Lord Marland
Main Page: Lord Marland (Conservative - Life peer)(13 years, 3 months ago)
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Lord Davies of Oldham
My Lords, having had recent experience of the phenomenon to which the noble Lord, Lord Jenkin, has drawn attention, I can say that in Government we of course took the recommendations of the Committee very seriously. I am glad to see these amendments. I appreciate that the Minister has something of a choice, but in any case at Committee stage he is not going to accept these amendments exactly as they are written. However, the Opposition give their full support to the concept behind the amendments. Therefore, I hope that the Minister responds positively and that the appropriate amendment is tabled.
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.
Lord Grantchester
I am grateful to the noble Baroness, Lady Maddock, for bringing forward her amendments. I echo her opening words on the private rented sector, as we on this side of the House have also received considerable approaches from organisations that want us to look diligently at that sector. We take encouragement that the Government are now looking at those issues. Like the noble Baroness, Lady Maddock, we think that several such properties could be adequately improved at no great cost. We have also received a lot of submissions asking that we look carefully at this issue.
We also thank the noble Baroness for bringing the attention of the Committee to the issues around the Housing Act. On this side, we initially thought that all eventualities would be covered, so we thank her for drawing our attention to that. Along with the noble Baroness, we would wish, in so far as is possible, for all housing, including rural housing, to be brought within the ambit of the Bill. Will the Minister confirm that other types of housing, including in the mining industry, will be covered under the provisions?
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I am grateful to my noble friend Lady Maddock, for moving Amendment 20E. She comes with a great wealth of knowledge of this sector, which is always much appreciated. In particular, her opening remarks welcomed some of the action that we are taking in this sector.
On the issue raised by my noble friend Lady Parminter, I should like to pick up the issue of the review at a later amendment.
I am glad to see that the Minister, my colleague Mr Gregory Barker, who will be taking this matter through the other place, has come to see how it is done properly here in the Upper Chamber. He will learn a lot from being here.
Amendments 20E to 20K all seek to amend Clause 35 by expanding the range of tenancy types and dwellings covered by the provisions in the Bill relating to the domestic private rented sector. Clause 35 lays the foundations for the provisions in the private rented sector by clearly defining what we mean by “domestic private rented property” and “non-domestic private rented property” in England and Wales for the purposes of this Bill. The domestic private rented sector is currently defined by the two most common types of tenancy arrangements in the sector: assured tenancies and regulated tenancies. We want to capture the largest range of private rented sector properties; we do not want to unintentionally exclude properties. I will now consider them in turn.
Amendments 20G and 20J would apply to accommodation provided for agricultural workers under either an assured agricultural occupancy, as defined in the Housing Act 1988, or a protected occupancy, as defined by the Rent (Agriculture) Act 1976. Those will be included in the definition; they do not need to be referred to specifically. I hope that that deals with the point made by the noble Baroness, Lady Maddock.
Baroness Smith of Basildon
My Lords, I welcome the comments of the noble Lord, Lord Jenkin of Roding, because I think they sum up some of the challenges of the legislation and why it is so welcome that we seek to make improvements in the private rented sector and indeed other sectors—the private sector and the social housing sectors—through the energy market.
It is right that we examine this in detail because the issue around the balance between the quality and quantity of housing is a fine one to walk, and we want to ensure that at all times the Government reach the correct balance. In proposing amendments and discussing and debating the clauses of the Bill, we want to ensure that the Government can fulfil the objectives they have set themselves. We entirely agree with the Government when they said that they wanted to be the greenest Government ever. When the Minister referred to that in the Chamber in our first energy debate, which seems an awfully long time ago, and I challenged him on it he said, “Like it or not”. I let him know that we do like it and that we will support the Government in these aims and wider where they seek to be as green as possible. The issue of having greener properties and more energy- efficient properties goes beyond just the idea of being energy-efficient. It goes into health, the economy and much wider. As we debate these clauses about the private rented sector I give the Minister our assurance that every time we raise an issue we do so only to improve the Bill and work with him to achieve his stated objectives.
Lord Marland
My Lords, it is wonderful to hear so much green co-operation bouncing backwards and forwards. We appreciate the very generous words from the opposition Benches, and of course from my noble friend Lord Jenkin of Roding, who has told us that we have a very significant task to perform in this Bill. He has told us that there are many challenges ahead, which we will have to address. The noble Baroness, Lady Smith, and my noble friend Lord Jenkin both talk about a balance that needs to be had, and they are quite right. If I may, I will deal with his specific point about ECOs later, when it comes up in the list of amendments, but I am very grateful for the encouragement.
I will speak to Clause 35, so that we are clear where that is going. Clause 35 lays the foundations for the provisions in the private rented sector by clearly defining what we mean by domestic and non-domestic private rented property in England and Wales for the purposes of this Bill. The domestic private rented sector is defined by the two most common types of tenancy agreements in the sector: assured and regulated tenancies. We have intentionally excluded social landlords from these requirements. The sector has previously been required to invest in the energy-efficiency performance of its homes. As a result, it has made some of the biggest energy-efficiency gains in recent years.
The definition of a non-domestic private rented property is one which is let under a tenancy and is not a dwelling. A dwelling is already defined under the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007, so it is logical to use this existing definition for the purpose of this chapter. I hope that that satisfies noble Lords.
Lord Best
My Lords, perhaps I may add a little factual information on the profile of the private rented sector. We know from Dr Julie Rugg at the University of York that there are some 1.2 million private landlords. Very few of these belong to the British Property Federation, for which I have a great deal of time and which is doing some very good work, including on this Bill. The vast majority of the 1.2 million private landlords do not belong to any kind of federation. The Residential Landlords Association and the National Landlords Association together have, I think, less than 5 per cent of the ownership from the private landlords sector. We will have to bypass some of those institutions and put in place mechanisms that will reach out to this huge mass of small-time private landlords.
Lord Marland
My Lords, this group of amendments covers a wide range of issues. The noble Baroness, Lady Smith, rightly asked about the purpose of the review, which is, we hope, to safeguard against regulation. We do not believe that regulation will be the answer if we want to encourage landlords in the private rented sector to respond to the Green Deal with open arms, to embrace it and to act as willing and proper landlords. As my noble friend Lord Deben rightly said, we should strike a balance between the pressures brought on by the sector and what we want to achieve, but we should not be led by the nose. Of course, we are working closely with the BPF.
The noble Lord, Lord O’Neill of Clackmannan, rightly drew our attention to the fact that there are unscrupulous landlords out there. It may be that we have to take action against them in the strongest possible way through regulation, but it is our desire not to do that and to give them an opportunity—a breathing space—to take part.
The noble Baroness, Lady Maddock—the godmother of HECA—drew our attention in her usual persuasive way to the merits of the Home Energy Conservation Act. We are incredibly grateful for all the work that she did but, as she has nobly recognised, we have moved on to another phase. Perhaps she will be godmother of HECA II.
Finally, let me respond briefly to my noble friends Lord Jenkin and Lady Noakes, who have raised a number of issues relating to the review period. Perhaps I may discuss the review later, given that—as my noble friend Lady Noakes mentioned—groupings 7 and 8 also deal with the review and its various timeframes. Although my noble friends’ amendments aim to strengthen the review, I reassure noble Lords that there is already a requirement in Clause 36(5)(b) for the review to assess the extent to which financial assistance is available. On the broader point, I think that we will be able to debate the timings of reviews and the need for them when we consider groupings 7 and 8. With these assurances, I ask noble Lords not to press their amendments.
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.
Baroness Smith of Basildon
The purpose of my Amendment 20KA is to probe whether additional items should be in the review other than those in paragraphs (a) to (d) of subsection (5). I do not think that the Minister addressed that, but I apologise if I have missed it.
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 Smith of Basildon
I hate to confuse the Minister and I apologise if my earlier comment was not clear, but all that I seek is confirmation that the review will be able to consider items other than those listed in paragraphs (a) to (d) of subsection (5). Are those the only items that the review will look at? Is the review limited to those items, or can other issues be taken into consideration?
Lord Marland
I am getting a lot of notes, but the short answer is that the review can consider other issues. I hope that that answers the question.
Baroness Smith of Basildon
I am most grateful. I beg leave to withdraw the amendment.
Lord Davies of Oldham
My Lords, I was about to make the same speech. But as the Minister is likely to listen to a noble Lord who supports the coalition rather than to the Official Opposition, I will merely say that of course it can be seen from our amendment that we saw no reason why there should be a time constraint—a delaying element—built in. We very much agree with what the noble Lord, Lord Teverson, said about the impact of these amendments building an extra year of delay. But we are not quite clear on why there should be a restriction in Clause 37(8), which is why we have tabled an amendment for its deletion.
I agree with the noble Lord, Lord Teverson. Of course, we will not get a perfect profile of the challenge which lies ahead. Governments never have perfect information on which to act, any more than anyone operating in the so-called market mechanism ever has perfect information on which to act. But we will have clear indicators of where the issues lie. We do not see why we should build into statute—certainly, not through an amendment—an extension to what the Government think is realistic and what can be achieved. I hope that the Minister will answer the points made by the noble Lord, Lord Teverson.
Lord Marland
My Lords, I should like to correct the noble Lord, Lord Davies of Oldham, by saying that of course I listen to the Opposition. It is fundamental to this entente cordiale that we currently enjoy that I listen to the Opposition. The whole purpose of this debate is to listen to people and to take in their views. We now have two sides of the argument: one side says that we should start the review at a shorter time, and the other side says that we should push it out and asks whether the time is readily available.
The review will not be just one review; it will be constant. We have to keep this under constant review. Having listened to the arguments, I would be minded—and I will urge my colleagues to do the same—to start our first review in 2013. At least that would be a start and allow us to see, as my noble friend Lord Teverson asked, whether it is working. We should do that at the earliest possible time and set down a timetable in which to do it. The noble Baroness, Lady Noakes, perhaps feels that we should give a greater time. Of course, there will be a greater time, because we will review it to see whether this is working.
We are trying to achieve an acceleration of a reduction of carbon and of take-up on the Green Deal. It is incumbent on the Government to make sure that it is working and to urge everyone to get on with it. Therefore, I invite the noble Baroness to withdraw her amendment. Before I sit down, I should declare an interest as a landlord, which I perhaps should have done at the beginning. It is in the House of Lords register of interests.
Perhaps I may help my noble friend who was thrown into the lion’s den with some rigorous questioning and answer two or three of the questions that were put. The noble Lord, Lord O’Neill of Clackmannan, who is not in his place, asked what would happen to short-term tenancies if bills were put up as a result of these measures. My answer to that is that they would be very short-term tenancies because people would look elsewhere for a better and more commercial short-term tenancy. We are in a competitive market in that respect.
As regards payment holidays, the Bill enables the Government to specify circumstances in which Green Deal payments can be suspended. The policy of this is being consulted on, as one would expect, and we will develop that as we go through consultation. But we do not expect that tenants will be able to opt out other than in the usual circumstances.
I ask noble Lords to forgive me for dealing with these questions now, although they might want to come back to these issues. But let us do that as we follow the Bill through by way of information. The noble Lord, Lord Teverson, asked about the enforcement of building regulations. Obviously, that is a matter for CLG and we will pass his remarks on as noble Lords would normally expect. I hope that that clarifies a couple of the points and that it enables the noble Baroness to withdraw her amendment.
Lord Davies of Oldham
The noble Lord has clarified a number of interesting points but we are talking about dates here and I am not sure the Minister has responded on the issue of dates. What is the point of having a statutory limit with regard to these regulations in circumstances where the Government are hoping to make progress? As the noble Lord, Lord Teverson, indicated and I agree with him entirely, we do not know the nature of the information, how full it will be or the basis on which the Government will act. Why build in a set date when in fact the Government may be able to act against their good instincts with regard to this Bill earlier if it were not prescribed by the legislation? We do not need this prescription.
Lord Marland
The answer is quite simple. We have to put in a prescribed date or it is unfair on those who have to fulfil their obligations by that time. If you do not prescribe the time when we are going to review it, they have no idea of the timetable on which they have to act, so it is very clear. I have made quite a concession already that we are going to review the first date, which will be 2013, and that thereafter there will be dates to monitor how this Bill goes forward. I disagree with the noble Lord on this rare occasion. We have to send clear signals to the market as to how this is going to operate.
Lord Jenkin of Roding
Perhaps I may add a word or two to the debate because I put my name on the amendment. We spent a good part of this afternoon’s proceedings all agreeing that the Government face a major challenge in seeking to extend the Green Deal or apply the Green Deal to the private rented sector; indeed many noble Lords from all parts of the Grand Committee were stressing the problems that are being faced on this. I agree with that.
Although I have a lot of sympathy for those who say we have waited a long time, we must get on with this. If we try to hurry it forward and bring forward the date of the review and curtail the length of time that the review may take, it will go off at half cock. When dealing with the complexities and the challenge, which I described earlier as enormous when citing the federation, we have to be prepared to make sure that the authorities and all the people who take part in this—the property owners, landlords and tenants so far as is possible—are sufficiently aware of what is expected before one tries to rush forward.
My noble friend Lord Teverson says that by 2013 we will know and have enough experience, but with the greatest respect I do not believe that for a moment. This is going to start pretty slow and the immediate reaction will be people coming along and saying “It’s not happening”, and that we have to have compulsion and the full panoply of regulations. That would be very unwise because it might get the process off in the wrong way.
The Minister has been absolutely right. The Government do not want to go down the road of compulsion through regulation, yet if one rushes the review and starts to make decisions on what is bound to be pretty imperfect and incomplete information, my guess is that is that we will be in greater difficulty than we otherwise would have been. I would therefore urge more caution on this.
The date that my noble friend and I have put on this amendment and the other amendments that go with it are perfectly realistic and I would not agree with the noble Lord, Lord Davies of Oldham, that we could bring the thing forward. That would run straight into the dangers which I have been trying, in my own imperfect way, to point out.
Perhaps I can say to my noble friends on the Front Bench that, if the Government are being criticised for anything, it is that on a number of issues they are moving too fast and trying to do too much at the same time. We are dealing here with a problem whose origins go back many decades. Indeed, in some cases it will be centuries. To try to rush forward and deal with it all in a relatively short time is a potential recipe for disaster. I hope that the Government will get the message that this needs a measured approach with enough time being given for people to consider and make sure that they understand the information that is to come out of the review before rushing to make regulations. That comes back to the very first point I made earlier this afternoon. If you go too fast, it will have the effect of drying up the rented sector. People will throw their hands in the air and say, “Blow that. I am not going to let any more”. That would be a very great pity.
Lord Teverson
Perhaps I could respond to that because it is exactly not what I am saying. I am surprised that we have a Bill where the Government are constraining themselves with a “best after” date as opposed to a “best before” one. I am not suggesting that things have to move forward at any time, but that we have within the Bill something that Governments normally try absolutely to avoid, which is a restriction on when they can take action if they feel that that action is necessary. We all hope that the action will not be necessary, although I note that a report of the review must be published by 1 April 2014, so there is a longstop. However, while I am the last person to argue that we should not put the quality and success of this scheme first—that is essential and why the 2012 date is right—what I find difficult to understand is not that we are forcing the Government to do this earlier, but that they could not exercise their own power to move forward if they felt it necessary to do so.
I did invite the Minister to suggest, if the scheme was seen not to be moving forward particularly well, other ways of doing it. I am sure that there are ways outside this Bill that the Government would get on with. Indeed, I know that my noble friend would do that, which may be part of making sure that landlords are aware of the benefits of the scheme, that it exists and can be successful. We have also discussed ways of utilising the local authorities, although not through enforcement because I am sure that the Government would find other ways to respond. What I find difficult is that the Government have imposed a constraint on themselves in the Bill about when the process can start.
Lord Marland
I am afraid that I cannot agree with my noble friend Lord Jenkin of Roding. I deeply believe that Government have lost themselves in a mire by failing to proceed quickly on things. We have a massive task ahead of us of reforming so many things in order to meet our commitments and face the challenges that lie ahead, so I am afraid I do not agree that we should elasticate time so that some people in the building sector who have been briefing noble Lords do not feel that they are perhaps being rushed into something.
We are now effectively at 1 January 2011 and we are talking about having a review in perhaps two years’ time. Every professional organisation knows about the Green Deal. People understand the possibilities that are available and a number are already making plans to take full advantage of it and put it into the housing sector. It is therefore not right that the Government should not set down tight timelines to see how this progresses.
I will follow up on the remarks of my noble friend Lord Teverson that we need to find out early on if it is working and, if it is not, what action we need to take to make it work. I will amplify what I said earlier. The start of the review will be at the end of 2013. Some people—I am one—are persuaded that it should be done then, while others think that it should be done later. We must start somewhere and get on with it. We cannot allow the land to lie fallow. We have a massive and monumental task. As my noble friend Lord Jenkin of Roding graciously admitted, this has been sitting around unresolved for a long time. The Government must get on and resolve it. Therefore, I am afraid that I do not agree with the amendment. Perhaps we will discuss the issue further. In the mean time, I ask my noble friend Lady Noakes to withdraw the amendment.
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.
Lord Deben
I did try to get in rather earlier, but I am now able to say that I would be very unhappy if the Minister were to go down the route of putting in another pause. We have had enough pauses in this over the past 20 years, so really we have now got to get on with it. I also have a slight difficulty believing that there is a connection between green bias and green ideologues. I hope that one is not a green ideologue, but I hope that there is a green bias. If there is not, the world will be in some difficulty. The concept that the opposite of that is a person who is somehow independent and not of that kind worries me very much. I hope, therefore, that the Minister will not go down this route.
My problem with the first part of the clause is that I fear the Minister will be in real difficulties. Under subsection (1)(b)(ii), he has to consider that the regulations,
“will not decrease the number of properties available for rent”.
Let us consider this in imaginary terms. When you think of some of the landlords we have, I can see a number of them saying, “I don’t want to spend anything and I don’t want to have anything to do with it. If there are regulations, I will take my property off the market”. In those circumstances, how on earth will the Minister be able to say that he does not consider that there will be a decrease in the number of properties available for rent? He could say that someone is off their head or make any number of comments, but the wording of this sub-paragraph could mean that he might be under judicial review if it could be adduced that any landlord had taken this view.
I am closely following the noble Baroness, Lady Smith, here. The problem is that this is one of those rare occasions where the actual wording is dangerously total. It is does not say “significant” or perhaps that there is “good reason to believe” that the number of available properties would decrease in more than a marginal way. There is nothing about whether the situation might change over time. It is a dangerous sentence and I hope that the Minister will agree at least to think about it again. I think that it is wrong.
The second reason why I am a supporter of the amendment proposed by the noble Baroness, Lady Maddock, is that I think that, although it is reasonable to say that regulations should not be made until the report has been published, it is perfectly reasonable to say that, once the report has been published—notwithstanding the worries of the noble Baroness, Lady Noakes—it should then be for the Minister to make his decisions in the context of the report. Picking out two things in the way that subsection (b) does will limit his ability. After all, this is a Government who do not believe in and do not like regulation; they turn to regulation only when necessary. My fear is that regulation may be necessary simply because the people in this business—or a very large number of them, as the noble Baroness opposite said—are not an easy lot to get to do things in a rational and sensible way. However, we are going to do our best. No one can possibly imagine that this Government will not go as far as it can to help people to do their best.
Having been responsible for the housing policy of the United Kingdom for some years, I have to say that private landlords—even the good ones—are not the easiest group of people to corral. There are some—rather fewer than some people think—who are certainly not good and who are impossible to corral. Given that that is what we know now, this may be an area where—however hard we may wish to bear down on regulation—we may need to do something. If we come to that conclusion, surely we ought to leave it in the hands of the Minster, who will, after all, have to argue his case for doing something that he has said that he does not want to do. He will have to argue his case against the general view of the coalition parties in both Houses of Parliament, and he will have to lay the regulations. Therefore, there are quite a number of hurdles in his way anyway in addition to any psychological dislike of regulation.
I would much prefer the Secretary of State to be faced with the simple statement of the report. The report will say to him these things, and he will have to make up his mind about it. That is what I would prefer. I would be happy to accept subsection (1)(a) of Clause 37—although, as no such amendment has been put down, I would be prepared to go for not having subsection (1) at all—but it seems to me that the Minister has undermined his position in a way I would have preferred him not to have done. Therefore, I would like him to accept this amendment. Certainly, I think that he would be well advised, if I may say so, to look at subsection (1)(b)(ii), because whatever bits of notes he gets handed to him from behind, I suspect that he will rue the day that he included that provision, because somebody will make mischief over it—even if it is somebody who just wants to push this off because they do not really believe in it.
Lord Marland
My Lords, I am very grateful to the noble Lord, Lord Deben, for his remarks and to others for the remarks that they have made. Before we start, to get us on the right footing, I would like to say that his excellent remarks about Amendment 20PA and subsection (1)(b)(ii) are very well made. Of course we will consider his comments, take them away and see how best we can improve matters. I am very grateful that he and the noble Baroness have drawn our attention to that particular issue, because these things do need tightening up.
On Amendment 20Q—some of this was answered by my noble friend Lord Deben—I agree with my noble friend Lady Noakes that it is an admission of failure for Government to regulate. That is a primary tenet of this Government, as my noble friend Lord Deben has said. If we cannot encourage people through these actions to participate in this opportunity—this great opportunity—then we will have failed and we will, therefore, have to regulate accordingly. However, as I said earlier, regulation is made on the basis that we have a “one in, one out”, arrangement, so we will have to look at the matter very carefully. I am not into “what if” scenarios about ideology, but I think that Government have quite a strong track record of choosing someone to do a review. That individual has to withstand the brickbats and the challenges of both Houses as to whether they are competent or going to give fair reason. Of course we must remind ourselves, as we do periodically, that the Green Deal will be a market-led product. We have to have confidence in the market without imposing too much regulation if the people involved are to be the proponents of the market. On that basis, I ask the noble Baroness, Lady Noakes, to consider withdrawing her amendment.
Amendments 20PA, 20P and 20Q would impact on the preconditions ahead of a Secretary of State being able to make these regulations. The Secretary of State will be able to make regulations only following publication of the review and only if he considers that the regulations are necessary to improve the energy efficiency of domestic private rented properties and would not decrease the number of properties available for rent. That is the framework that I mentioned earlier.
I hope that that largely covers the questions that have been asked. I invite noble Lords to withdraw their amendments.
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
Perhaps I should clarify that the authorities in Scotland will and can do whatever they want with their own powers. We are acting only as a facilitator for them to consider enacting those powers. I hope that that clarifies the matter for the noble Duke.
Baroness Maddock
My Lords, I thank the Minister for his reply. In a minute, I will be moving further amendments that are about regulation in local authorities. I hear what the Minister says. We may want to return to this another time, depending on the outcome of further discussions on this area.
I say to the noble Lord, Lord Deben, that, not for the first time, I am grateful to him for his support in this sort of area—the last time being rather long ago in another place. I am very pleased to see the noble Lord here because I know that he is a great enthusiast of the sorts of things that we are trying to put forward in this Bill. In the mean time, I beg leave to withdraw the amendment.
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.
Lord Marland
The point that I am making is that the landlord, if he has a tenant who will not agree, will continue the tenancy. When the tenancy changes, the landlord will have to change his plans. No one can force a tenant out, unless it is done legally—and, as the noble Baroness, Lady Noakes, says, tenants are strongly protected. But what would one do? One cannot force people into this Green Deal; one has to encourage them. The Green Deal is a market-led product. We are saying that once the tenancy ends, the new tenant will have to have the Green Deal. I am afraid that that is as far as we can legitimately go at this stage. No doubt during the review we will find out whether this has operated voluntarily or whether we need to find other ways to encourage people.
Lord Deben
Would the Minister not agree that there is a difficult issue here? We have to do things in this uncomfortable way because we could not have a situation where the landlord puts pressure on the tenant to refuse the Green Deal in order that he himself can claim that he was therefore not subject to the local authority’s rules. It has to be a little uncomfortable because we know there are landlords who will bring pressure on their tenants to do a number of things, and it would be very difficult to stop this. Therefore, we must accept that this is an uneasy but reasonable compromise.
Lord Marland
I am very grateful to the noble Lord. The situation is not ideal, but we have to live in a regulatory framework and the landlord-tenant framework that exists. In an ideal world, we would insist that everyone did this at a particular time, but the world is not ideal so we are going as close as we can to achieving that. I think that the noble Baroness makes a very valid point. When we review this, we will see whether there are other nudges or encouragements that we can make in respect of landlords.
Baroness Smith of Basildon
The point made by the noble Lord, Lord Deben, relates to issues raised by amendments that we discussed in the previous Committee meeting about consent being given or withheld reasonably or unreasonably. The issue was whether a landlord or tenant was behaving unreasonably or reasonably. It might help the Minister to reflect on the amendments that we put forward the other day.
I seek clarification on a couple of points. The Minister referred to the lists that are held by local authorities, but those are held very much on an ad hoc basis. It would be preferable, as far as concerns the responsibilities placed on local authorities by the legislation, if such matters were made more formal and uniform, so that local authorities know what is expected of them and so that landlords, too, will know what information they are expected to provide to local authorities. The Minister also said that Clause 37 provides that the worst performing properties will be the first to be improved. I would be grateful if he could clarify or explain that, as I do not understand where I will find that in the legislation or how it can be guaranteed.
My response earlier to the comments of the noble Earl, Lord Cathcart, was perhaps badly worded. I was not at any stage trying to suggest that there are not landlords who at this moment are taking good energy efficiency measures in the homes that they rent out. I am sure that all noble Lords who have declared an interest as landlords will rush home to ensure that energy efficiency measures are put in place immediately. I was trying to argue from the landlord's point of view. There are no guarantees for landlords that these regulations will ever come into effect because of their conditionality on the review. There is no guarantee of any substantial change, whereas we need substantial change across an enormous number of properties, given that the Residential Landlords Association estimates that 40 per cent of properties were built prior to 1919 and some of those will be the hardest properties to treat. Many landlords will be waiting to see what will happen. Good landlords will rush to undertake the work, and some have done so already. However, because there is no guarantee for landlords that there will be regulations, it will be very difficult for them—many are working on a budget for the properties that they own—to guarantee that they will be able to do the work, because they are not sure whether the regulations will come into play.
My final point is that I asked a question on Amendment 20YA, but I think that the Minister was unable to respond at the time.
Lord Marland
The noble Baroness raises several questions. It is not for this Committee to prescribe to local authorities what they should be doing. I hope that this Bill is one that local authorities can buy in to. That is a subject for the DCLG. We are committed to focusing on the worst performing properties because we are committed to energy efficiency, and if we can attack the lower-performing properties, we will do it. Clearly, we have a governor in place—the EPC, which we are reviewing at the moment—which will establish the level that properties must come up to. We will focus on the worst performers. We can use only the tools that are available in a market-driven product. It would be totally wrong for us sitting here to prescribe regulations at this point for those in the sector who are being recalcitrant or not performing. That is the point of the review, which will take place as we have discussed. We will then consider what regulations, if any, are needed to push this thing forward.
On Amendment 20YA, which the noble Baroness spoke to, and on her question who makes the judgment about the property’s energy performance, the judgment will come from the EPC, which defines performance. That is there in black and white on every home.
Baroness Smith of Basildon
I think that the Minister has misunderstood the point in my amendment, which refers not to energy performance but to the impact on the price of the property. Indeed, the Explanatory Notes refer to the possibility of an exemption,
“if the property is likely to be worth less as a result of the improvements being installed”.
Who will make that judgment? That is not a matter for the EPC, which deals with energy efficiency.
Lord Marland
With all due respect, I think that I answered that. I said that it is very unlikely that there will be negative value, but the market makes the judgment if something has gone down in value. If you put a property on the market or to rent, the market determines whether its value has gone down. That is how every price is achieved. I hope that that answers the noble Baroness—she is looking a little bit negative. I cannot imagine that we can set up a system that prescribes that a property is worth this or that amount; the market determines that.
Baroness Maddock
My Lords, I am grateful to the Minister for his reply and to other noble Lords who have taken part in the debate on this group of amendments. As the noble Baroness, Lady Smith, said, when we are looking at some of these very low rated properties, we are not talking about a lot of money to improve them one step up to the next band. I suggested some figures at the beginning and the noble Baroness, Lady Smith, repeated some of them. When we discuss this, I think that people are not really looking at what these properties are like. We may be talking about insulation and draught proofing, so some measures will involve quite low amounts of money. Therefore, in persuading tenants to improve the property’s rating, it may not be very much extra that they will be asked to contribute.
I am not quite clear what the Minister was saying in his answers to my amendments. I think that he was saying, “Yes, we understand all of this, and when we eventually get around to making regulations, we might do something a bit like what you are suggesting”. I am not sure whether that is what he was saying, but I will look at what is in the record. Perhaps at some point we can have a discussion about this. If we are keen to get local authorities and landlords working together to improve properties, we need a little more than is on the face of the Bill at the moment.
Lord Marland
Would the noble Baroness allow me to reply? What I am saying is that we must not prescribe regulation now for the private rented sector. This whole Bill is about trying to enable the sector to pick up the Green Deal and run with it. If we start saying, “If you don’t run with it, we’ll do this, that and the next thing”, we will be making a rod for our own back. That is the whole point. I think we are agreed on this particular subject of a review—an early review—and then a second review to work out what the dynamics are. I hope that answers her question; but, as always, I am very happy to extend the invitation to discuss the matter further outside the room.
Baroness Maddock
My Lords, the offer of further discussions might be helpful, because I think that, by using some of the legislation that we have already got and by being a bit clearer about the dates when regulations and so on might come into effect, we might be able to get landlords to start taking action earlier. We may be able to explore that between now and Report stage. In the mean time, I beg leave to withdraw my amendment.
Baroness Maddock
My Lords, my name is attached to the amendments to which the noble Lord, Lord Best, has just spoken. I do not intend to say much. It is clear from the amendments I moved earlier that I have a great deal of sympathy for what the noble Lord is saying. Perhaps we can also discuss between the Committee and Report stages whether there is some merit in doing more to encourage the private rented sector and to help local authorities with this work. I support the noble Lord, Lord Best, and I hope the Minister can at least agree to discussions on the detailed proposals that have been put forward.
Lord Marland
I am very grateful to the noble Lord, Lord Best, and for the support expressed by my noble friend Lady Maddock. The noble Lord spent a constructive Sunday writing his excellent speech because it has given us a good picture of what is going on in the sector. In many ways I wish he had spoken earlier, because he would have set the scene nicely for some of the debates today, as indeed he did at Second Reading.
Amendments 21ZA and 21ZB would insert two new clauses setting a minimum energy efficiency standard. However, they go further in that they would prevent the renting of properties that do not meet the minimum standard. They would also allow for the Secretary of State to suspend regulations with any local authority area if it is found that regulations are having an adverse effect on supply. Amendment 20TA would also prevent a landlord letting a property if a notice had been served by a local authority but not complied with.
The amendments raise an interesting proposition: that of using a minimum standard to improve performance in the sector and preventing properties that do not meet this new standard from being let. I read them with interest and welcome their intention to create a level playing field in terms of energy efficiency within the sector. However, I cannot accept the proposals for two reasons. First, I reassure the Committee that the provisions as currently drafted in Clause 37 already target the worst performing properties. Secondly, and most important, we will achieve this without setting minimum standards, other than those that have been referenced, which could be viewed as a barrier to new landlords entering the market. We are trying to plot a pragmatic and sensitive course.
Amendment 21ZB would give powers to the Secretary of State to suspend minimum standard regulations in local authority areas where they could be shown to be impacting adversely on the supply of properties available. As I have outlined, it is not our intention to impact on the market; in fact, it is the opposite. We want to create a more attractive rental market for improved properties. The review already creates a safeguard. It will take a very careful look at the impact of potential regulation on the rental market across the country.
I turn to the issue of timing, which we have covered quite frequently. Amendment 21ZA proposes that regulations, if any, be made no later than 1 January 2016. The noble Lord, Lord Best, has already referred to that. I hope that this explains the Government’s position. I am extremely grateful for the very valuable input, but I hope that these amendments will not be pressed.
Lord Best
My Lords, I will address the point that the Government are very keen for there to be no barrier to the entry of new landlords into the market. It is improbable that people will enter at the level of the worst properties in the worst conditions. The buy-to-let market has become an extraordinary phenomenon. More than 1 million properties have been acquired on a buy-to-let basis. The typical profile of these properties is that they cost around £100,000 to £110,000, are brand new and are in a block of flats built by a housebuilder. The energy rating for these properties is pretty good. One would not be setting a big barrier if one prevented the entry into the market of landlords who buy the most rubbishy properties on the market. It might be a good idea if they were required, before they let them, to bring them up at least to band E as a basic level. With those provisos, we live to debate this another day.
Lord Marland
I think I have answered that point, and I answered it on the previous batch of amendments. There is a guideline of EPC band E. The noble Baroness asked what the guideline is; that is it, and I have said it on a number of occasions. It is incumbent upon the local authority, because of not only its own carbon targets but its authority targets, to ensure that that property delivers that standard. Therefore it will use what powers the local authority has and what power the Local Government Association decides to use to make them fulfil their own carbon commitments. As I said on the previous group of amendments, it is not for us to be prescriptive to the local authority, other than in respect of the broader picture of what we are trying to achieve and what the Government are trying to achieve. It is up to the local authority to achieve its carbon reduction targets and its home improvement targets.
Lord Davies of Oldham
My Lords, I have not the slightest doubt that the Government will apply a cold and analytical eye to these issues, because that is their role. I hear what the noble Lord, Lord Jenkin, says, and we all know that certain powers are more honoured in the breach than in their exercise. But, of course, the powers underpin the position of the local authority. He is absolutely right to say that local authorities do not often exercise their powers: but if they did not exist at all, standards would conceivably be a good deal lower, because everyone would know that if minimal standards were not observed, the local authority would not be able to take action.
These amendments commend themselves because they introduce a floor to the position. They say, basically, that these are the powers that local authorities will enjoy. They may not have to exercise them often, but if they do not exist, the Minister will have to show how enforcement can effectively take place. It seems to me that these amendments are a constructive way of underpinning the Bill with an effective sanction. Given that, I think that the noble Lord, Lord Jenkin, is on somewhat dangerous ground if he says that the issue of enforcement depends on the level of resources at your disposal, and therefore underperformance may be looked at in those terms. If that were translated to the police under the present cuts, the Government would be in serious trouble. One has to look carefully at the issue of what level of resources is available, but what is important is that it is only through local authority enforcement that certain minimum standards with regard to this legislation can be achieved. We should seek to guarantee that such powers exist. The degree of enforcement will depend on resources, on will and on a general perception of the value of the legislation. We have said all along that the legislation depends not on compulsion but on the engagement of the community. That is the main driver. The issue covered by the amendments is the provision of an element of underpinning, which I subscribe to.
Lord Marland
I am grateful to my noble friend Lady Maddock for putting forward the amendment. Obviously it has considerable merit. The greater the fine, the greater the determination we show to achieve what we set out. On this occasion, contrary to the last, I agree with my noble friend Lord Jenkin of Roding—generally I agree totally with the noble Lord—that £5,000 is a reasonable limit. It is a considerable amount of money that is in line with existing limits for the amounts that local authorities can fine landlords for letting out substandard and hazardous accommodation. On that basis, and with due respect, I invite the noble Baroness to withdraw her amendment. As she rightly says, we have spoken to other amendments covering various parts of the Bill, and no doubt we will in future as well.
Baroness Maddock
My Lords, as I was only speaking to that amendment, I cannot withdraw it. However, I can withdraw Amendment 20Z that led this group. Given the discussions that we have had, I am prepared to do that. However, in doing so, I will say that it would be helpful to have some discussion about how we can encourage landlords to improve their properties, particularly the very bad ones—I hope that that will happen—and about how we can involve local authorities. I am particularly keen on local authorities because of some of the powers that they have under other legislation, which I will not mention again by name. That is one reason why I am keen to see them involved. I beg leave to withdraw Amendment 20Z.