Clause 45 - Sanctions for the purposes of tenants’ energy efficiency improvements regulations: England and Wales

Energy Bill [Lords] – in a Public Bill Committee at 5:30 pm on 14th June 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of David Crausby David Crausby Labour, Bolton North East

With this it will be convenient to discuss new clause 27—Protection from eviction under section 21 of the Housing Act 1988

‘(1) No section 21 notice (meaning a notice under section 21(1)(b) or (4) of the Housing Act 1988) may be given in relation to a tenancy at any time after a request in compliance with the regulations under sections 43, 44 or 45 has been made by a tenant of a domestic PR property under section 43(3) until such time as the landlord of the property has responded to the request in compliance with the regulations and—

(a) in circumstances where the landlord has refused the request, until such time as the court has ruled whether the refusal was reasonable or not; or

(b) in circumstances where the landlord has accepted the request, until such time as the relevant energy efficiency improvements have been made.’.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells 5:45 pm, 14th June 2011

New clause 27 would give tenants some protection from eviction. Under section 21 of the Housing Act 1988 a landlord may legally end an assured shorthold tenancy by giving the tenant a minimum of two months’ notice, without having to give any reasons so to do. The new clause will stop a landlord from using those powers once a tenant has requested energy efficiency improvements under the provisions of the Bill. The new clause does not prevent a landlord from going through the process for other reasons, but it prevents them from doing so until either the measures are carried out or any dispute process or tribunal on whether the landlord has to make the improvements has run its course.

The new clause gives tenants making requests under the Bill protection from retaliatory eviction—something from which I hope I will not suffer myself, nor should I, because my landlady is lovely. The principle of stopping a landlord having access to section 21 powers in certain circumstances has been established in the Housing Act 2004, under which tenants are protected from retaliatory eviction where the landlord has failed to protect their deposit. The new clause would extend that principle to energy efficiency requests, which is reasonable.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I want to say a couple of words in support of new clause 27. If the intention behind these provisions is to ensure that tenants drive the legislation and drive higher standards, we cannot give them that responsibility unless we also guarantee them some protection. The new clause would be effective in doing that and would ensure that tenants do not run the risk of eviction. Even the fear of eviction—it does not have to be a real probability—is sufficiently serious that we should try to reduce it as much as possible if we genuinely want tenants to drive the legislation.

While I have the floor, I want to make a more general point about clause 45. I am concerned that there is no specific sanction for landlords who do not respond to a tenant’s request for energy efficiency improvements; there is only the option for a tenant to apply for a court or tribunal ruling on the landlord’s failure to act. That is quite a big contrast with clause 42, which contains real sanctions for landlords who do not meet energy efficiency standards. The sanction in that case is a £5,000 fine.

I am concerned that we are creating disincentives for tenants to take the kind of action that would drive the legislation forward. There will be many tenants who simply will not be able to deal with the complexity, the inconvenience and the possible costs of a tribunal, particularly if the costs will be awarded against them if they do not win their case. That is a real disincentive for a tenant to take the kind of action that the clause allows them to take.

I want to know how the Minister will ensure that the tribunal system does not discourage tenants from taking landlords to court regarding energy efficiency improvements. I fear that many disincentives are built into the current system, and it is ambitious, strong and perhaps wealthy tenants who will be able to attend a tribunal or a court. Many tenants will simply be put off by the whole process, so there will not be the energy efficiency improvements that the Minister has in mind.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

I want to reiterate the point about the precedent set in section 21 of the Housing Act 2004, which already ensures that tenants are protected from retaliatory eviction when their landlord fails to protect their deposit. New clause 27 would extend that same principle to tenants making energy efficiency requests of their landlords.

New clause 27 is important. The National Association of Citizens Advice Bureaux has carried out research showing that many tenants fear making requests of their landlords because they believe it will result in eviction. Without this new clause, the Government risk  encouraging tenants to demand energy efficiency measures from their landlords without giving them adequate protection from the potential consequences.

There is further precedent for such protection. An early-day motion that was tabled in 2008 and supported by many Members who are now in government highlighted the problems tenants face when they make reasonable requests of their landlords to carry out repairs and essential maintenance to their properties.

I reiterate our support for the new clause, which would provide vital protection for tenants to ensure that they will not be evicted from their properties.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am grateful to my hon. Friend the Member for Wells for tabling new clause 27. I genuinely understand and appreciate the sentiment behind it, which is very important. It aims to provide greater protection for tenants from potential retaliatory eviction, which is a real issue, albeit one that we hope will apply in a relatively small number of cases.

I also want to see tenants making full use of the powers under the tenants’ energy efficiency improvements regulations in the Bill. I believe that the green deal is an extraordinary, indeed, unprecedented opportunity for landlords, as they will gain improvements to their property at no up-front capital cost to themselves. In fact, not only will there be no such costs; the improvements themselves will be paid for by their tenants. We therefore obviously expect any sensible, responsible and reasonable landlord to grasp this opportunity with both hands and to welcome the green deal, rather than seek to avoid it.

We have not touched on what I think could be a greater issue: when landlords want to upgrade the flats or houses of sitting tenants, and it is the tenants who unreasonably refuse access for any work. That is not necessarily because they are just begrudging of any such work, but because they do not want to clear out their loft, take time off work or be inconvenienced, or they are not mindful. So we must not simply assume that this is a one-way street—a case of “Landlords bad, tenants good”. This is a complex issue of human relations, with different motivations flowing. I believe that the number of landlords who will wilfully impede the upgrading of their own property will be small; nevertheless, it is an issue.

I recognise the concerns that exist— my hon. Friend the Member for Wells has raised them with me not only in Committee but outside it—and I want to dedicate further time to investigating them. We have taken her points very seriously. As a result of her interventions, I have written to the Department for Communities and Local Government to raise these issues, because they also relate to tenancy law. In addition to writing to my hon. Friends there, I will be setting up a working group to report over the summer on existing evidence, concerns and possible solutions. As someone who came to this issue with no prior real appreciation of the facts, it seems to me that among the different stakeholders and groups, there are divergent views about the evidence base that are seemingly at odds with each other. We need at least to arrive at a consensus on the evidence base before we consider solutions.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

Will the Minister therefore consider some sort of amendment that would enable him, within secondary legislation, to allow this to happen, depending on the stakeholder groups’ deliberations? I understand  the difficulties, but the worst possible outcome would be to find that there is a problem after the summer and that one has to introduce more primary legislation to deal with it.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The measure would impact on housing legislation, and the honest answer is that I am not empowered to tread my size 10s all over matters that properly come under the DCLG’s discretion. This could be done only in partnership with, and potentially with the lead of, the DCLG because the measure impinges on existing housing and tenant legislation. That is why we attach such value to having an effective partnership with that Department, why there is a joint working group and why we will be working with our ministerial colleagues and officials there to arrive at a consensus over the summer.

I cannot pre-judge what our conclusion will be, but given that we are seeking Royal Assent for this legislation before the House rises for the summer recess, I cannot put such a measure into primary legislation. We need to do all these things before 2018, and I assure my hon. Friend that we will look at all avenues and legislate further if necessary.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

Of course, it is actually 2016 when tenants might make such a request, so these things have a slightly shorter time frame than the Minister said. I suspect that there will need to be some ability within secondary legislation to link the measure in with whatever is going on in the DCLG or in housing legislation. It would help if the Bill included something on that; however, I am happy to discuss the matter with the Minister outside the Committee Room.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am grateful for that because the matter is something we need to discuss. Perhaps my hon. Friend might like to engage with not just me, but our colleagues at the DCLG to see if there is something we can do. This is an issue and we want to get to grips with the evidence base, so that we can all agree on the specifics of the problem. Once we have done that, we can define the potential solutions.

On the clause 45 stand part debate, that clause gives the Secretary of State powers to make regulations to secure landlord compliance with tenants’ requests contained under clauses 43 and 44. That is an integral part of this section of the Bill because it will ensure that tenants have a route to challenge non-compliant landlords. We envisage that if a landlord does withhold his or her consent, the tenant will be able to take their case to a court or tribunal for a ruling. The court or tribunal will consider whether withholding consent is reasonable—in other words, permissible—under the regulations. The goal is to undertake the improvement works: the tribunal will rule on that point, and that will be binding.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons) 6:00 pm, 14th June 2011

To press the Minister, there is the option to go to tribunal, but a G-rated property will fail the health and safety rating system. Going back to the £3,000 fee and the matrix of the situation, local authorities have a statutory duty to exercise primary legislation in seeking justice. They will lose cases if they use secondary legislation. Will the Minister comment on that? When  there are variances, with different avenues to pursue to put things right, the Minister must make it clear which is the primary legislation. There is a duty for primary legislation; cases will be lost if secondary legislation is used.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I do not quite follow the hon. Gentleman’s point. The tribunal will determine whether the tenant’s request is reasonable and valid under private rented sector regulations. If so, the ruling will mean that the landlord will have to install relevant energy-effective measures, or the tribunal would be able to levy a fine of up to £5,000.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

The landlord’s defence may be that secondary legislation had been used—because primary legislation is the Housing Act 2004 and the health and safety rating system—and therefore the case would be thrown out. That is the problem.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Again, I am not a lawyer, but I am looking at the shaking heads of officials. We simply do not expect that to be the case. I am happy to write to the hon. Gentleman to give him more detailed technical advice on the point, but the problem he raises is not one that we recognise.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Will the Minister respond to the specific points I raised about the complexity and difficulty of entering a tribunal process, particularly if there is a risk, as there presumably would be, that the case could go against the tenant? That is a pretty big disincentive for a lot of tenants. Will he explain further how he will incentivise them?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Absolutely; that is an important point. Tenants will be able to ask local authorities, community groups, civil advocates or other third parties to act on their behalf, to request a green deal. In addition, from 2018 it will be unlawful to rent out a house that has less than an E rating. Tenants are already protected from a range of hazards, including extreme cold, under the housing health and safety rating system, as the hon. Member for Hyndburn said. There is a framework under which others will be able to take up their cases for them.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I thank the Minister, but he seemed to address a slightly different point. He clarified earlier that a request for a green deal can be made by third parties on behalf of tenants, for example students. I am talking about a tenant in 2016 requesting that the landlord makes some changes and the landlord refusing. As I understand it, the tenant’s only recourse would be to a tribunal or court. For a great many people that will be a big obligation and very off-putting. They will not know their way through the legal channels. There is a very unequal power relationship between tenants and landlords; the landlord has all the power. This bit of legislation is not very realistic. Does the Minister think that tenants, who have a lot of other things to worry about, will push something to a tribunal and a court, when they have no real support and no certainty, if it goes against them, that they will not have to pay the costs?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I appreciate the hon. Lady’s point. Given that we are talking about a fine of up to £5,000 on landlords, I cannot conceive an alternative to a tribunal or court that would work and have the force of law, and that would allow the landlord to have a say. A malicious case could be brought by someone with a grudge. We can all think of instances in our surgeries when someone has considered bringing an unreasonable case. Any case, therefore, would have to follow due process and go along conventional lines.

Photo of Steve Brine Steve Brine Conservative, Winchester

Let me follow on from what the hon. Member for Brighton, Pavilion said. These third-party organisations, community groups and voluntary organisations will help to roll out the green deal in specific council areas. Could they not also provide help and support in times of trouble to residents who are unsure of the tribunal process?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Certainly, there is a role not just for Citizens Advice but for community groups, such as the Greening Campaign, which sprang up in Winchester and is now spreading across the country. Community action and mutual support will be very powerful in encouraging and empowering individual tenants to take action against unreasonable landlords. Before bringing out guidance to accompany the secondary legislation, we will be consulting organisations on the best way to encourage and support tenants in this case. Although we cannot dodge due process, there are ways in which we can encourage vulnerable tenants to engage with third parties and community groups to overcome the expense and the sheer intimidation of going before a tribunal.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

In respect of new clause 27, I want to be clear about one thing before the Minister makes his closing remarks. Revisiting primary legislation in a DCLG Bill or a future Bill from this Department is one thing, but is he saying that in the guidance and the regulations that may come forward we will have something explicit that captures the spirit of the new clause, or is he suggesting that there will be something further to encourage groups and so on? If it is in the spirit of the new clause, I am reassured. If not, I am lacking reassurance at the moment.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am not familiar with the wording of new clause 27. We are starting to stray into the territory of DCLG, which has the tenant protection competence. It is not an issue for the Department for Energy and Climate Change.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

With enormous respect—I know that the Minister is making a great fist of this Committee—he should be telling the Committee that he is working with DCLG to resolve the issue. I understand the different Departments’ work, but we expect to be told that the Minister is working with DCLG and that he will either bring forward a similar provision in regulations, or that the provision will be completely different, and we need to know.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I think I have already told the hon. Gentleman that we are working with DCLG. I have written to the Minister for Housing and Local Government, and we are setting up a working group. By any stretch of the imagination that would classify as working with the  other Departments. I have already put that on the record a couple of times. My officials are working extremely hard with their counterparts to achieve that. To embody the points that the hon. Gentleman raises we would need primary legislation, which would be in a DCLG Bill rather than in a DECC Bill.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I would ask why, because if the intent is there to deliver this, it could be done now. Will the Minister let us into the secret and tell us whether the measure is his departmental view of what should be encompassed in regulations, because that would give us some assurance?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

We have not come to a final view yet, as we are still gathering evidence and working with stakeholders. We are clear that we need to reach a view, but we will not be rushed or make precipitate judgments just to get the matter on to the face of the Bill. We feel that it needs to be dealt with prudently, and my Department cannot take a unilateral decision. The realm of tribunals and tenant legislation is properly the realm of DCLG, but we are working with DCLG, and I am happy with our constructive, albeit early, dialogue.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I am sorry to keep pressing, but this is important. In answer to my earlier comments about disincentives for tenants and ensuring that landlords will act, the Minister referred to the £5,000 fine covered in clause 42. However, there is nothing in clause 45 about any level of fine. Does the figure need to be repeated there? It needs to be a little clearer, at least to me. I am not clear whether the £5,000 fine will apply when a landlord refuses to bring his or her property up to the 2018 standard or when, after 2016, the tenant asks for improvements to be made and the landlord refuses. Will he be a bit more specific about when the fine will apply and, if necessary, can the figure be repeated in clause 45 to make it clear that it applies to both?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Having consulted my officials, I can tell the hon. Lady that the £5,000 fine will not apply to the tenant energy efficiency regulations in 2016, but it will apply to 2018. It is the 2018 backstop. If a landlord is in breach in 2018, he will face a fine of up to £5,000.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I thank the Minister for that clarification, but it alters what he said earlier in answer to my concerns about clause 45. It now looks as if there will not be an option to make landlords pay a £5,000 fine, which might concentrate their minds. In that case, could we not have a backstop in this clause as well? It would equalise the power imbalance between tenant and landlord. Obviously, the fine would apply only if it could be shown that the landlord had wilfully and unreasonably withheld consent, but if the tenant’s ability to make that request in 2016 is to mean anything, it needs the stronger underpinning that a potential sanction on the landlord would give it.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Lady makes a sensible point, and I understand entirely where she is coming from. The 2016 legislation will still be covered by a tribunal. I apologise that I do not have the detail of the  full range of powers that a tribunal will have at its disposal, but a tribunal will be able to enforce a tenant’s right to make a reasonable request for green deal measures to be installed. I would be happy to write to her before our next sitting to spell out what measures the tribunal could take using existing legislation to enforce the measures and ensure that they are carried out. It is our understanding that existing legislation already takes account of that, and that there are measures allowing tribunals to make their decisions binding on landlords. We envisage that if a landlord withholds his or her consent, there will be a tribunal, and the decision will be binding. The clause also provides for regulations to enable a landlord or tenant to appeal against the decision of a court or tribunal.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

It is welcome that the decision of the tribunal will be binding, but how will it be binding? I am just thinking out loud. If a tenancy agreement precludes entry to a property to anyone other than the tenant, how will it be binding and enforceable? Perhaps the Minister can help me.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 6:15 pm, 14th June 2011

The hon. Gentleman makes a reasonable point. To be honest, I am not familiar enough with the detail of tribunal workings to give him a detailed answer. I am assured that, according to legislation and the way tribunals work, it is available to tribunals to enforce their decisions. Those are binding on the landlord. I have just been informed that a tribunal will order a landlord to improve a property. The best way I could describe that is as being akin to a court order. If the court order is breached, that becomes an offence and triggers a further level of seriousness. I am sorry that I cannot furnish the hon. Gentleman with further details, but that should give him a clearer picture of what we have in mind.

Photo of David Anderson David Anderson Opposition Assistant Whip (Commons)

Who will the landlord appeal to if he loses the tribunal? Before the Minister gave way to my hon. Friend the Member for Hyndburn—I apologise if I am wrong—I think he was going to tell us that the landlord would have the right of appeal.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

That is right. The appeal would be through the conventional tribunal process to a higher tribunal or to a court, as is the case with other tribunals. We are not proposing to set up a new legal system or a separate tribunal court. It will take place within the existing legal frameworks for appeals. Both landlords and tenants will have that right.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I am sorry to keep coming back to this point. The Minister says that this will be done within the existing framework of tribunals, but as I understand it, they can take an horrendously long time. Leaseholders and freeholders arguing in tribunals about the rights and wrongs of an issue can go on for years. Given that some people will be in a tenancy for a year or two before they move on, I am not convinced that the existing legal infrastructure is fit for purpose for what is being proposed. I fear that the tenant will be put off going down this route. Looking at the length of time  tribunals often take in this field of law, by the time the issue is resolved, the tenant will have moved many months or years before.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Certainly, there is a backstop. If someone begins such a process in 2017—a year after the legislation comes in—they will only have 12 months to wait before a legal obligation takes effect. So, at the very most, there will be a two-year window. We would expect tribunals to be alive to that, to expedite their judgments promptly and to not wait for time to lapse.

We will make matters as simple as possible, and we can and will stipulate the procedure in secondary legislation. We can also stipulate the timing that will need to be adhered to. It is just a two-year window—we want to ensure that these things do not drag on. It would not be in the landlord’s interest to keep dragging their heels, because there will be this deadline, at which point they would have to take action anyway. I hope that we can expedite that.

Photo of David Crausby David Crausby Labour, Bolton North East

Does the mover of new clause 27 intend to press it formally to a vote when we get to the appropriate part of the Bill? We will not make a decision on it now, but it would be useful to know her intentions.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I would like to leave my options open.

Question put and agreed to.

Clause 45 accordingly ordered to stand part of the Bill.