Committee (1st Day)

Housing and Planning Bill – in the House of Lords at 3:49 pm on 9th February 2016.

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Relevant document: 20th Report from the Delegated Powers Committee

Clause 12: Introduction to this Part

Amendment A1

Moved by Lord Greaves

A1: Clause 12, page 8, line 17, leave out “rogue” and insert “specified”

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, it is an exciting privilege to set off this Committee. I do not know how many sittings we will have, but I am sure that by the end of it we will have completely forgotten today. I start by apologising for not tabling the amendments in time to go on to the Marshalled List. I was a bit spooked by the change in today’s business, so I apologise for that.

As it is the start of a new stage of the Bill, I should declare some interests: my membership of Pendle Borough Council, of which I am deputy leader; I am a vice-president of the LGA; and I am vice-chairman of the APPG on Local Democracy—I shall miss its reception today because of the Bill, and I would rather be there, but never mind. There will be other interests, but those relate to the amendments I have tabled at the moment. In moving my amendment, I shall speak to the others in the group.

We move straight to Part 2, and I say right from the beginning that, first, this is one of the better parts of the Bill and, secondly, it is one of the better written and presented parts, with a great amount of detail on the face of the Bill and in the schedules. If the whole Bill were like that, a lot of us would be a lot happier, but we can be happy for the time being. This part is headed:

“Rogue landlords and property agents”.

When I read it, I asked myself whether the word “rogue” is a proper word to appear in legislation. What does it mean? Is it not just slang and colloquial? Why is it here? We will come back to that.

Chapter 2—Clauses 13 to 26—is all about “Banning orders”. As I said, the clauses in this chapter are admirably clear. They require the Secretary of State to set out in regulations exactly what the banning orders may be put in place for but, nevertheless, by and large, it is a model of good legislation. Clause 13 bans a person from,

“letting housing in England … engaging in English letting agency work … engaging in English property management work, or … doing two or more of those things”.

That is absolutely clear. That is what a person is banned for if they get a banning order. The interesting thing is that, after the first clause of Part 2, the term “rogue” or “rogue landlord” does not appear at all.

What sort of offences are we talking about? It will require regulations, but it is clear that it could be maintaining their property poorly, posing a risk of harm to tenants or other people, dangerously overcrowding their properties, exposing people to unhealthy conditions, housing illegal immigrants, intimidating or harassing tenants who raise a complaint. These things are all absolutely clear, and clearly set out, but they are specific problems that lead to people being banned; it is not clear that they lead to a person deserving the epithet “rogue” or being given that epithet for however long.

In Chapter 3, we have the “Database of rogue landlords and property agents”. However, apart from a statement to that effect at the beginning of the chapter, the words “rogue landlord” do not appear again. Clause 27(1) says what the database is. It must include people with banning orders and it may include people convicted of a banning order offence while being a residential landlord or property agent. It includes some people who have to be on the list and some people who can go on the list, but it is all about banning orders and banning order offences.

This part of the Bill is complicated. I tried to get my mind round it perfectly, but I could not. Then I saw that it will rely on guidance from the Secretary of State so that local authorities can understand it in the way that I cannot. Okay, but it is very clear that what we are going to have is a register of banned landlords and others who have committed banning order offences. What will it be called? Will it be called the register of rogue landlords, because the word “rogue” does not appear in all this? I have the distinct impression that the phrase “rogue landlord” has been added to this legislation—after it was written by civil servants—by some spin merchant somewhere in the Government who thought it would be a good idea to get some good publicity to get it through. I do not think this is the way that legislation should be written. That phrase is in the heading, but it does not appear anywhere else.

Clauses 40 to 50, which are still under the part which is supposed to be about rogue landlords, are all about rent repayments. The phrase “rogue landlord” does not appear anywhere. It is not clear to me whether any landlords who get involved in the whole system of rent repayment are rogue landlords or not. The heading of this part of the Bill contains the words “rogue landlords”, but are they rogue landlords or are they just people on the list who are rogue landlords?

Chapter 5 is “Interpretation of Part 2”. Clause 52 quite rightly sets out in some detail the “Meaning of ‘letting agent’ and related expressions”. Clause 53 sets out the “Meaning of ‘property manager’ and related expressions”. Clause 54 is a typical clause at the end of a part of a Bill. It sets out the meaning of 16 different words and expressions, starting alphabetically with “banning order” and ending with “tenancy”. However, it does not define “rogue landlord”.

Another point about which I am not at all clear is whether, once a person comes off the banned list, they are still a rogue. The problem is that it is one of those words—once a rogue, always a rogue. What does it mean? I looked up the Oxford Dictionaries on the internet and it is full of colloquial meanings. For example, it mentions:

“a distinct criminal culture of rogues, vagabonds, gypsies, beggars, cony-catchers, cutpurses, and prostitutes emerged and flourished”,

in the 16th century. I suppose that we would not accept Gypsies in that definition, but we are not going to have legislation denouncing people as coney-catchers or cutpurses. The synonyms in the dictionary include:

“scoundrel, villain, reprobate, rascal, good-for-nothing, wretch; … rotter, bounder, hound, blighter, vagabond”.

Later on, there was something about which I was not too happy—it says:

Northern English informal tyke, scally”.

As a Yorkshireman born and bred, I was not too happy about “tyke” being there. Perhaps we will have legislation denouncing lists of “tykes” who have to be dealt with in some way. Another definition is:

“A person or thing that behaves in an aberrant or unpredictable way”,

I do not think “rogue” is a suitable word.

I have put “specified” in the amendment because I could not think of anything better. I was going to put “banned”, but it is clear that other people may also be put on the list who have not actually been banned but who nevertheless have been convicted of banning offences. It is not entirely straightforward, but I believe that the word “rogue” and the phrase “rogue landlord” are not appropriate to go into the law of England. The Government ought to think of another phrase which is less suitable for tabloid newspaper articles and more suitable for the law of the land. I beg to move.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 4:00 pm, 9th February 2016

My Lords, this is a perfect description of the kinds of people we are dealing with. It will emphasise in the public mind exactly what is going on in the area of housing rental, and I hope that the Government will not give way on this amendment.

Photo of Lord Deben Lord Deben Conservative

My Lords, I am so pleased to be on the same side as the noble Lord who has just spoken. It seems a frightfully good word, it says exactly what we mean and it would be very nice if more of our legislation used language which we understood. “Rogue landlord” is a very good phrase to use because it is very important to underline how disgraceful some people are in their treatment of other people in this crucial part of their lives. My only objection is that the word is not used more frequently within the Bill, because there are several references within it where a reminder that this is a rogue-like activity is very necessary.

My only objection is that “rogue” has a certain rather light touch—it is not as nasty as a number of other words that were used. Perhaps if we had to change it, we could go through the list that the noble Lord has put forward and choose something that is thoroughly more unpleasant than the word “rogue”. However, I cannot imagine why anybody should start this very serious debate off with a discussion about the word “rogue”. This is one of the best things in the Bill. I may have to draw my noble friend’s attention to a number of other things later on as requiring significant amendment, and many things are left out of the Bill that I would like to see put in, but the one thing I certainly would not like to see left out is the word “rogue”.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I understand why the noble Lord, Lord Greaves, would not wish to be considered to be a member of the “Liberal Demotic Party” but we have more important things to discuss in the 14 groups that are before us. I trust that the noble Baroness will deal with the matter briefly, and then we can get into the substance of the Bill.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, before I begin, I will correct a comment I made at Second Reading. At col. 1266 in

Hansard

I attributed a comment to my noble friend Lord Young of Cookham but he did not make that comment. Obviously, I cannot correct it in

Hansard because I said it, so I use this opportunity to correct the attribution.

I will deal with the amendment briefly. When I saw the word “specified”, I thought of “specified housing” as opposed to a person. The public understand the concept of a rogue landlord, just as they would understand the concept of a rogue trader. BBC 1 in the morning is full of stories of rogues of various descriptions, so it is understood in the public mind. However, just to be clear, the majority of landlords and letting agents provide a good service, and we should commend them for doing that. This part of the Bill, which is widely supported, is about tackling the small minority of rogues who deliberately flout the rules. We should call them out for what they are, as they are rogues. It is important that we send a clear message through the Bill that such practices will not go unchecked. I therefore ask the noble Lord to withdraw the amendment.

Photo of Lord Northbourne Lord Northbourne Crossbench

My Lords, I speak as a humble landlord. How will I know whether I am a rogue?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

The noble Lord will know very well if he is a rogue landlord, because I will now read out the definition. It is a landlord or property agent who knowingly flouts the law by renting out unsafe and substandard accommodation. To be on the database, they will have to be convicted of certain serious offences—and, for that, they may come before your Lordships’ House.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, that is not the correct definition, with respect to the Minister, unless being banned by a First-tier Tribunal is a conviction. Perhaps it is—it is certainly a status—but it is clear that people banned by the First-tier Tribunal will be on the banned list. One assumes that they are therefore rogue landlords under the definition in the Bill, so they would not have to be convicted in a higher court of law. Yes, the Minister is nodding her head.

I will be brief. I am no friend of bad landlords—far from it. In the part of Colne that I represent, parts of those streets have been wrecked by bad landlords, and I agree that it is a clear phrase in the public mind. However, we are not talking about the public mind but about phrases that will have to be interpreted at some stage by the courts of the country. We are talking about words written into the law of the land. The use of such colloquial expressions, which are perfectly okay on breakfast-time television as the people who are denounced there deserve everything they get, will get us into trouble if we put them into the law.

If the Government are really determined to put this rather unusual and extraordinary expression into the law of the land, it ought to appear in the list of definitions at the end of Part 2 so that we have a clear definition of it, because when the Minister was asked just now she did not quite give an accurate one. At the very least, I ask that it appears in the list of definitions because words mean what they say. This is not Humpty-Dumpty land. Words actually have a meaning and, when it comes to the law, words have more of a meaning than they do in chat in the pub or on breakfast-time television. Having said that, I beg leave to withdraw the amendment

Amendment A1 withdrawn.

Amendment B1 not moved.

Clause 12 agreed.

Clause 13: “Banning order” and “banning order offence”

Amendment C1

Moved by Lord Beecham

C1: Clause 13, page 9, line 1, leave out from “means” to end of line 10 and insert “—

(a) unlawful eviction of a tenant; or

(b) failure to comply with an improvement notice in relation to property conditions.

(4) The Secretary of State may by regulations made by statutory instrument amend the list of offences in subsection (3).

(5) A statutory instrument containing regulations under subsection (4) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I shall speak also to Amendment 8ZA. Both amendments stem from the 20th report of the Delegated Powers and Regulatory Reform Committee, published just last Friday—hence the fact that they are manuscript amendments. Both the clauses affected, Clauses 13 and 22, have attracted considerable criticism from the committee. They relate to the introduction of banning order offences, about which the committee expresses serious concerns.

A ban would arise following conviction for a banning order offence and would prevent the relevant person from letting or engaging in letting agency or management work, as a result of an order made on the application of a local authority. It would also ban the relevant person from holding an HMO licence and allow him to be placed on a database. However, the Bill does not define the offence that would allow the Secretary of State to describe its nature, the offender’s characteristics, the place where it was committed, the court passing sentence and the sentence itself by regulations subject to the negative procedure—with no restriction whatever on the character of the offence, which need not be related to housing issues at all.

In a memorandum, however, a wide range of offences is cited as possibly relevant. The committee sensibly pointed out that these offences could be listed in the Bill with a power to amend, if necessary, by secondary legislation. The committee averred:

“We consider it inappropriate that the determination of the offences that are to constitute ‘banning order offences’ should be left entirely to the discretion of the Secretary of State and with only a modest level of Parliamentary scrutiny”.

The committee recommended removing Clause 13(3) and replacing it with a provision listing offences constituting banning order offences, with a delegated power to amend by the affirmative procedure.

The amendment tabled today defines—very narrowly, it must be said—the grounds for a banning offence, and requires parliamentary approval for the relevant regulations. The grounds may be considered too narrow. I hope that the Minister will look at the issue and come back on Report with a more developed position in which parliamentary approval for any new offence is required.

Amendment 8ZA to Clause 22 relates to the provision for financial penalties for a breach of a banning order which may be imposed by the local housing authority. Subsection (9) requires the housing authority to have regard to any guidance given by the Secretary of State in respect of the exercise of its function under the clause. The amendment simply requires that such guidance should take effect only under the affirmative procedure. The amendment to Clause 22 relates to the provision in the clause in respect of the financial penalties for a breach of the banning order which may be imposed by the local housing authority.

The Delegated Powers Committee noted that Clause 22 allows a housing authority to impose a penalty of up to £30,000 for the breach of a banning order and points out that this is an alternative to a criminal prosecution. Unlike in the latter procedure, it will not be necessary for the authority to prove its case beyond reasonable doubt, such that, to quote the committee,

“this clause empowers an authority to act as if it were prosecutor, judge, jury and executioner”.

The provision in subsection (9) requiring the authority to have regard to the guidance means that such guidance will be expected to be followed unless there are cogent reasons for not doing so. The committee concluded that, given the nature of the power conferred on local housing authorities—which would deny the accused access to adjudication by a court as to whether a criminal offence had been committed—the guidance is of great significance, and accordingly that it should be laid in draft and not come into force with the affirmative procedure.

These observations essentially foreshadow the amendment to be moved later by the noble Baroness, Lady Gardner of Parkes. I think that we are at one on this: indeed, there was, I think, wide agreement around the House at Second Reading that there are far too many areas that are to be covered by regulation with no evidence that any of this will be presented to us as the Bill goes through. It may be ready for other parts of the Bill but there is nothing today on these matters. Unless we have an assurance from the Minister that we will be able to see regulations before Report, the House should take a strong view in support of the amendment which I now move.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, I rise in support of the amendments that have just been introduced. At Second Reading I welcomed some parts of the Bill but expressed concerns about some others: about the lack of detail, the large number of amendments laid at the very last minute in another place—again, without an opportunity for proper scrutiny—and the 30-odd additional powers given to the Secretary of State. Like many other noble Lords, I very much welcome the Minister’s commitment and promise to do all that she can to ensure that we get details of the various regulations, at least in draft form, as early as possible.

I think that many noble Lords, however, will share my concern that, despite the Minister’s promise, it seems increasingly likely that many of those draft regulations—even if we get them before we finish consideration of the Bill—will not come in time for the relevant amendments in Committee, and it may well be that some of those draft regulations will come after we have finished all stages of our deliberations in the House.

As has already been said by the noble Lord Beecham, we owe a debt of gratitude to the noble Baroness, Lady Gardner of Parkes, for tabling Amendment 1. Had it not been trumped by the amendments now before us, it would have been our only opportunity to express the concerns we have about the lack of detail and regulation. But since the noble Baroness laid her amendment we have now seen, as of yesterday, the 20th report from the Delegated Powers and Regulatory Reform Committee. It is a pretty coruscating document.

For those noble Lords who have not read it, it refers to a section of the Government’s memorandum to the committee and states:

“The memorandum gives only the barest explanation or justification for this power; indeed it seeks to dismiss this highly important provision as ‘quasi-technical’”.

It continues:

“The intended meaning of that expression wholly eludes us, and the House may wish to ask the Minister for an explanation”.

No doubt when we get to the relevant section of the Bill we will ask for that.

On Clauses 13 and 22, which are referred to in the amendments before us, as we have heard, there are numerous criticisms raised by the committee. It makes the point that there is no restriction on the type of offences that may be specified in regulations. It goes so far as to say that it does not have to be one connected with the letting or management of housing and could even be one committed before the enactment or coming into force of the Bill.

The committee points out, however, that some types of offences are described in the memorandum and that it cannot understand why the banning order offences are not listed in the Bill, together with a delegated power to amend the list as necessary. It points out that this is particularly puzzling given that the Government have succeeded in devising a list of offences in Clause 39, conviction for which could result in a First-tier Tribunal making a rent repayment order. That is why, as we heard from the noble Lord, the committee said:

“We consider it inappropriate that the determination of the offences that are to constitute ‘banning order offences’ should be left entirely to the discretion of the Secretary of State and with only a modest level of Parliamentary scrutiny … We therefore recommend that clause 13(3) be removed from the Bill and replaced with a provision listing the offences that constitute ‘banning order offences’, coupled with a delegated power to amend the list by affirmative procedure regulation”.

The committee is equally critical of the subsections of Clauses 13 and 22 which are referred to in the amendment. It is therefore to be welcomed that the amendment does just what the committee suggested should happen—it introduces a list and states that there should be an affirmative resolution for any subsequent changes to that list.

I am puzzled by one aspect of Amendment C1; perhaps the noble Lord will refer to it when he winds up. In the memorandum provided by the Government to the committee they say:

“It is envisaged that the type of offences which would be able to trigger an application for a banning order would be serious offences, including a conviction in the Crown Court for offences involving fraud, drugs or sexual assault that are committed in or in relation to a property that is owned or managed by the offender. It is also envisaged that a banning order may be sought where a person has been convicted of certain specified housing offences, which will include offences such as unlawful eviction and failing to comply with an improvement notice in relation to property conditions”.

The last two specified housing offences are referred to in the amendment, but no others are proposed, and there is no reference in the amendment to the conviction in a Crown Court for offences involving fraud, drugs or sexual assault.

The Government are saying that those offences should be included in the list. We believe that there should be a list, as proposed in the amendment, and hope, as the noble Lord said, that the Minister will reflect on this and add those offences to the list. We hope very much that the Minister will give her support for this and that in the event it will not be necessary to deal with Amendment 1.

Photo of Lord Deben Lord Deben Conservative 4:15 pm, 9th February 2016

My Lords, it is quite understandable why the Government have been—if I may put it like this —so loose in the wording, because they do not want to get themselves into a position where they cannot act when an offence of some notoriety takes place. I understand that. However, the big issue here for me is a very fundamental one about the freedom of people in this country. One needs to know that beforehand when one is doing something that will lead to one being punished. My concern here is that there is no certainty and that it might alter depending on who is the Minister responsible. In recent days, we have had an example of how different ways of looking at justice can proceed from Ministers of the same political party—if I may put it as delicately as that.

In those circumstances, it might be of advantage to have a list and to be a little tighter here, while still giving enough elbow room for the circumstances in which a rogue landlord might find some way to behave which we have not yet thought of. As a Member of Parliament for a very long time, my experience of rogue landlords was that they are infinite in their ability to discover mechanisms by which to penalise, harass and indeed destroy the lives of their tenants.

I am sympathetic to this amendment, and think it should contain some of the points raised by the noble Lord, Lord Foster, but I hope also that we would be sympathetic to the Minister on this, because it is important that we should be able to move with the crime. We should not be so caught by the phraseology that we cannot deal with something which we have not thought of yet. With that proviso, I wonder whether my noble friend will look again at the way this is done, so that we can protect that essential freedom whereby I know in advance what will happen if I do something which I should not do, rather than not knowing in advance what will happen if I do something which I might find out someone else has decided I should not have done. I just do not think that is a very good basis for English law.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I want to intervene briefly again, because this raises an issue of principle which came up during our consideration of tax credits. If you read the report of the Joint Committee on Conventions—the Cunningham report—you will find, under one of the sections, the conditions in which the House feels it is entitled to vote on fatal amendments. I am increasingly of the view, as I think are a number of other Members on this side of the House, that the Government are now abusing legislation by introducing skeleton Bills and bringing in, on the back of them, statutory instruments which they feel the House cannot consider in detail because we cannot amend them. This is a classic case of where, had the House had been given more information in the Bill, we would at least have had the opportunity to debate the detail, within the circumscribed area referred to by the noble Lord, Lord Deben, that would allow for flexibility. We could have considered in some detail what the crimes—if I might use that word, although it is a very broad one—might be.

I feel very strongly about fatal amendments. When it came to the consideration of tax credits, I was one of the very few Labour Peers who refused to vote, on the basis that I did regard what we were doing as fatal. That is how strongly I felt. However, increasingly in conversations with others, they will point to these recommendations on skeleton Bills and the use of SIs. One is being driven into a position whereby one has to vote on fatals—something which I never wanted to do when I was brought to this House some 15 years ago. As the Bill progresses, the noble Baroness should have it in mind that we need more detail, particularly in areas where Members might feel they wish to amend primary legislation.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

Amendments C1 and 8ZA relate to the same issue, so I shall address them together. Amendment C1 would remove Clause 13(3) from the Bill and replace it with a provision listing the offences that constitute banning order offences, namely,

“unlawful eviction of a tenant; or … failure to comply with an improvement notice in relation to property conditions”,

and would require that regulations to amend the list be subject to affirmative resolutions.

Amendment 8ZA would amend Clause 22, and would require financial penalty guidance to be laid in draft before Parliament, and not brought into force without an affirmative procedure resolution of each House.

We propose to define banning order offences in secondary legislation, as this will give us the flexibility to amend the list of banning order offences in the light of experience, as my noble friend Lord Deben said. As he has also requested in terms of certainty, we are sympathetic to that and we will consider it further.

Clause 13(4) explains what matters may be taken into consideration when setting out in regulations what are banning order offences. Banning order offences are likely to include a serious offence, where an offender has been convicted in the Crown Court of an offence involving fraud, drugs, sexual assault or violence that is committed in, or in relation to, a property that is owned or managed by the offender, or which involves, or was perpetrated against, persons occupying such a property. A banning order offence also includes any serious offence involving violence against the tenant by the landlord or property agent, and serious breaches of housing legislation.

We are planning to publish the secondary regulations in draft and will consult on these in the autumn before they are laid before the House. These will all be existing offences that already have serious consequences for those who are convicted. We are introducing civil penalties as an alternative to prosecution, and these will be available for certain serious breaches of housing legislation. The guidance for local authorities will be procedural and will provide advice on when it may be appropriate to issue a civil penalty rather than prosecute, together with advice on what might be the appropriate level of penalties.

The noble Lord, Lord Beecham, asked about the right of appeal for civil penalties. The landlord will have a right to appeal against a civil penalty to a First-tier Tribunal and can either cancel or decrease the penalty. Several noble Lords have brought up the DPRRC and its recommendations on the delegated powers in the Bill, including those highlighted in these amendments. I can confirm to noble Lords that we will consider the committee’s recommendations and respond in Committee if possible, but certainly before Report. I hope that, with those comments, the noble Lord will feel content to withdraw the amendment.

Photo of Lord Shipley Lord Shipley Liberal Democrat

Before the Minister sits down, can I confirm my understanding of what she has said about secondary legislation? There was a request earlier that a draft of the secondary legislation should be made available to this House before Report. Yet I understood the Minister to say that there would be a draft of the secondary legislation in the autumn, which is clearly not before the Report stage. This is an extremely important matter, so can the Minister confirm exactly what the Government plan to do?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I thank the noble Lord for seeking that clarification. I said that we were planning to publish the regulations and consult on them in the autumn. If I can get any detail on them before then, I shall do so.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice) 4:30 pm, 9th February 2016

My Lords, I am grateful for the Minister’s reply so far as it goes but there remain significant problems, particularly the contrast between a local authority being able effectively to impose a penalty of up to £30,000 for breach of a banning order on the basis of the balance of probabilities as opposed to a criminal prosecution, where of course the case would have to be proved beyond reasonable doubt. I am not at all sympathetic to rogue landlords, however they are described, but it is a curious position to have two processes, one of which requires a higher standard of proof than the other. That cannot really be satisfactory. In some respects, it may well be better to bring such a person to the courts on a criminal charge rather than the local authority taking action and securing financial compensation, yet that is a choice that will be left to the local authority. I am normally very much in favour of local authority discretion, but in this area we have to be careful not to infringe the responsibility of the judicial system. I invite the Minister to undertake at least to consider this aspect as well as those that she has already agreed to take back.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I am happy to consider it, but the guidance for the local authorities will make it clear in what circumstances it would be appropriate to use a civil penalty rather than to prosecute. If it would be helpful, though, I will set out more detail around the two routes available.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

That would be extremely helpful, but it would be particularly important to be clear what standard of proof is required under the procedures involved. Would it be the same standard of proof or a different one? I am not asking the Minister to answer that at the moment, but I would hope for an assurance that that would be dealt with in the information that she has kindly offered to supply. I assume that her nod was a nod of consent. I beg leave to withdraw the amendment.

Amendment C1 withdrawn.

Clause 13: “Banning order” and “banning order offence”

Amendment 1

Moved by Baroness Gardner of Parkes

1: Clause 13, page 9, line 10, at end insert—

“( ) This section shall not come into force until at least one year after the publication of a draft of regulations to be made under subsection (3).”

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, I am very grateful to the noble Lord, Lord Beecham, for covering so much of the explanation of what the wording of my amendment means. It looks a bit obscure to me, but I understand that it is the appropriate tool for bringing up the issue of the regulations. I consider that we cannot satisfactorily deal with the Bill in its present form without proper consideration of the proposed regulations. I am impressed by the comments already made by the noble Lords, Lord Shipley and Lord Foster of Bath, who have done a lot of explaining that I would otherwise have to do.

At Second Reading, of the 50 speakers, more than 20 drew attention to the need for us to have the detail, in the form of draft regulations, available for us to consider during this stage of the Bill. The noble Baroness, Lady Andrews, said:

“Vast swathes of policy are left to secondary legislation”,

and concluded:

“The Bill deserves, and I am sure will get, the most intense challenge and scrutiny in this House”.—[Hansard, 26/1/16; cols. 1188-90.]

The noble Lord, Lord Kerslake, ended his speech with the words:

“First, we urgently need to see the detail of what is proposed in the secondary legislation. Secondly, we need Ministers to be genuinely open to change”.—[Hansard, 26/1/16; col. 1195.]

I believe that Ministers are genuinely open to change but that there is some degree of obstruction within the department. When we have had our three meetings with the Minister on this issue, they have said that they feel they cannot get anything through in time and that all this could be looked at after the Bill receives Royal Assent. Of course, that is hopeless: if we look at things after Royal Assent, all we can do is have a statutory instrument come forward, to which we say yes or no. We are not then in a position to improve the legislation.

The noble Baroness, Lady Royall, said that,

“the regulation rot sets in at line 14 and continues throughout”.

Then she said:

“The details will be determined by regulation”.—[Hansard, 26/1/16; col. 1197.]

There it is again. The noble Lord, Lord Palmer, speaking about,

“the lack of published regulations relating to the Bill”,

said:

“I suspect that that is because they have not even been written yet”.—[Hansard, 26/1/16; col. 1239.]

That was a fairly appropriate remark, particularly in view of what had been said at our pre-meetings.

The noble Baroness, Lady Grender, wanted regulations now. Again, she is one of many of us who have said that. The noble Lord, Lord Whitty, said that he was expecting,

“vast reams of secondary legislation. Many of the clauses have not been properly considered and received cursory—if any—scrutiny in the Commons”.

I think that is true. The Bill has been pushed on to us after the barest consideration in the Commons, which makes it doubly important that we carefully consider every aspect of it in this House. The noble Lord went on to say:

“This Bill gives 34 additional powers to the Secretary of State”.—[Hansard, 26/1/16; col. 1254.]

That is highly significant.

The noble Lord, Lord Foster of Bath, made a point, which the noble Lord, Lord Beecham, also made, about the report of the Delegated Powers and Regulatory Reform Committee. I know its title well, because I served on that committee for almost 10 years —certainly for more than two terms—and I have never read a more scathing report than this one. I would not even have realised that it had been published, because it came out so close to time, had I not, at Questions earlier today, found myself sitting next to the chairman of that committee, who asked me whether I had seen the report. I left Question Time early to run out and get it, to see what it said. It affirms what we are saying: we need all this. We need the information so that we can deal with what is before us. As I said, once the Bill receives Royal Assent, it is too late for us to make any significant change. It is a very interesting and enormously powerful Bill, and it must be considered very carefully. Local authorities, too, have the right to know the detail of what is being considered, so that they can send their comments to Members of this House, and we can decide what we should be doing. I beg to move.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

I support the noble Baroness and, in doing so, I declare my interests, first as a professional property manager, and—possibly even more significantly—as a private sector landlord. I believe I have a very contented set of tenants, without any of the roguishness that we have heard about.

Leaving aside the absence of a clear due process in the Bill and the safeguards that should go with that, in what I can describe only as this “subcontract” process to local government, putting to one side the non-judicial disposal of a case that might result in the label “rogue”, with lasting stains on character, and parking for one moment the hiatus in terms of the standard of proof referred to by the noble Lord, Lord Beecham, there remains an overriding need for Parliament to retain scrutiny of the process, the safeguards and the standards. At the moment we seem to be short of a commitment on that.

I am also concerned that the whole process is a bit reactive, populist and, if I may say so, potentially discriminatory against a class of person called a landlord or their letting or managing agent. At Second Reading, I advocated—at least, I hope it was interpreted that way—perhaps going beyond that to try to support and nurture best practice, in equal measure carrot and stick. It seems to me that landlords can very easily be pilloried by their feckless tenants in the same way that tenants can clearly be very easily prejudiced by malevolent landlords.

There are probably at least as many undesirable tenants, in numerical total, as there are undesirable landlords. I do not say that in any way to cast aspersions on the tenants. I believe that the vast majority of them, in the same way as landlords, honour their commitments, try to do the best thing and genuinely create something that is growing in popularity. It is an expanding sector. The last thing we need to do is to set about damaging it so that people feel that they are under the cosh and go away. At Second Reading, I referred to the fact that our European neighbours seem to have sorted this out without this continual anti-landlord or anti-tenant adversarial approach in their dealings.

Therefore, we need to look at the whole situation and—if I may put it this way—somehow invert the process. Perhaps having the regulations before us is one step on the way so that we can look at that in detail and examine what the actual process is. At the moment, it would be possible for almost anything to be passed down to local government. As a vice-president of the Local Government Association, I would be slightly fearful, as a local government chief officer, of what might get passed down to me, thank you very much, as a hand-me-down to police this sector.

I support the noble Baroness. The key to this is very much to get these regulations out, and I support the general thrust of her amendment.

Photo of Lord Shipley Lord Shipley Liberal Democrat

In a sense, everything has been said about this issue, but we must put on the record, for the avoidance of any doubt, that this amendment in the name of the noble Baroness, Lady Gardner of Parkes, is extremely important. As we have heard, had it not been for the manuscript amendments, this would have been first that we discussed. It brings to the fore the issue of principle about the role of your Lordships’ House.

I agree that the Delegated Powers and Regulatory Reform Committee’s report is one of the most critical—possibly the most critical—that I have read. For that reason, it matters profoundly how the Government react to it. This House must be able to do its job properly. With so much being left to secondary legislation and so much that will not be with us by Report, the Government will have to do a very urgent job.

It has been asserted that perhaps the secondary legislation has not been drafted. It really ought to have been. If it has not been, we should be told. If it has been, and it is in a form that we could see, even if it is a draft of a draft, that would be extremely helpful. I think the Minister understands the strength of feeling in your Lordships’ House about this issue. I sincerely hope that she can respond positively to the amendment moved by the noble Baroness, Lady Gardner of Parkes.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I warmly endorse everything that the noble Lord, Lord Shipley, has said, and I, too, pay tribute to the noble Baroness, Lady Gardner of Parkes, who of course has long had an interest in these matters and has repeatedly raised them in your Lordships’ House.

It is important that the Government listen to the experience of Members from a variety of backgrounds, who know a good deal about the implications of legislation of this kind. There is a temptation to legislate in haste with a risk that you—or, more particularly, other people—repent at leisure. There is that concern about the way this matter has proceeded thus far. I fear that it is not uncommon for the committee to comment adversely on the way that matters are brought before your Lordships’ House. Lack of consultation and the reservation to government of powers to prescribe by secondary legislation, which may not come for a long time or sometimes come into force before any scrutiny has been given, is particularly invidious when we are looking at areas such as this, which impinge on the lives of many citizens.

The noble Earl, Lord Lytton, has a point, particularly about the role of local government. If the duties of local government are to be expanded—and they ought to be in this respect—that is clearly a new burden under the convention which is supposed to apply to new duties imposed on local government and will have to be resourced. In certain areas, there will be significant resource implications. That is a function of the expansion of the private sector market, in particular. The noble Earl referred to the growth of the sector, which has been substantial. We now have a very high proportion of properties rented in the private sector, sometimes by very reputable bodies. I am particularly pleased to see well-established, reputable financial institutions now looking at entering the market to provide such properties. I would not take it for granted, but they are more likely to be responsible owners and managers of private rented properties than some others of the character we have been discussing, of whom there are, unfortunately, too many.

The reality is that the market has expanded hugely because of the constraints on the building of local authority housing—social housing—which are likely to increase if other parts of the Bill go ahead unamended, and because of the general property shortage. Astronomical rents are being gleaned for little effort in either investment or management, save for the purchase price. That clearly colours our debate.

I concur with those who ask the Government to produce something before the Bill completes its course, even if only early drafts. We need to know the direction in which they are going. We need assurances about how the duty is to be resourced. I do not blame the Minister for this, but, thus far, those have not come over the horizon. I hope she will pass on the feelings that have been expressed across the House in an effort to encourage others in the department to get on with the job. That is, to bring forward material not just devised in Whitehall offices but after discussion with reputable bodies which have an opinion to give: local government, certainly, but also other organisations in the sector. Representatives of tenants and citizens advice bureaux, for example, deal with many cases of difficulties arising in landlord-tenant relations.

The noble Baroness is obviously of sympathetic mind. I hope that the opinion of the Committee today will reinforce her endeavours to persuade colleagues to react positively to something that is intended to improve the legislation, not to destroy it in any way, and make it effective in the interests of all parties.

Photo of Viscount Eccles Viscount Eccles Conservative 4:45 pm, 9th February 2016

My Lords, I was a colleague of my noble friend Lady Gardner of Parkes on the Delegated Powers Committee for a while. My experience on that committee was that it thought very carefully before making a recommendation. In general, it has been the House’s experience that the committee’s recommendations, particularly the more severe ones, are to a large extent accepted. I hope that my noble friend on the Front Bench will be able to persuade her colleagues that the recommendations we have been discussing—Clauses 13 and 22 come to mind—need to be taken very seriously and responded to in a positive manner, not pushed off into any form of long grass.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, I repeat my congratulations to the noble Baroness on being the first in your Lordships’ House to lay an amendment on this very important issue. I echo all the words of my noble friend Lord Shipley, although he left one issue rather hanging in the air: the current state of play with the drafting not only of regulations in respect of Clause 13, which we are discussing, but of all others. Perhaps in her reply the Minister will be kind enough to inform the House what her understanding is of the state of play with the drafting of legislation which affects the Bill.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I understand loud and clear the premise of the amendment of my noble friend Lady Gardner of Parkes, which proposes that the scheme for making the banning orders would not come into force until a year after the draft regulations setting out the nature and characteristics of banning order offences have been published. I understand the point about the laying of regulations and responding fully to the comments of the DPRR committee, which noble Lords have made loud and clear. However, I make it clear that people who have been convicted of offences that are in the nature of a banning order offence before the legislation comes into force cannot be subject to banning orders. That is quite important in the context of the discussion we are having. The legislation will therefore not apply retrospectively.

As I have said before, we have not included the specific offences in the Bill because we want the flexibility to add further. However, I can confirm that we will consult fully with interested partners on the matters that will constitute banning order offences before the regulations are laid in this House. I have set out the timetable for the consultation and for responding to the DPRRC. I hope to do that during Committee stage, but in any event we will definitely do it by Report.

I cannot remember which noble Lord—it may have been the noble Lord, Lord Foster—asked if we could have sight of what regulations they might be, when we might expect them and why we might not have them in a timely manner. I am more than keen to get what information I can to noble Lords to prevent some of the obvious concern that arises out of the Bill coming forward time and again, which it will—I cannot blame the House for doing that. The noble Lord, Lord Kerslake, is not in his place, but I point out that we are attempting to do that as fully as we can throughout the course of the Bill.

I hope that reassures my noble friend and other noble Lords that we do not intend to implement the banning order provisions in the Bill without fully considering the views of the interested parties on the nature and characteristics of such offences. We began that process last summer when we published our discussion paper on tackling rogue landlords, which noble Lords may or may not have seen, and we will develop them in further detail through further consultation later in the year. I therefore ask my noble friend to withdraw her amendment.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, I thank all those who have contributed very helpfully to the amendment and debated it. When the Minister says that she is more than keen to do things and make progress, I believe that. However, I feel there is a lack of willingness in the department. I do not say that just because she now happens to be the Minister. I had dealings with the Minister before her and with various Ministers before that. In all housing issues, I have found that there has been a reluctance to see any proper reform or progress. That is a great pity. We should probably have had a consolidation Act of all the property laws that have been passed. I have been involved in them myself since the early 1980s. All noble Lords know my registered interest, so I do not need to repeat it. Each time we pass another Act everyone working anywhere in the property world has to keep referring back to the previous Act and the Acts before that. I am told that consolidation Bills are not brought forward now because, in the past, the Law Commission used to finance them and bring them to Parliament. It will no longer do so unless Parliament agrees to finance the work that it does. This also needs a little bit of thought.

Something else that needs thought is the First-tier Tribunal. I opposed the removal of the leasehold valuation tribunal which could have dealt with the same sort of issue at a much lower cost. It is now extremely expensive. It used to be only £500. No matter what your case, more than £500 could not be awarded against you for most leasehold offences. Now, to bring your case at all, it is a minimum of £500 to walk in the door. It has changed into a much heavier legal procedure which I do not think works so well for simple cases. It has always been there and acknowledged to be necessary for the more important or serious cases. Certainly rogue landlords will come into that category. I did not speak earlier but, of course, the word “rogue” means something different to me as an Australian.

To return to the original point, I respect what the Minister has said. I hope she can persuade her department to bring these matters forward. I thank all those noble Lords who have participated and I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 13 agreed.

Clauses 14 and 15 agreed.

Clause 16: Duration and effect of banning order

Amendment 2

Moved by Baroness Grender

2: Clause 16, page 10, line 12, at end insert—

“( ) A banning order must specify how many tenants are thought to be affected by the banning order and what arrangements will be put in place to mitigate against those tenants becoming homeless.

( ) A banning order must specify that a local authority has given due consideration to issuing a management order to ensure existing tenancies are continued, wherever possible.”

Photo of Baroness Grender Baroness Grender Liberal Democrat

My Lords, these Benches welcome moves in this Bill to deal with rogue landlords, but this amendment deals with what I believe to be a possible unintended consequence which I think the Government and the Committee should consider.

When a landlord is banned what happens to any existing tenants of that landlord? This Bill lacks clarity in this situation. In Clause 16(4)(a) the implication is that existing tenancies will normally need to be brought to an immediate end with the following wording:

“A banning order may… contain exceptions— to deal with cases where there are existing tenancies and the landlord does not have the power to bring them to an immediate end”,

On the face of the Bill, this seems to suggest that the preferred route in these circumstances would be an immediate end to all other tenancies. The danger here is clear. An immediate end to a tenancy of someone already in the precarious situation of renting from a rogue landlord means for many the threat—or maybe the reality—of homelessness or rooflessness. My amendment tries to provide a safety net for any tenancies who will be in danger of becoming homeless as a result of a ban.

We also need to assume, in a worst case scenario, that the banned landlord has two options. First, he could transfer property to another party. In spite of the list of exceptions in Clause 26, let us assume, for the sake of argument, that the address book of this rogue landlord is not littered with responsible social landlord friends and acquaintances to whom he wishes immediately to transfer his property. The second option is immediate eviction and a quick sale of the property.

This brings me to the tenant. If they are living in appalling conditions, with a bad landlord, but know and understand that their complaint will result in eviction, will their fear of this outcome reduce their likelihood to make use of this welcome change in the law? Will local authorities in turn worry that to ban a landlord will result in more people being accepted as unintentionally homeless on their books? Is there a danger that these tenants will be classified by local authorities as intentionally homeless because of mandatory possession under Section 8 of the Housing Act 1988? The risk of that increases with buy-to-let mortgages when landlords get Section 8s in situations of mortgage arrears and repossessions.

I have a further question for the Minister suggested by the amendment: if the exemption in the Bill is in place because of existing tenants, where does that rental income go—directly to a landlord that the local authority is trying to ban at that point in time? The amendment simply attempts to ensure that a possible consequence is anticipated and dealt with in advance by understanding the likely impact on tenants. I guess that there are some ideal scenarios; perhaps the Government should consider an option where the local authority could be given the freedom to step in and appoint a suitable person or agency to manage the other properties, although obviously that would need to be with sufficient resource. Either way, the amendment throws light on an issue in the Bill that needs serious consideration.

Last week the Minister spoke in the Moses Room with great conviction about preventing homelessness. Will she please give an undertaking today to look again at this part of the Bill to ensure that homelessness is not the outcome of a banning order on a rogue landlord? We know that the end of a private tenancy is now the most common cause of statutory homelessness, accounting for 31% of all households accepted as homeless in England and 42% in London. These Benches believe that this part of the Bill has laudable intentions, but if the consequence is to make more people homeless then it is a very high price. I beg to move.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat 5:00 pm, 9th February 2016

My Lords, I support my noble friend’s comments and agree with everything that she has said. I shall speak specifically to Amendment 7, which is in this group and is a probing amendment.

Banning orders are a very important element of the Bill. They are not undertaken lightly and involve a great deal of research and work on the part of the local authorities. It takes many months of gathering information from tenants and consulting with related agencies operating in the sector, such as Citizens Advice, food banks, social services and local housing associations, to build up a picture around a person who they are investigating with a view to considering a banning order. Local authorities’ budgets are extremely stretched, as we know, and while it is to everyone’s advantage that they undertake this work in order to achieve a successful outcome when they apply for a planning order, it seems not unreasonable that they should receive the fine as recompense for the work undertaken. This will be especially important when it is highly likely that the local authority will be expected to house those previous tenants of the landlord subject to the banning order, as my noble friend has indicated.

There is an undertaking that local government will not be expected to take on new burdens that are not listed in the new burdens doctrine, with the expectation that the Chancellor will have had regard to this requirement when making the local government settlement. I would be grateful if the Minister could confirm that this is the case. Might she also be able to find a way forward to recompense local authorities in some way for this additional work, which is desperately needed by private sector tenants?

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, the noble Baroness, Lady Grender, has raised a very important matter, and it is appropriate that it should be grouped with government Amendments 3 and 4. As the noble Lord, Lord Deben, mentioned earlier, there is no limit to the amount of roguishness that can come about. As to the question of identifying who is the perpetrator, who the owner and who the person in control—is it a company and or an individual?—these are murky waters, particularly with patterns of complex ownership, possibly involving ownerships of non-domestic individuals or companies, and so it goes on. It begs the question, in terms of Amendments 3 and 4, as to what the person faced with the sanctions envisaged here will do under the government amendments in particular. What is the nuclear option? What are the choices before the case is even heard, let alone when it is actually heard? What happens when a conviction occurs and is subject to an appeal?

This leaves potentially malevolent folk, if that is what they are—we assume that the ones who are rogues are malevolent folk and are appropriately labelled as such—still with the considerable ability to make mischief and make life a misery. Whether that is spitefulness, simply being manipulative, or whatever, I see great problems. That is one of the reasons why I am concerned for local government being handed this issue on a plate. There may be very uncertain outcomes that are extremely costly to unpick. Bearing in mind what I said a few minutes ago, I am not in favour of short-changing due process. There must be due process. I do not think we can tackle roguishness that borders on, or may actually be, criminality, other than by proper due process. We cannot have the rule of law being circumvented to catch these people; we have to play this by the rule book. That is the only way in which not to discourage the willing horses while at the same time squeezing out the malevolent types.

I see, as the noble Baroness, Lady Grender, sees, some serious structural difficulties in dealing with this in practice. We have in this Committee the skills set to unpick this and to consider the complications and ramifications.

Photo of Baroness Redfern Baroness Redfern Conservative

My Lords, I support the Bill and welcome the following very clear measures to tackle the issue of rogue landlords that will strengthen the private rented sector.

Private tenants need additional reassurance that rogue landlords will be driven out of business, and banning orders for these criminal landlords and property agents is needed to prevent them operating and repeating serious housing offences. As a council leader, I believe that having the ability to apply for banning orders, together with fines, against rogue landlords and property agents is essential. This will prevent serious or repeat offenders, who are known to cause misery and harm to renters and place them at serious risk, from letting property. In such cases, there should be no room for these operators within the sector. I am pleased that the Government are determined to crack down on these landlords so that they either improve the service they provide or leave.

I also welcome the introduction of a much-needed database of rogue landlords and property agents. This will allow greater co-operation of local authorities around the country to keep track on banning orders and monitor ongoing trends. Having this national co-operation will, as I said, prevent serious or repeat offenders who are known to be causing misery and harm to renters and placing them at serious risk, from letting property, and there should be no room for these operators within the sector.

I ask the Minister to assure noble Lords that further government intervention against rogue landlords will happen and that she will collaborate with council leaders, like myself, in bringing a rogue landlord database to fruition as soon as possible.

Photo of Lord Palmer of Childs Hill Lord Palmer of Childs Hill Liberal Democrat

My Lords, I support Amendments 2 and 7, and draw the Committee’s attention to my entry in the register of interests as a director of the Property Redress Scheme, one of the government recognised organisations.

Amendment 2, in the name of my noble friend Lady Grender, draws attention to the fact that this House and the other place do not consider legislation in a holistic fashion. We seem to consider one amendment to one piece of legislation without looking at the unintended consequences of that legislation, as identified by Amendment 2. Yes, we should address rogue landlords, however one describes them, but that will have an effect on the tenants of the relevant properties. The tenant who makes a complaint will have some protection in terms of getting rehoused, but the property may contain a number of tenants, including those who have not made a complaint against the landlord who is banned. If the property is no longer available for letting, those tenants will become homeless. My noble friend drew attention to the transfer of the relevant property to other people who are not specified in the Bill. What then happens to the tenants? We do not know that because we are not adopting a holistic approach to the legislation. The noble Baroness, Lady Gardner of Parkes, said that we do not have consolidation Bills. We have unintentional effects because of that.

Amendment 7 was spoken to by my noble friend Lady Bakewell. The problem is that we pass legislation without considering sanctions. The sanctions are to be imposed by local authorities, which are having their grants reduced and are looking for ways not to spend money rather than to spend it. Amendment 7 proposes that local authorities which are proactive in implementing the legislation should retain the relevant financial penalty. When the Minister replies, will she say whether the Government have had discussions with trading standards departments, environmental health departments and housing departments on how they will implement this part of the legislation to ban rogue landlords? I know of only one London borough—Camden—that has a really active trading standards officer dealing with housing, but the rest do not have the finance to cover this area. Therefore, I hope that some research has been carried out with local authorities in England to determine whether these restrictions will bite where they need to.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, I support Amendment 7. I appreciate what has just been said, but certainly my view is that one of the big problems with all these housing issues of overcrowding and everything else is that the local authorities cannot afford to implement the enforcement and inspection measures that are constantly necessary. Indeed, at a later stage in the Bill I intend to bring forward an amendment to enable them to charge more for planning applications for these enormously expensive huge underground developments which many people find very inconvenient. The person who applies for planning permission for a simple little underground development just to give their family more space pays the same amount as the person applying to build a multimillion pound development. That is very unfair. The proposed measure would enable local authorities to have a little more money to enforce their many obligations. This amendment is valuable in that respect.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 5:15 pm, 9th February 2016

I will speak to the amendments moved to and spoken by the noble Baronesses, Lady Grender and Lady Bakewell of Hardington Mandeville. We all know the reality. The reality is that local authorities will be picking up this responsibility because people will be advised by the homeless charities or whatever to go to the local authority, and the local authority will have to pay. The question is: who should ultimately pay?

It may be that the Government should take upon themselves the right to take a charge on the landlord’s property. I know it would be very controversial—I am sure the lawyers would have a field day—but it would mean that the local authorities would get their money back. I therefore put that as a suggestion, which the Minister might wish to pursue when we get to Report.

Government Amendment 4, in the name of the noble Baroness, Lady Williams of Trafford, deals with further offences by the person who committed a first offence. What about people who transfer their interest, so that the further offence is committed by the person to whom the interest has been transferred? Clause 26 deals with the “Prohibition of certain disposals”. Subsection (1) states:

“A person who is subject to a banning order that includes a ban on letting may not make an unauthorised transfer of an estate in land to a prohibited person”.

Subsection (4) describes a “prohibited person” as,

“a person associated with the landlord”,

or , under subsection (4)(f),

“a body corporate in which the landlord has a shareholding or other financial interest”.

Subsection (5) states that an,

“‘associated person’ is to be read in accordance with section 178 of the Housing Act 1996”.

In that section of the 1996 Act, I am told that an “associated person” is someone who is in a marriage to, or is a cohabitee of, or lives with, or is a relative of the landlord, or someone whom the landlord is about to marry, or who is a child of the landlord. Does this include relationships that have developed and are registered overseas? Many landlords will be operating from overseas, so we will have great difficulty identifying who the owner of a particular property is.

This brings me to the second point, which is about,

“a body corporate in which the landlord has a shareholding or has a financial interest”.

What about companies registered outside the United Kingdom? The landlord might be in some tax haven or in some other part of the world, which is perfectly respectable but where we do not have much access to information. I think these bodies need to be more clearly defined in the law, and I wondered whether the noble Baroness might wish to comment on that as a proposition.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, the amendments put forward give rise to a very simple, brutal question—I speak as somebody who is wrestling with trying to produce a council budget at the moment, in very difficult circumstances—and that is: how much is this going to cost local authorities? I have looked at the impact assessment, and basically it talks about the cost to the private housing sector—to the providers of private-landlord accommodation. Unless I have completely missed it, I cannot find any assessment of the cost to the local authorities, who will have the responsibility of doing all this. My first question is: have the Government made an assessment of this and, if so, will they tell us what it is?

The second thing I have been trying to apply my mind to is, in my own authority, how we will deal with this. The point about local authorities, of course, is that they are very different: there are large unitary counties, there are large metropolitan and other unitary urban authorities, and there are small districts. It is the housing authorities as a whole which will have to deal with this, including the small districts. The way the small districts may be able to cope is perhaps very different to that of a large authority that employs a lot more specialist staff, such as solicitors and property management people. I have, therefore, been trying to get my mind round how local authorities will actually make the decisions about applying to the tribunal for a banning order—who will make those decisions, how it will be done, how much it will cost, how much work will go into it—and dealing with appeals, because it is quite clear that there will be a lot of appeals, assuming that a lot of people go through the banning process.

Then there is the second decision. Apart from the people who have gone through the tribunal and automatically go on the database, there is a decision about whether to put the other people who have been convicted of banning offences on the database. How much time and resource will that decision take? Again, there is the question of appeals, which are never cheap for local authorities, and then there is the cost of maintaining the database itself: whether or not that is onerous depends on how many people there are on the database. My second question is really linked to how much the Government think this is going to cost local authorities—any answer to that must be based on an idea of how many cases there are going to be over the period of a year, or whatever it might be. Do the Government have any answer at all to those questions?

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

My Lords, at the start of the first day of Committee, and my first contribution at that stage, I should have declared that I am an elected councillor of the London Borough of Lewisham.

I join other noble Lords in concern about the lack of regulations available for noble Lords to see. Why does the Minister think that it is acceptable to bring forward a Bill in such a sorry state? Does she accept that it is wholly inadequate to suggest that the Government will consult fully and lay regulations months after the Bill has become law?

On Second Reading, and subsequently, I and other noble Lords from these Benches have welcomed the banning order proposals in the Bill. They will provide, we hope, an effective additional tool for local housing authorities to use against rogue landlords and persons engaging in letting agency or property management work who think that they can rip off tenants and treat them badly with impunity. With an ever-increasing number of people forced into the private rented sector, it is important that there are proper safeguards. Peter Rachman became synonymous with the rogue landlords of the 1960s. We want to ensure that we do not have any modern-day Rachmans, or, if we do, that they are dealt with effectively.

I also see the proposals in this part of the Bill as a first step to dealing with the issues in the private rented sector that make life difficult for tenants living at the poorer end of the market. The ward that I represent on Lewisham Council is typical of those that the Bill is aimed at: we have very little local authority housing other than a successful housing co-op, and until recently an overwhelming number of people there were owner-occupiers. However, there has been an explosion in the private rented sector in the last 10 years, for a variety of reasons. Most landlords are very good, with anything from one to a few properties. They often get into the market as a landlord because they have fallen into negative equity, have looked to move on but have been unable to cover their capital outlay. Many of those coming to my surgeries are now private sector tenants, invariably young people, both singles and couples, who cannot get any social housing because they are not in a priority group, cannot go on the housing list, cannot afford to buy and are left to seek refuge in the private rented sector.

When I was a member of Southwark Council in the 1980s, we had properties deemed hard to let—that nobody wanted to live in—and the council was able to let those to single people and couples who would not otherwise qualify for social housing. That category no longer exists. The amendment proposed by the noble Baroness, Lady Grender, in this group, has identified what is a significant omission from the Bill. The amendment has the full support of noble Lords on these Benches. After we have taken action against the rogue landlords, what happens to their tenants? These will be the very people who have suffered at the hands of the rogue landlord in the first place. It is right that the amendment should be in the Bill and not left to regulations, advice notes or any other procedure that does not involve it being clear in the Bill itself. If the noble Baroness, Lady Williams of Trafford, does not accept the amendments today, I hope that she will at least reflect on this proposal and meet with colleagues from your Lordships’ House to discuss this matter before we get to Report.

We also support Amendment 7, in the names of the noble Baroness, Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Palmer of Childs Hill. Following an enforcement action resulting in a financial penalty, it must be right that the money should be retained by the local authority and not be lost to the Consolidated Fund or some other place where money from these penalties goes and never returns.

The remaining amendments in this group are government amendments. Amendments 3 and 8 appear to correct drafting errors and make matters clearer. Amendment 4, to which my noble friend Lord Campbell-Savours referred, seeks to deal with the situation where a person convicted of an offence continues with the breach after conviction. I have an issue with this amendment. Does it go far enough when dealing with people who, at this stage, have no respect for the law, or where the tenants are again in a difficult situation? We may need to look at that further.

My noble friend Lord Beecham will ask more questions of the Minister when she moves her amendments. At that point, we may need to look at the issue further and bring an amendment back on Report.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I shall answer the noble Lord, Lord Kennedy, first because I ran out of time in a debate the other day and I could not answer him fully. He will get first place on the housing list today.

The noble Lord referred to the regulations which other noble Lords have mentioned at length. I can only reiterate my desire to bring forward as much information as I can. In any event, as I outlined in relation to the previous amendment, none of the orders could be implemented until the regulations were in force. So the orders would not be retrospective; they would only be made after the regulations had gone through. However, I take his point and I will do my best to bring forward as much information as possible.

The noble Lord made a point about social housing being so much harder to obtain than previously for people who would seem to be on modest incomes. That is behind the Government’s priority of building homes for all types of tenure in this Parliament, but focusing particularly on the younger generation that he talks about who are increasingly left out of the housing market. He also asked whether I would meet with him and colleagues before Report and I will be happy to do so.

Amendments 3 and 4 amend Clause 20 so that a person who has been convicted of breaching a banning order and continues to breach the order after that conviction shall commit a further offence and be liable to a fine not exceeding one-tenth of level 2 on the standard scales for each day or part of a day on which the breach occurs. This would equate to up to £50 a day until the breach ceases The amendment also introduces a defence of reasonable excuse in relation to the further offence which will capture any cases where a person was genuinely not able to cease breaching a banner order following conviction because, for example, they were in hospital and therefore unable to manage their affairs to bring tenancies to an end. Rogues who continue to let out their properties despite being convicted for that offence will therefore not only incur punishment for the initial breach of the order but will continue to be punished for each additional day that they remain in breach of the order. This sends out a strong message that a breach of banning order will not be tolerated.

Amendments 5, 6 and 8 amend Clause 22 so that a person who has had a civil penalty imposed upon them for breaching a banning order as an alternative to prosecution, and continues to breach the order despite the first civil penalty, can have an additional civil penalty of up to £30,000 imposed for each period of six months or part of a six-month period in which the breach of the banning order continues. Rogues who continue to let out their properties despite having incurred a civil penalty for the breach will, therefore, be subject to additional civil penalties for continuation of the breach. This sends out the strong message that a breach of a banning order will not be tolerated and will ensure that the business model of rogue landlords is disrupted.

Turning to Amendment 2, tabled by the noble Baroness, Lady Grender, I totally acknowledge her point that a vulnerable tenant should not be made homeless through no fault of their own as a result of a banning order. However, as my noble friend Lady Redfern says, the Bill is focused on sanctioning rogue landlords, but not at the cost of innocent tenants. The Bill will prevent tenants being made homeless by providing exceptions to a banning order or by allowing a local authority to manage the property in place of a banned landlord.

Clause 15 provides that in deciding whether to make a banning order and what order to make, the tribunal must consider the likely effect of the banning order on anyone who may be affected by it, which clearly includes tenants. Provision has been made for a banning order to be subject to exceptions; for example, where existing tenancies are in place which the landlord does not have the power to bring to an immediate end, or to allow a letting agent to wind down their business. An exception could, for example, be made for a period of some months to allow tenants adequate time to find alternative accommodation.

The noble Baroness asked who the rent would be paid to and the noble Baroness, Lady Bakewell, asked about recompense, which are both valid questions. The use of management orders by local authorities is already established through the Housing Act 2004. Schedule 3 to the Bill extends the circumstances in which management orders may be made. It allows a local authority to make a management order in respect of any property owned by a landlord who is subject to a banning order. These orders, which would allow tenants to stay on in the property while it is managed by the local authority, are particularly likely to be made in areas of high housing demand. In such circumstances, the local authority will be responsible for managing the property and will retain all the rental income, which can be used for the local authority’s housing purposes. Because of this, local authorities will in future be incentivised to consider the use of management orders.

On Amendment 7, proposed by the noble Baroness, Lady Bakewell of Hardington Mandeville, as the Housing Minister set out in the other place, local housing authorities will be able to retain fines they receive as income. The Bill will enable local authorities to issue civil penalties of up to £30,000 and to seek rent repayment orders covering the previous 12 months. Councils will also be able to retain the money from civil penalties and rent repayment orders where the rent was paid from housing benefit or universal credit, and reuse that for housing purposes.

Photo of Lord Greaves Lord Greaves Liberal Democrat 5:30 pm, 9th February 2016

I have an amendment later on that refers to empty dwelling management orders, which do not work very well at the moment. If a local authority is managing a property because the owner of that property has a banning order, is it assumed that the only money the local authority can spend on the property, which may be severely substandard—that may be why the banning order is there, or may be related to it—is the money taken in rents, even if it is not sufficient to bring it up to standard? If so, do we accept that a local authority is managing a substandard property for a period of time and if not, where will the local authority get the money to put into that property?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I think that comes back to the point made by the noble Lord, Lord Campbell-Savours, about charges on properties. The local authority cannot in any circumstances of managing that property be out of pocket, but nor would the tenants be expected to live in substandard conditions. Therefore, any money that needed to be spent on the property could be recouped by a charge on the property. I think that answers the questions of both the noble Lords, Lord Campbell-Savours and Lord Greaves.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

A further question has just occurred to me. We are assuming that we are talking only about a landlord and a tenant but of course, there may well be a mortgagee. What happens in the event that the council takes over the property? Is the council then responsible for paying the mortgage payments out of the money it receives and, if not, is the tenant not at risk of the mortgagee obtaining possession of the property?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, as far as I know, the mortgagee is responsible for paying the mortgage. If the rents do not cover the costs of any works that need to be done on the house, again, it comes back to the charge on the property in order to keep those tenants in the property for the agreed period of the tenancy. That is the way I think it would work, but I will confirm that in writing because I do not want to mislead noble Lords.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

The issue there would be whether the council had a first or second charge.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

I wonder if the Minister can help me because I am now slightly confused. If the local authority is expected to use funds upfront to make repairs and bring a property up to suitable standards, and the only way it can recoup them is through a charge—whether a first or a second charge—is it not the case that that money can be realised to the council only when the property is sold, which may be a considerable time after the local authority has incurred the costs?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

That might be the case. The point is that the local authority could recoup the costs. I think the premise of all the questions is the local authority not being out of pocket because of its obligations to the tenants. The noble Lord, Lord Greaves, is shaking his head so I will let him intervene.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I am grateful to the Minister for giving way when I was not asking her to. This is a new convention which perhaps we should adopt. I think the point that my noble friend Lord Foster of Bath was making is that it might be a very long time before the property is sold by the owner. It could be 50 years, by which time who knows whether local authorities will still exist? There appears to be no means by which the local authority is guaranteed to get its money back within the period of the banning order.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I hope I made the point clearly that ultimately, the local authority will get its money back. That might mean that at the end of a tenancy the local authority could force the sale of a property in order to get its money back, but the point is that the local authority can get its money back. I guess if it incurred any interest charges over the period, it can claim those back as well. But such is the level of the civil penalty that local authorities should be in a fairly good position, using penalties and other things to service any housing costs they might have and to not be left out of pocket.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I am trying to be helpful to the Minister. It would be extremely helpful if she could write to us all with some examples and figures showing how this might work in practice, both in terms of the procedure and some numbers, so that we can understand it—which we are not going to this afternoon, clearly.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I think I understood what I was saying, but and I am sorry if noble Lords did not. I shall be very happy to write and explain. I always use the example of a house that costs £100, so it will probably be something around that.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

While all this is going on, I am conscious that there is one very vulnerable tenant and one rogue landlord, who is getting angrier. What protection is there for the poor tenant left there while all this is going on? The landlord is not getting his rent or having his mortgage paid and the council is in there taking things over. I am wondering about the human issue.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I do not have any particular concerns about the rogue landlord; I am concerned about the vulnerable tenant. That is why the local authority, or the managing agent of the local authority, is the protection for the tenant who, if they have been subject to the practice of a rogue landlord, might find it a light relief not to be treated in such a contemptuous way.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

That is absolutely right. I have no worries for the rogue landlord but the noble Lord, Lord Deben, spoke earlier about these characters and some of their despicable practices. I am worried about how they treat their tenants.

Photo of Lord Palmer of Childs Hill Lord Palmer of Childs Hill Liberal Democrat

In terms of the charges on the property, I seek some clarification. We are told that the local authority may have taken over management of the property and be taking a charge on it, and will be able to underwrite its costs in one way or another, which seems very sensible. The problem is if there is an existing charge on the property because the owner has a mortgage on it. To seek recompense and take action, the local authority will have to take cognisance of the fact that there is already a charge on that property. A local authority may be very reluctant to incur the cost when it knows it is in a queue and may get nothing whatever at the end of the line.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I would assume that in those circumstances the local authority would take a second charge out on the house. That is the assumption I would make in such circumstances.

Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under this clause are to be dealt with. Broadly speaking, we envisage that such sums could be used in connection with the authority’s private sector housing functions, but we will discuss the details of how the income is to be applied with relevant parties before making the regulations. We will consult on guidance, setting out the appropriate penalties to levy, and take into account a wide range of circumstances. Such guidance will also cover landlords’ right to appeal. Furthermore, we will issue local authorities with guidance on the utilisation of any money they receive through financial penalties.

I do not know whether I answered the noble Baroness, Lady Bakewell, and the noble Lord, Lord Greaves, about the new burdens. I have probably made my point, but any policy that could result in a local authority incurring costs is subject to a new burdens assessment. We have considered this test when developing this policy. It is not a burden as it is not a requirement to place someone under a banning order.

In answer to the noble Lord, Lord Palmer, on how local authorities will implement this policy, local authorities have warmly welcomed it because it will help them to crack down on the rogues and retain the income from civil penalties and rent repayment orders. It is important that noble Lords are satisfied that local authorities are very happy with this.

The noble Lord, Lord Campbell-Savours, mentioned the transfer of interest to a prohibited person when that interest is an overseas interest. It does not matter whether it is an overseas interest or whether it is in this country, the policy still applies, as I understand it.

The noble Lord, Lord Greaves, asked how local authorities would make their decision and how many cases we would have a year. Local authorities are likely to seek banning orders where the offence is particularly serious or where they have a repeat offender. We estimate that there will be about 600 banning orders per year. I hope my comments have reassured noble Lords, but I see that the noble Lord, Lord Beecham, is about to stand up.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice) 5:45 pm, 9th February 2016

I am sorry to add to the noble Baroness’s problems. However, I am slightly puzzled by the relationship between government Amendments 3 and 4, which apply to Clause 20, and government Amendments 5 and 6, which apply to Clause 22. Government Amendment 4 to Clause 20 specifies:

“Where a person is convicted … of breaching a banning order and the breach continues after conviction, the person commits a further offence and is liable … to a fine not exceeding one-tenth of level 2 on the standard scale for each day or part of a day”.

However, government Amendment 6 to Clause 22 states that,

“subsection (3A) allows another penalty to be imposed … If a breach continues for more than 6 months, a financial penalty may be imposed for each additional 6 month period for the whole or part of which the breach continues”.

Is that on the same basis or a different basis? I apprehend that the Minister may not be able to give me an answer off the cuff, but will she have a look at that—or get somebody to have a look at it—to see whether there is a relationship between those two positions, or whether they deal with different issues? At the moment, I am confused—which is not unusual. It may be perfectly simple but it does not look terribly simple from these two amendments.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, as I understand it, the second penalty is an enhancement of the first, so they are related. However, I think the first is a lesser penalty because it involves a first breach and the second is greater because it perpetuates the breach.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

With respect, that does not tell us or the offender the basis on which the second penalty would be calculated.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, Clause 20 concerns a criminal offence whereas Clause 22 concerns a civil penalty, which is an alternative, if that makes any sense.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

I am sorry to persist but that does not tell us the basis on which the relevant penalty would be calculated. It is clear as regards the criminal offence, if that is the distinction, but it is not clear whether the same way of calculating the penalty is used. I do not expect the noble Baroness to answer that today but if she could answer it in writing subsequently, that would be fine.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I thank the noble Lord, not for letting me off the hook but for deferring the hook. I will write to him about that. I request that the noble Baroness withdraws the amendment at this stage.

Photo of Baroness Grender Baroness Grender Liberal Democrat

I thank all noble Lords for their contributions to this discussion and the noble Earl, Lord Lytton, for his support for continuing to examine this area. I also thank the noble Lord, Lord Palmer of Childs Hill, who raised property transfer and the noble Lords, Lord Campbell-Savours and Lord Greaves, for commenting on where the resource goes, about which we have already had much discussion. The Minister said that we would find some answers and reassurance for tenants in Schedule 3. We will continue to scrutinise this issue to make sure that there is absolutely no threat of a tenant being made homeless as a result of the activities of a dreadful rogue landlord. That is the main aim of this amendment and we will continue to review that as the Bill progresses. However, at this point, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 16 agreed.

Clauses 17 to 19 agreed.

Clause 20: Offence of breach of banning order

Amendments 3 and 4

Moved by Baroness Williams of Trafford

3: Clause 20, page 11, line 23, leave out “this section” and insert “subsection (1)”

4:Clause 20, page 11, line 27, at end insert—

“(3A) Where a person is convicted under subsection (1) of breaching a banning order and the breach continues after conviction, the person commits a further offence and is liable on summary conviction to a fine not exceeding one-tenth of level 2 on the standard scale for each day or part of a day on which the breach continues.

(3B) In proceedings for an offence under subsection (3A) it is a defence to show that the person had a reasonable excuse for the continued breach.”

Amendments 3 and 4 agreed.

Clause 20, as amended, agreed.

Clause 21 agreed.

Clause 22: Financial penalty for breach of banning order

Amendments 5 and 6

Moved by Baroness Williams of Trafford

5: Clause 22, page 12, line 4, leave out “20” and insert “20(1)”

6: Clause 22, page 12, line 9, at end insert “, unless subsection (3A) allows another penalty to be imposed.

“(3A) If a breach continues for more than 6 months, a financial penalty may be imposed for each additional 6 month period for the whole or part of which the breach continues.”

Amendments 5 and 6 agreed.

Amendment 7 not moved.

Amendment 8

Moved by Baroness Williams of Trafford

8: Clause 22, page 12, line 13, leave out “20” and insert “20(1)”

Amendment 8 agreed.

Amendment 8ZA not moved.

Clause 22, as amended, agreed.

Schedule 1 agreed.

Clauses 23 and 24 agreed.

Schedule 2 agreed.

Clause 25 agreed.

Schedule 3 agreed.

Clause 26 agreed.

Clause 27: Database of rogue landlords and property agents

Amendment 8A not moved.

Clause 27 agreed.

Clauses 28 to 30 agreed.

Clause 31: Appeals

Amendment 9

Moved by Baroness Bakewell of Hardington Mandeville

9: Clause 31, page 15, line 29, at end insert—

“( ) An appeal under this section must be heard within 28 days.”

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat

My Lords, when I spoke previously I should have drawn your Lordships’ attention to my entry in the Register of Interests as a district councillor of South Somerset District Council and as a vice-president of the Local Government Association.

I will speak, in the first instance, to Amendment 9. I will then speak to Amendments 10, 12, 13 and 14. On Amendment 9, it is only fair and proper that those who have the prospect of a banning order being imposed on them should have the right of appeal. My colleagues and I are happy with the process laid down for dealing with appeals, with one exception. Both the landlord and his tenants, plus the local housing authority, will be in some uncertainty during the appeal process. Uncertainty leads to stress, and this will be extremely unwelcome for tenants, who are already fraught because of the situation in which they find themselves. The state of their accommodation may be less than we would wish, and they may have been threatened. They will want their ordeal to be finalised as quickly as possible. Likewise, the landlord will be waiting for the sword of Damocles to fall, and this could be unjustified, as we heard from the noble Earl, Lord Lytton, earlier. It is only fair and equitable that this uncertainty be as short-lived as possible for all concerned. That is why I have tabled this amendment, requiring the appeal to be heard within 28 days so that the decision is reached quickly and efficiently for the benefit of all concerned. I hope the Minister can agree to it.

Turning to Amendment 10, the register of rogue landlords is one of the most important steps forward in this Bill. Those of us who have been, or are still, councillors will know at first-hand what misery can be caused by a tenant who has what is now classed as a rogue landlord. All housing department officers know who they are as the tenants of these landlords are frequently in their offices or on the phone complaining about the treatment meted out to them. The frequency of evictions by these landlords or the sudden ending of tenancies alerts officers to where they are and the properties that they own and run.

It is essential that a register of rogue landlords be set up which can be accessed by those agencies supporting their tenants. These agencies will be well-known, trusted deliverers of advice and support, including the local authority, the CAB, the DWP, jobcentres and possibly food banks. It is vital that tenants are also able to access this register if they are not to go from one poor landlord to another. It will always be the case that those who are the most desperate to find a roof over their head for themselves, their partner and perhaps even their children will be most at risk of being exploited. They need this information to assist them to make the right choices.

It is not as though the names of those who are likely to arrive on the register will not already be in the public domain. Local newspapers are full of court reports. Someone on the register is also likely to be engaged in other activities and will have come to the notice of police and local authorities. If they have previously held a licence for a HMO, that will have been reported in the local newspapers. I can understand that there are some sensitivities here, but we must protect tenants by allowing them access so that they can make value judgments. This is a freedom of information issue and I hope the Minister will be able to concede to this amendment.

I turn now to Amendments 12, 13 and 14. As already said, it is important that all those who are operating in the private housing market are able to provide for and assist their tenants to have a secure and untroubled home. It is to no one’s advantage for people to be continually seeking alternative accommodation; to be moving within an area where they are currently living or having to move to a different area is stressful. This is especially true if there are children involved. Disrupting a child’s education as they are forced to move schools is very harmful and will set back their education progress.

It is essential that tenants are able to access the register of rogue landlords so that, having moved from one such landlord, they do not fall foul of another operating in a similar type of accommodation. Let us not forget that the people and families looking for the accommodation which is likely to be provided by those on the register will have little choice because of their straitened circumstances. However, like everyone else, they deserve to be protected from exploitation.

As I have already indicated, the information on rogue landlords is likely to already be in the public domain through court proceedings and other avenues. I urge the Minister to consider these amendments and respond positively to them. I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I support the amendments moved by the noble Baroness. I have one query about Amendment 12, which removes a requirement for information disclosed from the database to be anonymous. It would be helpful if it were made clear that any information concerning a tenant would continue to be anonymous. It is not clear whether there would be any information about a tenant revealed or recorded but, to be on the safe side, such a tenant should not have his or her details revealed. That ought to remain guarded by anonymity.

This group of amendments addresses a large range of issues designed to facilitate dealing with the problems occasioned by rogue landlords. Amendment 15 specifically bars any landlord on a database of rogue landlords from obtaining a houses in multiple occupation licence. It would be good to have that in the Bill.

The background to this group and much of what we are discussing today in the Bill was set out recently in disturbing statistics produced by Citizens Advice in its response to the welcome funding by the Department for Communities and Local Government to tackle the problem on the ground.

I am bound to report that a grant of £80,000 has been received to be applied in the ward that I represent on Newcastle City Council, in an area just half a mile away from the new properties that the noble Baroness visited recently. We got a selective licensing scheme for that area—eventually; it was not easy to obtain. About a third of the landlords in the area were clearly not conforming to the requirements. I am glad that we have received this funding to enable us, as a council, to pursue matters.

However, there are still too many properties in the hands of bad landlords who continue to fail to look after their properties, and indeed their tenants, properly. Given the lengths to which councils have to go to establish such schemes for selective licensing, this is particularly objectionable. The national picture is a cause for great concern. There are apparently 700,000 tenants—which probably means about 2 million people in all, if we add family members and the like—including 500,000 children, living in unsafe properties with exposed wiring, leaking roofs and even rat infestation. There are some 740,000 rented homes that constitute a threat to the health of residents, and apparently 80,000 tenants are faced with threats of retaliatory eviction because they seek repairs. Again, that probably affects around 200,000 people, with a particularly high proportion of properties in London—some 14%, it is said—falling into this category. This especially affects residents from a BAME background.

There is therefore a great deal to be said for strengthening the role of local authorities in overseeing the sector, and also in fulfilling this part of the Bill, in allowing and promoting tenants’ access to information about the owners of the properties that they seek to rent. Anything that can be done to bring pressure to bear on such owners to behave responsibly is welcome, and I hope the Minister will feel able to accede to the amendments tabled by the noble Baroness, and to my own amendment relating to the consequences with regard to HMO licensing.

Photo of Lord Tope Lord Tope Liberal Democrat 6:00 pm, 9th February 2016

My Lords, my noble friend Lady Bakewell spoke to these amendments fully and explained them very well, and we all wait with interest to hear the Minister’s response. We should recognise how important the issues that they raise are. My name does not happen to appear on Amendment 9—I am not quite sure why—but I certainly support it. We do need some sort of indication—I think 28 days is entirely right and appropriate—of how soon an appeal on matters that are so important and sensitive for both the tenant and the landlord will be heard. We are only too aware of other types of appeal that wait not just for months but for years. For an appeal to be heard within 28 days seems to me entirely reasonable.

The other amendments deal with another important point: exactly who will have access to the information in the database? Surely it must be right for the tenants to have a right of access to that information. Whether it is appropriate to put that in the Bill or in the draft regulations we wait to hear—but we have heard enough about the regulations already while debating this Bill, and we think that it should be on the face of the Bill. I hope that when the Minister replies she will, at the very least, agree with the point being made here. We can then argue about where the provision is to be placed. We look forward to the Minister’s reply; I hope it will be a positive one, recognising the importance of these issues.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I firmly support Amendment 9, moved by the noble Baroness, Lady Bakewell of Hardington Mandeville. It is a very sound amendment.

Clause 29 refers to a power to include a person convicted—that is, convicted in a court of law—of a banning order offence. Then it says in a subsection:

“A local housing authority in England may make an entry in the database in respect of a person who has, at least twice”— not once, twice—

“within a period of 12 months, received a financial penalty in respect of a banning order offence committed at a time when the person was a residential landlord”.

We are talking here about a habitual offender. In Clause 32 the Government set out what can be on the database. Let us go through the list, because that list should be available to the general public for the reasons set out by the noble Baroness, Lady Bakewell, when she referred to freedom of information. First, there is the period for which the entry is to be maintained: why should that not be available to the tenant or tenants? Details of properties owned, let or managed by the person: why should they not be in the public domain when the matter has been dealt with in the courts?

Details of a banning order offence of which the person has been convicted in a court of law: why should that information not be made available to the tenant? Details of any banning orders made against the person, whether or not still in force: why should tenants not know the background of their prospective landlords? Also on the list are “details of financial penalties” received by the person.

Finally, I return to the first item in the list: the person’s address or other contact details. One would have thought that a tenant should at least have the right to know who their prospective landlord is, where they live, and their contact details. I put it to the Minister that the Government are a little oversensitive about this. They should reconsider this area and think about what is in the public interest. Who is going to lose as a result of this? The local authority does not lose; the tenant does not lose; only the landlord who has been convicted of a criminal offence loses. I ask the Minister to reconsider the position.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I shall speak to Amendment 16 in my name in relation to Clause 38. Amendment 16 would mean that for the purposes of paragraph 17 of Schedule 23 to the Finance Act 2011, the database will be treated as being maintained by the Secretary of State, although Clause 27 sets out that local authorities have responsibility for maintaining its content. This will ensure that HMRC is able to access the database, using its powers under the Finance Act 2011, so that it can use the data in discharge of its tax functions when dealing with rogue landlords and property agents.

I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, for speaking to Amendment 9. While appeals, and not just appeals about entries on the database, should be dealt with without undue delay, it is not appropriate to set out in primary legislation strict time limits for doing so, because it may not be practical or reasonable to do so. The tribunal has a wide range of powers to ensure that cases are dealt with fairly and justly. It can award costs against vexatious litigants whose only purpose in appealing is, for example, to delay their entry on the database or to cause further expense to the local housing authority. It can also prioritise cases that it considers urgent and refuse adjournments when there is no good reason for the request. In general, however, when the appeal is not vexatious in nature, how quickly it can be disposed of will ultimately depend on its complexity and other factors, such as the representations that the parties intend to make. Indeed, other factors can lead to delay, such as the illness of a party or a representative. It would be manifestly unfair if representations could not be accepted outside 28 days when there is genuine and good reason for doing so because the law has said that the appeal must be heard within that timeframe, regardless of circumstances.

I turn to Amendment 10. Landlords and property agents included on the database will have either been convicted of a banning order offence or received two or more civil penalties, as an alternative to prosecution, for serious breaches of housing legislation. I appreciate the feelings of noble Lords on this issue. It is not intended that all those included on the database should be banned from operating their business, but banning orders would be sought for the very worst or repeat offenders. Banning order offences will be defined in secondary legislation but are likely to include a serious offence. This is where an offender has been convicted in the Crown Court of an offence involving fraud, drugs, sexual assault or violence that is committed in, or in relation to, a property that is owned or managed by the offender or which involves, or was perpetrated against, persons occupying such a property. It would also include any serious offence involving violence against the tenant by the landlord or property agent, and serious breaches of housing legislation.

Amendment 11 would allow tenants and prospective tenants to petition their local housing authority to gain access to the database of rogue landlords and property agents. Doing so would effectively blacklist those landlords and agents on the database and put them out of business. This is not the intention of our legislation. The database aims to enable local authorities to keep track of rogue landlords and agents and target their enforcement action more effectively. Where a local authority believes a landlord or agent should be prevented from renting out or managing property, it should seek a banning order.

Noble Lords, and particularly the noble Baroness, Lady Bakewell, asked whether the public or tenants will have access to the database. The database will hold details of landlords and property agents who have been convicted of certain offences. Just because a landlord or property agent is on a database does not mean that they are banned from letting out a property—that would require a banning order. Making the database publicly available could raise data protection issues. However, the Secretary of State can give information held on the database in an anonymised form for research, statistical or monitoring purposes. The noble Lord, Lord Beecham, asked about tenants’ details. These will never be disclosed. The noble Baroness, Lady Bakewell, also asked about the effect of putting a landlord or property agent on the database. A database will enable a local authority to keep track of the landlords or property agents who have been convicted of a relevant offence and who may seek to move to a new area to avoid detection and attract new tenants. It will also enable them to obtain details about other rental properties owned by the landlord. In some cases, a local authority may decide to monitor a landlord or property agent on the database before deciding whether to apply for a banning order.

Information on the database will be made more widely available in an anonymised form. In addition, where tenants raise concerns about their landlords failing to take action over property conditions, local authorities can carry out an inspection, using the housing health and safety rating system introduced in the Housing Act 2004, and take appropriate enforcement action.

Where a local authority believes that a landlord or property agent should be banned from being involved in renting out or managing property, it should apply to the First-tier Tribunal for a banning order. Banning orders are intended to be used for those landlords and property agents who are particularly serious or prolific offenders, and who represent a real risk to the health and safety of prospective tenants. Local authorities have been provided with strong enforcement tools to ensure that, once a banning order has been made, it is not breached by the offender.

Amendments 12, 13 and 14 would require the Secretary of State to make information on the database of rogue landlords and property agents accessible to everyone and provide that the purposes to which the data may be put include the protection of tenants. As I have said, making the database publicly accessible would effectively drive anyone on the list out of business—which is not the purpose of the database.

Finally, Amendment 15 would require local authorities to automatically bar landlords on the database of rogue landlords from holding an HMO licence. As I have said previously, the purpose of the database is not to ban landlords and property agents from operating. The idea is to enable local authorities to monitor rogue landlord activity and effectively target enforcement action. The noble Lord, Lord Beecham, mentioned retaliatory eviction. We legislated through the Deregulation Act 2015 to stop the practice of retaliatory eviction, a move that has been much welcomed by Shelter.

I hope I have explained enough to enable the noble Baroness to withdraw her amendment—

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 6:15 pm, 9th February 2016

On government Amendment 16, I do not quite understand why HMRC would want to gather these data. Perhaps the Minister could explain.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, it is for tax purposes—to enable the rogue landlords to fulfil their tax obligations.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

I am not opposed to that but are we saying that persons who are subject to the legislation in terms of banning orders come under a separate reporting arrangement to the Revenue as against the generality of landlords?

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

Are we saying that there is a separate category for those landlords who would fall under the legislation in terms of banning orders as against the generality of landlords, who, as the noble Earl, Lord Lytton, said, are pretty good people?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, it is the rogue landlords who are on the database. HMRC will have access to that database.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

Does it not already have access to the Land Registry and can therefore find out more quickly and more cheaply who the owner of a property is?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, anyone can have access to the Land Registry but not everyone can have access to the database of rogue landlords.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

But the rogue landlord must be the owner of the property; otherwise he would not be the landlord, presumably.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat

My Lords, I thank noble Lords who have taken part in this short debate. I am very grateful to the noble Lord, Lord Beecham, for mentioning the anonymising of tenants’ names on the list. It is very important that their names should not be released.

I cannot pretend that I am anything other than disappointed with the Minister’s response. It is very important that the appeals are heard in a timely manner and I think 28 days is a reasonable time in which to hear an appeal. In other parts of the Bill we shall come to issues of abandonment, where there are very definite timescales that people must abide by. So I find it somewhat strange that we cannot have a timescale for hearing the appeals. This may be something we wish to return to on Report.

With regard to the list of landlords being anonymised and not released to tenants, I cannot see the point of holding a list if it is be anonymised. That seems somewhat perverse. Tenants should have access to the list and should be able to see whether their landlord is on the database. I accept that rogue landlords will be on the database when they may not have a banning order. I understand that difference but, nevertheless, these are not the kinds of landlords we wish to promote. The Minister has indicated that she does not wish to drive rogue landlords out of business, but what of the good landlords? There are hundreds and thousands of responsible landlords operating their properties for the benefit of their tenants and just one or two rogue landlords are in danger of giving other landlords a very bad name. We should be able to name and shame these rogue landlords.

However, I understand the Minister’s view. It is possible that we may return to this but I will withdraw my amendment.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

May I revert to my Amendment 15 about the HMO licence? I do not understand the logic of the Minister’s position. If a landlord is described as a rogue landlord and is on the database accordingly, why should that not operate as a bar to obtaining a licence for a house of multiple occupation?

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

Amendment 15 would prevent a landlord on the database of rogue landlords obtaining an HMO licence, which seems perfectly logical. The Minister appeared to reject the idea; I cannot think why. If she cannot for the moment remember why she did, perhaps she could communicate her thoughts later.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

I rejected the amendment because the purpose of the database is not to ban landlords and property agents from operating but to enable local authorities to monitor rogue landlord activity. It is crucial to give local authorities the freedom to make judgments regarding the licensing in their area, just as they do in other forms of licensing, so it does not necessarily follow that a rogue landlord should be banned from holding an HMO licence. Although a local authority may make the judgment that they should be banned from having such a licence because of their activity, it does not necessarily follow.

Photo of Baroness Andrews Baroness Andrews Deputy Chairman of Committees

My Lords, is it your Lordships’ pleasure that the amendment be withdrawn?

Amendment 9 withdrawn.

Debate on whether Clause 31 should stand part of the Bill.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, on that matter, I had almost forgotten what I was going to ask, but it was this: if we can ban a doctor or a dentist for bad practice, why can we not ban a landlord?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

The landlord who is on a database of rogue landlords has not necessarily been banned but may have had a civil penalty. So it is up to the local authority, when coming to a judgment about an HMO licence and in the light of the information that it has, whether that landlord will be banned from holding one. It may decide on balance that he or she will be, because they are such a rogue, or they may have had one civil penalty and it might therefore grant him or her a licence.

Clause 31 agreed.

Clauses 32 to 36 agreed.

Clause 37: Access to database

Amendments 10 and 11 not moved.

Clause 37 agreed.

Clause 38: Use of information in database

Amendments 12 to 15 not moved.

Amendment 16

Moved by Baroness Williams of Trafford

16: Page 18, line 21, at end insert—

“(5) For the purposes of paragraph 17 of Schedule 23 to the Finance Act 2011 (which relates to HMRC data-gathering powers), the database is to be treated as being maintained by the Secretary of State.”

Amendment 16 agreed.

Clause 38, as amended, agreed.

Clauses 39 to 51 agreed.

Amendment 17

Moved by Lord Kennedy of Southwark

17: After Clause 51, insert the following new Clause—

“Extension of the Housing Ombudsman to cover the private rented sector

(1) The Secretary of State shall by regulations introduce a scheme to extend the Housing Ombudsman Scheme, as set out in section 51 of and Schedule 2 to the Housing Act 1996, to cover disputes between tenants and private landlords relating to properties within the area covered by the Greater London Authority.

(2) The scheme under subsection (1) shall—

(a) come into effect within 6 months of the passing of this Act; and

(b) last at least one year and no longer than two years.

(3) The Secretary of State shall, within three months of the closing date of the scheme, lay before each House of Parliament a report on the scheme under subsection (1), alongside any statement he thinks appropriate about the extension of the Housing Ombudsman Scheme to the private rented sector.

(4) The Secretary of State may by regulations extend the powers of the Housing Ombudsman Scheme as set out in section 51 of and Schedule 2 to the Housing Act 1996, to cover disputes between tenants and private landlords throughout England.”

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

My Lords, Amendment 17, which is in my name and that of my noble friend Lord Beecham, seeks to extend the services of the Housing Ombudsman to the entire private rented sector. Following a successful pilot scheme in London, the Government decided to proceed in that manner. Ombudsman services are available for a variety of matters. They have proved highly effective and seek to resolve complaints having investigated the issues at hand independently and in a less confrontational way than proceedings in court can be.

At present, the Housing Ombudsman provides ombudsman services to housing organisations that are registered with it. The service is free, independent and impartial. It has two classes of membership: a mandatory membership, which includes all bodies registered with the Homes and Communities Agency; and a voluntary membership, which includes landlords and letting agents in the private rented sector who want to provide a good service to their tenants and who also have, and wish to retain, their good reputation.

My amendment seeks to extend the service on a trial basis to cover all disputes between landlords and tenants in the private sector in the Greater London area. It provides that the trial would last for between six and 12 months and that subsequently, within three months of the ending of the trial period, a report must be laid before Parliament with any statement the Secretary of State thinks appropriate about the extension of the scheme. That could be anything from welcoming the trial and extending the scheme to concluding that it was not a success and ending it there. The Secretary of State has complete flexibility in this regard. If it is deemed to have been a success, we have also included in subsection (4) of the proposed new clause the power to extend the scheme to cover the whole private rented sector in England. This is a sensible and proportionate measure and amendment, which I hope will receive a positive response. I beg to move.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, we are being asked in this amendment whether we think there is a need for further protection for tenants in the private rented sector. I suspect that I can guess the Minister’s response, although I hope I will be proved wrong. The Minister will point out that there is already a large amount of legislation to protect us from—I hesitate to use the phrase—“rogue landlords” and that further strengthening of that is to come, and that there is protection as regards retaliatory eviction against people who run

“beds in sheds”. The Government’s own website lists a large number of tenants’ rights, which include the rights to,

“live in a property that’s safe and in a good state of repair”,

to have your deposit protected, to,

“challenge excessively high charges, know who your landlord is, live in the property undisturbed, see an Energy Performance Certificate … be protected from unfair eviction and unfair rent”,

and to have a written agreement if the tenancy term is fixed for more than three years. The Minister will no doubt point out, rightly, that some councils already have an accreditation scheme; she will point to the excellent Private Rented Sector Code of Practice that was developed on behalf of the Government by the Royal Institution of Chartered Surveyors back in 2014. She may talk about the trade bodies that many residential landlords associations have, and as a fallback she will also of course refer, rightly, to the county court mediation service.

On first sight, given that long list, it may appear that there is no need for further protection for tenants in the private rented sector. However, noble Lords will be aware that in a number of the areas I have referred to there are ongoing problems. For example, after the list of rights that appear on the Government’s website, a section then tells you what to do if you feel that you are not able to exercise those rights. It suggests that you should first complain to the landlord; failing that, you should complain to one of the recently set up “designated persons”—that is, an MP, a councillor or one of the various tenant panels; and finally, if all that fails, you should go to your local council. Notwithstanding the responsibilities in some areas—but not all—that local councils have, as most noble Lords will be aware, many councils simply do not have the resources and expertise sufficiently to deal with the wide-ranging types of complaints that will and do come forward. The county court mediation process has of course been successfully used on a number of occasions, but there is a problem, due to various legal arguments as to whether private sector landlords are defined as “suppliers”. Can the Minister can tell us whether, if landlords are not defined as suppliers, that particular problem means they will fall outside the remit of that mediation service?

Even though the private rented sector code of practice is excellent, it has no teeth. Earlier this morning I talked to somebody at the Residential Landlords Association, which is one of the signatories to that code of practice. It says that although it is a signatory, it has no ability to enforce it. It is of course also worth reflecting that the vast majority of the maybe 2 million landlords are not even signatories to the code. On that point, nobody is entirely sure what the figure is for the number of private sector landlords, whether in England or across the whole of the country. Can the Minister help? I have looked everywhere to try to get a figure but cannot get any clear, precise figure from anywhere beyond that figure of around 2 million.

There are a number of ways we could move forward instead of accepting this amendment. The most effective is to make the code of practice to which I have referred a statutory code, and I am aware that there have been discussions within government about the possibility of doing that. Have those discussions taken place and are the Government likely to come forward with a proposal to make it statutory? If so, we would have a fairly powerful tool instead of the proposal in the amendment before us. We have got pretty clear evidence that, unless the code is made statutory, with all the appropriate ways of making it work in that state, there will be concerns about whether the many forms of protection are collectively sufficient.

However, before I can be finally persuaded that this is the right way to proceed, I would be grateful if the noble Lord, Lord Kennedy, clarified some aspects of the proposal, as the Committee will need to have confidence that there is in fact going to be a Housing Ombudsman as such. The Committee will be aware that the Government recently consulted on the idea of having a single public sector ombudsman, bringing together the Housing Ombudsman with the Parliamentary and Health Service Ombudsman and the Local Government Ombudsman services. During that consultation, there was a loud outcry from many of the respondents about the idea of incorporating the Housing Ombudsman within a single public sector ombudsman. I was pleased that the Government made it clear in their response to the consultation that they intend to start by combining the Parliamentary and Health Service Ombudsman and the Local Government Ombudsman, and not include within that the Housing Ombudsman. However, rather ominously, the consultation response goes on to say that they will establish that combination “in the first instance”, providing,

“a framework that allows others to join over time”.

The Committee will be interested to hear from the Minister the Government’s thinking on the slightly longer-term situation for the Housing Ombudsman. Clearly, if it is going to change, that will create a problem for this amendment.

There is also the issue of the resources needed to operate the scheme proposed in the amendment. At the moment, the Housing Ombudsman deals with roughly 5 million housing units, with a staff of 55 people. In the last financial year, they have seen a 28% increase in the number of complaints, so there is quite a lot of pressure on them, although they have helped to achieve a solution to that by providing a lot of support and help —on which I congratulate them—for local resolution. But if we take the current figure of 5 million housing units and add a further 3 million, which is roughly what would be required, clearly, that would place a significant additional load on the Housing Ombudsman. I would be interested to know what solution the proponents of the amendment have thought of for funding it.

The Housing Ombudsman is funded by levying a charge per housing unit. Because of increased efficiency the ombudsman has been able to reduce that charge, which is now—this may surprise many noble Lords—down to just 96p per individual housing unit. If we added to the scheme all private rented sector landlords, the vast majority—72%—of whom have only one property, and if the funding regime remained the same, in order to collect an appropriate amount of money, the Housing

Ombudsman would have to find a mechanism for raising 96p from something like 1.5 million individuals. Clearly, that does not make a great deal of sense.

I have some concerns about some of the details, but broadly, I think the level of protection for tenants in the private rented sector is still not strong enough. We need to do something. We have before us one possible solution. The alternative could be to make the code statutory. I look forward with great interest to the Minister’s response to this proposition.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative 6:30 pm, 9th February 2016

My Lords, this is an interesting proposal and if it is introduced, leaseholders too should be included. There are 6 million leaseholders, who in the past could have gone to a leasehold valuation tribunal for a very reasonable cost, but who now have to go to the First-Tier Tribunal, which is much more expensive. There are many things that could be resolved by applying the ombudsman scheme. I would like to hear more about how this would work, and also—perhaps at a later stage in the Bill—to look at the possibility of including leasehold properties.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, I support the amendment, because I think there is a real issue here. Speaking as a former local authority leader—many people in this House are either former or current local authority leaders—I had three ombudsman judgments against me, of which two were correct and one, in my view, was not. That was over about 25 years, and most were associated with planning issues.

Throughout all my ombudsman experience, both in this sector and in the health service, the issues were between the ombudsman service and a publicly accountable body, such as a local authority or a health authority, in which there were members concerned to maintain the reputation of that authority, and to respond, if not precisely to the ombudsman’s proposals—the ombudsman had no enforcement powers—at least in a positive way. The ombudsman had no powers to make us do anything, but people would respond positively by trying to address the problem and see whether it was largely procedural or whether policy needed to be changed in some substantial way. That was because the ombudsman was overseeing a public organisation that had a reputation, with trustees, councillors and so on, who were accountable for their decisions in public, in the press.

If the Minister cannot support an amendment like Amendment 17, I hope that she will tell us how she would apply that same degree of scrutiny and enforcement to rulings against rogue landlords. There is a real issue here. Local authorities will respond, even if they cannot go all the way, but a private individual, knowing that the ombudsman has no statutory powers of enforcing a decision, may decide to go in a different direction and weather hostile criticism. Can the Minister help us by telling us in what ways the Government would ensure that the naming and shaming effect of ombudsman practice could apply in the private sector?

Photo of Lord Best Lord Best Chair, Communications Committee

My Lords, I declare my interest as the chair of the council of the Property Ombudsman, and so I am on familiar ground. As chairman of an ombudsman scheme, I am very much in favour of the principle of having ombudsman services. They save having to go to court, spending a lot of money and being at loggerheads for longer. If one can resolve matters through the mediation services that, in effect, an ombudsman provides, it can be beneficial to everyone. I am also familiar with the Housing Ombudsman scheme because it is the body to which people take their complaints if they are tenants of housing associations and local authorities. I have had responsibility for housing associations and, like the noble Baroness, Lady Hollis, I have had judgments against my organisation for, hopefully, rather trivial matters. The Housing Ombudsman has a very good reputation and is doing a very good job. It is sorting out many complaints and provides a good model for ombudsman-ery.

However, in the circumstances of both the Property Ombudsman, who looks after complaints from estate agents, letting and managing agents and corporate bodies, and the current Housing Ombudsman scheme, which looks after the mostly responsible local authorities and housing associations, one is in completely different territory to the 1.8 million individual private landlords. I see severe practical difficulties in applying the principles of ombudsman-ery—which require you to deal with a corporate entity, a body whose reputation needs protecting and who has a great deal to lose from the process—to the 1.8 million individual landlords, which, I say to the noble Lord, Lord Foster, is perhaps the current figure, 72% of whom have just one property.

It is extremely expensive if one gets bogged down in an individual dispute. Cases which involve the Property Ombudsman in dealing with disputes between agents and tenants who complain to us can sometimes go on for a very long time. However, the agents will try to get matters sorted: they will have their own complaints procedures and will work things through. They will show a willingness to go with this and, at the end of it, when we make an award—if we do make an award—against the agent, then the agent will pay up. We have sanctions if they do not.

When dealing with individual landlords, who sometimes do not have an office or an address and do not reply, these disputes can run and run and be extremely expensive to administer. This, I am afraid, is a criticism of having a system which has 1.8 million landlords looking after the properties. The practical difficulties of simply applying the ombudsman system to all private landlords are enormous. I suggest that if one were to have a pilot scheme to test out whether one can apply ombudsman principles to this sector, it would be a good idea to go with the corporate entities first. These landlords are private companies and have status. There is therefore an opportunity for legal processes to be brought into play if they do not pay up on awards and so on.

Forget the great mass of individuals for the moment because they could be expensive. I am afraid 96p per landlord will not do it because if tenants and landlords get into a dispute it can be ongoing. Even when one is half-way through trying to fix a dispute the landlord/tenant relationship can break down again on a new issue and the case could run and run. It is a big undertaking. So, to start with, I would stick with the corporate entities.

The Housing Ombudsman scheme is able to take on board corporate players. Some of the good landlords we have are already in membership of the Housing Ombudsman scheme on a voluntary basis. If one was seeking to extend the principles of ombudsman services, the first step would be to make this compulsory, as it is for housing associations and local authorities. Corporate bodies which are landlords should have somewhere to go. As with when we complain about our electricity, telephones or anything else, there should be a service. I suggest a pilot should start there, but it should be a little less ambitious than the scheme suggested in the amendment which, in many ways, is going in the right direction.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Lord in Waiting (HM Household) (Whip) 6:45 pm, 9th February 2016

My Lords, I thank the noble Lord, Lord Kennedy, for moving Amendment 17, which seeks to place into the Bill a power to widen the Housing Ombudsman’s role to cover private sector housing and disputes between tenants and private landlords. As the noble Lord said, private sector landlords can already join the Housing Ombudsman scheme on a voluntary basis. Indeed, many landlords who wish to assure their tenants of the quality of their services have already done so.

The Government’s interest is in protecting tenants and provisions elsewhere in the Bill already address this; for example, tenants whose landlords have failed to carry out repairs can complain to their local authority, and through the Bill the Government are strengthening the powers of local authorities to deal with landlords who do not comply with the law.

We do not wish to introduce unnecessary regulation on landlords or institute a national register, which would be the ultimate effect of this amendment since, to make it work, all landlords would be required to sign up to the scheme. Despite the excellent work of the Housing Ombudsman in resolving complaints, we think that for private landlords membership of the scheme should remain voluntary, although we encourage landlords to sign up.

Where private landlords have signed up voluntarily, they are signalling to their tenants that they are committed to a high level of service and can be expected to comply with any determination. Were they to be required to sign up, we might not see the same level of engagement with the process or level of compliance, as the noble Lord, Lord Best, intimated, and determinations would not be enforceable. We would risk increasing the number of complaints and the associated costs, while the tenants of reluctant landlords might not see the benefit.

The measures in the Bill are focused on tackling rogue landlords, but we must remember that the majority of landlords in the private sector provide good-quality and well-managed accommodation. We know that 84% of private renters are satisfied with their accommodation and stay in their homes for an average of three and a half years. The Government want to support and encourage good landlords so that they become more professional and continue to provide good-quality rented accommodation. Part of that approach involves ensuring that the regulatory framework is appropriate and proportionate, keeping red tape to a minimum and having a level playing field so that good landlords are not undercut by less reputable ones.

To support that objective, the Government have introduced a number of measures, as the noble Lord, Lord Foster, said, to drive up standards across the board, including: publishing How to Rent and other guides for tenants; developing a model tenancy agreement for use by landlords and tenants; requiring letting agents to display their fees in a prominent place so that prospective tenants will always know from the outset how much they will be charged; and promoting voluntary accreditation schemes and the industry-wide code of practice.

In answer to the question about making the code of practice statutory, we have no plans to do so because it is currently working well and we do not want to add further burdens. In relation to the Housing Ombudsman, we have no plans at this stage to merge it into a single ombudsman service because the Housing Ombudsman performs a specific role and needs to retain its independence.

I hope that on the basis of this explanation the noble Lord will withdraw his amendment.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

My Lords, I thank all noble Lords who have spoken in this short debate. I take the point that the noble Lord, Lord Foster of Bath, made about the funding mechanism. We certainly need to devise a system that collects the fee with another charge or over a longer period, although, as the noble Lord, Lord Best, said, there are already private landlords who have signed up to the scheme and pay their contribution to be part of this valuable service.

That is also why our amendment put forward a pilot scheme in only one part of the country—London. At the end of the scheme, that would be evaluated by the Secretary of State and a report would be laid before Parliament; at that point the scheme might have been a great success and could be extended further or might not have worked—or somewhere in between. We gave all options to the Secretary of State to move forward.

We should not forget that, in many of the areas that I outlined in which people have protections, virtually no legal aid is available now for these things. The protections are there, but they do not have the legal aid to ensure those protections. With that, though, I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Clauses 52 to 54 agreed.

Amendment 18

Moved by Lord Beecham

18: After Clause 54, insert the following new Clause—

“Accreditation and licensing for private landlords

Local authorities shall be required to operate an accreditation and licensing scheme for private landlords.”

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I may not be visible, but I rise to move Amendment 18 and speak to Amendment 27 in this group. Amendment 18 is about local authorities operating an accreditation and licensing scheme for private landlords and it would require local authorities to do it. A number already make this part of their work. In Leeds it has been particularly successful, with 332 landlords accredited, providing nearly 15,000 bed spaces. In a parallel scheme with the universities, some 20,000 bed spaces are covered by an accreditation scheme—so near enough 35,000 people are covered by such schemes. There is expense involved in running them and, in the present financial climate, it would be difficult for local authorities to progress the proposal in this amendment, unless there were government backing in the form of some funding. As I have already indicated, some funding is currently available. My own authority has benefited from it and, no doubt, others have too. Perhaps the Minister can clarify the position but I suspect that this has so far been something of an experiment to see how effective such investment might be. If these schemes are proving successful, I hope the Government will look at extending the programme elsewhere.

Amendment 27 is of a different kind. It would create a register of all private landlords and privately rented properties, to be maintained by local authorities. It simply registers where properties are so that local authorities know which properties are rented out and who the owners are. They can then use that information to inform landlords of their duties under housing legislation and under the recent, rather difficult requirements of immigration legislation, which, I suspect, is a considerable burden on landlords. It is also good property management practice.

The noble Baroness and I have not exactly crossed swords, but we have occasionally discussed the progress of the duty on owners to provide carbon monoxide alarms in their properties. I speak with some feeling about this, since my own carbon monoxide alarm has fallen down three times in the last couple of weeks and I cannot persuade it to stay in position. Better organised people no doubt can—and they certainly should when they are letting out properties. The programme that the Government launched in the summer was done without very much publicity or very much time. I understand that the Government intend to review matters only several months into the current year. If the Government —or, more specifically, local authorities—knew which were rented properties, they could direct the publicity to known landlords, rather than in general terms through the media. They could do this potentially in other contexts. It would be a very useful tool in assisting the good management of properties by responsible landlords. Otherwise, they may simply not come across the publicity around carbon monoxide or smoke alarms, for example. There is the potential here for the Government to create a situation in which councils and landlords can work together in the interests of tenants and, ultimately, landlords. It is not much use to a landlord having a property that has been exposed to fire or other damage, let alone the dreadful consequences of carbon monoxide poisoning.

I hope that the noble Baroness will look sympathetically at both these suggestions. They are designed to make sure that standards are maintained and to assist good owners to carry on responsibly the business in which they are engaged and thereby to protect their tenants. Ultimately, of course, it also protects their own property interests. It is in everybody’s interest that progress along the lines of these two amendments should be made. I beg to move.

Photo of Lord Flight Lord Flight Conservative

My Lords, I declare my interests as set out in the register, and will speak to Amendment 21, whose objectives I trust will command broad support. These are, in essence, to provide practical and low-cost measures to enforce existing laws to protect tenants from criminal landlords. If measures along the lines of this proposed new clause are adopted, I also believe they would avoid the need for new regulations.

The private rented sector has already become larger than the social rented sector, and PricewaterhouseCoopers estimate that, by 2025, 25% of UK households will be private rented homes. Such large increases argue strongly for greater scrutiny of how the sector operates. One of the main reasons for a lack of effective enforcement of existing laws is that there is no clear and systemic way of identifying the landlord of a property and how they can be contacted. This needs to be readily available, if both the enforcement of existing regulations and the taxation of landlords are to be effective.

There are also a number of other government policies which will work only if there is a way of knowing how to contact landlords. For example, the Government’s right- to-rent scheme—making landlords legally responsible for checking the immigration status of their tenants—needs the name and contact details of the landlord to be readily available for the Home Office to tell a landlord if a tenant is in the country illegally.

Within the Housing and Planning Bill, how can Government expect their proposed rogue landlord database to work if there is no systemic way of identifying such landlords? How can HMRC seek to claim tax for which a landlord may be liable if there is no ready way of finding him?

The case for a clear and systematic way of identifying landlords is, I suggest, compelling. A national register of landlords has been suggested as a solution to this issue. The problem is that it would be only the good landlords who readily identified themselves. What landlord, flouting his legal obligations, would voluntarily come forward to make himself known?

In 2014, a report on the regulation of private rented housing was produced by Michael Ball, professor of urban and property economics at Reading University. He noted that such registration schemes fall back on the threat of penalties for those who fail to register to try to ensure that higher numbers do so, but that such threats are unlikely to impress the worst landlords because of the more draconian penalties they would be likely to face if their poor practices were found out. They are thus unlikely to co-operate.

Ministers have claimed that the Bill already includes measures that will allow local authorities to access information held by tenancy deposit schemes to assist with the enforcement of regulation. This is certainly a welcome move to better use the data which are already available. However, councils will be expected to pay to access such information, which may deter many authorities. Also, the measure would not help local authorities find landlords who do not abide by their legal obligations as they relate to tenancy deposit schemes. Recent research has found almost 300,000 landlords still not complying with deposit protection rules.

The solution is, in essence, to ask the tenant. That is what this amendment is about. Something similar was promoted by Dame Angela Watkinson MP, in the other place. The amendment would make it compulsory for local authorities to ask tenants to provide on their council tax registration forms details of the property’s landlord or managing agent. Thus collected, the information should then assist local authorities to enforce all regulations pertaining to the private rented sector as well as support other government policies, such as the right to rent and the rogue landlords database, which require knowing where landlords can be contacted. Local authorities would also have an up-to-date picture of the size of the private rented market in their area, enabling better evidence-based policy. It could also be used as an invaluable tool to communicate with landlords.

Tenants are already legally entitled to information about their landlord, so landlords will find it difficult to prevent tenants identifying them. Where the tenant does not hold information on the owner of a property, they could provide details of the managing agent. If either the landlord or managing agent is not identified by a tenant, this would send a clear message to the relevant local authority that further investigation was appropriate. In some cases, there may be legitimate reason for the omission, but it is likely that criminal landlords will do what they can to remain hidden. In such cases, the tenanted address can then be checked against the Land Registry database and the owner identified. This approach would provide local authorities with the intelligence to target their limited enforcement resources on the relevant properties and landlords.

Ministers have argued that local authorities already have the power to collect such information on council tax forms but, crucially, this is not compulsory and few authorities are aware of their power. As a result, the DCLG knows of only a handful of councils that use the power. In some local authorities, environmental health officers who would like to collect this information are blocked by council tax officers who do not want to make changes to their forms, or believe that this is an issue of data protection. Rather, local authorities are using bureaucratic and expensive licensing schemes. As with a national register proposal, all these do is identify responsible landlords who register and drive up costs.

A system to collect data through council tax returns has a far lower cost, as it uses existing processing mechanisms and is a lighter-touch approach for good landlords. The proposal is that the amendment’s provision should be applied universally across all local authorities.

With your Lordships’ indulgence, I shall briefly address Amendments 24 and 25, which I tabled with Amendment 21. Amendment 24 provides for the relevant person concept to be removed on the grounds that it is confusing and gives little or no protection to tenants. When someone other than the tenant contributes to or pays in full the deposit for a home, they are required to be given prescribed information as well as the tenant, and such a person is known as the relevant person. Failure to give the prescribed information leads to financial penalties and an inability for the landlord to recover possession of their property. There is little need for this requirement, as the arrangement between the tenant and the relevant person is a private one that the landlord is not required to know about, despite being required to provide the relevant person with information. The provision can be forgotten about easily, thus creating a needless trap for landlords, who are potentially hostage to unscrupulous tenants entering into such agreements and then seeking to conceal it from their landlord, who is left in breach of their obligation.

Amendment 25 is about providing electronic information—

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour 7:00 pm, 9th February 2016

I am grateful to the noble Lord for giving way. I understood that Amendments 24 and 25 were in the 11th group, but perhaps I missed some earlier realignment of amendments.

Photo of Lord Flight Lord Flight Conservative

The noble Baroness is entirely correct. That is why I asked the indulgence of the Committee quickly to address them now. That is for two reasons: first, they relate to Amendment 21 and, secondly, as I have given notice, I may not be able to be here when they are called later, for some particular personal reasons.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Lord in Waiting (HM Household) (Whip)

No, I fear we must stick with the group of amendments that we have.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

I am sorry to be a misery on this, but it is rather difficult because, when we get to that point in the debate, we will not be able to debate the amendments. They are quite some distance away; they would have needed to be grouped.

Photo of Lord Flight Lord Flight Conservative

I am bound by that judgment, but I did ask the Whips’ Office and was given permission so to do.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I am not sure that the Whips’ Office has jurisdiction in these matters. The amendment in the name of the noble Lord, Lord Flight, deals with a local authority’s arrangements for gathering council tax payments and business rates. However, there is another very important form of taxation when discussing these matters, which is taxes raised by the Inland Revenue—that is my explicit interest in Amendment 16, as spoken to by the noble Baroness. We now have a booming rental market in the United Kingdom, with programmes on television promoting buy to rent and organisations issuing leaflets and sending them to people’s homes explaining the benefits of buy-to-rent arrangements. A lot of people should be paying taxes on rental income.

Take a flat in London with two bedrooms, costing £500 a week or £25,000 a year. There will be many examples in London of people gathering in very substantial rents, even on just one property, who through some means or another are simply not declaring it to the Inland Revenue. Any system, including the system promoted by the noble Lord, Lord Flight, would be helpful in itself, but the system proposed by my noble friend, of a mandatory register of all private landlords, would certainly be very helpful in enabling the HMRC— which I keep referring to as the Inland Revenue, being a bit old-fashioned about these matters—to identify those people who should be paying tax on their rental income. The Inland Revenue are missing a trick here, because I suspect that there are probably billions in unpaid taxes on rentals which are not declared to the Revenue.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I have Amendment 33A in this group. I do not want to say too much but give general support to the two amendments spoken to by the noble Lord, Lord Beecham, which tackle the question of the register from opposite ends but which are mutually complementary, as far as I can see—there are two different purposes but both would be desirable. There are two points in this amendment.

First, it is our view that wherever possible, local authorities should have discretion over what they do, and therefore this question of whether a local register of private landlords should be set up and collected should be a matter for the local authority concerned. For all the reasons put forward by the noble Lord, Lord Beecham, and indeed to a degree by the noble Lord, Lord Flight—as well as those in the very interesting contribution from the noble Lord, Lord Campbell-Savours, which bring in a different dimension altogether—I suspect that most authorities would want to do it, because of the value there would be. However, the real reason we would like to see it is for local housing purposes, to enable a local authority to maintain proper scrutiny over the private rented sector in its area and to more easily take action when action is required. My amendment is a statement against “one size fits all”-ism to some extent, but if the Government were minded to set up the kind of register that the noble Lord, Lord Beecham, is proposing, and it were compulsory for all local authorities, I do not think we would squeal too much.

Secondly, it seems to us that a register ought to pay for itself. An ordinary register would not be terribly expensive to run, and it ought to pay for itself rather than requiring further contributions from local authorities. Those are the two reasons for my amendment.

I listened carefully to the contribution of the noble Lord, Lord Flight. I am not sure that the council tax register as such would be a particularly efficiently way to do this, since as I understand it, people only really register for council tax in the sort of sense he is talking about when they are new residents in a property. Over a period of time, they might well provide the information he wants, but in the short run I do not think they would, because people simply pay the bills they get each year rather than filling a form in to register again afresh each year. No doubt these are details which could be discussed.

Photo of Lord Flight Lord Flight Conservative

I think I need to respond to that. Yes, it is correct that this would essentially be when a new residence starts, but there could be a simple form that went out with regular council tax demands.

Photo of Lord Greaves Lord Greaves Liberal Democrat

Indeed, but it would not be compulsory to send it back—or perhaps it would if the legislation said that it was. Equally, it might be more efficient to do it with the electoral register. I do not know, but I am sure it could be done. However, there is a growing consensus on this, and sooner or later Parliament will have to legislate on the Government’s behalf. Registers of private landlords are going to be required for a number of varied purposes, which have been discussed around the Committee today.

Photo of Earl Cathcart Earl Cathcart Conservative

My Lords, I should declare that I am a landlord. I support Amendment 21, tabled by my noble friend Lord Flight. This is a bit of a hobbyhorse of mine, and I raised this exact solution on a Question last summer, when I said:

“One of the problems is not knowing who the landlords are. Some suggest that there ought to be a national register of landlords, but the good ones might register while the bad ones will not bother and thus remain below the radar. Surely a better way is if all new tenants, who are required by law to complete a council tax registration form, put on that form the name, address and contact details of their landlords; then, councils would build up over time a complete picture of all the landlords in their area”.—[Hansard, 23/6/16; col. 1467.]

I raised the point again at a later date, but that too fell on stony ground. My noble friend the Minister then kindly arranged a meeting with Brandon Lewis, the Housing Minister, and all three of us agreed that it was a jolly good idea—until an official put a spoke in the wheel by suggesting that such a measure would put a burden on local authorities. Quite what that burden would be I do not know. It must be in local authorities’ interests to know who all the landlords in their area are—the good and the bad. I understand that, as my noble friend said, some local authorities already require this information on their council tax registration forms. So surely this is best practice, not a burden.

There are numerous occasions when the Government need to contact landlords, but cannot do so because they do not know who they all are. We heard from the noble Lord, Lord Beecham, that the Smoke and Carbon Monoxide Alarm (England) Regulations allowed only two weeks for landlords to comply, but the Government could not write to the landlords, so how on earth could they comply on time? We also heard from my noble friend Lord Flight about the provisions in the Immigration Bill legally requiring landlords to monitor whether their tenants are legally allowed to rent in this country. I wholeheartedly support my noble friend’s amendment. I shall not go over all his arguments, but I hope that the Minister will agree to look at this again.

Photo of Lord O'Shaughnessy Lord O'Shaughnessy Conservative 7:15 pm, 9th February 2016

My Lords, I register my concern about Amendments 18, 27 and 33A because of the unintended impact of the regulation that I believe they would introduce.

It is worth reflecting once again on the reasons behind the Bill: we have too little housing in this country, it is too expensive and is not of a high enough quality. To address this crisis we need to generate radically greater investment in housing. I think everyone in the Committee agrees with that. That investment must come from government and the private sector. Several noble Lords have already commented on the growing role of the private rental sector. For better or worse, we now have 4.4 million households in private rented accommodation—the second highest tenancy after ownership. Earlier, the noble Lord, Lord Kennedy, talked about an explosion of private rental housing. I welcome this in its own terms because we will simply not get the housing we need without the billions—indeed, trillions—of pounds of investable money that is sitting in pension funds and other investment funds.

It is also worth remembering that we have a public debt of 80% of GDP and a budget deficit, so private sector funding is essential to meeting our housing need. Whenever you talk to private pension fund and investment fund managers about investing in housing, you find that it is the complexity of the product that puts them off. We must be very wary about increasing that complexity.

What are the conditions needed to encourage this investment? Clearly, any investment needs to look for an economic return. I think we all agree that that is available in the housing sector. We need a quick and simplified planning system—we are not dealing with that part of the Bill today but will do so—and a low regulatory burden for the non-rogue landlords. It is on this last item that these amendments are problematic. I totally understand their intention but believe that they will provide another barrier to entry for potentially good landlords.

My noble friends Lord Flight and Lord Cathcart talked about the fact that licensing schemes will tend to attract good landlords and not capture the bad ones. For that reason, a mandatory licensing and accreditation scheme—let alone the charging of fees, as suggested by the noble Lord, Lord Greaves—would potentially discourage investors and raise the costs of housing while also increasing the burden on local authorities. Surely this is not the way forward to generate the housing that we need.

What we need, of course, are greater powers to crack down on rogue landlords—exactly what we discussed earlier today—a proportionate response to the problem rather than a blanket response. As we discussed—and will continue to discuss—these are well provided for in the Bill, with great agreement across the House. So the discussion of voluntary arrangements—

Photo of Lord Greaves Lord Greaves Liberal Democrat

I do not understand how a simple act of telling the council that you are the owner of a property is a huge regulatory burden. But putting that on one side, how is a council supposed to crack down on a rogue landlord if it does not know who owns the property?

Photo of Lord O'Shaughnessy Lord O'Shaughnessy Conservative

That is a perfectly good question. I was going to end by talking about the voluntary arrangements that have been discussed in both this area of registration and with the Housing Ombudsman. However, the amendment of my noble friend Lord Flight points to a simpler, lower-impact and more elegant way of gaining the information that we are after. Every time there is a change of tenancy or of ownership is precisely the point at which a new registration would have to be made. I do not believe you would need to send out forms every year; you would just need them when the occupancy or the ownership changed. That would provide a rolling database of the information that local authorities need.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, this series of amendments has raised some very interesting points. At Second Reading, I suggested a means whereby prospective tenants might get access to information on landlords who were signed up to a reputable body with established standards that it imposed on its members, and with current and valid membership of a dispute resolution and redress scheme. I am told that there is no such facility. My thought was to bring out the best and to lead from the front with the positives rather than try to deal with the negatives and, in so doing, squeeze out those rogues we have heard about. It was suggested to me by a residential managing agent of my acquaintance that it would be a bit like Checkatrade or TripAdvisor, particularly if it had user or customer—that is, tenant—feedback built into the system. However, I cannot see that that sort of thing can work by compulsion.

I am not an advocate of a compulsory scheme, as proposed by noble Lords in some of the amendments. It would have large costs; it would be readily circumvented, especially by the rogues; and it would suffer from a measure of disregard through ignorance among the 1.5 million one-unit property landlords. I tend, therefore, towards the solution of the noble Lord, Lord Flight, but, again, with some caveats. I would particularly like to know what proposed new paragraph 27A(2)(a) means in terms of the word “category”, and, with apologies to him, where airbnb fits into the framework. The Government have already moved to facilitate this trend, which may be here today and gone tomorrow. How, therefore, do you keep track of that as “category” in terms of art? A holiday let today may be an assured shorthold tenancy tomorrow, or vice versa. I see great practical problems in this regard.

There is, however, another problem about candid declaration, if one is going down this road. How frequently, given this quite rapid churn in the system, do you have to trawl for the information to ensure that it is bang up to date? What happens when something that has planning consent for, for example, holiday lets, turns out to be on an 18-month assured shorthold tenancy, potentially in breach of planning control? For that matter, what happens when it operates in the other direction? There could be issues to do with planning or potential breach of private contract, and I wonder who gets to see and use the information garnered by this process. There is quite a quite dangerous mix of stuff here, with all sorts of people coming in with different motives. The truth is that, over many years, housing has become commoditised. It has gone beyond being the roof over your head and the security for your family; it is now an investment vehicle, a pension pot and a place to park a significant sum safely where you can manage it and see what is happening, as opposed to subcontracting it to somebody who manages portfolios on the stock exchange, where you may have less control. That brings all sorts of different motivations and methods of managing, owning and occupying property.

I said earlier that I would hesitate, if I were a local government official—which I am not—to delve into this issue. It has very significant resource implications. I still tend, therefore, to the amendment of the noble Lord, Lord Flight, but it has a number of holes and would provide far from perfect coverage. That said, we are beginning to drill down and head in the right direction, which is somehow to find a method whereby people will voluntarily sign up because they see it as being in their interests to do so—because they want to be seen as the good guys and the providers of quality, and not to be associated with the rogues about whom we have heard so much today.

I hope the Government will feel that there is merit in that. Perhaps with one or two tweaks—a combination of some of the things discussed in this group of amendments—we could end up with something of long-term benefit that would defuse some of the adversarial nature of what we have been talking about, which is corrosive to the sector and to relationships between landlords and tenants and ultimately may end up leading us around the houses—excuse the pun—several times without achieving what we need: the long-term betterment of the landlord-tenant relationship in the private rented housing stock.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, we seem to be discussing two slightly separate issues in this group of amendments. The first is whether or not we need to have a register of all private sector rented landlords, and I certainly believe that we need to have that. As my noble friend Lord Greaves made very clear, if we do not know who owns a particular property or who is its landlord, it is very difficult to take enforcement action against them. It is also very difficult, as the noble Lord, Lord Flight, has pointed out, for a number of bits of government legislation to be effectively enforced without having such a register—for example, the requirement for landlords to vet the immigration status of their tenants.

Amendment 27 from the noble Lord, Lord Beecham, proposes a mandatory register and suggests that the way of filling the data in it is by requiring all landlords to sign up to it. As the noble Lord, Lord Flight, has pointed out, there are some difficulties with that: those landlords who are not particularly good, those who are on the border of being rogue landlords, are not likely to bother to provide the information. The noble Lord provides an alternative means of filling the data sets: using the form that is initially sent in for registering for council tax, although, as my noble friend Lord Greaves has pointed out, that is done by very many tenants only once in a blue moon.

So there are problems with how we fill the data set, but what is most important is that we hear from the Minister whether it is the Government’s view that we should be having a national database. Whether it is run at individual local authority level or nationally I am not that concerned about at this stage, but it is important to know what the Government’s thinking is about having a database of all private sector landlords. Then perhaps we could get together from all sides of the House to work out the details of how we could fill the data set and ensure that people registered appropriately.

The second issue is local authorities operating an accreditation or licensing scheme. There is a straight -forward difference between Amendment 18 from the noble Lord, Lord Beecham, and my noble friend’s Amendment 33A. My noble friend suggests that this should be voluntary and local authorities can decide whether or not to do it, while the noble Lord, Lord Beecham, is suggesting that all local authorities must do it. I make it clear that I side entirely with my noble friend. It is right and proper that local authorities do this, but it is also important that we recognise that some local authorities have already found ways of doing it; across many parts of London there is already such a scheme, and other councils—for example, by using an Article 4 direction—have been able to do that.

Still, it is important that we treat these two issues as separate: first, with regard to the list of all private sector rented landlords so that we can ensure that legislation that we pass in your Lordships’ House will be enforced; and, secondly, that we allow discretion to local authorities to decide how best they wish to operate in the best interests of the people that they seek to represent in local authority areas.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, I remind noble Lords that this issue came up earlier under the Deregulation Bill. I was very opposed to the fact that they threw out all rights to register people who were living in these places. It came up, in particular, in relation to Airbnb. I divided the House and we lost the issue. Westminster Council had been prepared to register people even at 24 hours’ notice so that it could know who was occupying, not only as a landlord but who was living in the place. This was rejected. I found it extraordinary that, at a time when New York and Paris were bringing in this regulation, we were deregulating it. It went through on the Deregulation Bill and it should be drawn to the attention of noble Lords again. It seems to be in total conflict with what the House carried at that time, against what I was hoping, which was more like what the noble Lord, Lord Foster, has just suggested.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government 7:30 pm, 9th February 2016

My Lords, if I may, I will take note of what my noble friend Lord Flight has said and deal with it in the relevant group so that I have both heard him and responded at the relevant time and we do not move amendments out of kilter.

Amendments 18 and 33A are very similar, so I will address them together. These amendments would involve local authorities operating an accreditation and licensing scheme for private sector landlords in their area. The current licensing arrangements were introduced to give local authorities the ability to deal with problems that might arise in connection with rented property and provide for three types of licensing: mandatory licensing of larger houses in multiple occupation; additional licensing of smaller houses in multiple occupation; and selective licensing of all types of private rented housing, should the local authority see fit to do that.

A major drawback of licensing is that it impacts on all landlords and it places additional burdens on reputable landlords who are already fully compliant with their obligations. As my noble friend Lord O’Shaughnessy says, this creates unnecessary costs for reputable landlords which tend to be passed on to tenants. The majority of landlords—the non-rogue landlords, to quote my noble friend—provide a good service and the Government do not want to impose unnecessary additional costs on them or on tenants who may see their rents rise as landlord costs rise.

Accreditation is of interest only to good landlords who rent out decent accommodation, so it does not help to identify and tackle criminal landlords nor lead to improvements in the sector. Local authorities are in the best position to decide whether or not there is a need for an accreditation system in their area. Indeed, voluntary accreditation systems have been introduced by many local authorities and are also promoted by the main landlord associations. The noble Lord, Lord Beecham, asked whether these could be extended if they were successful. They most definitely could, but it would be a local decision-making process. I hope, with that explanation, the noble Lord will agree to withdraw the amendment.

I would like to thank my noble friend Lord Flight for tabling Amendment 21. I see that my noble friend Lord Cathcart is in his place; he has spoken to this. The amendment would require local authorities to request tenure information from residents, owners and managing agents whenever the local authority requests council tax information. As my noble friend Lord Cathcart and I have already discussed, it happens in some councils, as noble Lords have pointed out, particularly in London. It is already being practised by some councils, but not all. I am very supportive of ensuring that local authorities have the tools necessary to tackle rogue landlords in the private rented sector in their areas. Parts 2 and 3 of this Bill demonstrate our commitment to this.

Local authorities already have powers in existing legislation to request tenure information on council tax forms—as I have said, some do—through the Local Government Finance Act 1992 and the Housing Act 2004. They can also access the tenancy deposit protection schemes. I am very sympathetic to the purpose of this amendment but, before jumping head first into legislation to require it, which could potentially increase financial burdens, the Housing Minister and I intend to investigate the matter further and have taken steps to establish a working group to explore this important issue. It will be chaired by none other than Dame Angela Watkinson herself. The working group will assess the extent to which local authorities are currently using their existing powers, examine how they could currently use this information to tackle rogue landlords and, crucially, consider how and whether requiring the collection of tenure data will assist in tackling rogue landlords. It is due to meet in March and will report back to Ministers within three to six months.

The noble Lord, Lord Campbell-Savours, came back on the point about the ability of the Inland Revenue —or HMRC—to access rogue landlord data.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

Yes, it can access all data, but in particular it can access rogue landlord data. This is part of my point: there is evidence of some practices in London where rogue landlords are housing 20 or so tenants in two-bedroom properties. That evidence could be married up with the various agencies not only to find those rogue landlords but to fine them as well, and recover the tax that is due to HMRC. I thought that might be a useful circling up.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

I am not referring to rogue landlords but to all landlords.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

Absolutely—I would just make the point about the rogue ones, but the noble Lord is absolutely right.

Amendment 27 would require all private landlords to sign up to a national register, which would be operated and maintained by a local authority. The information on the register could be used by local authorities to inform landlords about regulatory matters, of their duties under the Housing Act and the Immigration Act 2014, and other useful information. The Government do not support a national register, for reasons which some noble Lords have pointed out. In addition to the costly undertaking of supporting a national register—

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

I am sorry to press the Minister again, but has any estimate been made of what the cost would be? Can we have some idea, or is there just an assumption that it will be too costly?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I am not sure whether an assessment has been made, but while I do not know what the cost will be, there will be a cost. There will obviously be an obligation to provide a register, and therefore an associated resource and cost. I cannot say what the quantum of that cost would be at this point.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

I wonder whether the Minister can also help me. She was helpfully describing a working party which is being set up and chaired by Dame Angela Watkinson, to report in three to six months’ time. Given the findings and recommendations with which it will no doubt come forward, can the Minister assure us that there are powers within this proposed legislation—the Act may have gone through by then—to implement them in a way which reflects the opinion of this House? Does she have those powers? How would she therefore progress any findings which might or might not follow the path of the noble Lord, Lord Flight, or the path of my noble friend Lord Beecham on this?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

It may be helpful if I tell the noble Baroness that what I discussed with my noble friend Lord Cathcart and the Housing Minister was that there are local authorities doing just this. I imagine that the working group will be exploring the art of the possible—to extend if it needed—and what the implications would be for local authorities, but some are already doing it under existing legislation. I do not think that the Bill per se would do it, but it is about how we would marry up existing legislation with what is already being done by local authorities.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

But that would suggest that the chair of the working party and that party did not produce recommendations any different from those currently practised. That of course is not probable. If it is to be effective, one will need some powers in this legislation, by affirmative regulations or something, to come back to that should it be appropriate. I doubt that the Minister would want primary legislation for that, but if she does not have statutory instrument powers, she will not be able to do it.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, the working group will meet in March and I would not want to pre-empt what it will come up with or recommend. I am saying that there is existing legislation to do what my noble friend Lord Flight suggests, but it is a question of local authorities’ willingness to take it up, which is varied. I cannot pre-empt what the working group will say.

My noble friend also made the point that only the good landlords will come forward, and I agree with that. I also agree that local authorities should focus their enforcement on the small number of rogues who knowingly flout their obligations, and that what is why we are establishing the database.

The noble Lord, Lord Greaves, asked how the council can crack down on a landlord if the tenant does not know them. The tenant can raise concerns with the council, which can use the powers in the Housing Act 2004 and seek action from the landlord or the property manager. The tenant may not know the landlord, but they should know the managing agent.

My noble friend Lord Flight asked how local authorities know where the rogue landlords are. Obviously the database will be built up, but authorities will be able to combine the tenancy deposit data with existing data sets, such as council tax and housing benefit data, to identify properties that are not on the tenancy deposit protection list and hence those potentially belonging to rogue landlords.

The noble Lord, Lord Foster, asked about immigration, particularly illegal immigration, and how those tenants would be identified. The Immigration Act 2014 introduces a requirement now to check the immigration status of the tenants. Where a landlord has concerns about a tenant’s immigration status, he should contact the Home Office. Local authorities can also raise any concerns regarding illegal immigrants with the Home Office.

With those points, I hope that the noble Lord will feel content to withdraw his amendment.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I will not keep Members of your Lordships’ House from their dinner or from the dinner break business, whichever they prefer or are committed to.

I have a couple of very short points. The first is that the Minister did not quite reply to my noble friend Lady Hollis’s question, but perhaps she will send her a reminder. Alternatively, of course, the Minister could look at Hansard.

The noble Baroness, Lady Gardner, has raised Airbnb matters more than once in the House. If she looks down the list she will see that I have Amendment 32, which will touch on that matter, so, hopefully, we can revert to it.

Lastly, I shall say a brief word about Amendment 18. Part of the problem is that at the moment we have a selective licensing scheme that operates slowly, and there are hurdles to surmount before you can implement such a scheme. I mentioned the scheme that is now working in my own ward in Newcastle and which has received this additional funding—I repeat my gratitude in the hope that perhaps we will get some more—so it is not a straightforward matter to produce any form of licence scheme on a selective basis.

Having said that, I think it is clear that there is not much support for making this universal and comprehensive, but I invite the Minister to commit to looking at how the current scheme might be improved so that it could be speedier and done much more at the discretion of local authorities. At the moment you have to have a certain number and a certain percentage; it is full of hurdles that get in the way of dealing with what is quite an important problem for many people. I beg leave to withdraw the amendment.

Amendment 18 withdrawn.

House resumed. Committee to begin again not before 8.43 pm.