Baroness Noakes
Main Page: Baroness Noakes (Conservative - Life peer)Energy Bill [HL]
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Baroness Noakes
“(za) orders and regulations under section 1 or 2,”
Baroness Noakes
My Lords, briefly, Amendments 20A and 20C, which stand in my name in this group, come directly from the Delegated Powers and Regulatory Reform Committee’s eighth report of Session 2010-11. The amendments concern the level of parliamentary approval that should be given to orders and regulations made under Clauses 1 and 2. The eighth report makes it clear that the powers in Clauses 1 and 2 are significant. For example, the Government have powers to specify in detail what a Green Deal plan is, what improvements fall to be dealt with and what descriptions of property are covered or not covered. Clause 2 confers powers to extend by order the meaning of energy efficiency measures, and therefore the scope of the Green Deal scheme, as well as other matters.
The key point for the Delegated Powers and Regulatory Reform Committee is that the affirmative procedure is, in its view, the appropriate level of scrutiny, given the ability to extend key terms by subordinate legislation. In paragraph 5 of its report, that Committee recommends,
“that orders and regulations under clauses 1 and 2 should be subject to the affirmative procedures”.
That is what my two amendments provide. I beg leave to move.
The Deputy Chairman of Committees
If Amendment 20A is agreed to, I cannot call Amendment 20B by reason of pre-emption.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I welcome back the noble Baroness, Lady Smith of Basildon, and hope that she is well. I hope that all noble Lords have had an agreeable weekend. We will now carry on with the Energy Bill.
The amendments in this group would affect a number of orders, including those that define qualifying energy improvements and eligible properties. We need to strike the right balance between normal administrative functions and parliamentary scrutiny of the criteria by which administrators exercise their functions. I am very grateful to my noble friends Lady Noakes and Lord Jenkin of Roding for tabling their amendments. However, we need to ensure that the amendments have the intended effect in law. Therefore, we will warmly and favourably consider the amendments and all the recommendations of the Delegated Powers Committee.
I hope that honourable Members have found my explanation reassuring and will not press their amendments.
Baroness Noakes
With the proviso that I am a noble, rather than an “honourable”, Member, I am grateful to the Minister for warmly considering my amendments. I hope that that warmth will extend to action on Report and I assure him that, if he does not take action, we will return to the matter. I beg leave to withdraw the amendment.
Baroness Noakes
My Lords, I have Amendment 20L grouped with this. Unfortunately I did not see the grouping before I got in today, and I am not sure it fits particularly well with Amendment 20KA. I support what the noble Baroness said about the review being capable of including other issues, whether specified by the Secretary of State or determined to be appropriate by the reviewer. I suggest that if that is what she wants she should have tabled the amendment differently—to say whether the Secretary of State should specify additional matters or whether the reviewer should be empowered to consider whatever other matters he wants. It seems to me a sensible flexibility to introduce into the Bill in some way.
Amendment 20L is rather different. I support the necessity of a review prior to the implementation of the private rented sector provisions of the Bill. The amendment is inspired by a briefing from the British Property Federation. It is differently expressed from the suggested amendment; my noble friend, Lord Jenkin, who has an amendment in this group, has followed the suggested amendment more faithfully.
Clause 36(5)(b) requires this review to include a consideration of the extent to which financial assistance is available to landlords of private rented properties for the purpose of taking measures to improve their energy-efficiency. My amendment takes this further, and asks that the review also examines the extent to which such financial assistance is known to be available. There is a world of difference between something being available and people knowing that it is. My noble friend Lord Jenkin’s amendment focuses on the amount of marketing effort and the sums spent in making landlords aware of financial assistance. To that extent his amendment focuses on the inputs to the process, while mine tries to focus on the outputs: in other words, whether there has actually been knowledge of the financial assistance available. For example, if the marketing in the early stages of the Green Deal is not addressed to landlords in the private rented sector, there may be zero knowledge of that in the sector.
Alternatively, landlords might know about the availability of financial assistance, not through marketing efforts from Green Deal providers, for example, but through trade bodies or the media. We cannot assume that because financial assistance is available landlords are aware of it and ready to act on it. It is important that the powers in this chapter are not activated unless and until there is awareness of financial assistance among private rented sector landlords.
Lord Jenkin of Roding
My Lords, as my noble friend Lady Noakes has indicated, Amendment 20MA in my name follows a recommendation from the British Property Federation. The federation makes the important point—which I may have made earlier—that the energy-efficiency supply sector does not have a good record of approaching private rented properties. It is much easier to take the low-hanging fruit provided by the owner-occupier properties, where the owner is the one paying the energy bills. The private rented sector has hitherto not been approached formally—other than perhaps in a number of cases—but that needs to happen. Therefore, the suggestion in my amendment is—as my noble friend Lady Noakes has said—that there should be a clear review of the efforts made to bring this whole process to the attention of both landlords and tenants.
I imagine that many noble Lords will share my experience of having people in their families who are both landlords and tenants—some are landlords and some are tenants. Of course, the biggest single problem is always to get both parties to see that an improvement will be to both their advantages. That will require a considerable effort. All that I am saying is that the review must take account of the efforts that are being and could be made to spread the awareness both of the process and of the mutual advantage that will come to landlords from the enhancement of the value of their property, and to tenants from lower energy bills and perhaps a more comfortable house. That will take some effort. The review must recognise that and form a view on how successful the measures have been to date.
Baroness Noakes
My Lords, before the noble Baroness, Lady Smith, decides what to do with her amendment, I will say that my amendment—Amendment 20L—seeks to go beyond what is in Clause 36(5)(b), which the Minister rightly said covers,
“the extent to which financial assistance is available”.
I accepted that, but I went on to ask for the review to ensure that financial assistance is “known to be available”. The Minister did not cover that point in his summing up—unless I missed it—and I would be grateful for his comments.
Baroness Smith of Basildon
While the Minister seeks inspiration on that point, perhaps I may put to him that my comments and my amendment seek to probe whether there should be additional items in the review, but he did not address that, either.
Lord Marland
I will deal first with the point made by my noble friend Lady Noakes. There is a limit to how much one can inform. Clearly, there is a greater emphasis on the private rented sector to inform. If we find that the sector is not informing people, we will bring that to attention under the review. I hope that that deals with the point.
I am not sure of the direction of the question of the noble Baroness, Lady Smith. Perhaps I could also deal with that at a later point.
Baroness Noakes
I am sorry. Possibly my noble friend has said that this might be looked at, but the point is not specified in Clause 36(5). I tabled Amendment 20L to see whether that should be specified, so that the matter would be covered. The Minister sort of said that it would be covered, but it is not covered in Clause 36, so I am still struggling on whether the Government think it important that landlords of public rented sector properties are aware of the financial assistance. As I pointed out, there is a big difference between financial assistance being available and people being aware of it, in particular if Green Deal providers do not target private sector landlords because of the difficulties.
Lord Marland
I think that I understand the question, so it may be the second question that I do not understand. If we are talking about awareness, it is incumbent on the private rented sector to make people aware. It is also incumbent on the Government to make people aware of the range of assistance available under the Green Deal. If there has been no—or not enough—positive action, the review will endeavour to make the necessary adjustments to make sure that that action is provided to communicate the information that is required. This set of opportunities should be widely known about. This is a very new initiative that, as I understand it, virtually everyone in property knows is about to happen. If we feel that the information is not being passed on, obviously we should take action.
Baroness Noakes
“( ) a consideration of the willingness of tenants of PR properties to agree to repay the financial assistance available to improve the energy efficiency of PR properties”
Baroness Noakes
My Lords, we are sticking for the time being with Clause 36(5). I have another suggestion to make. The report that is required under this subsection focuses on property characteristics and on landlords, but it does not seem to say anything about tenants. If landlords enter into a Green Deal scheme, it will mean that the energy bills of tenants will increase and thus tenants’ willingness to pay is an important element which should not be ignored. The theory is that the golden rule will not allow a Green Deal to go ahead if the energy savings do not cover the additional cost of energy bills, but it is less than clear that tenants will see the analysis in that way. They will have different time horizons from, say, owner-occupiers, and almost certainly different appetites for risk. While tenants in the private rented sector are clearly not homogenous, I imagine that significant numbers do not have the ability to analyse a Green Deal and its potential impact on their household finances in their rented accommodation, or whether, even if they could analyse it, they would be comfortable with it.
The purpose of the amendment is to ask the Minister to explain what role the Government see for tenants in decisions under this clause. It seems that they have no existence in the context of a scheme, yet they are the ones who will be paying the energy bills. I beg to move.
Lord Teverson
My Lords, I welcome this amendment from my noble friend. It is important that tenants are actually mentioned, which is the emphasis here. The broader point is that although tenants are not a homogenous group, because of the differences that arise in the sector, there certainly will be people who cannot and never will be able to afford their own homes as opposed to more transient people who have not bought a property perhaps, because they are seeking to move on. The group will be different in many ways. I therefore support the idea that the review should try to identify the particular hurdles faced by this group in asking their landlords to make the improvements through the providers of the scheme. It is an important area and one it would be useful to understand if and when the report is produced.
Baroness Noakes
Perhaps I can clarify the golden rule. The issue is that tenants have different time horizons so a tenant might be looking at a one or two-year time horizon for their tenancy, which is quite different from the time horizon of looking out over a 25-year period of an occupancy or long-term tenancy. That may well create difficulties in the rented sector because tenants analyse things differently. The point I was trying to make was that the golden rule does not help to give a guide to rational decision-making for tenants.
Baroness Northover
I understand what the noble Baroness is saying. These are all areas which the department is looking at. However, I point out that the Bill already ensures that sitting tenants must give their express consent before a Green Deal can be taken out, so if a tenant feels that it is to their detriment, they have the right to refuse. Similarly, landlords must make clear to new tenants if a Green Deal is attached to a rental property before they sign a contract.
Given that these consumer safeguards are already in place, and bearing in mind what the noble Baroness is saying, I hope that at this stage she feels able to withdraw her amendment.
Lord Teverson
I ask the Minister what happens when we have a change of tenancy and the golden rule is met by the first tenant whose energy use is quite high, so it works, but the new tenant is a lower energy user. They may be a smaller family or a smaller household or have a different preference as to how they spend their money. The golden rule that was met by the first tenant might not be met by the second and yet, because there is such a competition for rented accommodation, you will possibly get a position where the incoming tenant, although warned, will just say yes anyway.
I wonder if the Minister could remind us—or me—if there is an opportunity for the Green Deal to be renegotiated at that point or does the higher electricity rate stay the same all the way through? This may be important in terms of this change and whether subsequent families could be put into energy poverty.
Baroness Noakes
Perhaps I may clarify the aspect of the review that I was probing. While the consent of the individual tenant to a Green Deal may be required, the point of making sure that this is covered in the review is that if there was widespread tenant apathy or unwillingness to get involved because of the issues that I have raised, there would be little point in going ahead with a regulatory approach, which is what Chapter 4 allows the Government to do. I also suggested that the tenant environment should be properly assessed before we go down the regulatory route. That is why I tabled the amendment.
Baroness Northover
I hear what my noble friend says. We will debate the review in more detail. My noble friend Lord Marland has indicated that, in addition to the areas that are listed in connection with the review, there is the possibility that it will consider other things. It may be that the department should give some thought to this area.
I will respond to my noble friend Lord Teverson. I am concentrating on DfID, justice, et cetera. I am pretty sure that in this situation, should a tenant decide that they want to take a holiday from opting into the Green Deal, that would be possible. I remember being briefed on that. That may fit the situation that the noble Lord spoke about in which a tenant decides that it is not in their interest that the Green Deal is pushed down the track and that they do not want to repay the charge. I will make absolutely sure that I am right about that.
I am briefed that one cannot renegotiate the charge, but one can have a repayment holiday. Therefore, should the tenant decide in that instance that that is what they want to do, that would be possible. It does not mean that the money does not have to be paid back. However, it may not have to be paid back by that particular tenant at that time. It has also been pointed out to me that there will be a Green Deal ombudsman who will provide some protection. I hope that that will reassure noble Lords.
Baroness Northover
I will resist the temptation to speculate about areas that I may be less than well briefed on. If the noble Lord wishes to bring that up again when my much better briefed noble friend Lord Marland is dealing with a suitable amendment, I would welcome that he does that. ECO will target households and presumably subsidise poorer ones. However, before I get myself into any more of a complicated mess, I invite the noble Baroness, having led me down various alleys, to withdraw the amendment.
Baroness Noakes
My Lords, I am happy to withdraw the amendment. I think that we have opened up a number of interesting areas in the debate on my small amendment. I cannot pretend that the Minister has answered all the points to the satisfaction of the Committee. I feel sure that, in one way or another, we will return to this topic when we reach Report stage; but, for the time being, I beg leave to withdraw.
Baroness Noakes
Baroness Noakes
I shall speak also to Amendments 20Y and 21C in this group. These amendments concern the timing of the regulations that will affect the private rented sector. Currently, the review that is required under Clause 36 has to be published by 1 April 2014, and the regulations that will follow the review, as provided for in Clauses 37 and 40, should come into effect no earlier than 1 April 2015. The effect of my amendments would be to slip all of those dates by exactly one year.
As I understand it, the Green Deal regulations themselves are likely to come into force in October 2012. If that is the case, the review under Clause 36(4) cannot start until October 2013. The report must be published by April 2014, which gives a mere six months. Since Ministers have said that a key element will be the impact of the Green Deal, it is difficult to see whether enough data from the early stages of the Green Deal will be available to reach an informed assessment. Indeed, initial take-up may well be low among the private rented sector precisely because Green Deal providers will target the very much easier owner-occupied sector rather than try to reach this diverse group of private sector landlords with different types of tenants.
A key component of the review under Clause 36(5)(a) is a
“comparison of the energy efficiency”,
of private rented sector properties with that of non-private rented sector properties. The British Property Federation has pointed out that the most comprehensive statistics available on housing are to be found in the English Housing Survey, but they take 18 months from collection to be published. So the review that is going to be taking place in the six months from October 2013 to April 2014 will use data that are considerably out of date and will not reflect the impact of the Green Deal. Therefore, the review, based on heaven knows what information, could lead to regulations being enforced from April 2015, only one year later. Those who are involved in the private rented sector believe that more time should be made available before something as heavy-handed as regulation under this chapter is introduced.
A number of bodies have lobbied for the Bill’s provisions on the private rented sector to be modified. However, none of them has suggested a date as early as 2015. They seem to have coalesced around 2016. It is interesting that the Government’s date is 2015 while those who have campaigned most actively for action to be taken in the private rented sector are content with 2016. My amendments challenge the Government to say why the timetables set out in the Bill are fair and practical. I beg to move.
Lord Teverson
My Lords, I am very concerned about the amendment. This is one of the risks of the critical path that we have in the Bill. I accept that because of training requirements, the setting up of everything that has to be done, proper consultation, and because the Green Deal has to work effectively, preparation is crucial and we cannot expect it to start until 2012. That is the Government's expectation. Therefore, we have the whole of this year and some part of next year. It is logical to start the review of the private rented sector by 2013. It will not report until 2014 and therefore we could not precipitately take action until 2015.
I like the direct approach on these issues of my noble friend Lord Dixon-Smith. If the policy is not working for tenants and landlords—which is one of the key areas of policy importance—the amendment would mean that we would have to twiddle our thumbs for four years from when the Bill gets Royal Assent. That worries me. There is logic in the current timeframe. It is questionable whether that is the case in the amendment of the noble Baroness.
If the Bill goes through in its current form, it will be obvious within a year—if we are collecting any data—whether it is working in the private rented sector. Whether or not we have sophisticated analysis, we will have enough data-capture to understand whether it is starting to work. I would be fundamentally concerned, and would not believe it to be the case because of the importance of the programme, if the Secretary of State were just to sit in his chair—I know that he would not do this—and say, “I’ve got to wait until 2014 to test this thing out and see whether I need to do anything else”. Surely that will not be the case.
I could perhaps cope with local authorities not being empowered to take action before 2015, although I am very sceptical even about that timeframe. I ask the Minister to imagine what actions the Government might take, apart from the formal process detailed here, to make sure that the tenanted sector gets a move on. This is my problem with the issue. There are very good landlords. I have nothing against the private rented sector, which is crucial in delivering accommodation to families. However, the Bill’s timetable gives a signal that says, “Actually, guys, you don't have to do anything until 2015. That's when we’ll start to get angry, and until then there won't be any pressure”.
Baroness Noakes
My Lords, we have had an interesting debate, with differing views on the most important factors, including whether we should press on quickly or make sure that we are very clear about whether regulatory action is required. The purpose of amendments is not to say that the Government should not, for example, communicate with landlords in the rented sector to ensure that, so far as possible, they are encouraged to act. My concern is to ensure that regulation is not rushed into. There is a danger that the Minister's rather gung-ho approach will be replicated across the whole of his department. I fear that precipitate action may be taken in this area.
Lord Marland
I slightly object to it being called a gung-ho approach. It is a very measured approach that has taken a lot of time. I am saying merely that a timetable should be available, that we should stick to it and that we should send out the right signals to the market.
Baroness Noakes
I will withdraw the word “gung-ho”, but perhaps not the sentiment. The Minister seems to be rushing towards action, particularly regulatory action, rather than focusing on the outcomes that are required. The need to take regulatory action would be a failure on the part of the Government. This early timetable will allow Ministers to be put under pressure by those who think that much tougher regulatory action should be taken much faster. That would not be the best approach in this area. The points of my noble friend Lord Jenkin were well made. As the noble Lord, Lord Best, pointed out, the rented sector is very complex, with a large number of different players who are not easily reached through organised groupings. Therefore, action in this sector will be particularly difficult. That is another reason for a longer timetable.
Lord Marland
Perhaps I may clarify one point for the noble Baroness. There are fundamental differences between reviews and regulations. It is important that we do not confuse them. What the Bill states is that there will not be any regulation before 2015. We will simply review the activity that has gone on in the market up to the end of 2013 in order to see what progress has been made. The Government are not fixated on regulation. In fact, we have a common tenet of “one in, one out”. We are not in a rush to regulate for the sake of regulating. We are talking merely about a review, not an insistence on regulation. We will review the situation to see whether we can urge the market to act more speedily if it needs to do so.
Baroness Noakes
I thank the noble Lord for that. I am sure that the Government will keep this under review. The issue is that a formal review will be launched at a particularly early date when the evidence on the impact of the Green Deal will be relatively light. This will lead to rushed and ill considered action. I will not pursue this further, but will read carefully in Hansard what the Minister and other noble Lords have said and may return to it, perhaps in a different form, on Report. I beg leave to withdraw the amendment.
Baroness Smith of Basildon
Amendment 20PA, which is in my name, is in some ways not dissimilar to the amendment in the name of the noble Baroness, Lady Maddock. I think that we are perhaps trying to achieve the same ends in different ways. We both raised concerns that any regulations introduced by local authorities should not be conditional on a review taking place. It is worth looking at the scale of the problem, which we will perhaps do in respect of the next group of amendments. Nineteen per cent of private tenants live in fuel poverty. The figures and the impact assessment show how great the problem is for those who live in the private rented sector, the difficulties that they face in meeting their bills and the impact of living in cold properties on their health.
Properties in the private rented sector have the worst energy performance rating of any property sector in the UK. My amendment takes a slightly different approach to that of the noble Baroness, Lady Maddock. However, we share a widespread concern about the timing of the review and the fact that until the review takes place no regulations can be brought in. We do not want the action to be conditional on the review, but any regulations brought in must improve energy efficiency.
As regards the number of properties available to rent, no one wants to see a decrease. However, the issue is the degree of decrease. I am sure that although the Minister will tell me that the word “significant” is not normally used in legislation, he will understand the point that we are making. There may be times when it is appropriate to have a short-term decrease in the rented housing stock in order that work can be undertaken, but no one wants to see a permanent or a long-term decrease. We have put in the word “significant” to address that and to tease out from the Minister what he anticipates when he refers to a decrease in the housing stock.
The clause raises the enormous concern that the regulations will be pushed so far into the future that the significant problems of energy efficiency that exist now for people living in fuel poverty in the private rented sector will not be addressed. I am grateful to the Residential Landlords Association, to which we will come in the next group of amendments. The private sector needs certainty. As the Bill stands, all that it knows is that there will be a review, after which it may be required to undertake energy efficiency measures. But there is no clarity or certainty. This is a probing amendment. I hope that the Minister understands the points that are being made and why the concerns have been raised; namely, that great problems exist in the private rented sector.
Baroness Noakes
My Lords, I shall speak to Amendment 20Q in this group. I allowed it to be grouped with Amendments 20P and 20PA because it gives a contrasting view on the topic. The amendment moved by my noble friend Lady Maddock, and that spoken to by the noble Baroness, Lady Smith, seek to remove the conditionality, either totally or in relation to the report, before regulations are introduced. My concern, which I expressed earlier, is to ensure that regulation is not introduced unless there has been careful thought and consideration, because a regulatory solution would be an admission of failure and is not to be undertaken lightly.
Clause 37(1) requires not only that the report is published but that the Secretary of State considers that the regulations will improve energy efficiency and not reduce the number of properties available for rent. Those are the good requirements prior to the introduction of any regulation, and I support them. Amendment 20Q adds another requirement, namely that the report should be approved by both Houses of Parliament. We have already discussed the fact that the use of the regulation-making powers in this chapter could have a significant impact on the private rented sector, both in terms of economics and of the regulatory burden that could be laid on it. It will be important to ensure the widest possible consideration of the impact of any regulation. I tabled my amendment in relation to Clause 37, but my points apply also to Clause 40, which covers the power to make tenants’ energy efficiency improvement regulations. Both will have a significant impact.
Let us assume for a moment that the Secretary of State is some kind of ideologue who sees everything through green-tinted spectacles. While not for a moment would I say that this is a description of the current holder of that office, let us assume that we have such a green ideologue in the position of Secretary of State. That Secretary of State appoints another green ideologue to carry out the review, because Clause 36 makes no requirement for the reviewer to be an independent person. We could easily get one ideologue appointing another ideologue—there are rather a lot of them around in this area—to carry out a review which would then be undertaken from a particular set of prejudices. My amendment, in addition to providing the ordinary involvement of Parliament in such an important decision at any early stage and not simply in approving regulations, in approving the report would also be able to provide some kind of counterweight if a green bias was built into the review.
I am aware, of course, that there is a form of institutionalised bias along certain lines in both Houses of Parliament, and that Members of both Houses have a wide range of views on these issues. It is therefore important that the findings of the review are subjected to full and dispassionate scrutiny by both Houses and approved as the basis, effectively, for the Secretary of State to go forward and introduce regulations. While I have treated this in a rather light-hearted way, there is a serious point here in that we want to be clear before defaulting to regulation. This would provide another pause in the process before ending up in regulation. For that reason, I hope that the Minister will favour my amendment in this group and not those of the two other noble Baronesses.
The Duke of Montrose
My Lords, although I have not participated greatly, I have attended quite a few of the Committee’s meetings. The Minister says that he will take away and consider issues such as those raised by my noble friend Lord Deben. With the great efficiency of this Committee, we are presently discussing the clauses to do with England and Wales, but exactly mirroring clauses, which are word for word the same, later extend the provisions to Scotland. However, nobody has thought to extend their amendments into that same text, but no doubt the Minister will consider—
The Duke of Montrose
Well, I have said that it is highly efficient to consider these matters at the same time.
Lord Marland
My Lords, I am grateful for these amendments, which aim to set a minimum energy efficiency standard for the private rented sector. As a result, Amendments 20R, 20S, 20T and 20V would set a minimum energy efficiency level of EPC band E for the domestic private rented sector. I hope that this deals with one of the questions asked by the noble Baroness, Lady Smith. Amendment 20X would require the Secretary of State to make at least one increase to this minimum standard between 2016 and 2019. The EPC is a key factor in this.
First, I can reassure the House that our provisions in Clause 37 already target the worst performing properties. Our intention is similar to that of the amendment—that properties below a band E rating would be targeted under the local authority enforcement powers. Secondly, and most importantly, we are achieving this without setting a minimum standard that could be viewed as a barrier to new landlords entering the market. That is very important. The private rented sector is an increasingly important part of responding to our housing challenge. Yet evidence suggests that there is currently a shortage of supply, which is illustrated by increasing rents. We are trying to plot a pragmatic and sensitive course here. I believe that the provisions are drafted to achieve this balance.
Amendment 20YA would remove an important safeguard for property owners. While we do not believe that improving a property’s energy performance will result in a negative impact on its value, it is only right and proper that we provide owners with that reassurance. I agree with my noble friend Lord Dixon-Smith and the noble Baroness, Lady Smith, that it is unlikely. There could be solid wall installations, for example, which do not enhance the value of an old property, but that would be pretty rare.
Amendment 20U proposes a national or local register of domestic private rented properties. On 10 June, the Housing Minister stated that the Government have no plans to create a national register of landlords, although he will keep that position under review. I am, however, aware that local authorities are initiating local lists of this type of property where they deem that such lists are of benefit in their areas. My noble friend Lord Dixon-Smith made the good point that some landlords are the local authorities.
Amendment 20RA would provide that the Secretary of State must make regulations requiring local authorities to issue a notice to landlords of domestic private rented properties requiring them to make such improvements as are identified in the notice. If regulation is required, it is our intention clearly to set out provisions requiring local authorities to issue a notice to landlords requiring them to make the necessary improvements. Finally, Amendment 20W would appear to create an incorrect cross-reference. It proposes deleting “subsection (5)” and inserting “subsection (6)”. I hope that that acts as an explanation.
I was asked about whether it is the landlord who must make improvements to a property. Under Clause 37, the requirement is on the landlord, but tenants can request that the landlord take action. I was asked: what if the property is vacant? That is not covered by a definition. No action is required until the property is re-let, after which the action will take place. In summing up, I would invite my noble friend Lady Maddock to withdraw her amendment. Her amendments are extremely valuable and I am very grateful to her for presenting them to us.
Baroness Noakes
Before the noble Baroness, Lady Maddock, decides what to do with her amendment, perhaps I may follow up a point made by my noble friend Lord Cathcart in relation to tenants. I do not understand the position. Since my noble friend laid it out so clearly, I recall some of the debates that left me with a slightly foggy view when we debated this earlier.
The local authority can require an energy efficiency improvement under the terms of the regulations. An energy efficiency improvement is one which is either paid for by the Green Deal or is free under the energy company’s obligations. Let us assume that it is not free but must be funded by the Green Deal. Let us suppose that the tenant says: “I do not want it. I am the bill payer and I do not want this Green Deal because I do not understand all this stuff about getting extra bills and about energy efficiency—it is too complicated”. This is the point I was trying to make earlier about tenants having a different perspective on life, with different timescales. What happens then?
Lord Marland
The first tenant has to agree to the Green Deal. If he or she does not, it will not be installed. If he or she does, it will be part of the ongoing tenancy agreement. As to the desire to have the Green Deal installed, the initiator is the first tenant.
Baroness Noakes
That is what I hoped the Minister would say. Can he then explain to me what happens in relation to the local authority’s powers, and whether a landlord who is not in compliance with his obligations is therefore subject to the sanctions that are covered by Clause 39? The local authority issues the regulations; the landlord says, “I will do it, I will get this Green Deal”. The tenant then says no, so the energy efficiency of the property is not improved. Is that landlord, because of the tenant’s action, in non-compliance with his obligations and therefore subject to the penalty clauses?
Lord Marland
The noble Baroness hits on an important point. It is that awkward period when the landlord is under an obligation to achieve a minimal EPC banding and is continuing to let the property. It is therefore incumbent upon the local authority to put pressure on the landlord to deliver a property that reaches that banding. I totally accept that, if you have a tenant who does not want the improvements, there is a period of time when pressures are brought to bear. If they do not work, the landlord may have to withdraw his property from the market and the tenant might have to find something elsewhere.
Baroness Noakes
It is my understanding that you cannot just throw tenants out nowadays; it is a rather more complicated process.
Lord Dixon-Smith
My Lords, my noble friend has a serious point. If the tenant seriously objects, it is completely wrong to hold the landlord responsible for that individual decision. It may be uncomfortable, but that is the reality. Otherwise, we have a form of compulsion that is wholly inappropriate.
Baroness Noakes
My Lords, I certainly do not want to delay the Committee beyond its natural span, but perhaps I could just ask the noble Lord, Lord Grantchester, how the possibility of local authorities carrying out improvement works and charging for them fits with the scheme of this Bill, which contains a requirement to carry out the relevant efficiency improvements financed either by the Green Deal or by the energy company obligation. I do not understand how another party in the form of the local authority can do something that should be dealt with by either the Green Deal or by the energy company obligation. It seems unfair at the very least, if we are talking about a group of tenants where one is holding out, for the landlord to be stuck with the cost for a whole building or block in circumstances where, for the rest, there would be a Green Deal. I do not understand how this amendment fits with the scheme, which is that the relevant energy efficiency improvements are Green Deal or energy company obligation-funded. They are not funded in any other way.
Lord Grantchester
I thank the noble Baroness for seeking that extra clarification. In this clause we are assuming that in a situation where a tenant is holding out against the wishes of every other tenant in a block, he would be required to undertake the improvements as part of the Green Deal. The costs arising would not land on the local authority. The tenant that was proving to be the roadblock would be entered under the Green Deal and would make payments under that deal. I think that this provision is set out in Clause 37.