Home Energy Conservation Bill – in a Public Bill Committee on 26th February 2002.
I remind the Committee that with this we may discuss the following: Amendment No. 52, in page 3, line 14, leave out from 'house'' to end of line 25 and insert
'where its occupancy is or would be subject to more than one tenancy agreement whether written or verbal'.
Amendment No. 53, in page 3, line 37, at end add—
'(e) a building which has been converted into self-contained flats in accordance with Building Regulations;
(f) service tenancy agreements.'.
Clause stand part.
Government new clause 7—Meaning of ''house in multiple occupation''—
'(1) Section 345 of the Housing Act 1985 (meaning of ''multiple occupation'') is amended as follows.
(2) In subsection (2)(b), for ''by a single household'' there is substituted ''as a separate dwelling.
(3) After subsection (2) there is inserted—
''(3) The Secretary of State may make regulations prescribing—
(a) circumstances in which a person is, or is not, to be regarded as occupying a house, or
(b) circumstances in which persons occupying a house are, or are not, to be regarded as forming a single household.
(4) Regulations under paragraph (b) of subsection (3) may (without prejudice to the generality of that paragraph) secure that persons occupying a house are regarded as forming a single household only where there is a prescribed relationship between each member of the group and any one or more of the others (as the regulations may require).
(5) In subsection (4) ''prescribed relationship'' means any family or other relationship of a description specified in the regulations.
''(6) The Secretary of State may also make regulations prescribing descriptions of houses which (whether or not otherwise falling within the definition in subsection (1)) are not to be regarded as houses in multiple occupation within the meaning of this Part.
(7) Regulations under subsection (6) may frame a description of house by reference to any features of the house (including the nature of its use or occupation).
(8) Regulations under this section—
(a) may make different provision for different circumstances;
(b) may make incidental, supplementary and transitional provision; and
(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.''.'.
And the following amendments thereto:
(a), after proposed new subsection (3)(b) of section 345 of the Housing Act 1985 insert
'(3A) Regulations made under subsection (2) shall include in any definition of ''house in multiple occupation'' a house occupancy of which is or would be subject to more than one tenancy agreement whether written or verbal.'.
(b), in proposed new subsection (6) of section 345 of the Housing Act 1985, leave out from second 'of' to end and insert
'buildings which are, or are not, to be regarded as houses'.
(c), in proposed new subsection (7) of section 345 of the Housing Act 1985, leave out from first 'of' to '(including' and insert
'building by reference to any features of the building'.
Amendment No. 43, in title, before the second 'make' insert
'to amend the definition of house in multiple occupation in Part 11 of the Housing Act 1985;'.
I was in full flood before lunch—lunch with the chairman of the BBC, which was a most welcome break from our proceedings—explaining why the amendment tabled by my hon. Friend the Member for Billericay (Mr. Baron) was so splendid, why I supported it and why the rest of the Committee should do likewise. My hon. Friend made several important points about the nature of the private rental sector, what may happen under the Bill and what could happen under Government new clause 7.
I have some worries about part 3, as drafted. It states that a house in multiple occupation
''means subject to subsection (2) below a house occupied by adult members of more than two families.''
Presumably, if a house were occupied by only two families, it would not be an HMO. I can imagine circumstances in which a house that was occupied merely by two families ought to be classified as an HMO, as I can imagine circumstances in which a house occupied by two families should not be so classified. Such a definition is a strange basis on which to proceed.
I greeted new clause 7 with some surprise. The Minister has had today's sitting in his diary for a considerable time, but he was unable to attend this morning because of an engagement. The new clause states:
''The Secretary of State may make regulations prescribing—
(a) circumstances in which a person is, or is not, to be regarded as occupying a house, or
(b) circumstances in which persons occupying a house are, or are not, to be regarded as forming a single household.''
The Minister's pressing diary engagement is evidence that Ministers do not have enough time as it is, without their having to consider whether someone who occupies a house forms or does not form a single household and when someone is, or is not, deemed to be occupying a house. They have better things to do than that. I therefore commend the amendment tabled by my hon. Friend the Member for Billericay, which would revert the clause to the original position that a house in multiple occupation
''means a house which is occupied by persons who do not form a single household.'
That is a clear definition and one under which disputes can be solved, not by far too busy Ministers, but by the courts as has hitherto been the case.
I have received a letter from a constituent, Mr. C. Binks, from Pulham Property Company Ltd. in Pulham Market. Those members of the Committee who knew my predecessor will know that Lord MacGregor of Pulham Market took his title from that splendid village in the heart of the constituency. Mr. Binks writes:
''We let mainly to students in Norwich, and work very closely through our agent with the students union.''
He believes that he does not need interference from the council to spoil the confidence that he has built up with his clients over many years. He objects to the permission that he would have to obtain under the Bill to sell a company property if it became unsuitable, and I shall expand on that later when we debate amendments Nos. 45 and 46, which I have tabled.
Mr. George Haines, Mr. Binks's colleague, explained the position to me as it obtains in Norwich where, in the golden triangle, is desirable terraced housing near the university of East Anglia in which some young professionals live, but which is also much liked by students. Typically, there are lets in houses of either four or five students living together, with shared lavatories, shared bathrooms and shared kitchens with one communal room, and one bedroom each. We would usually describe such conditions as a house share or a flat share. When I was a student, I lived in similar accommodation. We would not have regarded such accommodation as anything other than a single household. It would not have been right for it to have been included under the ambit of the Bill.
The problem, to which my hon. Friend the Member for Billericay alluded, is that if the Bill were passed in such a form that such properties were caught, the effect would be simple. According to Mr. George Haines,
''We would no longer be in charge of our own properties''.
People would move towards ordinary family letting, and the supply of rental property available to students would be reduced. He said that, although the income received would be lower, his company feels so strongly about the matter that it would do that. They are reputable landlords who work hard to form close relationships with their clients, build relationships with student unions, understand what their clients want and provide a good service at a reasonable price.
I understand that the purpose of the Bill is to catch the small proportion of landlords who are not doing the right thing. I do not believe that the definition of HMO as proposed either in the original Bill or in new clause 7 is the right approach. Instead, I feel strongly that the best approach in defining HMOs is to revert to the former definition as contained in amendment No. 51, and it is in that light that I support the amendment.
I listened with great interest to the observations of previous
speakers. I found the remarks of the hon. Member for Billericay fascinating. They were a delightful mixture of straightforward honesty, on which he should be congratulated, and observations, laden with a call for the status quo, which we hope to change. I should like to comment on some of those interesting observations.
The hon. Member for Billericay referred to the number of people who own dwellings that may or may not be defined as HMOs by whatever means we finally determine and how they tend to be held in the possession of one or more members of a family, especially in the case of one property, and suggested that corporate interests are rarely involved. I think that I understand the difference between a corporate interest and the interests of someone who may have five, 10, 20, 30, 50, 200 or 300 houses and own them individually. We have that in Leeds, and problems flow from that.
On either side of my house are HMOs that have been newly developed in the past few years. I can look from my landing window through the opposite landing window and see the locks and bars on the doors of the bedrooms opposite. I can look straight through, as there are no curtains. That is one of the effects of a plague of houses in multiple occupation—the standard of appearance of the housing stock quickly degrades.
The nature of such ownership is causing most of the problems. Great sums are made from such properties. I was fascinated to hear the suggestion that people may accept a lower income. That is not the information that I have from the owners of such properties. On the contrary, they look for every possible means to increase their income and are terrified of a definition of an HMO such as is contained in the Minister's new clause 7, as it would mean that they would have to register in a manner that might affect their profit-making capacities.
Houses in Headingley, where I and the great bulk of students at Leeds university live—there are some 60,000 students in total, from two universities and a large teacher training college—have had an enormous effect on the environment there. More than 50 per cent. of what was formerly traditional family housing stock has become HMOs. Hon. Members can imagine the catastrophic social and structural effects that that has had and how damaging that can be in relation to, for example, the number of schools in the area. A primary school was built 10 years ago that the demographics suggested would have a long and continuous future. A large sum of public money was invested in it, and yet it is struggling to survive. The reason for that is simple; the area has more houses in multiple occupation and fewer families. That means that there are fewer children, which leads to a greater threat to the community's infrastructure.
That process is being driven by the pursuit of profits. Vast sums of money are being made. The houses either side of me will generate income streams of about £15,000 to £20,000 a year if their owners are lucky—which they are. They have six, seven or eight bedrooms, and the numbers of tenants, and their safety, depends on the effectiveness of the local authority. We had a protracted battle with the house next door to mine. With the aid of the planning
department, after a long inquiry, we eventually reduced the number of its occupants from eight to six for their safety, and in accordance with the planning regulations. Those are the kinds of real problems that it seems that the hon. Member for Billericay would not want to do anything to address them.
The hon. Gentleman has, to put it mildly, misinterpreted my comments.
With regard to the composition of the private rented sector, the point that I made is that the vast majority of landlords are small landlords who own merely one or two properties. They are not quasi-corporate investors who own large swathes of property, or entire streets.
With regard to the licensing of HMOs in their present definition, my point is that councils and local authorities have plenty of opportunity to put right what is wrong with ''slum landlords''. The change of definition that is envisaged in the Bill as it stands, and in new clause 7, will encompass most, if not all, of the private rented sector. That will cause great inconvenience to landlords, and it will, perhaps, persuade them not to stay in the market, as has been the case in Scotland.
I am not against the licensing of HMOs in their present definition. On the contrary, I have a greater desire than most people to drive out slum landlords. However, the change in the definition of an HMO will suddenly bring into its ambit most of the private rented sector, and that would not be for the good of tenants.
I hear what the hon. Gentleman says, and it causes me to reassert my observation that he seeks to maintain the status quo. I understand why he might want to do that, because he seems to have a close affinity with landlords.
I take on board the hon. Gentleman's point that there is a problem with regard to the accommodation of large numbers of students. I am pleased to say that Lord Falconer visited my constituency on Friday 15 February to examine the nature and effect of the degeneration that results from the kind of abusive use of traditional family housing stock that we are experiencing. He was surprised to see the detrimental effect that that had had on what was a highly desirable residential area, and how seriously damaging it is, because of the change of use. There is seasonal use of properties; it is like living in a seaside town. Local businesses benefit intermittently, depending on how many students are present at any given time. There is not a fixed number of people consistently living in the area. The student body is permanently changing at Leeds, as it is at other universities. At Leeds, one third of students roll over each year. Therefore, there is a constant change of tenancies inside buildings, which leads to degeneration of their interiors, and of the neighbourhood. That can also be extremely damaging to the health and safety of the tenants.
It is a measure of the desirability of these properties, and the profit margins that are available, that while the average price of properties in Leeds rose by 60 per cent. between 1995 and 2001—pretty much the average
across the United Kingdom—in Headingley it went up by 90 per cent. That shows the healthy profit margin made from the grotesque misuse of housing stock for traditional family use. However, it is not that which brings me to my feet as much as the threat to the safety of those who live in those circumstances. Opposition Members may not believe me when I say that from my house I can see the bolts on the doors in the house opposite. I am happy to show them from my window. It would be bad enough if that were a unique example, but we know that it is not. The hon. Member for South Norfolk (Mr. Bacon) agrees that there are some problems with the issue, and I have heard him say so before. I have to acknowledge that there are some first-class landlords in the area. They are brilliant. They have been in the family business for years or decades. They know how to take care of properties, and they do not allow that kind of practice.
Where there are separate dwellings, they will be classified as HMOs. It sounds to me as if the buildings that the hon. Gentleman describes would be classified as HMOs under the amendment. I shall give him two examples of the accommodation that I lived in when I was a student in London. The first was a house designed for traditional family dwelling. When one went through the front entrance, there were locked doors leading in different directions, to different dwellings. Some were small flats and some were bedsits. I should think that that would undoubtedly be categorised as an HMO under the amendment.
On another occasion I lived in a flat in which there was a communal living room, kitchen and bathroom but separate bedrooms, which did not have locks on the door. We were one household. Those types of dwellings and flats would not be classified as HMOs under the amendment or by the courts. My concern is that the second type would be classified as an HMO under new clause 7, and as a result, the total volume of the rental sector would decline. Does the hon. Gentleman accept that there is a risk that the rental property sector could decline in volume? That would present a problem.
I shall make a quick observation on that point. It may well be—no one could be certain until it became a reality—that there would be some decline. If that were so and it improved the living conditions of some of those in difficult circumstances whom I see daily, it might not be a bad thing. It might also have the beneficial effect of inducing those who plan to increase the numbers of students at universities without any preparation or taking any responsibility for their accommodation, to rethink their policies.
Before anyone suggests that I oppose the expansion of higher education, I state that that is not true. I support expanding higher education in a way that is manageable and tolerable to existing communities—but that needs planning. The fact that we have pursued policies that deny the appropriate planning for that kind of housing change is a measure of our collective failure. I consider new clause 7 a step in the right direction. I have suggested to Lord Falconer, for example, that we should freeze the number of students at Leeds university at the 2001 level until we have an
appropriate mechanism that allows us to accommodate them in a safe and secure manner.
The hon. Member for Billericay spoke about returning to the previous position. He seems to believe that Barnes v. Sheffield was an unfortunate event, which might have been better dealt with in another way, but nevertheless represented the local position that we have learned to live with. Yes, it does. If I understand him correctly, he suggests that the lack of clarity in new clause 7 might lead us back to the courts. It might, yet clear intent has been expressed about definitions. The parliamentary process embraces clear intent, but the Barnes v. Sheffield scenario had much less clarity. The courts took that decision, which has hamstrung local authorities and good landlords, who are other victims of the process. I could tell the same horror stories about good landlords being victims of the system as about students being forced into such accommodation.
Attempts to change the status quo can be difficult when one has to legislate in a context where there are no precedents. It is difficult. I sympathise with the Opposition as well as the Minister. I understand the difficulties of changing the system when such complexities have evolved about the meaning and effects of property ownership up and down the chain. New clause 7 offers the hope of radical change—
The hon. Gentleman makes it sound as if the status quo is bad and we must advance from it, but I believe that the status quo should be changed only if there is a good reason. We have freed up the private rented sector, and far more houses are on the market and far more properties are available to rent. Local authorities have powers to intervene if necessary. One is not against the licensing of HMOs in their present definition and, broadly speaking, the system has worked.
May I take the hon. Gentleman back to his point about locks and bolts on doors? In that context and under the present definition of an HMO, to which it is proposed that we revert, that is an HMO.
The hon. Gentleman referred to bedroom doors being bolted and people living separate lives. Under the present definition of an HMO—before the Bill and associated amendments came into being—such a dwelling would be regarded as an HMO. Accordingly, the local authority would have the right to enter and serve either section 352 or overcrowding notices to put the situation right if it were deemed necessary. The hon. Gentleman's point is not therefore valid in the context of the amendment, which is not helpful in clarifying the ambiguity of prescribed relationships for more than two families. At least some clarity emerges from court decisions, and people know where they stand. We will be inviting the courts to intervene again to interpret the definitions and throw the market—certainly in the short term—into a state of flux as to their meaning.
To return to my central point, one should move on from the status quo only if—
I see little point in rehearsing the arguments again. The hon. Gentleman holds one view and I hold another. One benefit that might accrue from market development is that properties previously occupied by family units of two, three or four could be occupied by five, six or eight students. I understand that argument. Any intrusion into the freedom to operate in that way will restrict the market.
There is another element of the market that must be borne in mind. I am surprised that landlords and others who support the free market do not talk about the devastating effect that such misuse of property has had on the first-time buyers market. The properties that I referred to are priced way out of the range of a first-time buyer. The asking price of my house, which I bought for £5,000 nearly 30 years ago in 1973, when I had a young family, is now £230,000. Which young family could get a mortgage on a house that cost nearly a quarter of million pounds? The first-time buyers market has been devastated.
There are other serious downside consequences for easily provided housing units for students. There has been an effect on the environment; large numbers of professional people who used to travel gently to work on public transport have been driven out of inner-city areas. We now have the second most polluted road in Leeds, according to the official roadside measuring device, with huge consequential damage to the environment. That is part of the price of the system, and I ask hon. Members to take it into consideration when making their case for a return to the status quo.
The state of security of the properties also says something about the status quo to which the hon. Member for Billericay wants to return. The local criminal fraternity see September and October, when most students are new to their properties, as heaven with its gates left open for them. The technique is simple: the burglar knocks on the door of a single housing unit, where everyone lives together, and says, ''I've come to see Darren.'' It is not complicated; the person who answers the door says, ''Do we have a Darren here? He may be on the third floor.'' The local villain goes upstairs with his plastic bag, knocking on every door he passes, and if there is no reply in he goes, taking the laptop computer and all the other bits and pieces.
We have the highest burglary rate anywhere in the United Kingdom, and the best season for burglaries is well understood. There are armed robberies on a scale that is difficult to imagine, because the targets are soft. That is the downside of the traditional solution recommended by the hon. Member for Billericay, and it is not the way forward for anyone who is concerned about housing for young people at university. Like Conservative Members, they too want security and decent standards of housing.
I do not follow the logic of the hon. Gentleman's argument that changing the definition of HMOs will affect the housing market or crime figures. He seems to be blaming the HMOs and the restricted definition of them, and saying that they are responsible
for rising house prices and crime figures. Is that what he is suggesting?
It is an incredible coincidence if adjoining areas do not have the same crime rate and victim status. There has been an increase in the average price of properties in other parts of Leeds of about 60 per cent.; in Headingley prices have gone up by 90 per cent. in the last six or seven years. Those are not insignificant indicators of the availability of profits from the misuse of property to which the hon. Member for Billericay wants to return.
We want a change; we want proper use of property and safe accommodation for students, especially in my constituency, where—unlike other areas in which there are HMOs—there is an exceptionally high demand for properties. It is necessary to be able to deal with the special peculiarities of the property market, which the market cannot resolve on its own. What is proposed, especially in new clause 7, is an intelligent sensitive intervention in the marketplace, which would benefit all those who are currently using these properties.
The hon. Member for Leeds, North-West (Mr. Best) spoke about the effect of transient and termly residence in the area in which he lives. He spoke movingly, not just now but on Second Reading, about a populous family-oriented area that has become almost a dormitory town at some times of the year. I understand what he says, but I do not think that the Bill—part 3 in particular—is the proper way of dealing with that planning problem. The requirements for the licensing of HMOs should have a different effect—to provide quality, safe and properly insulated accommodation for people who hitherto have not had that degree of protection. It is not a panacea for a particular planning problem.
The Government have resolved to alter the provisions of the Bill that would license houses in multiple occupation. We know that they have failed to fulfil their promise in their manifestos both of 1997 and of 2001 that they
''will provide protection where most needed: for tenants in houses in multiple occupation. There will be a proper system of licensing by local authorities which will benefit tenants and responsible landlords alike.''
Despite the extensive consultations on the licensing of landlords in low-demand areas, the Government do not seem to have been in a great hurry to meet their pledge, especially considering that it was first made in 1997. The House, supported by the Conservative party, has established that the licensing of houses in multiple occupation is a worthy concept. However, my party has persistently and consistently reiterated our concerns about the detail of part of the Bill.
I have expressed my gratitude already to the Bill's promoter for his efforts to address various concerns of members of Her Majesty's Opposition, and I am pleased that the hon. Member for Brighton, Kemptown (Dr. Turner) has attempted to provide a maximum threshold for maximum registration fees and, in effect, to give an appeals procedure. The broad intention of part 3 is to increase the health and safety
standards of houses in multiple occupation. That is why, although I understand the problem and sympathise with the point made by the hon. Member for Leeds, North-West, this is not the Bill to deal with that problem.
We know that higher standards are necessary in HMOs. Some 10 per cent. of all HMOs—and 20 per cent. of flats and bedsits—fail standard tests, and 80 per cent. of HMOs lack fire escape facilities. As the House noted on Second Reading, for people who happen to live in an HMO of three storeys or higher, the danger of fire is 17 times greater. More than 1.5 million people live in HMOs in England alone, and Shelter has described their housing conditions as
''among the poorest and most dangerous in the country.''
The Government's document ''Fuel poverty: The New HEES'' highlights the health and safety deficits in the private rented sector. It says:
''As a proportion of housing in a sector, the incidence of fuel poverty is greatest in the private rented sector'',
and it puts the figure at 39 per cent. Experts believe that that amounts to 709,000 households in England alone, which means that more than 1 million people probably suffer fuel poverty in that sector. The UK figure will be higher, and may amount to more than 1 million households, and 1.5 million people.
The Government tabled amendments that sought to delete the provisions relating to licensing houses in multiple occupation. The amendments were an odd reversal of their pledges and policies. I am pleased to note that they have reconsidered part 3 and have tabled more constructive amendments, such as new clause 7. I will discuss the implications of that new clause later.
In the Government's most recent statement on the national licensing scheme on Second Reading of the Homelessness Bill, Lord Falconer of Thoroton said:
''We accept all the arguments advanced in favour of it. It is simply a question of finding time—[Official Report, House of Lords, 12 November 2001; Vol. 628, c. 406.]
In view of the Government's previous reluctance to accept part 3, I suggest to the Minister that there is no time like the present.
The Minister has said:
'' Ministerial colleagues in the DTLR have made clear that they are seeking agreement to bring forward as soon as possible a housing Bill that will deal with the whole context of measures, not just the limited measures included in the Bill.''—[Official Report, Standing Committee C, 24 January 2002; c. 18.]
However, the Government have promised those measures since 1997. A start in the right direction would not only reflect better on the Government but, more importantly, would decrease the number of deaths in HMOs. The Conservative party broadly supports licensing houses in multiple occupation. However, we will continue to press home our concerns about certain aspects of the provisions.
I have already recognised that the promoter of the Bill has agreed to instigate a maximum cost threshold by which local authorities should abide. We mentioned our concern that good landlords should not be penalised, and that the cost must be kept under constant review. If the costs of licensing become a key
aspect in decisions about whether to continue as landlords or to enter the buy-to-let property market at all, the Bill will have failed. The hon. Member for Brighton, Kemptown stipulated that a registration fee should not exceed £112 per letting agreement for a five-year period. That capped figure is reasonable. Will the Minister confirm that he agrees with it?
We also need further information from the Government on start-up funds that may be available to local authorities to assist with establishing a licensing system. We want to ensure that the legislation protects tenants and landlords, but we do not want it to become burdensome to local authorities. It is important that the implementation of the legislation is thorough and efficient. If it is, bad landlords will have to reform or go out of business.
I also mentioned my concern that local authorities may refuse planning permission to landlords who wish to change the use of a property from an HMO to a single dwelling unit if the price of compliance is too high. My hon. Friend the Member for South Norfolk tabled amendments that would ensure that the owner had the right to revert the HMO to single dwelling status if the costs of refurbishing it to the standards required by the licensing scheme exceeded 50 per cent. of the annual rental income of the property. I ask the Government to consider that.
We also need appropriate time scales for the implementation of licensing requirements. Will the Minister confirm that there will be an effective appeals procedure? The Government have claimed that registered social landlords are governed under other regulatory schemes that ensure that health and safety standards are met, so they do not need to be covered by the Bill. The Minister needs to reassure the Committee that any similar scheme is at least as rigorous as the HMO licensing scheme. I am vehemently opposed to burdens being placed on private rental landlords that are not imposed on registered social landlords. I urge the Government to consider the inclusion of RSLs in the Bill, or to confirm that the demands on them are no less onerous under the Bill. That such confirmation is necessary cannot be in doubt. RSLs need to be controlled as effectively as private landlords because they cater for some of the poorest people in our society, who are in the greatest need of protection.
Other points need ministerial clarification. Hitherto, part of the definition of an HMO was that it was
''occupied by persons who do not form a single household.''
The Bill sought to change that definition to a house
''occupied by adult members of more than two families.''
The Government now seem to insist that the definition in the original legislation remains. We need to know the regulatory impact of the amendment. I understand that the Minister wants to avoid a repetition of the Barnes v. Sheffield city council case, in which the court held that a property let to a group of students did not constitute an HMO. In that case, the court gave consideration to factors such as whether the persons
living in the house came to the property as a single group or whether they had been independently enlisted. The Government are understandably keen to avoid similar variable interpretations of what was obviously a hazy definition.
New clause 7 affirms that a single household exists
''only where there is a prescribed relationship between each member of the group and one or more of the others (as the regulations may require)''.
I need the Minister's help in understanding what the regulations require, and the definition of a prescribed relationship. There is a danger that the interpretation of the regulations may give rise to absurdities. Is a group of close friends or colleagues, for example, to be treated differently from an unmarried couple? My hon. Friend the Member for Billericay has posed other examples.
There is potential for considerable contention that could go as far as the courts unless there is demonstrated equity in the definition of those who are in the prescribed group. The Minister should perhaps consider another definition of a single household, such as one based on whether the inhabitants have signed more than one tenancy agreement. That may ensure that the regulations are not unnecessarily onerous for fit and proper landlords, while getting to the heart of the Bill's aim of providing a degree of security to people in HMOs that they have not previously been offered.
My hon. Friend the Member for Billericay spoke, from his considerable experience, about the dangers of redefining an HMO. We will all see that there are considerable difficulties in that redefinition of HMOs when the Minister tells us what the regulations prescribe. I do not say that it should never happen, but I just wonder whether we have given it long enough to ensure that we are producing a good piece of law.
Part of the Bill says that local authorities retain the discretionary right to ascertain whether some HMOs should be registered. I am convinced that that sort of discretionary power for local authorities will remain a problematic part of the licensing system. In order to reduce the potential for problems, would the Minister consider providing updated guidance to local authorities, which would also serve as guidance for the appeals procedure—a procedure that I hope he will endorse?
It is imperative that each local authority should subject its landlords to a nationally uniform registration scheme. Therefore local authorities should operate the same reporting procedures, and the appropriate paperwork should be consistent throughout England and Wales. If local authorities work according to completely different procedures, no one will be able to prove whether one local authority is placing heavier burdens on landlords than another. With that in mind, it would make sense to run a pilot licensing system in a town that has problems. I suggest Brighton, Kemptown or Brighton as a whole. I have already tried this on the hon. Member for Brighton,
Kemptown and he is rather keen on it. We have a willing volunteer for a trial.
The hon. Gentleman will be aware that I represent Brighton, Pavilion. He may not be aware that there has been a pilot scheme in my constituency, on a voluntary basis, for just over a year. The council reports that it has no record of landlords withdrawing their properties from the market or of rent rises that can be directly attributed to the licence fees associated with the scheme. In a sense, what the hon. Gentleman suggests is already under way. The council in Brighton and Hove is about to extend that scheme, irrespective of what decisions Parliament takes on a mandatory scheme, across the whole of the city area.
I thank the hon. Gentleman for giving the Committee that information. I had been given it previously by the hon. Member for Brighton, Kemptown. As I understand it, the scheme that is extant in Brighton is slightly different. It does not have all the provisions of the Bill, for fairly obvious reasons. Brighton has many of the problems that the Bill seeks to address. It has some glorious crescents and terraced housing in multiple occupation by students either at Sussex university or what used to be Brighton polytechnic—I do not know its new name. As the scheme has worked so well in Brighton, Pavilion, it should be extended elsewhere. It would be a good idea to ensure, through the Bill, that that happens.
As for rents, Brighton is in a fairly populous, popular and fairly rich area, and parts of it have the great benefit of a large student population. Students leave a seaside town during the summer months, and their accommodation can then be let to those who spend their summer holidays by the seaside. I do not think that that appertains in all university or ex-polytechnic towns; there are differences.
I only suggested Brighton, Kemptown at the request of the hon. Member for Brighton, Kemptown. Whether the location is Brighton, Kemptown or Brighton, Pavilion or Billericay or Bolsover matters not. We simply need to test the proposals with a trial, find out whether they work and amend them if necessary before they are implemented nationally.
I am grateful for the opportunity to express support in principle for this part of the Bill. The licensing of HMOs has a valuable part to play, but the Minister must reassure the Committee about much of the detail before we can give it our wholehearted support.
My hon. Friend the Member for Brighton, Kemptown may be a willing volunteer for a pilot scheme, but I suspect that he would quickly discover that he was a lamb to the slaughter at the hands of his colleagues on his way out of the Room. Many hon. Members on the Committee and even more in the House are looking not for a pilot scheme, but a national scheme to address the known problems that many of us have been struggling to address for too long.
I apologise; I may have given the wrong impression. I was not talking about a pilot scheme by itself; I said that we should trial the scheme
to ensure that it worked properly before implementing it nationally.
I am sure that the practical issues surrounding the implementation of such a change would be more than taken on board by the Minister; he is particularly sensitive to the importance of getting things right. However, it is important for the Committee to locate itself back in the real world, which the Bill is designed to address, and to move the situation forward. If we waited for perfect definitions on which to base legislation, we would never have any legislation.
The important question that we must ask is whether the definitions and provisions in the Bill move us on significantly from the mess that we are in now. There is not a shadow of a doubt that the answer is yes. The status quo is utterly unacceptable. The Barnes v. Sheffield decision has paralysed local authorities such as mine and many other university towns and cities. They presume that they cannot intervene now because the courts have ruled against them, and they are looking to Parliament to define a different framework within which local authorities are required to act. In that context, the new definitions that have been offered are a significant improvement on the current situation.
It is important that, as a Committee, we reject the amendments that have been tabled, but it would be even better if the hon. Member for Mid-Bedfordshire (Mr. Sayeed) did not move them. It is also important to set out why the amendments should not be moved. They are based on fairly significant misjudgments about the nature of the issues and where they would take us.
Let me explain the first misjudgment. We are in danger of becoming confused between contracts and conditions. Various contracts are available for the acquisition of properties, whether to rent or buy. It is in contract law that one begins to explore the possibilities of people having joint contracts for a property. They might not have a relationship in the terms that the Bill addresses. They might have a commercial relationship, as occupants; one is able to do that. However, we must not end up getting drawn into a situation in which people can contract into mythical relationships—in this context, the word relationships should be placed in parentheses—because that would be used as a vehicle to return to the Barnes v. Sheffield position, where everyone was involved in a tenancy agreement relationship, regardless of whether it had any meaning in human terms.
If that were to happen, Parliament would look absurd, and hon. Members of the Conservative party, whose traditions have been particularly vociferously rooted in the defence of the family, would find themselves in difficulties if they were accused of creating fictitious families entirely for contractual purposes. The issue is not about whether there is a number of consenting students or adults to that contract. It is about the meaningful nature of a relationship and—to raise a separate issue—the conditions in which people live. It is important that we separate those issues out.
It is legitimate to be concerned about whether there would be an effect on the supply of private rented property in any areas. My understanding of what happened in Scotland is that much of the difficulty related to the substantial costs of the registration process, and I welcome the fact that the Minister, in the debate about the money resolution, attempted to pre-empt some of the dangers of going down the same path that this legislation might present.
It is not necessarily the case that there would be a diminution of the market. Nottingham has been a prosperous city, and it is currently experiencing dynamic growth both in its economy and in the number of students who are coming to both of its universities. One of the things that has already begun to change is that, commercially, people have begun to understand that, with regard to some of the most wretched properties that are let to large groups of students, there is an opportunity for better market offers to be made.
Developers are currently about halfway through the construction of 7,000 new units of accommodation in the city centre, in converted properties or purpose-built flats complexes, which seek specifically to address lettings or sales to couples—or, probably, at most three people—who wish to share a property. That perceived market is partly founded on the belief that there will be large numbers of students who would prefer to share a decent flat than an indecently overcrowded house.
Therefore, with regard to Parliament's responsibilities, we must concern ourselves, not with the possibilities of growth in other parts of the market, but with the conditions of the properties that remain in the student-occupied and multiply occupied areas of our inner cities. We have a responsibility to hold with the current definition, because the local authorities desperately want us to do so, to make it possible to deliver a contractual relationship that will address the pockets of the worst housing poverty, which is a problem that most local authorities face. The vast majority of landlords welcome that change as an opportunity. They wish there to be a clear distinction between the decent landlords who offer decent conditions for their tenants, and those who simply exploit the vulnerability of tenants who have no other choices.
We must also understand that some of the terms used in the amendments tabled by the hon. Member for Billericay beg as many questions as they appear to answer. When I read them, a question immediately came to my mind with regard to people who are subject to more than one tenancy agreement. Have they had more than one tenancy agreement or are they currently involved in more than one tenancy agreement? Was the tenancy agreement made at the start of the letting? Is it a tenancy agreement that varies when someone leaves the property and someone else joins it? Is it a new tenancy agreement? If people start off in a relationship, but then fall out and agree to share the same property, will they be subject to a different tenancy agreement? If people fall in love and
change the nature of their relationship, will that change the tenancy agreement? Such matters roll us down a path that is riddled with its own absurdities. It is extremely important that we, as a Committee, understand at what we should be directing our attention and at what we should not.
I shall take up two points, one of which concerns Scotland. The matter was not about the variation of licence fees, although, in many cases, that was great. It was a factor that resulted in the property stock in the private rented sector diminishing in size. However, different local authorities had different requirements and that often meant that great costs were incurred because of the application process. According to Unite—I have no reason to doubt its figures—in complying with Glasgow city council's requirements, which were different from other cities' requirements, its licence application cost it £10,000 in photocopying and administration costs. It is an issue not only of licence fees, but of the process of applying for registration.
I appreciate that I may be stepping slightly over the mark, but tenancy agreements would be the second-best option. The best option would be to leave matters as they are, but if we are to tinker with the definition of HMOs, it must be clear what a tenancy agreement involves. If someone leaves a house and a new person joins it, a new tenancy agreement must be introduced and signed by all parties, the effect of which would be that everyone would be jointly and severally liable and there is a sense of one community. If there were more than one tenancy agreement, different groups would operate and the property could legitimately be considered an HMO.
I am grateful to receive clarification from the hon. Gentleman on his second point. It reinforces my belief that we shall be taken right back into the mess over Barnes v. Sheffield and be unable to get out of that hole. I believe genuinely that the Minister is giving us the opportunity to get out of the hole and not jump into a similar one.
I accept the first point made by the hon. Member for Billericay. It was to be my concluding remark in response to the hon. Member for Mid-Bedfordshire. We must view with caution the notion of a uniform structure that is imposed throughout the country. The hon. Member for Billericay emphasised one of the realities with which we shall be confronted, which is that different circumstances will face local authorities. To ensure that we do not bind ourselves into a one size, fit-all model with no flexibilities, it would help if the hon. Gentleman spoke to the hon. Member for Mid-Bedfordshire so that we do not deliver inflexibilities. It is important that they are pursued against the test of what works locally. In that context, the definition offered to us by the Government contains a balance of flexibilities and a way to move forward. They have set out the need to move on from the status quo.
We would be criticised by those outside the House if we did not move on from the straitjacket that Barnes v. Sheffield has imposed on us. I hope that the
amendments are not accepted because, generally, they would be more of a hindrance than a help, even on the terms of the hon. Member for Mid-Bedfordshire. I hope that we can maintain consensus in Committee by continuing to support Government amendments, and I hope that we have the support of my hon. Friend the Member for Brighton, Kemptown.
Considering that we are discussing amendment No. 51, which is a tightly defined amendment, it has been a wide-ranging debate, which has covered just about every issue that could arise in part 3.
Order. I am sure that you will not mind my pointing out that we are discussing more than amendment No. 51. It is grouped with several amendments, which are quite wide-ranging.
My apologies. I understood that new clause 7 was not yet under discussion.
That is fine, as that saves me from making two speeches. I am sure that the Committee will be grateful for that.
I would like to focus on definition, as that is the key question. We must concentrate on that definition; if we cannot define what we are registering, we will get a bit lost. I take issue with the hon. Member for Billericay, who is attempting to return to the existing status quo definition of single households. In light of the Barnes v. Sheffield decision, the status quo is not what was intended under the original legislation. This is a case in which the courts have made a law by precedent that Parliament did not intend to make.
That precedent, as my hon. Friend the Member for Nottingham, South (Mr. Simpson) pointed out, has made it extremely difficult for local authorities to take appropriate action with HMOs when there are real problems. They cannot do it because Barnes v. Sheffield has left a gaping hole in the law. In clause 5, we attempted to arrive at a new definition based on the family. I readily admit that there could be problems with that when it is put to the test. I am happy to accept new clause 7. Parliamentary counsel has done quite a good job. It has put a double lock on the matter. New clause 7 is based on the concept of the single household but defines what can be considered a single household. That is important. However, I ask the Minister for clarification.
I must take a measure of blame for the provisions because I suggested to officials in the Department for Transport, Local Government and the Regions that they should introduce the family criterion in association with the household criterion; otherwise, letting agencies would drive a coach and horses through HMO registration by making a collection of disparate people sign up to a tenancy agreement on the same day, although they were not a household with anything in common. That would undoubtedly happen. New clause 7 contains both a provision for the single household and a provision for the Secretary of State to determine what a single household is and what the relationships shall be.
I have read the ratio decidendi of the Barnes v. Sheffield case. Will the hon. Gentleman explain his anxiety? It is clear that the tenants were happy and had not suffered injury. They had freely chosen to occupy the property and were happy in it. The landlords provided fire provisions. Why is he so unhappy with the Law Lords' decision in that case?
The decision may have made both tenants and landlords happy in those circumstances, but those circumstances are unusual. I find it difficult to imagine that tenants would be as happy in some of the HMOs in Brighton, for instance, where fire standards are not as the hon. Gentleman describes in that case. One example does not cover all circumstances. It is not possible to generalise from one example.
The case of Barnes v. Sheffield seems to have been mentioned a lot, but the hon. Gentleman now seems to accept that little was wrong with the case.
What did the hon. Gentleman find wrong in the case of Barnes v. Sheffield? The tenants were perfectly happy, no injury had been caused, and fire provisions had been supplied. Having read the ratio decidendi, I understand that the case centred on whether structural work was necessary to create additional halls and lobbies in a house of modest size when adjacent, similar houses were not required to fulfil such requirements.
The decision makes it difficult to apply existing HMO regulations to a whole raft of housing stock, because a landlord can say that a property is occupied by a single household that is not a single household in any sense that the hon. Gentleman or I would understand. That is the difficulty, and that is why we need a better and more court-proof definition of HMO. I am not happy for definitions to be made by courts. I would much prefer that they were made by Parliament.
I suspect that my hon. Friend has partly answered my question. Does he agree that an important distinction is to be made between whether people are happy and whether they are covered by national regulations that give them rights? Happiness may be a nice criterion by which to judge life, but it is not one against which it is possible to measure the conditions in which people are being invited to live or the use to which properties are put. It is against such objective criteria that a national framework based on rights and responsibilities supersedes one determined by the happiness or unhappiness of the contracting parties.
My hon. Friend is absolutely right, and that is precisely what we are trying to achieve with the Bill. I have just been reminded that a Conservative student organisation, Conservative Future, strongly objects to any attempt to return to or retain the single household definition. It wants what we suggest, because that will be much clearer and will prevent attempts to avoid registration of what should be HMOs. I hope—it is not possible to guarantee anything once clever lawyers get to work—that it
will provide clarity and that everyone will know where they stand. That is absolutely essential.
I shall not try to deal with all the points that have been made. They will be relevant to other clauses.
The amendments tabled by the hon. Member for Billericay relate to the clause as drafted. I shall ask my colleagues to oppose the question that the clause stand part of the Bill so that we may substitute new clause 7, which would negate the amendments. The hon. Gentleman would have to pursue his amendment (a) to new clause 7, which would have nearly the same effect. I raise that as a procedural point.
I am advocating the new definition, but I would like the Minister to give the clearest indication that he can of the nature of the prescribed relationships that would be accepted as single households. Are we including married couples, men and women living together in established partnerships, same-sex partnerships and other arrangements? That must be spelled out, and it must be sensible and sensitive.
I wish to raise one other important point. Clause 5 changes section 345 of the Housing Act 1985 and inserts into it lists of properties that would, without being specifically exempted, clearly fall within the HMO definitions. Hospitals, nursing homes and so on were originally classed as subject to exemption on the basis that they were already covered by other schemes of regulation, which we would not wish to duplicate. I ask the Minister to give some clarification about his intentions in new clause 7, which says:
''The Secretary of State may also make regulations prescribing descriptions of houses which . . . are not to be regarded as houses in multiple occupation within the meaning of this Part.''
With those important considerations, which I would like the Minister to address, I am happy with new clause.
We have certainly had a wide-ranging, interesting and reflective debate, made memorable by the fact that the hon. Member for Billericay contrived to make not just one speech in presenting his amendment but, by my count, seven speeches by way of lengthy interventions. That is a new parliamentary device, in which he shows great skill.
The hon. Gentleman raised an interesting point. There is no question that this is a difficult area. Everyone wants to get it right, although we may not agree about exactly what is right. This is not a great ideological issue, nor do I think that it should be, but we must find the right balance. The hon. Member for Billericay does not think that we have and seeks to remove the definition in clause 5, in which an HMO is
''a house occupied by adult members of more than two families''
and to reinstate the definition from the Housing Act 1985, in which an HMO is
''a house which is occupied by persons who do not form a single household.''
The reason for that is that he believes that the definition in the Bill will lead to a lot of landlords,
including reputable ones, deciding to withdraw the rented accommodation that they currently offer. [Interruption.] I know exactly how my hon. Friend the Member for Brighton, Kemptown feels when his alarm goes off.
I argue against that on two grounds. First, the allegation of the hon. Member for Billericay about the consequences is based on the acceptance of clause 5. However, the Government do not propose to do that. Instead we have introduced new clause 7, which is rather different. Secondly, he said in answer to my hon. Friend the Member for Leeds, North-West, on moving away from the status quo, that there is nothing wrong with the status quo and that one must give good reasons for moving away from it.
My hon. Friends the Members for Leeds, North-West and for Nottingham, South gave, in passionate and well-argued speeches, the grounds for doing that. We are left with Barnes v. Sheffield City Council. The riposte of the hon. Member for Billericay is to ask what is wrong with Barnes v. Sheffield City Council. He rightly says that it was a fair decision on the particular facts of the case, but I answer that that does not provide a proper basis for dealing with HMOs generally. It would involve close inquiry into the living arrangements in each case, which is not a satisfactory basis for making law. If we stick with Barnes v. Sheffield City Council, there is a risk in examples, such as those that my hon. Friend the Member for Nottingham, South gave, of fictitious relationships being pretended to achieve a certain contractual condition.
There is a case for moving on, but the problem is how to do that. That is where the difficulties start. Our proposals on HMO licensing suggested a definition based on family. To some degree, we are moving back in the direction of the hon. Member for Billericay. We suggested that because of the difficulties that many local authorities and landlords have faced over the interpretation of the current definition.
However, considering the drafting of the Bill in preparation for Committee, we encountered several difficulties with that approach. We are not in a position to produce a satisfactory family-based definition in time that could work within the restrictions placed on us by the current regime as set out in part 11 of the 1985 Act. In other words, this is a private Member's Bill that does not deal with the much wider context in which the Government propose to introduce their legislation. We are constrained and have found it difficult within the constraints to devise a watertight definition that returns to family and family relationships as its key point.
We therefore propose to continue to use a definition based on household, as the hon. Gentleman suggested, but, importantly, and in recognition of the problems produced by the current definition, seek to improve on it. We propose to provide the Secretary of State with powers to prescribe what shall be regarded as a house, when someone shall be regarded as occupying a house and where persons shall be regarded as forming a single household. I shall speak about that further when I examine new clause 7.
Amendment No. 52 and amendment (a) to new clause 7 seek to base a definition on tenancy. My hon. Friend the Member for Nottingham, South made quite a withering attack on that proposal. I can understand my hon. Friend's desire to address the current difficulties with the definition of an HMO. As I have said, new clause 7 will allow a much clearer definition of HMO, which I hope will satisfy him.
I acknowledge that the current definition has allowed uncertainty regarding what constitutes a household. We are aware of the concern about whether a house shared by students should be judged to be an HMO. My hon. Friend the Member for Stroud (Mr. Drew) raised a point about purpose-built private student accommodation. That will fall outside the definition of an HMO, assuming that it is self-contained and complies with building regulations, which will be made clear through regulations.
I am not sure whether that is a good or a bad thing. People to whom I have spoken welcome their inclusion under the provisions of energy conservation measures, but how long will that position be tenable? Obviously, such buildings will age; will there be a subsequent attempt to include them, or will student accommodation be specialist and not play any part in HMOs, come what may?
We are extremely keen that student accommodation is included under the definition of an HMO in principle, but my hon. Friend specifically mentioned purpose-built private accommodation for students, which is separate.
The hon. Member for Stroud was talking about accommodation offered by an organisation called Unite, which provides study bedrooms with communal facilities. What is the difference between that and another purpose-built block that provides bed-sitting rooms and communal facilities?
I will postpone giving an answer to that question until later, when I shall be answering several of the hon. Gentleman's questions.
I would like to return to the Barnes v. Sheffield City Council court ruling, which suggested that such a property would not be viewed as an HMO. However, we are seeking to provide greater clarity to that definition through our amendments. I give a commitment to the Committee that further legislation will make it clear that student properties of that sort will be viewed as HMOs.
I would like to address the point raised by the hon. Member for Billericay—it is a long time since he said it—about sharers. It is not true that the legislation was never meant to cover sharers. The problem is that the identification of household is unworkable. Therefore, all sharers are excluded, and among them are vulnerable groups of students who do not comprise households in any real sense. We intend to retain the phraseology of household but to clarify it, and we will do so with the intention of recognising established non-family and non-marital relationships where appropriate. I am coming on to the question raised by the hon. Member for Mid-Bedfordshire and my hon. Friend the Member for Brighton, Kemptown
about prescribed relationships. We will also carefully target policy by setting thresholds at levels that will not affect small sharing arrangements and we will certainly focus on houses with three or more storeys, and larger properties.
Is the hon. Gentleman making an intervention or a speech?
They will, but since that is another request for clarification about prescribed relationships, I will deal with that point now. I was asked by my hon. Friend the Member for Brighton, Kemptown whether we intend that a prescribed relationship will include a man and woman living together as husband and wife, although not married, or a same-sex couple living together in a gay or lesbian relationship. The answer is yes; we included those examples of a prescribed relationship subject to the important proviso that we do not intend to create a situation in which landlords and enforcement authorities would be forced to make inquiries into couples' sleeping arrangements in order to decide whether they really are couples.
The problem is that one needs rules based on genuine relationships without having the amount of prying necessary to establish the truth. We also want to avoid creating a loophole that would adversely affect the protection of students in boyfriend-girlfriend relationships. We will have to work out how to create workable criteria, which will be quite difficult. However that is done, established couples, regardless of gender, will be treated as being related. That is the criterion; the question is whether we can get criteria that will clearly establish that without the kind of prying that nobody wants.
I ask this question only because it illustrates one of the difficulties. Although a Muslim husband with three wives would clearly be in a familial relationship, what about a person with three—I was going to say concubines—lovers who all live together? I do not know the answer, and I wonder whether the prescribed relationship will cause a series of problems for the Minister.
I can see that that will run and run. The people that the hon. Gentleman cited in his example would be included, but I agree that it is difficult to draw lines. He will have to leave it with us to come forward with criteria, which will include the proviso that I indicated, that will establish a genuine, familial-type relationship in regulations.
If I may turn to amendment No. 53—
I am anxious to move on, but I will give way for the last time.
I am grateful to the Minister, and I shall try to be quick.
In my original speech on new clause 7, I referred to prescribed relationships as a minefield. It is not particularly likely that they are going be clearer than what we had before. People who are heterosexual could claim a fictitious homosexual relationship in order to be seen as a single household. How will the Minister go about avoiding that?
As I said, there are innumerable questions that can genuinely be raised. We have not been able to draw up in the time available criteria within the constraints of section 11 of the 1985 Act that would meet the purposes of the private Member's Bill. When we come forward with our Bill, as we intend to, we will not be subject to those constraints, and I hope that we will be able to answer those questions, which I agree are genuine and difficult. There is no doubt that the Government have tried to answer them with all sincerity.
It is very difficult to find an exactly right criterion that is established as fair, but that cannot be manipulated for fictitious purposes. The only way in which to avoid that is to move away from the genuine relationship concept. The difficulties about which we heard earlier in the debate would be even greater if one tried to do that. The hon. Gentleman will have to leave that with us for the time being.
I apologise to my right hon. Friend the Minister. Will he consider making the regulations relating to clause 5 by affirmative resolution rather than a statutory instrument subject to annulment? The matter would be sensitive, and the Lords Select Committee on Delegated Powers and Regulatory Reform would potentially be giving him the power to amend definitions under primary legislation by statutory instrument. That would therefore be subject to amendment in the Lords, which could impede the progress of the Bill because we may run out of time. Will the Minister consider using that procedure for this sensitive subject?
I shall consider it, but we are talking about Government legislation, which is in the process of preparation; we are still looking for a legislative slot. I hear my hon. Friend and shall consider what he has said.
Amendment No. 53 proposes to exclude converted blocks of self-contained flats from the definition of an HMO, where the conversion has been carried out in accordance with building regulations. The Government intend to prescribe the circumstances in which a building is not to be regarded as an HMO. It has been Government policy to exclude blocks of self-contained units, which have been properly converted to modern building control standards, from HMO registration, and we intend to exclude them from being considered HMOs altogether.
Service tenancy agreements are somewhat more complicated. Such a tenancy arises pursuant to
accommodation being made available in connection with a person's employment. Many such tenancies would be excluded because the accommodation is not within the definition of an HMO, such as a porter occupying a flat in a purpose-built block. Some might also be excluded by virtue of the fact that the accommodation is not occupied in the sense of being lived in. In other cases, the accommodation may be an HMO, and the law in England and Wales does not require that occupants of an HMO live in it as their only or principal home. Thus, accommodation above a restaurant that is shared by staff might form an HMO. Some forms of occupation will be subject to regulations made under the Health and Safety at Work, etc. Act 1974. However, where that does not apply, and the property is an HMO, the Government do not consider that such occupants should be deprived of basic health and safety protection simply because they are housed by their employers.
I now come to the thorny issue of what should be classified as an HMO. The current definition is recognised as being far from satisfactory, and it is important to get it right. We aim to achieve that by removing detailed definitions of an HMO from the Bill. The hon. Member for South Norfolk made reference to that. Removing it and leaving it to secondary legislation gives us the opportunity to prepare a definition that is watertight. The Government are sympathetic to the use of the ''family'', as opposed to the ''household'', definition, which has been the subject of several disputes in the courts; even the family definition, however, is not beyond criticism. With regard to advice from our parliamentary draftsmen, we are adopting a non-prescriptive approach based on household and for that reason I propose that clause 5 does not stand part of the Bill as new clause 7 will address the difficulties.
Problems arise because an entirely new definition cannot be satisfactorily worked out in a Bill that makes improvements only to part 11 of the 1985 Act, rather than reforms the law relating to HMOs comprehensively, as our proposals envisage. What we propose will enable us to deal with the main problems with the current definition, and pave the way for the new legislation. We intend to achieve the same effect as introducing a new family-based definition, by saying in regulations that a household cannot be said to exist unless there are family relationships—or their equivalent, such as established partnerships—between those living together. That will ensure that most houses in which persons live together who are likely to lack a sense of shared responsibility, including shared student houses, are brought within the definition of HMO.
We intend to clarify ''house'' to exclude purpose-built blocks of self-contained flats, as proposed in clause 5. For the moment, older, converted blocks of flats will be covered and not excluded. That is desirable until stronger general fire safety powers are introduced because it would be practically impossible for technical reasons to include them if a new definition were introduced in the Bill.
We also intend to clarify ''occupation'' so that bona fide hotels and conference centres are outwith HMO
regulations, but homeless and other persons living residentially in hotels and students in term-time shared occupation are covered, again as proposed in clause 5.
We shall use regulations to clarify that the other property mentioned in clause 5 as being exempt from HMO status are not HMOs and I hope that that reassures my hon. Friend the Member for Brighton, Kemptown and other Committee members.
A number of other specific points was raised, one of which concerned fees. Section 346A(5) of the Housing Act 1985 empowers the Secretary of State to regulate and specify the maximum permissible fee that local authorities may charge and cases in which no fee is payable. I gather that the Local Government Association suggested £112 as an example. We share the desire not to place undue financial burdens on landlords, but we want the regime to become self-financing. We must do further work, but I stress that we want costs to be kept to a minimum.
The hon. Member for Mid-Bedfordshire asked about appeals. The existing mechanisms are specified in the 1985 Act and appeals may be taken to the county court. Those mechanisms will continue.
An interesting cross-party idea was to have a test run in Brighton, Kemptown and there were tests under the 1985 Act. The provisions are voluntary for local authorities and the purpose of the Bill is to make them compulsory. The tests that took place under the 1985 Act showed that the schemes had technical weaknesses, including the definition of HMO, and limited powers to rectify problems. It is not sensible to put the details of exemptions and inclusions in the Bill because a lot of technical detail referring to other legislation would be necessary. We must consult the relevant authorities and bodies and I stress that it is vital for the detail of the definition to be right. Unless it is the hon. Member for Billericay properly made this point we shall either reduce the supply of cheap accommodation by over-regulating, or leave loopholes that can be exploited so that vulnerable people are left unprotected in defective housing. The precise issue is to get the right balance.
Amendments (b) and (c) to new clause 7 will help us to get the detail of definition of an HMO right by enabling the regulations to provide what categories of buildings or parts of buildings are to be regarded as HMOs.
Amendment No. 43 is a technical amendment better to reflect the Bill's purpose.
I apologise for the length and complexity of this intervention, which was more a speech than an intervention.
I may have missed this, but I should be grateful if the Minister would clarify the example that I gave. If four students chose to live together in a rented terraced house in Norwich—each having their own bedroom, sharing communal facilities and essentially living together as one household but without any sexual relationships—would that be considered an HMO?
The crucial point concerns whether they are self-contained and the existence of another
system of regulation or public control. If student accommodation is in the private sector and not self-contained or run by the university, as in the case to which the hon. Member for Mid-Bedfordshire referred, it would be covered.
I am speaking about a four-bedroomed, Victorian terraced house, which under my definition of self-contained would have its own entrance and be self-contained. That being the case and the four people having chosen to live together and rent the place from a landlord with their own bedroom but shared facilities, would that be classified as an HMO?
I am always grateful for further advice. All examples will have to be clarified, and I am advised that it will depend on the threshold. We still have to establish where that threshold is. The hon. Gentleman chose the example of four self-contained units; we must decide where that threshold is drawn, and that will provide the answer to his question.
I hope that in light of my comments, the hon. Member for Billericay accepts that our policies will properly address the issue of definition and that our approach will provide the clarity that we all want. I hope that, if he is paying attention to what I am saying, he will be prepared to ask leave to withdraw the amendment.
May I seek clarification from the Minister? He has tried to tell us what a prescribed relationship would be, but I admit that, like my hon. Friend the Member for South Norfolk, I am uncertain about what would be defined as an HMO. Will the Secretary of State give detailed examples of what would be HMOs? New clause 7 says that they would be classified in regulations, but is the Minister willing to introduce them on Report? Would a three-bedroomed flat, with no locks on bedroom doors and a communal living area, be considered an HMO, or will that be clarified on Report?
I thought that I had finished my speech. I invited the hon. Gentleman, in light of what I had said at considerable length, to consider withdrawing the amendment. The answer to his question—I hope that he will not continue to ask questions, but answer mine—is that we will not be able to resolve the issue by Report, which may be in a month or two. We will do our best to introduce further amendments on Report, but it would not be possible to answer all the detailed and complex issues within the next month, especially bearing in mind the consultation that we will need to have with relevant parties.
Question put, That the amendment be made:—
The Committee divided: Ayes 2, Noes 8.