repeatedly suggested that the costs will be considerable and that the burden should not be underestimated. However, I make a prediction on which I invite the hon. Gentleman to comment: that if we prescribe the maximum, almost every local authority will regard it not as a maximum, but as a benchmark, and charge it.

Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)

The hon. Gentleman may have a point. We should perhaps consider going further and stop the Government setting a maximum fee at all, instead allowing local authorities to set the fee as appropriate. I am much more prepared to trust the judgment of local authorities, which know their local area better than central Government. After all, if the public do not like what councils are doing, they can throw them out. One reason why nobody votes in local elections is that they do not think that their council has any powers, so it is not worth bothering to vote for it.

Mr John Hayes (South Holland & The Deepings, Conservative)

The hon. Gentleman knows that, having served in it, I am a champion of local government. My hon. Friend the Member for Poole and I are well acquainted with the importance of the role of local authorities and councillors, but I want the hon. Gentleman to be clear. He is suggesting not only that we should reject my hon. Friend's amendment, but that no maximum should be set. In a fragile marketplace, that will sound a warning bell to every landlord in the country about Liberal Democrat intentions.

Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)

The hon. Gentleman says that it will send a warning bell. Let me put my case another way. I think that most local housing authorities take a responsible view of housing throughout their area, not just the bit that they or registered social landlords control, but the private sector rented accommodation and HMOs as well. He says that councils will say, ''We don't give a monkey's whether there are any private HMOs. We'll stick the charges up and get as much tax as possible off them, so that we can get the money.'' Maybe that is what Conservative-controlled local authorities would do, but many other authorities are far more responsible than that.

The Government's approach, which is less prescriptive than that proposed by the Conservatives, is that nanny knows best. Clearly the Conservatives now back a nanny state, which worries me considerably. They have made it plain that, in authorities where the scheme proves expensive because there are very few HMOs to be licensed, it would have to be paid for through increases in council tax.

There are severe problems in what the Conservatives are saying. I hope that the Government set the maximum fee at a level that enables them to cover the costs of the smaller authorities and, through guidance, indicate that they should not do anything when setting fees other than to meet the costs. That may be the way around the problem, but my concern is that the Government will set a maximum that will suit the big cities, while the smaller local housing authorities will not be able to meet their costs and will have to go elsewhere.

As for meeting costs through Government grant, I do not think any local authority or many local voters believe that any Government properly compensate local councils through that grant when they give them a new duty. While this Government have not been great in that regard, I am not sure that it is an issue that the Conservatives will want to probe in too much detail. We do not support the amendments as they may have the effect of forcing up council tax levels in small authorities.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Before I deal with the amendments and the particular points raised by hon. Gentlemen during the debate, it may be helpful to the Committee if, as I have done in the past, I put the purposes of the clause and the effect of the amendments on those purposes into context.

Clause 52 provides that an application for a licence must be made to a local authority in accordance with the requirements specified by that authority. In other words, subject to the regulations, an application must be made in accordance with the requirements specified. Importantly, the local authority can fix a fee for the consideration of licence applications that takes account of all its costs in running the licensing scheme. I will return to that point in a second.

Clause 52(5) gives the appropriate national authority the power to make regulations specifying various matters about licence applications and how they should be made. That includes the contents and form of the application forms, the manner in which applications are made and the maximum fees that a local authority can charge. I have forwarded to Committee members a note of policy intent on what we expect the regulations to say. I should emphasise that that will provide some standardisation across all licensing regimes, an issue that we have frequently debated in this Committee and which will be welcome to the Committee, in order that landlords do not face completely different applications for different types of property in different parts of the country.

I reassure Committee members that I am as keen as everyone else to ensure that landlords' costs are kept

to a minimum. However, we also wish the licensing regime to become self-financing through the fee revenue received. We have already carried out initial work with the Local Government Association on the issue. The association represents all types of authorities including the smaller ones and I have no reason to believe—as the hon. Member for Ludlow alluded—that the interests of the smaller authorities have not been taken into account in the course of the initial work.

As a result of that initial work, we expect fee levels to be capped at about £110 per unit—for example, per habitable bedsit. For a five-year licence, that amounts to a little more than 40p a week. I hope that the Committee will agree that that is not an unreasonable amount.

Mr Robert Syms (Poole, Conservative)

The Minister has set out a likely maximum of £110. Is that at all variable between districts? For example, in a debate earlier today we talked about a property block in London. Let us consider a block of 100 properties, in which an inspection might be an all-day, two-day or even three-day job, which is rather different from the inspection of a block that has just a few people in it in a small town. Will the fee use a broad-brush approach so that there may be some inspections where the local authority loses money and some where it makes money? The fee of £110 would not be much for a large block in London but it might be an awful lot for a small place in Prestatyn. Is it a set fee for the whole of the district, or would there be some variation depending on the sort of property or on the amount of work that a local authority has to do?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I thought that the hon. Gentleman's reference to the quality of property in Prestatyn was gratuitous, and not in accordance with the generous and happy spirit that for the most part has prevailed in the Committee. I am convinced that there are some excellent properties in Prestatyn, which would be worth the full £110.

Mr Chris Ruane (Vale of Clwyd, Labour)

Prestatyn is in my constituency. Denbighshire county council tried to operate a licensing scheme and was charging £60 per room. Surely that is more in line with the cost of thoroughly inspecting a property? Does the Minister not think that we are selling ourselves short at £110 per house?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

My appetite for a visit to Prestatyn grows with each of my hon. Friend's interventions. However, we are talking about a maximum—a capped sum.

I am grateful for the question put by the hon. Member for Poole about the possibility of variability across a district. That contributes to what I might describe as a mutual learning process in this Committee. The answer to his question is yes. There is provision for exactly that variability across districts.

Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)

The Minister is in danger of displaying the Office of the Deputy Prime Minister's new enthusiasm for capping.

Did the Minister say that £110 is the maximum per bedsit? Would a property with several bedsits in it—several independent households—incur £110 per

household, or would the £110 be imposed on the property, which could vary considerably in size? If the charge is per bedsit, the maximum for a six-bedsit property would be £660, rather than £110.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

The hon. Gentleman is absolutely right. It is important that we are clear. We are talking about a charge per unit—per habitable room. However, I remind the hon. Gentleman and the Committee that there is local flexibility, and that the fee is a maximum fee; any local authority can charge less. The maximum fee will be set through secondary legislation, on which we will consult in due course. As part of their desire to keep fees low, the Government have already expressed their willingness to assist local authorities with start-up costs relating to the introduction of licensing. We estimate that about £13 million will be made available for that.

I recognise that amendments Nos. 266, 267 and 268, tabled by the official Opposition, are probing amendments, but I point out that they would remove the discretion for local authorities to set a fee appropriate to their local circumstances; they would impose a fixed fee across all localities. I accept the case for seeking as far as possible a common approach among local authorities, but on this matter the case for local discretion is strong. A flat-rate national fee would have to be set at a level that ensured that all local authorities could finance their licensing regimes. The average cost of running schemes is likely to vary considerably, and we want local fees to reflect that. It would not be right for a local authority to make a profit from its licensing scheme. We expect local authorities to set much lower fees in certain circumstances—for example, for landlords who are already part of voluntary accreditation schemes; the cost of licensing such landlords would inevitably be lower.

Mr Richard Younger-Ross (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Teignbridge, Liberal Democrat)

Will the Minister give way?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Of course, although I am not used to gazing that far down the Room.

Mr Richard Younger-Ross (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Teignbridge, Liberal Democrat)

The Minister says that he does not think it right that the authorities should make a profit from the fees. Will he impose regulations to prevent them doing so?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

It is not our intention to introduce a regulation to that effect, although it is fair that the licensing fee should cover the cost of the operation of the scheme in a particular locality. That reinforces the point that these are horses-for-courses costs for specific localities: we are intent, in the spirit of new localism, to leave the matter to local authorities. Such an approach will also be an incentive for good landlords to work with local authorities in the run-up to the introduction of licensing: that would benefit all involved.

Mr Peter Pike (Burnley, Labour)

Order. I am getting the impression that the Minister needs inspiration.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I dare say that, not for the first time, it will wing its way to me in due course. Here it comes:

the US cavalry rides to the rescue. If I need to correct anything that I have said, I will do so. We are pretty relaxed. I am advised that the matter to which the hon. Gentleman referred is in the Bill already. We should all have known that. It is in clause 52(7). I was going to deal with that.

I return to amendment No. 273. The hon. Member for Ludlow chastised the Conservative amendments for their centralising tendency. He is right, but I have sometimes had occasion to remark that the Liberal Democrats are not immune from the same regulatory tendency. The amendment would constrain local authorities and would require that the conditions that they could impose could only be those that the appropriate national authority considers to be appropriate. The amendment therefore seems to presume that the appropriate national authority would prescribe in a more detailed way than is currently provided for in clause 56(2) and schedule 4.

Unamended, the clause is about the scope that local authorities have for imposing conditions on a licence. Once again, the official Opposition want to restrict the scope of local authorities and require central Government to make the most prescriptive provisions. The scope that local authorities may have is indicated, and therefore somewhat limited, by clause 56(2). Central Government have been most prescriptive in relation to subsection (3) and schedule 4, which refer to the conditions that a licence ''must'' have.

The amendment would mean that the Government would also prescribe an approved list of conditions that might be included by a local authority in a licence. We do not see that the appropriate national authority is better placed than local authorities—as moderated by the housing tribunal on appeal—to determine the sort of conditions that are applicable, and to do so for all local authorities.

In light of those observations, I invite the hon. Member for Poole to withdraw his amendment.

Mr Robert Syms (Poole, Conservative)

We are learning a lot about the Bill's implications. The £110 charge per bedsit threw a lot of light on what local authorities could charge. Somebody inspecting a large property in London with 100 or 200 properties could charge £15,000 or £20,000 for doing so, compared with £200 or £300 for a small property. Presumably, if an inspector went into a large property and found that in a number of flats everything including the wiring was fine, it would not be necessary for them to look into every flat, so it would probably be more profitable to inspect 100 or 200 properties because one would quickly get a clear idea of whether the block was well maintained or able to meet the standards. I thank the Minister for the points that he has made. He mentioned that 40p per week was not an awful lot per property, and that it is payable for five years. On that basis, I am minded to withdraw the amendment. I am grateful to the Minister for enlightening us on that part of the process. I am sure that we will return to the matter, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 ordered to stand part of the Bill.

Clause 53 ordered to stand part of the Bill.