With this it will be convenient to discuss the following:
‘(1A) Provision falling within subsection (1) includes, in particular, that where a notice has been served under this section requiring a landlord to make relevant energy efficiency improvements and that at the end of the period for compliance in the notice, the landlord has failed to comply with the notice in whole or in part, the local authority may enter the property and carry out relevant energy efficiency improvements that the local authority considers necessary to ensure the domestic PR property meets the minimum energy efficiency level and recover from the landlord any costs and expenses reasonably incurred by it in doing so.’.
Government amendments 138 to 141.
Amendments 124 and 125 are about the sanctions relating to the domestic energy efficiency regulations. I wanted a discussion on whether we should firm up the sense of the clause by replacing “may” with “shall” and including the words in amendment 124.
On reading the clause, it strikes me that the most sensible thing that the Minister could do is include the word “shall”, because the clause relates to securing compliance with requirements. Clearly, the measure is for those who are not compliant, as opposed to those landlords who will be. It strikes me that a lot of the Bill’s provisions give protection to landlords. There are various protections, appeals and mechanisms that protect landlords all round.
I refer the Minister to clause 42, which states:
“the regulations must also include the provision for a right of appeal to a court or tribunal”.
The measure seems to be slightly without balance. I am seeking to ensure that the Secretary of State must include provision for securing the compliance of landlords. The measure should not be quite so gentle. I ask the Minister for his comments.
I am pleased to support the two amendments, to which my hon. Friend the Member for Southampton, Test, and I have added our names. We have great sympathy with the amendments. The hon. Member for Wells, who spoke to her amendment so well, referred to sanctions and trying to get the balance right. That is what we want to explore as well.
“Our proposals provide a voice for tenants living in poorly insulated, draughty homes”.
I repeat “a voice for tenants”. He went on:
“The Green Deal is a win-win opportunity for landlords by removing upfront cost of work to upgrade the property by making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.”
I agree with all that. He went on to say:
“For those landlords who don’t take up the Green Deal then we will get tough so that by 2018”—
I will not rehearse much of the debate we have had on whether it should be 2018 or not—
“the poorest performing rented housing stock is brought up to a decent standard.”
That is what the amendments are about; they go to the heart of that point. I shall be very interested to hear the Minister’s response, because the amendments seem to be very much in the spirit of what he and the Secretary of State are trying to do.
If you could extend your leniency a little, Mr Crausby, perhaps I might ask the Minister some questions in light of the comments of the hon. Member for Wells, rather than us having a stand part debate. One of the great safeguards in respect of landlords, of course, is the use of the powers in section 21 of the Housing Act 1988. In the light of the clause and the debate we are having, what discussions has the Minister had internally with officials and landlord bodies up and down the country on avoiding the abuse of section 21? That measure gives the tenant a certain amount of notice that they must quit but, in effect, it is a notice to quit. We must ensure that section 21 is not used in response to a reasonable request for energy efficiency measures.
Let me turn directly to the two amendments in the name of the hon. Member for Wells and others. Amendment 124 would transform the Secretary of State’s power to make regulations into a duty to do so. I struggle to see why we would not want “shall”, rather than “may”. It seems that it would ensure exactly what the Minister intends to happen, and what we want to happen, so let us put it in there.
Looking through the history of the legislative work of these Committees, it is interesting to note that “shall” tends to outnumber “may” by something like five to one, and for very good reason: committees demand precision and intent. It might seem that we are talking about how many angels can dance on the head of a pin, but we are not. Accepting the amendment would be a clear signal from the Minister that he intends the regulations to be made, and not that he thinks they may be made. I hope that the Minister will agree to amendment 124.
Amendment 125 would allow local authorities to carry out energy efficiency improvements themselves and recover the cost from the landlord in addition to, or instead of, imposing a fine of up to £5,000. Such a fine for the landlord of one property, rather than a large, multi-property landlord, is quite significant.
Indeed, I am a small individual landlord—I inherited a property—and it would be a lot of money for me, despite what anyone might say. For others, however, it would not be such a great amount. A power for local authorities to step in to do the work if a property is not brought up to standard seems to be correct.
What will be the difference for a local authority between the cost of pursuing a lengthy court action, albeit civil, for the £5,000, and the cost of work in default? The latter seems substantially cheaper and far more effective.
I agree entirely with my hon. Friend. I do not know the figures, but I am convinced that the Minister and his officials have them, because they will have done the analysis. From the signs, it seems much more cost-effective and timely to allow the local authority to step in and do the work when all else has failed.
We are not talking about a draconian power. Looking at the careful wording of the provision, it may not be exactly right, but it is pretty much there. Where a notice has been served and there has been a failure to comply, not only in whole, but in part, the local authority “may”—not “shall” or “will”, as we talked about when we considered the power of the Secretary of State—enter the property, do the work and recover the costs.
Going back to the point made by my hon. Friend the Member for Hyndburn, the amendment seems to be a timely, efficient and cost-effective way of carrying out the necessary works, but only when the landlord, having been served a notice, has failed to comply in whole or in part. I hope that the Minister will be keen to show his support for these sensible amendments, or will explain why they are not required, because they seem to be completely in the spirit of what he and the Secretary of State have said. I remind him once again of the Secretary of State’s words:
“For those landlords who don’t take up the Green Deal then we will get tough”.
Again, I do not think that Members on the two sides of the Committee are so far apart when it comes to the overall vision for the rolling out of the green deal, but we Government Members are more cautious about creating statutory duties with the full force of law. That will create additional burdens, particularly at the outset of the green deal, which will, as I have said a number of times, potentially run for two decades.
I realise that the “may” versus “shall” versus “must” debate is something others have heard time and again, but I confess that I am concerned about imposing a duty on local authorities which they may or may not be set up to carry out as part of their working practice. Before we even get to that stage, one of the things that concerns me is that in the poorest households, which many of us have talked about, we have issues about language and mistrust. Can the Minister enlighten us on what the process looks like, before we get to the stage of the local authority coming in? What safeguards will there be in the system? My final question, if the Chair will indulge me, is about my concern on social rented housing. Will this regime and, ultimately, enforcement apply to the social rented sector as well? Sorry, that was many questions in one intervention.
Many questions, but I am not so sure that there will be many answers. My hon. Friend raises some legitimate points. In many places where it is more likely that this legislation will be implemented, there will be a more complex social situation than would necessarily be the case when we are thinking of this in the vanilla terms on the amendment paper. Those places could be inner-city areas where English might not be as readily understood as a first language as it is in Committee. There could be different layers of complexity, such as multi-tenanted houses or short tenancies. We are cautious about imposing blanket obligations where there is the potential for a range of local circumstances. The effect could be very different from the intention of the Committee.
I want to give a reciprocal reassurance to the Minister and to the hon. Member for Devizes. The amendment would not create an obligation or a statutory duty; it would create a power. Under the amendment, a local authority could determine, according to local and individual circumstances, how it applies the power. It could deal with the issue of an individual family or tenant where it would seem draconian if the power were imposed on them. It would be an enabling power, not a duty. The only duty we are asking to be imposed is on the Secretary of State, because we want to hold them accountable.
The hon. Gentleman is right, but amendment 125 would still grant local authorities the right to enter a landlord’s property and carry out improvements charged to the landlord, if they fail to comply with regulations, as I touched on earlier. The amendment would create a strengthened enforcement position, but we need to be careful, as I previously indicated, because it brings us on to a further layer of the onion of rights and obligations. These entry powers would engage article 1 of the first protocol of the European convention on human rights, which protects the right to property. I am concerned that powers in this case are not proportionate and would interfere with the rights of property owners. Also, the Protection of Freedoms Bill would rationalise powers to enter premises. Granting further access here would run contrary to the implementation of that legislation, which the Government are committed to.
I thank the Minister for raising that important issue. There is a creeping sense that powers that sit in the statute book end up being imposed as regulatory burdens or at some sort of regulatory cost. If we have concerns about whether this is enforceable under the Protection of Freedoms Bill or the European Court of Human Rights, I suggest we vote against the amendment.
I thank my hon. Friend for that intervention. The fact is that, while it may seem simple to allow a local authority to do this, we would then expect a local authority to make a decision on whether it was right to enter an individual property within its area, and some small local authorities to make judgments on articles and protocols of the European convention on human rights and on proportionate interference that potentially runs counter to the Protection of Freedoms Bill. We could end up—entirely through the unintended consequences of well intentioned legislation—with a small local authority inadvertently wandering into a minefield of European legislation, which could tie up officers’ time and act as a huge distraction to rolling out the green deal in that area. It is not something that I would wish on local authorities, which would be taking up the powers that the hon. Member for Ogmore seeks to give them merely to fulfil a discrete action on an individual property. The potential to open up that minefield massively outweighs the benefits that could accrue.
I understand the Minister’s caution, but what is the response to the Local Government Association, which does not share those worries and which is calling for the power? It has clearly judged that the Minister can satisfy himself about the international, human rights and other obligations, and it will follow—there is so much in the Bill that will be dealt with in secondary legislation—whatever guidance, policies and regulations are introduced in the autumn and in the spring of next year. It has confidence that he can satisfy himself of that, and it will get on with the job. It wants the power.
I am not arguing with the LGA’s views on this Minister, but I do not necessarily agree with all its conclusions. I have not had the opportunity to discuss this specific line of the Bill in detail with the LGA, but it would be irresponsible to put such powers in the Bill, encourage local authorities to take them up and use them and then inadvertently let them wander into a European minefield. Being mindful of the cost of litigation and the potential to end up in Europe, the whole of a local authority’s budget for home improvements could be swallowed up in hugely distracting and expensive court cases. At this stage in the development of the green deal, it is simply not necessary to offer such powers.
Of course, that does not preclude us revisiting the issue in future years in the light of experience. I have, however, been told by my officials that, despite the words of the hon. Member for Ogmore—he may well have had a discussion with the LGA on the matter, but I have not—the LGA has not made representations to us about the issue. I will ask my officials to contact the LGA to clarify its position, but he possesses more information than we do.
When the Minister engages with the LGA, he may also ask about the existing powers that are available to local authorities, including those under the Housing Acts, where they have the ability to intervene in making works and recovering costs. I believe that those powers are used sparingly, and I wonder whether the Minister could ask the LGA why that is.
That is exactly what we intend to do. In fact, when I discussed the matter with my officials before we came into Committee, the use of the Housing Acts and the ability of local authorities to deploy similar powers was something that we wanted to engage with the LGA and Department for Communities and Local Government officials on. I understand the intention behind the amendment of my hon. Friend the Member for Wells, and we are mindful of it, but it is a complex issue, and the last thing we want, having come this far and made so much progress, is to derail the proposal through unintended consequences. In year one or year two, if some ultra-keen, pioneering local authority inadvertently, because it wanted to be on the front foot, caused a court case in Europe through the use of the powers, that case could stymie the whole roll-out of community plans. Before accepting the need to legislate along the lines that my hon. Friend has suggested, we want to be a lot more comfortable. As I said, we have not had representations from the LGA directly.
That is exactly right. My hon. Friend probably has more expertise in such matters than I do, given her long-standing interest in the sector, so I would be very happy to keep her informed and to have her inform those discussions. This area is complex, and the potential impact of European and other domestic legislation means that we must tread very carefully, however well-intentioned such amendments to the Bill, or strengthening powers, are. I therefore encourage my hon. Friend to consider not pressing amendment 125. That would not preclude us from deciding at a later date that such powers are necessary, but we believe that including them in the Bill today would be a step too far.
Amendment 124 would place a duty on the Secretary of State to make regulations on sanctions. That proposal is, again, unnecessary, as Government amendments debated earlier today already provide a duty to make minimum standard regulations. It is inconceivable that such minimum standard regulations would be made without provision within them to deal with sanctions, so there is no need for separate express provision on that point. We will bring forward the intent behind the amendments as part of secondary legislation. Embodying that intent in secondary legislation gives us greater flexibility to return and potentially strengthen the powers in due course, if they prove to be less than satisfactory. That extra flexibility will allow us to future-proof this framework, which, as I keep saying, will stretch well into the 2020s.
Government amendments 138 to 141 make consequential amendments relating to the sanctions for the purpose of domestic energy efficiency regulations, as a result of new provisions tabled elsewhere. Government amendment 138, in particular, clarifies that it will be the local authority that enforces the regulations.
It is often asked whether local authorities will get funding for such enforcement work, to which I can say that the coalition are absolutely committed to ensuring that the new burdens on local authorities are funded to avoid pressure on council tax. We recognise that the enforcement mechanism will place costs on local authorities, and we will assess costs in the usual ways. We will want to consider any possibilities for meeting costs from income generated, by which I mean from the fines that are levied on recalcitrant landlords. If the regulations are made, they will create a level playing field, and we intend that they will apply to the worst performing properties, no matter where they are in England or Wales.
There is also the question of whether a landlord would have to pay to appeal against the penalty. Further detail, which will be consulted on in due course, will be set out in secondary legislation. We expect, however, that the court or tribunal will have the discretion to award costs. Ultimately, it is about ensuring that we have the levers to make the most effective regulation. It may be most appropriate to make provision for appeals by amending existing legislation governing an existing court or tribunal.
I hope that I have reassured my hon. Friend on these important issues. We need to tread carefully. Our plans on them will evolve, and I am happy to continue to work constructively with her through the year to ensure that we arrive at the right solution. I hope that, on that basis, she will consider not pressing her amendments.
I am reassured, bearing in mind our discussions this morning, the items mentioned by the Minister in our discussions this afternoon and what he sees as the possible impact. If he is happy to carry on the discussion and to keep me updated on the subject, about which I feel strongly, I will happily withdraw the amendment.
I am not as reassured as the hon. Lady, so I want to add a few comments and to test the Minister further. On amendment 124, which would change “may” to “shall” and therefore put a duty on the Secretary of State to make regulations, which is what we are asking for, the Minister did not give a rationale of why that is such an onerous problem. I listened closely to his answer, but I may have missed it and, if so, I apologise. Will he reiterate for me why that is such a difficulty? I assume that the Secretary of State will not only be expected to make regulations, but, in the light of this and earlier debates, get on and do so, which is why the word “shall” is in the amendment. I may have missed the rationale, but could the Minister respond to that?
As the Minister will know, amendment 125 inspired a fair bit of debate in the other place, which is why we have brought it back. I seek reassurance from him on two things. First, he went into his detailed concerns about the possible unintended consequences of agreeing to amendment 125, not least in relation to human rights legislation. In that case, will he share the full legal opinion with us, not necessarily in Committee, but certainly in time for all Committee members to look at it and decide whether we are satisfied and reassured, because we have nothing in front of us? I trust the Minister implicitly on what he has said, but as a former Minister I want to see that opinion and to understand how a power, as opposed to a duty, on local authorities might raise the spectre of impacting on human rights legislation and possibly other legislation. I have to say to the Minister that we would need to have that information in time to give us the chance, if we are not assured, to bring the debate back in the other place.
Secondly, I am slightly reassured by the Minister’s offer to the hon. Member for Wells, whose name heads the amendment, to meet the Local Government Association. For the benefit of the Minister, I want to read into the record this quotation from the LGA:
“The LGA is proposing that any new powers include provisions for the local authority to decide whether to make physical improvements to an offending property or to issue a civil penalty to the landlord. This will help ensure that action the local authority takes results in a building stock with greater energy efficiency.”
Things might have changed and the view might have altered—I do not know—but I again ask the Minister: will he share promptly the outcome of the discussions that he intends to have with the LGA, which I anticipate will need to be in the next few days? If the LGA has changed its mind and says that it shares the Minister’s concerns and does not want to end up in legal disputes, not between the tenant and us or the landlord and us, but over human rights legislation, he should let us know so that we can make a decision. We need to have that information in time so that, if we are reassured, we can stop the ongoing debate before it even reaches the Floor of the Commons. Will the Minister respond on those two points, which are not too onerous, to give the Committee further assurances?
The hon. Member for Devizes raised the issue of the burden that might be placed on local authorities. As I have made clear, we are not introducing a duty that would require an assessment of additional costs and so on, but rather a power that can be used. If the Local Government Association wants such a power, I am intrigued to know why the Minister does not want to allow it. It is a power, not a duty. Will the Minister respond on those two specific points and see whether he can reassure the Committee?
As the hon. Gentleman will know from having been a Minister, it is not normal practice to share Government legal opinion—nice try. I seem to remember that he was member of an Administration that would have died in a ditch rather than share legal opinions, even when the whole country was clamouring to hear the advice that the Attorney-General gave the Cabinet about the Iraq war. We will not go down that rabbit hole just now [ Interruption. ] Perhaps we will.
The Minister is absolutely right about legal opinion but it was worth a try—I always have a try, just in case. Will he write to members of the Committee and expand on his detailed concerns about where he thinks the amendment would cause local authorities problems of a legal nature were it to be implemented?
I am happy to reflect on that point and get back to the hon. Gentleman and the Committee in writing. One must be a little more forthright about the LGA. I am endeavouring to be as consensual as I can, but ultimately, we are the Government; we take the decisions and lead on the issue. The hon. Gentleman is starting to push the envelope a little too far in terms of wanting a hand on the tiller. The LGA is important, and if there is anything of substance that we feel would be appropriate to share with the Committee, we will. If the hon. Gentleman really wants to share in these decisions, I invite him to sit on the coalition side of the Committee.
On at least two occasions during previous Bill Committees, as a Minister I invited Opposition Members to sit in discussion with the LGA—and others—and look at matters that were pivotal to the success of the Bill. If the Minister is saying that he does not regard Opposition Members as worthy of being part and parcel of such discussion, that is a disappointment. I am asking the Minister to share the concerns of the LGA with us, or alternatively to tell the Committee whether the LGA is satisfied with what the Minister is saying and no longer requires that power.
I can say clearly that we have had no formal representation from the LGA on the issue, and I will not prejudge our response to any further engagement with it. If it is appropriate—as it clearly was during the glory years when the hon. Gentleman was a Minister—we will come forward. I will not give a carte-blanche commitment to do that without first having the benefit of a discussion on the coalition side of the Committee. The hon. Gentleman will understand that.
On the issue of “may” and “shall”, I know that there is a degree of hesitation about the creation of a more liberal regime. We are a little more cautious about creating duties and obligations on the Secretary of State to make enforcement provision. We are coming forward with regulations in secondary legislation. It is inconceivable that we would come up with sanctions that will not contain provision for strong and effective enforcement. I can give the hon. Members for Ogmore and for Wells the assurance that it is our intention, when we bring forward the regulations around sanctions against recalcitrant landlords, to include clear direction about enforcement. I am sorry that I have not been able to accommodate the hon. Gentleman in my usual generous way on this issue. I hope he will, nevertheless, withdraw his support for the amendment.
Amendments made: 138, in clause 42, page 27, line 28, leave out ‘about—’ and insert ‘—
(za) for a local authority to enforce any requirement imposed by or under the regulations;’.
139, in clause 42, page 27, line 29, at beginning insert ‘about’.
140, in clause 42, page 27, line 31, at beginning insert ‘about’.
141, in clause 42, page 27, line 33, leave out ‘both cases’ and insert ‘cases falling within paragraph (a) or (b)’.—(Gregory Barker.)
I have one brief question in the stand part debate. Will the Minister return to the overarching issue of the use or potential abuse of section 21 powers? I understand from the nature of the debate that we just had that he did not feel he could turn to that immediately. I refer to the issue of the notice to quit. What discussions on that has the Minister had with his team? I shall continue to speak so that he can receive inspiration. How can we ensure that good, responsible landlords have nothing to fear, but that exceptional bad landlords, who have previously used section 21 powers to get rid of tenants for no good reason, do not also use them because a tenant has quite reasonably, under the terms of the Bill, asked for improvements? The landlord might think, “I will not tell you officially no, but we will wave goodbye in a couple of months”, and forward comes the section 21 notice. Will the Minister tell us about the discussions that he must have had with his team? What safeguards are in place for such tenants to ensure the right balance?
The clause gives the Secretary of State powers to make regulations in order to secure landlord compliance with domestic energy efficiency regulations. In short, it is about ensuring that those potential regulations have teeth. Landlords of the worst-performing properties who do not comply with a local authority notice or provide false information, could be subject to a civil penalty of up to £5,000 per property. That is consistent with the maximum level at which local authorities can impose fines on landlords for letting out substandard or hazardous accommodation and is a clear and proportionate deterrent.
The regulations must also include provision for landlords to appeal to a court or tribunal, and include details on the jurisdiction of the court or tribunal, the grounds for appeal, the procedure for appeals, the suspension of a penalty until the outcome of the appeal, the powers of the court or tribunal, and lastly on how any sum payable in pursuance of a decision by the court or tribunal is to be recoverable. In addition, the Secretary of State may revoke or amend existing subordinate legislation—I am coming to the hon. Gentleman’s point—governing a court or tribunal to make the provisions I have just listed. That will enable us to provide for appeals in the most appropriate way.
The Minister has been generous in giving way throughout the Committee. He referred to the £5,000 fine under the clause and earlier said that he would allude to the division between the duality of prosecutions under the housing health and safety rating system for a standard assessment procedure rating of less than 35—going up to 38 for F and G-rated property, so they are almost coterminous. How does he expect the division to work? Will he provide clarity about a scenario in which a tenant is faced with an F or G-rated property and a local authority has the option to take a £5,000 fine or take action under the HHSRS?
If a local authority is going to take action against a G-rated terraced property, for example, it could go to civil court for the £5,000 fine or, because an F or G-rating is nearly almost broadly the same as having a category 1 hazard, it could take action under the HHSRS as well. A local authority therefore has a dilemma because it has two options. What is the situation regarding the legislation? How does the Minister expect the two systems to work together?
It would be precipitate for me to interpret the position for them. It is for the local authority, which is availed of all the facts of the situation in particular local circumstances, to judge that for itself. We are obviously crossing into housing legislation, which comes under the Department for Communities and Local Government, in which I am not particularly expert and on which I have not been briefed. It is not Ministers in London but local authorities—fully availed of local circumstances and facts—that are in the better position to make those judgments.
To re-emphasise, the clause will ensure that potential regulations have teeth, but also provides for landlords to be able to appeal against any penalty. It is proportionate and effective, and on that basis, the clause should stand part of the Bill.