Tenant Fees Bill
Rishi Sunak Excerpts(7 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I am today placing in the Library of the House the Department’s analysis on the application of Standing Order 83L in respect of the Government amendments tabled for Commons Report stage for the Tenant Fees Bill.
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Oral Answers to Questions
Rishi Sunak Excerpts(7 years, 8 months ago)
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
Our local government finance settlement will increase resources for local government over the next two years because we recognise the pressures on local services, but it is right for decisions about funding priorities for individual local services to be made by local area representatives.
Chi Onwurah
The Cabinet has followed your example by visiting Newcastle today, Mr Speaker, but rather than giving its members the welcome that they deserve, I came here to hear the Minister’s totally out-of-touch answer. Central Government funding for Newcastle has halved since 2010. The number of looked-after children has increased by a fifth since 2014, and the number of vulnerable adults has risen by the same proportion in the last year alone. Given a funding gap of £300 million in 2020 just to keep services running, how does the Minister think Newcastle can deliver good public services?
Rishi Sunak
As we have discussed before, the hon. Lady’s local authority actually receives more funding per household than the average local authority similar to hers. Today of all days, I was hoping that she would welcome the meeting of the Cabinet in her area, the extra £1 billion for the northern powerhouse, and the continuing success of the Great Exhibition of the North, chaired admirably by my constituent Sir Gary Verity. In her area, the sun is shining, the visitors are pouring in, and the local economy is booming. It is a good time to be in the north-east, and that is being delivered by a Conservative Government.
Mr Speaker
I hope that one of those Ministers, in the course of this away day—which I am sure is a meeting of the utmost importance—will take the time to visit Newcastle University, which is a most admirable institution. They could benefit greatly from a visit. I mean that the Ministers could benefit, as much as the university.
Neil O’Brien (Harborough) (Con)
I welcome the Government’s commitment to a fair funding formula, and I thank the Minister for meeting me and representatives of Leicestershire County Council. Will he confirm that the review that is under way will look at the balance of funding between districts and counties? After all, it is the counties that are bearing the burden of a growing older population and the growing burdens on children’s social services.
Rishi Sunak
I can confirm that I have met representatives of my hon. Friend’s council regularly to discuss this topic, including just the other week at the local government conference. We received more than 300 submissions to the recent consultation on fair funding. That is one of the topics raised, and the Department is considering all responses with a view to replying later this year.
Mr Clive Betts (Sheffield South East) (Lab)
There is a great deal of concern in local government about the financial cliff edge that is facing a number of authorities. The Public Accounts Committee recently asked the Department to do two things: to explain by the end of September why it believes that local authorities are sustainable in the current spending round; and to agree with local authorities within 12 months a definition of financial sustainability and a methodology for assessing risk. Those are both important requests. Will the Minister ensure that his Department complies with them?
Rishi Sunak
I thank the Chair of the Housing, Communities Local Government Committee for his question. As he knows, the Department is considering the Public Accounts Committee’s report as we speak. As for his broader question, the Department is constantly evaluating local government sustainability, and in the upcoming meetings, and ahead of the spending review, the topics that he has raised will of course be closely scrutinised.
Sir Vince Cable (Twickenham) (LD)
How does the Minister justify an emerging system of negative rate support grants under which councils that have made themselves financially self-sufficient are now being told to make net contributions to the Government?
Rishi Sunak
I am pleased to tell the right hon. Gentleman that the Government will be launching their consultation on negative RSG very shortly, and I look forward to his contribution.
Andrew Gwynne (Denton and Reddish) (Lab)
Last week the Municipal Journal reported the Minister as saying that councils will be unhappy with the outcome of the fair funding review, so can he clarify just how unfair his review is likely to be and which types of council will be hardest hit?
Rishi Sunak
What I can confirm is that the fair funding review will be a bottom-up fresh look at how we fund local government in this country. It is long overdue, as the current formula is 10 years out of date with over 120 different indicators. It is right that that formula is fair, transparent and objective, and I am sure all councils will have a fair crack at persuading me of their case.
Mr Speaker
I am very glad that the Minister is in such a good mood; he really is a very cheery, upbeat fellow who positively exudes optimism about all things and all around him. We are delighted to see him.
Andrew Gwynne
But it will not wash, Mr Speaker. The Tory-led Local Government Association is warning that the funding gap for councils is now due to grow to £8 billion and the Public Accounts Committee has damned the financial capability of the Ministry to sort out this mess. With Northamptonshire the first broken shire and other local authorities of all types teetering on the cliff edge, when, rather than managing down expectations about fair funding, is the Minister going to stand up for the sector and demand the resources our public services so desperately need?
Rishi Sunak
If the hon. Gentleman had been at the local government conference just the other week he would have heard my right hon. Friend the Secretary of State describe to the sector exactly what this Government are doing to support them. We acknowledge the pressures on local government over the past few years; they have done a commendable job of maintaining high-quality public services in a difficult environment, and we will ensure that they continue to get the backing they need from this Government to deliver for all our local communities.
Ruth George (High Peak) (Lab)
Peter Aldous (Waveney) (Con)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
We are undertaking a fair funding review of local authorities’ relative needs and resources to address concerns about the fairness of the current system, and I am pleased to say that we are making good progress in collaboration with the sector in order to introduce a simple, fair and transparent funding formula.
Nigel Mills
Councils across Derbyshire have suffered under the previous funding formula, and I welcome the consultation and the fact that Derbyshire is one of the business rate retention pilots. Does my hon. Friend agree that local councils could achieve a double whammy by encouraging local growth and creating more jobs, and also by raising their own funds through the increased business rates?
Rishi Sunak
It is refreshing to hear my hon. Friend talk about growth in the context of local government funding. Economic growth is the only sustainable way to ensure the vibrancy of our local communities and to raise the vital money that we need to fund our services. I am delighted to tell him that the Government are committed to implementing further retention of business rates, so that his local authority, like all others, will have both an incentive and a reward when they drive growth in their local areas.
Peter Aldous
I am grateful to the Minister for those replies, but recent work by the County Councils Network has found that, despite additional funding provided to the last funding settlement at the beginning of the year, county areas including Suffolk will face £3.2 billion-worth of funding pressures by 2020. What can the Government do, in advance of the fair funding and comprehensive spending reviews, to ensure that councils are able to meet the essential needs of their residents?
Rishi Sunak
I pay tribute to my hon. Friend’s work on representing counties in this place, and I am delighted to have met him to discuss this topic on multiple occasions. I agree with him that county councils have done a tremendous job of maintaining services in this climate. I recognise the pressures that he identifies, and I can confirm to him that, in the short term, the Government will soon be publishing a technical consultation for local government finance in the upcoming settlement. As I said to the right hon. Member for Twickenham (Sir Vince Cable), we will be including a consultation on the issue of negative revenue support grant, and I can also confirm that there will be a new round of business rate retention pilots.
Lilian Greenwood (Nottingham South) (Lab)
Since early 2015, the Government’s troubled families programme has contributed funding to help with early support and preventive support for priority families in Nottingham, which is vital given the high levels of deprivation and the pressures on children’s services in our society. By intervening early, family support workers have helped to tackle crime and antisocial behaviour, helped parents to get back into work and reduced the need for care proceedings. Will the Minister meet me and my hon. Friends the Members for Nottingham East (Mr Leslie) and for Nottingham North (Alex Norris) to discuss his plans to support councils working with families when the programme funding ends in 2020?
Rishi Sunak
I thank the hon. Lady for her question, and I completely agree with her on the importance of this vital programme, especially with regard to prevention work. I am pleased to say that recent reports show that the incidence of children on the programme has declined by 13% as a result of intervention work by councils such as hers, and I would be delighted to meet them to learn what they are doing on the ground.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
What assessment has the Minister made of the length of time it takes to reach a decision on business improvement district appeals, such as that of the Harborne BID in my constituency?
Rishi Sunak
Like the hon. Lady, this Government believe that business improvement districts can be a fantastic asset for local businesses to ensure that their area remains a vibrant place to trade. She has strongly supported the application from her area, and I am pleased to tell her that a reply will be sent to her imminently after questions.
Giles Watling (Clacton) (Con)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
Over the spending review period, councils have received more than £200 billion for local services, and the 2018-19 settlement sees an increase in resources to local government over the next two years, increasing to £45.6 billion in 2019-20.
Giles Watling
I thank my hon. Friend for that answer, but can he set out how his Department will support local councils to regenerate valuable coastal communities such as Clacton, which is positively Caribbean at the moment?
Rishi Sunak
I am pleased to say that the Government have spent £174 million through a fund to support local communities over the past few years. I pay tribute to the great progress made by the Jaywick Sands coastal community team in my hon. Friend’s constituency in bringing forward its proposal for a new coastal village. He has been intimately involved with that proposal, which is a model for others to follow.
Wera Hobhouse (Bath) (LD)
Local councils, including Bath and North East Somerset Council, are facing a funding gap of £2.2 billion for adult social care. What measures is the Department taking to incentivise preventive services to reduce the burden of adult social care on councils such as ours?
Rishi Sunak
Work between the NHS and local authorities through the better care fund is addressing the issue that the hon. Lady mentions. I am pleased to say that the most recent statistic shows a 37% fall in delayed transfers of care relating to social care, which shows that the approach we are taking is working, and local authorities should be commended for delivering that.
Mohammad Yasin (Bedford) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
The Secretary of State for Housing, Communities and Local Government has many conversations with the Secretary of State for Health and Social Care, and most recently they have been discussing the fact that effectively targeted NHS spend can reduce the need for social care, just as effectively targeted social care spending can reduce pressures on the NHS.
Mohammad Yasin
Bedford Borough Council has the country’s lowest rate of delayed transfers of care. Instead of being congratulated, the council has been told that it will now be penalised if it fails to meet zero delays, when other authorities have much more generous allowances. Does the Minister agree that he should be supporting Bedford Borough Council to be the best in the country, instead of making that as difficult as possible through the delays in funding and the unfair targets?
Rishi Sunak
I am happy to look into the specific issue that the hon. Gentleman mentions, but I join him in paying tribute to the work that has led to Bedford delivering a fantastic performance on delayed transfers of care.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Does my hon. Friend agree that it is essential that both local authorities and the health service work more closely together to provide a seamless combined service? That requires a change in culture at local level, similar to the one in Gloucestershire, where we have an excellent joint commissioning board.
Rishi Sunak
My hon. Friend is right about that and right to highlight the work of his local authority, which is a pioneer in collaborating more closely with the local NHS. That is showing tremendous results on the ground in reducing delayed transfers of care, which are stopping people from getting into the NHS in the first place. I hope that others can learn from Gloucestershire’s example.
Christian Matheson (City of Chester) (Lab)
Diana Johnson (Kingston upon Hull North) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I thank the hon. Lady for highlighting those particular cases, the details of which I am not intimately familiar with. I would be happy to look into the matter. She is absolutely right to highlight the important role that local authorities play in prevention, particularly when it comes to public health. As we approach the spending review and the fair funding review, I would be delighted to talk to her to see how we can best capture the role that local authorities play in delivering that.
Bob Blackman (Harrow East) (Con)
Mohammad Yasin (Bedford) (Lab)
Rishi Sunak
It is important that each local council makes those decisions itself. It was the responsibility of the statutory officer to decide on the appropriate level of reserves. I am pleased to see that, in the hon. Gentleman’s own local authority, non-ring-fenced reserves are up 30% in the past six years. I am sure that his council will use those reserves prudently as required.
Maggie Throup (Erewash) (Con)
Will my right hon. Friend update the House on what progress has been made to select sites for HS2 garden villages in the east midlands, especially around the Toton hub?
Parking (Code of Practice) Bill (First sitting)
Rishi Sunak ExcerptsThursday 19th July 2018
(7 years, 8 months ago)
Public Bill CommitteesRead Full debate Parking (Code of Practice) Act 2019 View all Parking (Code of Practice) Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts
Daniel Zeichner
The right hon. Gentleman is absolutely right, but the problem is that about 30% are intimidated. That is the problem, and the point I am making is that until we can give people confidence, we will need a very strong message and very clear designation. I do not know whether the Minister has given any thought to how we might go about that, but it is certainly where I would like to go with it ultimately. Until we do that, the numbers will remain significant, and I fear we will still get complaints in our postbags about the practice.
With that caveat, I think that the proposals are a significant step forward. I am sure that they will get support across the House, and the sooner we see them in legislation the better.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Mr Bailey. I do not want to detain the Committee for long, but I congratulate my right hon. Friend the Member for East Yorkshire on introducing the Bill, and more generally on his work to highlight this issue, which affects millions of people every day.
I was pleased to speak on behalf of the Government in support of the Bill on Second Reading. I pay tribute to all hon. Members for the important contributions they have made, both today and on Second Reading, highlighting the unfair practices that are being carried out every day, affecting their constituents. We heard then, and we heard again today, that Members are doing their absolute best to stand up for their constituents and to highlight these practices, which need to be stamped out. Indeed, that is what the Bill is designed to address.
I will turn briefly to some of the specific questions raised by hon. Members, but first I pay tribute to my right hon. Friend the Member for Scarborough and Whitby, who, in a previous guise as a Transport Minister, himself took steps to tighten up practices in the parking industry. Those steps have already been mentioned today, and he was far too modest to take any credit for them, but we should pay tribute to him for tightening up the rules regarding the unfair use of automatic number plate recognition and clamping.
The hon. Member for Cardiff South and Penarth spoke passionately today, as he did on Second Reading, about the issues affecting his constituents. I am pleased to say that in general, all the issues that he raised are likely to be covered by the new code of practice. I would be delighted to meet him when we return from the recess to discuss any further points in more detail, but he spoke well on Second Reading about threatening solicitors’ letters. What he said stayed with me, and I am determined to ensure that the code of practice has specific guidance on that point, which affects so many people.
Stephen Doughty
I appreciate what the Minister has said. What discussions has he had, or will he have, with the Ministry of Justice and the SRA? Just to convey the scale of this, another firm that I mentioned, called BW Legal, regularly issues 10,000 county court judgments a month, and is known to have issued 28,000 in one month. A significant proportionate of them relate to parking. They are jamming up our court system, and are often totally unjustified.
Rishi Sunak
The hon. Gentleman makes a very good point. I am pleased to tell him that we will engage directly with the MOJ and the SRA. To date, I do not believe that we have done so, but we will happily do that. He makes a very good point about the impact on the court system. More broadly, on the point that he raised on Second Reading and today about county court judgments and, in his personal experience, letters going to previous addresses, I am relatively confident that we can address that in the code of practice by including some clauses about reasonable efforts by parking operators to find a more up-to-date address.
The hon. Gentleman talked about the appeals process, which of course should be independent. I am pleased to tell him that, as part of the code of practice in the Bill, it will be scrutinised, funded through the levy. That will ensure independent scrutiny of the appeals process, as well as the associations and operators, to ensure that appeals are working not in the manner that he highlighted, but in one that is fair to those who need to avail themselves of such a process. He talked about information, which many other hon. Members talked about, and of course the code of practice will outline the information that should be standardised on tickets and signage, so that there is good practice and consistency across the industry.
On the devolved Administrations, I am pleased to tell Committee members that the Welsh and Scottish Governments are represented on the working group that has been engaged in developing the code of practice, and are in extensive dialogue with the team in my Department, to ensure uniformity of execution of the Bill and to confirm that all the various matters have been put in place as required.
I have an update for the Committee. The explanatory notes are out-of-date with regard to the legislative consent motion. Originally, the advice from the Scottish Government was that that would not be required, but that advice changed and they believe that they require it. That motion has now been passed, so I am pleased to say that the Bill will have force in Wales and Scotland, and that all legal requirements have been satisfied in that regard.
I pay tribute to the experience of the hon. Member for Cambridge in transport matters. He has spent a considerable time in the House weighing in on such issues, so it is a pleasure to have his experience on the Committee. I will touch briefly on the issues he raised. He made a good point about rogue operators. I am confident that not having access to the DVLA will deal with the vast majority of problems that hon. Members have mentioned, because the lifeblood of trying to extort money from people is having access to their details.
By standardising tickets, complaints processes, fees and lots of other things, the code of practice will offer us the opportunity to educate the British public when the Bill has passed. From that point forward, one will be able to say to the people of the United Kingdom, “This is what tickets should look like. These are the various things that you should expect to see on them”— whether that is a kitemark or something else. In that way, through consumer education, we will hopefully ensure that they will be able to check for some kind of mark or language that would not be on rogue parking tickets. By bringing everything together in a standard way, that education process can happen in a way that it cannot today. I hope that that will deal with most of those issues.
I am also happy to look at the law that already exists to tackle people who are doing things that are presumably illegal, such as trespassing or interfering with other people’s private property. As I said, however, the huge opportunity comes from the code of practice, which standardises behaviour and practical things such as the information contained on signage and tickets, so that we can get to the point where people know what to look for on a parking ticket.
Mr Goodwill
Does the Minister agree that one reason why people often fall into those traps is that local authorities are generally very straightforward and honest with people in their parking areas, and offer free parking that is free? For example, in Scarborough, all parking is free for tourists after 6 o’clock.
Rishi Sunak
I am sure everyone watching the Committee will have heard that advertisement to visit my right hon. Friend’s constituency. Near to my own as it is, I also encourage them to visit the Yorkshire Dales and the North York Moors.
Kevin Hollinrake
While we are on the subject of Yorkshire, as well as putting on record my thanks to APCOA Parking at York railway station for letting me off my parking ticket, I ask the Minister to join me in recognising the fantastic efforts of Malton Estate. It owns private car parks in the centre of Malton and gives two hours of free parking throughout the day. That has incentivised more shoppers to come into the town, and is one of the reasons why Malton is now Yorkshire’s food capital.
Rishi Sunak
I pay tribute to the car parking practices in Malton that my hon. Friend describes. It is evidence of what my hon. Friend the Member for South West Bedfordshire said, which is that good, honest and fair car parking is vital for the health and wellbeing of our town centres and high streets. We all want to see it encouraged across our constituencies.
Kevin Brennan
I will resist the temptation to advertise the delights of Cardiff, although they are great and many. We are all grateful to the Minister for sending us the draft advisory code of practice summary in advance of the sitting. Paragraph 12(b), which covers complaints handling, states:
“There should be a requirement to issue an acknowledgement or full response to a complaint in a timely manner”.
Does he agree that if a parking company failed to respond to correspondence on such a matter from a Member, and if that wording is included in the final code, it would, in effect, be in breach of the code of practice?
Rishi Sunak
I should have mentioned that the code of practice includes the issue that the hon. Gentleman has raised both on Second Reading and in Committee. This is just a summary of the code of practice. The details, including timescales and exactly what will be required, will be fleshed out. However, in broad brushes, he is right: the code of practice is there to be adhered to. Parking operators will be audited as to whether they are adhering to it, partly by the trade association that they belong to and partly by an independent scrutiny body that will be funded by the levy. There will be sufficient scrutiny of operators’ behaviour in this regard, and replying to correspondence will be one factor considered when their behaviour is evaluated.
Stephen Doughty
The Minister is being very generous with his time. I have one specific question about paragraph 4 of the draft code of practice summary, which covers clear signage and surface markings. We have talked about clear signage, but surface markings are also important. For example, at the entrance to blocks of flats in Cardiff there is often a barrier. However, around Cardiff City’s football stadium—they are in the premier league this season; many people will be coming to watch—it is not often clear where the public road ends and private land begins. Football fans are often caught out, suddenly finding themselves on private land on the boundary between my constituency and that of my hon. Friend the Member for Cardiff West.
Stephen Doughty
The stadium is in my hon. Friend’s constituency; the road where many people park is not. People often get caught out without realising that they are on private land, because no clear boundary is indicated between the public highway and the private land. Will the Minister look at that issue?
Rishi Sunak
I do not want to get drawn into that intra-Cardiff debate; I will leave the hon. Gentlemen to conclude that after the Committee. I am happy to look into the issue that the hon. Member for Cardiff South and Penarth mentions. Cardiff is wonderful and is represented here in force, but I think Yorkshire is slightly more represented. Yorkshire Members remind everyone to visit the delights of Yorkshire over this summer.
In conclusion, I thank Committee members for their constructive comments, this morning and on Second Reading. I look forward to working with not only my right hon. Friend the Member for East Yorkshire but all Committee members to bring this important piece of legislation on to the statute book as soon as possible, so that we can start to right the wrongs that so many of our constituents have had to endure. This is a fantastic example of Members from all parties working together to solve a practical problem that will make a meaningful difference to people’s everyday lives.
I commend the Bill to the Committee.
Sir Greg Knight
I thank all colleagues who have contributed to the debate. Each has brought to bear some of their and their constituents’ experiences of unfair practices, which emphasises that the Bill is overdue and necessary. I also thank the hon. Member for Perth and North Perthshire, who cannot be here because of other proceedings but who has indicated his support on behalf of the Scottish National party, so the Bill really does have all-party support. I thank the Minister for his diligence, help and assistance.
I commend the Bill to the Committee.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 11 ordered to stand part of the Bill.
Question proposed, That the Chair do report the Bill to the House.
Non-Domestic Rating (Nursery Grounds) Bill
Rishi Sunak ExcerptsTuesday 10th July 2018
(7 years, 8 months ago)
Commons ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 View all Non-Domestic Rating (Nursery Grounds) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship today, Dame Rosie. I should like to start by reiterating this Government’s commitment to supporting the sustainable growth of farming and horticultural businesses. We firmly believe that the agricultural exemption from business rates plays an important role in supporting this aim and boosting agricultural productivity. This measure will therefore help to drive our ambitions for a more dynamic and self-reliant agricultural industry. Until a Court of Appeal ruling in 2015, the long-standing practice of the Valuation Office Agency had been to apply the agricultural exemption to all plant nurseries. However, the ruling clarified that the exemption did not apply to plant nurseries in buildings that were not occupied together with agricultural land, and used solely in connection with agricultural operations on that or other agricultural land. This does not reflect Government policy, and neither does it reflect our commitment to growth in the rural economy. The Bill will therefore amend the Local Government Finance Act 1988 and enable the Valuation Office Agency to return to its former practice of exempting all plant nurseries solely consisting of buildings. It will also enable the VOA to exempt those plant nurseries that have been assessed since the ruling.
The Government have been consistently clear that they would take action on this matter. In March 2017, we set out our intention to legislate in a written ministerial statement. A further written ministerial statement was made in 2018, restating our intention to legislate and for the first time confirming that the measure would have retrospective effect in England from 1 April 2015. In Wales, the measure will have effect from 1 April 2017. The Bill delivers on that commitment and, once enacted, it will restore the previous practice and enable refunds to be provided to the handful of plant nurseries that have already been assessed for business rates as a consequence of the Court of Appeal ruling. While the Bill will restore the practice of exempting plant nurseries and buildings, it will not otherwise disturb the existing boundary of the agricultural exemption. The Bill amends schedule 5 to the Local Government Finance Act 1988, which determines the extent to which certain hereditaments are exempt from business rates.
Turning specifically to clause 1, it amends paragraph 3 of schedule 5 to the 1988 Act, providing that a building that
“is or forms part of a nursery ground and is used solely in connection with agricultural operations at the nursery ground”
will, subject to the passage of this Bill, be exempt from business rates. Clause 1 also contains a provision that the measure will have effect from 1 April 2015 in England and from 1 April 2017 in Wales, as requested by the Welsh Government. That will ensure that the measure has the intended retrospective effect and that refunds can be provided as necessary.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Dame Rosie, you will be pleased to hear that the Bill is non-contentious. It simply fixes the position as it was before the 2015 Court of Appeal ruling and, on that basis, the Opposition are happy to allow the Government to go ahead without objection.
It was said both in the press and when the Local Government Finance Bill was in Committee before the election that the Government were pledging to right the wrong of the Court of Appeal’s hearing after listening to businesses’ concerns, but several other similar representations have been made. For example, in towns where the banks have closed and there is no post office, a convenience store might step in to install a cash machine, but it would straight away be taxed on the turnover of the cash machine, which could take the store over the threshold for small business rate relief. There have been calls for that issue to be examined, but we are yet to see any progress.
Another big issue affecting many high streets and town and city centres is the impact of business rates on the viability of retail. We see companies go under on an almost weekly basis because they cannot afford to meet the high running costs of operating in primary locations. Communities resent seeing their local high streets and town centres go downhill, and businesses and representatives of other organisations have made the same point, but the Government have offered nothing comprehensive in response, because there would be a big bill.
However, the truth is that if we want to save our town centres and high streets, we must be bold and fully examine how such premises are taxed if they are to have any future. This goes beyond business; this is about communities. When people talk about how well or badly their communities are doing, they will often point to their town centres and high streets as a barometer. When people see the roller shutters pulled down or boards over windows, that has a material effect on how they feel about their community, and the Government ought to take note of that.
When the Local Government Finance Bill was in Committee, the Opposition made the offer that where there were non-contentious issues on which local government was seeking progress, we were happy to sit down and go through a plan for the legislation that ought to be brought forward. That would be done away from partisan interests because it is the right thing to do for our communities, and I look forward to the Minister arranging such a meeting.
Rebecca Pow
I have written down in brackets “and cream”. During the tournament last year, more than 166,000 portions of strawberries were served, with cream. That is 33 tonnes of strawberries. Were I not speaking in this debate, I would be at Wimbledon. That is how important I think it is that we get our business through.
Many strawberry plants, like other plants in the horticultural chain, start life being propagated in nursery grounds, which are often the lifeblood of the horticultural industry. They are the hotbed of germination, propagation and cultivation, and we are discussing them because the Bill exempts from non-domestic rates buildings that are, or form part of, a nursery ground, as several hon. Friends have already said. It gives nursery grounds parity with their agricultural counterparts.
The south-west region, where I come from, is a rural region with a good climate for gardening, growing and horticulture, and it supports so many businesses in the sector, not least in Taunton Deane, which is one reason why I particularly wanted to speak in this debate. I also wanted to speak because in a previous life I worked for the National Farmers Union and got quite involved with the horticultural industry, and I was for many years a horticultural and gardening journalist and broadcaster, so this subject is close to my heart.
I certainly appreciate the hard graft—to use a horticultural term—involved in the industry and the very tight margins, especially for those at the start of the chain. It is difficult for them to pass on their costs: they cannot have huge add-ons because they do not deal with the general public. For this small sector of the industry to discover recently that it was to be penalised by having to pay business rates, when previously it had been exempted, like its agricultural counterparts, was a bitter blow.
Let me give some background. Nursery grounds were exempt from non-domestic rates from 1928 until recently when, through one particular court decision, about which we have heard from colleagues, it was found that the exemption was an incorrect application of the law. This was a bolt from the blue and, as can be imagined, caused a huge amount of angst in the nursery industry, which was already up against the tight margins that I mentioned. The Horticultural Trades Association reported that the change would be detrimental to the industry: if nurseries had to pay business rates that they had not paid previously, that would inevitably drive up costs that would be passed on to the consumers at the end of the chain. As Conservatives—we are the party of business—that did not sit easily with us. The HTA reported that some of its members could face bills to the tune of hundreds of thousands of pounds if the situation was not rectified.
I am delighted to say, though, that through the ripening of this small but perfectly formed Bill, the wrong has been righted. The fruitful outcome that we are witnessing today clarifies once and for all that the situation will again be aligned with the previous practice of exemptions. I am particularly pleased to hear that the funds will be backdated, as specified in the Bill. The Bill demonstrates that, in such an instance, where unfairness has so obviously been demonstrated, the Government, particularly the meticulous and attentive Minister, have listened—and they have not just listened but acted.
The Bill is fully in step with the Government’s commitment to a vision of a productive, competitive and sustainable UK agricultural sector, of which horticulture and the plant nursery sector are an important part. In fact, I believe there is great scope for the industry to grow and blossom, particularly as we exit the EU. With the right back-up, such as that demonstrated through this Bill, there is an opportunity to grow more of our plant material at home, to fuel our landscaping and ornamental plant industry, thereby avoiding the inherent plant disease and pest threats that are associated with importing plants for this trade. For example, we hear a great deal about the disease xylella, which is wiping out olive trees and many other herbaceous and woody commercial plants in Europe. We do not want that in the UK.
After the granting of Taunton’s new and most welcome garden town status, designated through the Ministry of Housing, Communities and Local Government, I am working to see more trees included in our townscape. Would it not be wonderful if, at the same time as improving the environment and people’s health and wellbeing, along with all the other benefits that we get from trees, those trees were home-grown, so that the economy benefits at the same time?
Let me touch on the idea of growing the whole horticultural industry and why it is important to put in place measures such as the Bill to stimulate the industry. It is thought that there is great scope to grow the industry, perhaps by as much as an incredible £18 billion. In fact, tomorrow the all-party group on gardening and horticulture is holding an inquiry into how we can skill up the industry and what we need to do to make that happen. There is consensus from the Horticultural Trades Association that if the gross value added—that is, the goods and services that emanate from the diverse horticultural and gardening industry—was measured, which it currently is not, it would demonstrate exactly how valuable the sector is to the economy. It would then be easier to make a case for putting in the right measures, including research and development and so on, to grow the sector.
This small but perfectly formed Bill rights an injustice relating to the imposition of business rates on a special sector of the important horticultural industry, one of the very veins of the supply chain. In so doing, it benefits the industry by not saddling it with an unwelcome property tax and thus helps all those who work in the trade and the whole economy, by giving back to the industry one of the benefits that it needs to thrive. It will have particular resonance throughout the south-west, so I fully support the Bill.
Rishi Sunak
It is a pleasure to respond briefly to the various points raised. I thank my opposite number, the hon. Member for Oldham West and Royton (Jim McMahon), for the typically constructive way he has approached this type of legislation; of course, we do not agree on everything, but it is fantastic to be able to move these relatively technical matters through the House speedily.
The hon. Gentleman expressed, as he has before, a specific concern about whether the presence of an automated teller machine in a convenience store could take the rateable value of that small shop above the threshold for small business rate relief. Having looked into the matter, I am delighted to tell him that we do not believe that that should be the case. If an ATM is rateable, it would appear as a separate assessment on the ratings list and the ratepayer would typically be the financial institution that operates the ATM, not the shop itself. I assure the hon. Gentleman that we are discussing the specific issues with the Association of Convenience Stores to ensure that its concerns are investigated and addressed.
The hon. Gentleman turned to the important topic of high streets. I know that all of us in this House celebrate our local high streets; they are vital parts not just of our communities, but of our economies. I am very pleased to tell him that my hon. Friend the Member for Rossendale and Darwen (Jake Berry) is the Minister for high streets and is fully focused on the issue at hand through the Future High Streets Forum. More excitingly, he has just launched the Great British High Street Awards 2018. I will do a plug and call on all Members to nominate their local high streets. Nominations are open until the end of August. The last iteration of the competition saw almost 1,000 entries from across the country and hundreds of thousands of votes from the public to choose the eventual winner. There is a considerable cash prize on offer for the winner and, indeed, a new rising star category. The winner will also receive expert advice from industry professionals. I hope that the hon. Gentleman knows that we take the issue of high streets very seriously indeed.
Let me touch briefly on some of the other contributions. My hon. Friend the Member for St Austell and Newquay (Steve Double) should take enormous pride in the role that he has played in ensuring that we are discussing this important issue today. Hopefully, this legislation will eventually receive Royal Assent and that will be in no small part owing to his efforts to put this issue on the agenda of Ministers, and he deserves enormous credit for that.
My hon. Friend the Member for Nuneaton (Mr Jones), who had this job before me, put in motion the Bill that we are discussing today and engaged with my hon. Friend the Member for St Austell and Newquay on this important topic, ensuring that when I arrived in the Department this agenda was ready to take forward, and he also deserves credit for that. It is always intimidating to have to respond to him in this Chamber, as I am always reminded that so well did he do this job before I inherited it that the job had to be split between two different people. The Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), sits beside me on the Bench. The two of us together do our best to replicate what he did before us and we are grateful that he left everything in such good shape for us to pick up.
My hon. Friend the Member for Boston and Skegness (Matt Warman) has been a stalwart in speaking about business rate tweaks. I join him in hoping that there are far fewer of these to come in the immediate future, but thank him for his support of the Bill. He spoke eloquently about defending the rural interests in his constituency, which will benefit from this Bill, as he did when we enabled business rates relief for new fibre installations, a topic that is dear to his heart and which he pushed hard for. He should shortly be seeing the benefits of that policy in action across the country.
My constituency neighbour, my good hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), has, as I know at first hand, a very mixed constituency. As ever, he did an excellent and eloquent job in talking about the importance of small businesses across Teesside and the efforts that this Government have put in place to ensure that the tax burden on those small businesses is as low as possible. I welcome his support for the £10 billion-worth of measures to alleviate the burden of business rates on small enterprises across Teesside. I am glad that they are benefiting from that. In the rural part of his constituency in East Cleveland, the agricultural community will, I am sure, welcome his support and lobbying for this measure as it can ensure that its productivity remains high in the months and years to come.
What better place to end than with my hon. Friend the Member for Taunton Deane (Rebecca Pow)? As ever, she gave us a brilliant defence and a brilliant celebration of our rural economy and everything that it contributes to our national life. We are, of course, grateful to her for gracing us with her presence today, when she could have been at Wimbledon enjoying the strawberries, the Pimms, the cream and everything else on offer. I must say that, when it comes to slipping requests, she clearly has a much better relationship with the Whips than I do, as my previous requests for various exemptions for cricket matches and tennis matches were firmly denied, so I have something to take up with the Whips in due course.
I am glad that we have had a very constructive discussion today and that there is widespread support for this particular clause.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment (Standing Order No. 83D(6)).
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. As indicated on the Order Paper, the Speaker has certified that the Bill relates exclusively to England and Wales on matters within devolved legislative competence. As the Bill has not been amended, there is no change to that certification. Copies of the certificate and the consent motion are available in the Vote Office. Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. Does the Minister intend to move the consent motion?
Rishi Sunak
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Sir Lindsay Hoyle in the Chair]
David Linden (Glasgow East) (SNP)
On a point of order, Mr Deputy Speaker. I beg to move that the Legislative Grand Committee do sit in private.
Rishi Sunak
I beg to move, That the Bill be now read the Third time.
I thank all hon. and right hon. Members who have contributed at the various stages of the Bill in supporting the measures involved and highlighting the contribution that it makes towards furthering the Government’s ambitions to support agricultural and horticultural productivity. I am grateful to the Clerks of the House and for the work done by the officials both in DEFRA and in my own Department.
I thank the National Farmers Union for its strong support for the Bill. We have worked closely with the NFU to make sure that nurseries benefit from the exemption in the Bill. I am grateful for its invaluable insight and expertise, which has helped to bring these effective measures to the House.
This Bill is just a small part of how the Government are using the business rates system to create opportunity and drive growth across the country. It has wide support, restores a long-standing policy position, and will support a vibrant and sustainable rural economy. I commend it to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Parks (Sheffield, Brightside and Hillsborough)
Rishi Sunak Excerpts(7 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I congratulate the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) on securing this debate and on her passion for her constituency and its parks. That passion shone through her speech. I am grateful to her for highlighting some important issues and sharing her experiences of the huge benefits that local green spaces bring to lives of so many.
I recognise the ambition of local councils, working together with their communities and Government, to preserve good-quality parks and green spaces now and for future generations. The Government are committed to ensuring that our parks and open spaces continue to provide vibrant and inclusive places for local communities to enjoy. Local parks are great at connecting communities and encouraging interaction between younger and older generations and between people from different backgrounds. I recognise that to achieve that shared goal we need to support local councils to deliver it, so it may be helpful if I set out what the Government are doing to support the hon. Lady’s local area and, more broadly, if I touch on some of the activity the Government are undertaking to safeguard parks and open spaces.
On overall funding for local government, this Government believe strongly that local people who know and understand their community are best placed to decide how funding should be spent in their area. That is why funding provided through the local government finance settlement is largely not ring-fenced, as it allows local authorities, which are independent of central Government, to manage their budgets in line with local priorities. In practice, that means there is no specific funding stream for parks, just as there is not for waste services or children’s services, for example. Local communities are best placed to decide on their own local priorities.
I pay tribute to the many local authorities that have done a fantastic job over the past few years to continue delivering high-quality services, from improving adult social care to maintaining our roads, public spaces and parks in what has been, for some, a difficult financial climate. The most recent local government finance settlement, announced earlier this year, provided a £1.3 billion increase in resources to local government over the next two years, taking the total to £45.6 billion in the forthcoming financial year. Of this, Sheffield will be able to access more than £1.2 billion between 2017 and 2020 to spend on all its important local services, including its parks. I am pleased to say that this year Sheffield will see a real-terms increase in the core spending power available to its council.
In addition to funding from the settlement, the current business rates retention scheme is also yielding strong results, and it is warmly welcomed by local authorities across the country. Sheffield itself estimates that, in this financial year, it will keep just shy of £5 million in business rates growth. All in all, there are significant financial resources that Sheffield can decide how to spend among its various priorities.
There are many local authorities across the length and breadth of our country that are doing great things at local level and exploring new and innovative approaches to attracting funding and reinventing park management. I recently had the pleasure of addressing the Local Government Association’s “Action on Parks” conference, and I was hugely impressed by the great examples of local authorities working collaboratively with local communities, health bodies and academics to explore new approaches to joining up services to realise the benefits for parks.
The truth is that there is no single answer to achieving good-quality green spaces. An example of the excellent work that local authorities are doing to help raise the quality of parks is participation in the green flag award scheme, which recognises a high standard of parks and green spaces. The scheme is owned by the Ministry of Housing, Communities and Local Government and operated under licence by Keep Britain Tidy. A record 1,500 green flags were awarded last year, illustrating the scheme’s success. We are seeing ambitious local councils striving to achieve green flag status for more of their local parks, and I am pleased to say that Sheffield is among the leaders, with 13 local green flag award-winning parks.
Furthermore, Sheffield is embracing opportunities for attracting new funding. Since 1996 the council has received £13.7 million of Heritage Lottery Fund grant investment for its various parks, which includes fantastic support for the botanical gardens and Weston Park.
In 2014 the innovative “Rethinking Parks” programme, delivered by the Heritage Lottery Fund and the National Endowment for Science, Technology and the Arts, awarded £100,000 to support two new projects in Sheffield to develop new ways to fund and manage parks. Since 2010, Sport England has invested just shy of £1 million in 30 grassroots sports projects across the city, including a £65,000 award to Wisewood Juniors football club to improve its football pitches.
However, no one size fits all. For example, Newcastle is a pioneer in exploring an innovative charitable trust model for its parks in conjunction with the National Trust, and Sheffield has also looked at that in the past. That model has the potential to make it easier to raise outside funding from social investment and businesses; to ring-fence budgets; to focus on a single objective of the parks in question; and to mobilise volunteers.
I am pleased that the Government have already taken steps to support improvements to our local parks and green spaces. We heard about the Communities and Local Government Committee’s excellent report—I agree with the hon. Lady that it was fantastic. In response, the Government created the parks action group, which is a testament to the importance we place on government at all levels coming together with the sector to identify the right solutions to the various issues she has presented this evening. I would like to give my personal thanks to the membership of the parks action group, who have worked tirelessly to explore some of these issues. Its membership is a veritable “Who’s Who” of the sector, and includes excellent organisations such as Fields in Trust, Natural England, Groundwork, Keep Britain Tidy, the National Federation of Parks and Green Spaces, the Association for Public Service Excellence and many others. The group has begun to develop some key programmes of work, which will be supported by half a million pounds that the Government have committed to support its work.
That activity will support the delivery on six priority workstreams, which touch on some of the topics that the hon. Lady raised: exploring the funding landscape and proposing solutions; setting parks and green space standards; sharing a vision for parks and green spaces; empowering local communities; increasing knowledge and building skills, and increasing usage by all. I look forward to sharing more details on the work that the group will undertake to better secure the future of parks. I will provide an update to the Select Committee later this year, but I expect to be able to set out the programme of work in more detail in the coming months.
I wish to address the question from the hon. Member for Strangford (Jim Shannon) about the planning framework. I am pleased to tell him that the national planning policy framework offers protection to all recreational facilities, including parks. The framework is clear that recreational land should not be built on unless an assessment has been carried out and has shown clearly that a park is surplus to requirements or that the loss resulting from the proposed development would be replaced by equivalent or better provision in terms of quantity and quality in a suitable location.
Lastly, I wish to deal with the point the hon. Member for Sheffield, Brightside and Hillsborough raised about access to parks in a deprived area. She makes an important point, and one that I am keen to ensure becomes a reality as the parks action group carries on its work. She will be pleased to know that there was a previous programme called the “pocket parks” programme, whereby the Department funded £1 million-worth of small parks and almost 90 were created up and down the country. Ensuring access in deprived areas is a high priority for allocating that funding. I will be pleased to start looking through the results of that work to ensure that the money found its way to the right places, so we can use that work in formulating future plans in the parks action group.
Again, I thank the hon. Lady for securing this important debate and for ensuring that the value of parks is recognised. I pay tribute to local councils up and down the country for the hard work and dedication they put into parks. As we have heard, parks are often at the heart of our communities and are the space where families and local communities come together. I believe we have a shared vision of providing good-quality open spaces for our local communities, and I firmly believe that by working together we can build a better future for our green spaces.
Question put and agreed to.
Local Government in Gloucestershire
Rishi Sunak Excerpts(7 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Stroud (Dr Drew) on securing this important debate. I very much recognise and respect his long-standing personal views on the topic, no doubt informed by his many years of service at various tiers of local Government, which I am sure he draws on today. He will have heard me say before that, when requested, the Government are committed to consider locally led proposals for unitarisations and mergers between councils. He will also know that we recently legislated to create two new unitary councils in Dorset, as well as mergers of district councils in Somerset West and Taunton, East Suffolk and West Suffolk. In each of those cases, the councils developed their proposals locally, as is currently happening in Northamptonshire, where a public consultation is underway to help inform the councils’ proposals for the Secretary of State.
Turning to Gloucestershire, there is currently the county council and the six district and borough councils, and adjacent to the administrative county there is also the unitary council of South Gloucestershire. It is important to state for the record that the Department has received no proposals from the county council or any of the district councils for local government reorganisation in Gloucestershire. I am not aware of any other plans in development that are to be presented to me imminently. The Government’s stated policy is to consider any locally led proposals that are submitted.
To answer the hon. Gentleman’s first question, it might be helpful for me to talk a little about the processes for unitarisation. There are two legislative processes that can be used. First, the Cities and Local Government Devolution Act 2016 allows a process to proceed if at least one affected authority consents. This process was used recently for the creation of the two unitary councils in Dorset. Secondly, we can use the Local Government and Public Involvement in Health Act 2007, as we are currently doing for Northamptonshire. Regardless of the legislative process used, the Government have been clear on what our criteria for unitisation are and how the Secretary of State will assess any proposal.
I want to spend a moment outlining the three main criteria. First, the proposal has to be likely to improve local government in the area, by improving service delivery, giving greater value for money, yielding cost savings, providing stronger strategic and local leadership, delivering more sustainable structures and avoiding fragmentation of major services. Secondly, the proposed structure has to be for a credible geography, consisting of one or more existing local government areas, and the population of any unitary authority must be substantial.
Matt Western (Warwick and Leamington) (Lab)
So many authorities are under significant financial pressure, as the Minister described. The majority of those named are smaller, more rural authorities. In that light, is it not appropriate to go through this exercise as a matter of course, to explore what sort of cost savings could be made? In Warwickshire that would enable us to understand what sort of savings and efficiency improvements in the services delivered could be made.
Rishi Sunak
We are here to talk about Gloucestershire today and not Warwickshire, but I will address the hon. Gentleman’s underlying question about the Government’s role in this process when I answer the second question from the hon. Member for Stroud.
The third criterion for judging a proposal is that it commands local support. In particular, the structure must be proposed by one or more existing councils in the area and there is evidence of a good deal of local support, including from business, the voluntary sector, public bodies and local communities.
Matt Western
To that end, rather than just getting anecdotal support from businesses and other organisations, would the Minister support going to the public with that at the time of an election or through a referendum?
Rishi Sunak
The hon. Gentleman anticipates what I was about to say, so let me elaborate on what the Government mean by a good deal of local support. The Government would like that to be assessed across the area from business, the voluntary sectors, public bodies and local communities. That does not mean unanimous agreement from all councils, stakeholders and residents, but it is vital that any proposals to change structures in local government are truly locally led. That is why we feel that a public consultation is so important.
That has been the experience of recent proposals, where the councils involved have used opinion services or consultants to engage extensively with the public through discourse, surveys and events, to ensure that they have captured the state of public opinion on the proposals they are due to submit to the Department. Having received those proposals, following an invitation, the Secretary of State must consult all affected local authorities that are not signed up to the proposal, and any other persons he considers appropriate, before reaching a decision, judged against the three criteria I outlined. The extent of any consultation would depend on the extent of the consultation that those making the proposal have already carried out.
It is essential that those making a proposal carry out an effective consultation before submitting their proposal, not least to provide evidence about the level of local support. The Secretary of State may then implement the proposal by order, with or without modification, or decide to take no action. Such an order is subject to the affirmative resolution procedure but does not require the consent of any council.
Let me turn to the question from the hon. Member for Stroud about the Government’s role. He will hopefully have seen as I have been outlining the process that our role is to receive proposals developed locally in a particular area; it is not to enforce or dictate from on high the organisation of any local area’s affairs. It is for local councils and local people to develop those proposals. However, as he said in alluding to the new Secretary of State’s remarks, the Government remain open and willing to engage with areas that want to embark on this journey and will willingly receive proposals and adjudicate on them in due course.
Dr Drew
For Northamptonshire—thankfully, we are not quite in that situation—the Government came up with solutions, seemingly with the support of Northamptonshire’s MPs. Whatever the Minister means by “receiving” a particular idea, when do the Government intervene to say, “This is right and proper, and we need to get on with it”?
Rishi Sunak
To differentiate, there was a statutory intervention in Northamptonshire because of the situation that council found itself in. A statutory inspection was carried out and, after careful consideration, the Secretary of State appointed commissioners to go into the authority. However, Max Caller, who carried out the inspection, recommended that unitarisation might be part of the solution, which prompted the Secretary of State to issue an invitation. It is important to note that those proposals are being developed locally by the authorities in Northamptonshire. That remains a fundamental point: proposals come directly from councils, in consultation with local people. The process in Northamptonshire originated from a situation that no one would want to see in Gloucestershire—no one is suggesting that it is close to that, as the hon. Gentleman said. In that sense, the two counties are not directly comparable.
Turning to Gloucestershire, all councils should plan for and embrace the future and ensure that they can provide for their communities. I was heartened to see “Gloucestershire 2050 vision”, the extensive consultative exercise on which the county is embarking. The hon. Member for Warwick and Leamington (Matt Western) alluded to the need for councils to consult the public, and that is what Gloucestershire County Council is doing. More than 600 members of the public and 30 exhibitors attended the “big conversation”, the launch of the exercise in February at Cheltenham racecourse, where the council discussed its plans for the future to ensure that Gloucestershire remains a vibrant place to live, raise a family, grow old and, indeed, work and start a business.
Dr Drew
The Minister is being most generous in giving way. Of course, one of the proposals was for unitary local government, but sadly that was not one of the preferred solutions to Gloucestershire’s future needs. Will the Minister at least look at the earlier proposal and see that as a trigger for a proper discussion in Gloucestershire?
Rishi Sunak
The hon. Gentleman keeps tempting me, but I will keep saying that it is not for me to dictate to the people of Gloucestershire the appropriate way for them to organise government in their area. It is for the people, the councillors and all those involved locally to develop such proposals. Indeed, many ideas will be debated as part of that conversation, such as those I saw for a new cyber-park, a “super city”, a regional area of natural beauty and a water park to attract tourism. It may be that not everyone agrees on them, but the point of the exercise is to think about the best way to serve the people of Gloucestershire and ensure that their area remains a vibrant, prosperous, safe and healthy place to live. I am delighted to see Gloucestershire carrying out that exercise and wish it every success.
The hon. Member for Warwick and Leamington touched on the financial situation, and it would be remiss of me not to respond. I pay tribute to councils up and down the country, which have done an extraordinary job of maintaining a high level of public services in the face of a difficult financial climate in the past few years as the Government embraced the difficult task of ensuring that the country lives within its means again. I am pleased to say that, in both this financial year and the next, the county of Gloucestershire will see a significant real-terms increase in core spending power, which is the total amount of money available to spend on its residents.
I am grateful to the hon. Member for Stroud for alluding to the fact that Gloucestershire is one of the 10 or so 100% business rates retention pilot areas. That programme, which will ensure that many millions of pounds in extra revenue will flow to Gloucestershire this year, was not available to everyone, and I know that the county is delighted to have access to it. Although there have been challenges in children’s services—it is right that those receive urgent attention—I am pleased to see a strong performance in social care in reducing delayed transfers of care. The latest statistics show that Gloucestershire reduced delayed transfers by 58%, considerably exceeding the national average of 35%. Indeed, its performance is now 20% better than the national average. I pay tribute to the county council for that excellent performance in tackling a difficult social care challenge.
First and foremost, it is imperative that the councils of Gloucestershire and those elsewhere in the country consider how best they might serve their residents, deliver high-quality services and ensure financial sustainability. Of course, the creation of unitary councils can lead to service improvements for residents and achieve savings, which may be of interest to residents. However, it is ultimately for the councils and people of Gloucestershire to decide, having informed views locally. If they so choose, it is for them to submit a proposal to the Government, which we will consider.
I commend the hon. Member for Stroud once again for securing the debate on an issue that he has thought about long and hard. I wish Gloucestershire County Council well with its 2050 vision and hope that the conversations it has with its residents prove fruitful, ensuring a bright and prosperous future for its people.
Question put and agreed to.
Council Tax and Second Homes
Rishi Sunak Excerpts(7 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I commend my hon. Friend the Member for St Ives (Derek Thomas) for securing this debate. The issue of second homes is a subject that I know he cares about passionately and has raised repeatedly in the House. It is right that he voices his constituents’ views on this topic, for they deal with the issue of second homes more than most. When we look at the percentage of a local authority’s housing stock accounted for by second homes, we find that the Isles of Scilly ranks second among authorities in England and Cornwall ranks 13th. I have some personal familiarity with this issue, due to the reasonably high prevalence of second homes in my rural constituency of Richmond (Yorks), especially in the Yorkshire Dales national park. As we heard, in areas where the number of second homes comprises a significant proportion of the housing market, there is a risk that local people, particularly those who might be looking for their first home, might be priced out of the local market. There are legitimate concerns about the effect on local services, as well as on community cohesion.
However, it is also important that we do not lose sight of the benefits of second homes: the boost they can give to local economies and the tourism trade. Many local livelihoods will depend on tourism. This Government are not in the business of removing people’s right to choose where they want to purchase property. There can, of course, be many reasons for owning more than one property. Although second homes are frequently referred to as “holiday homes”, they can just as easily be properties that enable someone to work in and contribute to the local economy of an area, while being able to return to a family home in another part of the country on a regular basis.
However, we do recognise the concerns, which have been set out so clearly by my hon. Friend in this debate. As such, I would like to highlight for the House the range of actions the Government have put in place to mitigate the impact of second homes in affected areas and pass on more benefits to local residents. Let me start with the second home discount. The Government inherited a situation where second homes were automatically entitled to council tax discounts. There was a presumption that those who do not use local services for much of the year should pay less, but we shifted away from that approach. From 2013, the law was changed so that local authorities were no longer required to offer council tax discounts in this way, allowing them to target any discounts as necessary, according to their particular circumstances. I am pleased to report that that change has made a difference. Last year, no local authorities still offered blanket exemptions for second homes; nearly a third of billing authorities offered no discount at all on second homes; and, perhaps most clearly, fully 92% of second homes were charged the full rate of council tax.
Secondly, although that was a positive step, we have gone further. Beyond council tax, the Government raised stamp duty rates for those buying second homes. Since April 2016, anyone who has purchased a second home has paid a stamp duty charge of three percentage points above the current rates. Since then, more than half a million people have bought their first home, and first-time buyers now make up an increased share of the mortgage property market. It is worth noting the other significant support for first-time buyers, in the form of the total removal of the need to pay stamp duty on homes worth up to £300,000, which will benefit many people in the constituency of my hon. Friend the Member for St Ives.
Thirdly, the community housing fund is helping to channel funds back into local communities. It has allocated part of the additional revenue raised from the higher stamp-duty rates to areas with the potential to deliver community-led housing. That specifically includes areas with high rates of second-home ownership. Community-led housing is affordable at local income levels and is almost exclusively additional to any housing developed by other sectors, because it is brought forward on sites that would not normally be granted planning permission to speculative house builders.
The community housing fund has provided revenue and capital funding for numerous schemes since 2016, as I have seen at first hand in my own constituency, where the Hudswell community centre used the funds to develop affordable homes for people with local connections to that village. I was delighted to open up the homes and see how the scheme had enabled tenants with strong family ties to the local area to move in. I am aware of other shining examples throughout the country. Indeed, in the first round of the scheme, Cornwall received £5 million to support community housing projects, including the Cornwall Community Land Trust, which I am sure was welcomed by my hon. Friend and others across Cornwall.
Fourthly, through neighbourhood plans, communities have the direct power to develop a shared vision for the future of their areas. Over 590 such plans have been completed so far. The plans allow communities to make decisions on where new homes, shops and offices should be built, what they should look like, and what facilities and infrastructure should be provided. I am delighted that the Government have committed more than £20 million to support communities in the development of neighbourhood plans over the next few years.
Through the neighbourhood-plan process, residents can develop plans that manage second-home ownership of new builds. We are aware that communities in areas such as Cornwall and Northumberland have put in place neighbourhood plans with such restrictions. Indeed, one of the more well-known plans that does exactly that is in my hon. Friend’s constituency of St Ives, where new open-market housing is permitted only where there is a restriction to ensure its occupancy as a principal residence. It is quite right that local residents should have the opportunity to express their views on the design of their areas and ultimately to approve neighbourhood plans via a referendum.
Lastly, my hon. Friend expressed his concern about the possibility that some second-homeowners may be registering their properties for business rates and consequently not paying their share in council tax. Indeed, I have discussed this issue not just with my hon. Friend, but with my hon. Friends the Members for St Austell and Newquay (Steve Double), for North Cornwall (Scott Mann), for Suffolk Coastal (Dr Coffey) and for Totnes (Dr Wollaston), among others.
Holiday lets are a valuable part of the local business landscape in many communities. It is absolutely right that such genuine businesses should pay business rates and, as such, be able to avail themselves of small business rate relief, where appropriate. In the case of holiday-let accommodation, the properties are assessed for business rates rather than council tax if they are currently available for short-term lets for 140 days or more per financial year. This rule is widely understood and provides a clear method of deciding whether a property should be liable for council tax or business rates. It also ensures that properties do not switch between the two systems year to year merely due to success in letting out the property.
However, I assure all hon. Members that the Government take any suggestion of council tax avoidance or gaming extremely seriously wherever it occurs. My hon. Friend the Member for St Ives is absolutely right to point out the potential impact on his area. A reflection of this is that 17% of all holiday lets registered for business rates in England are to be found in Cornwall, and 97% of those have rateable values of £12,000 or below, so may potentially be eligible for small business rate relief.
Bob Stewart
I thank both you, Mr Speaker, and my hon. Friend for also allowing me to intervene. Does a business rate raised on a holiday let go to the local council or to central Government? In other words, if it is roughly the same as council tax, does the local council get the same amount?
Rishi Sunak
In general, business rates are split between central and local government. Depending on the particular area, that share may be more or less, but a rough rule of thumb is 50:50. Obviously, the particular question that my hon. Friend the Member for Beckenham (Bob Stewart) asked as to the level of difference between the two will depend on the rateable value of a typical business. The thing to bear in mind, as I said, is that 97% of holiday lets registered in Cornwall, for example, have a rateable value below £12,000, which means that they will be eligible for small business rate relief and to pay no business rates at all, and therein lies the issue that my hon. Friend the Member for St Ives highlighted.
Clearly, if these properties ought not to be eligible for business, rates this could represent a financial loss to both the local and central Exchequer and that would not be fair. I know that there are different approaches to how such properties are taxed. Wales is a case in point. There, such properties must provide evidence of actual letting in the previous year in order to be valued for business rates, rather than for council tax. There may indeed be merits to such an approach, and I am happy to listen to views and ideas on this.
I very much understand the concerns that my hon. Friend the Member for St. Ives has raised. As he knows, I have been looking at this issue for some time and have tasked my officials to investigate this matter in detail, and especially to speak to their counterparts in Wales about their experience there to see whether we should change the criteria under which holiday lets are valued for business rates. Whichever approach is taken, it is crucial that we strike a balance between ensuring that properties pay the right tax at the right level, and also ensuring that genuine small businesses receive the reliefs that they deserve.
To conclude, I have explained the wide-ranging measures that this Government have put in place to deal with the issues raised by second homes—from abolishing mandatory council tax discounts to increasing stamp duty rates, and from allocating funds to community-led local affordable housing to supporting neighbourhood planning. I hope that hon. Members will agree that the Government have been proactive in this area. However, ever restless to ensure that we are taking all sensible steps to address any issues, I am also examining the particular concern raised by my hon. Friend with regard to business rates and look forward to reporting back on this issue to him and to other Members in due course.
I end where I started: by commending my hon. Friend for so tenaciously and passionately continuing to raise this vital issue for his constituents. He is making a real difference to them by putting their issues directly on the Government’s agenda, and I know that he will continue to do exactly that in the days and months to come.
Question put and agreed to.
Oral Answers to Questions
Rishi Sunak Excerpts(7 years, 9 months ago)
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Liz Twist (Blaydon) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
As part of the Ministry’s oversight of local government, we consider the financial stability and service delivery of individual authorities, liaising with the Department of Health and Social Care on adult social care. On that basis, we have no immediate concerns about the ability of local authorities to fulfil their statutory duties.
Liz McInnes
Wow! I am shocked by that response. This year’s precept of 1% raises only 0.8% of our total adult social care budget in the Borough of Rochdale. With nursing home beds being converted into residential beds because of providers’ difficulties in recruiting and retaining nurses, how does the Minister suggest that my local authority provides the nursing home beds that my constituents so desperately need?
Rishi Sunak
This Government have increased funding for social care across the country. Rather than talking down the hon. Lady’s constituency and local authority, I point out that Rochdale’s performance in reducing delayed transfers of care is among the best in the country and deserves praise, rather than being talked down.
Liz Twist
This weekend we heard the announcement of additional funding for the NHS, but there was no mention of funding to resolve the issues in social care as part of that package. What discussions were there with the Secretary of State about the future funding of social care in advance of that announcement?
Rishi Sunak
This Government want to guarantee the security and dignity of people in old age and are absolutely committed to providing a long-term sustainable settlement on social care, on which the hon. Lady will know the Health Secretary is working. He will bring forward plans in due course.
Andrew Gwynne (Denton and Reddish) (Lab)
Some 1.2 million older people in England are living with unmet care needs, according to Age UK. More than 400,000 fewer people are receiving publicly funded social care than in 2010. Council spending on adult social care fell by 10% in real terms between 2010 and 2015. A miserly £150 million in funding was announced for 2018-19 in the local government finance settlement, and now we hear that there is no funding for social care in yesterday’s NHS announcement. With social care in crisis, putting pressure on the NHS and sending councils across England towards bankruptcy, when is this Minister going to do his job and secure the resources that our councils need to give the elderly the dignity they so desperately deserve?
Rishi Sunak
This Government are already responding to the pressures in social care, which is why we announced £2 billion in last year’s Budget for local authorities up and down the country. That represents a real-terms increase every year from last year to next year in social care spending, and we are seeing it translate into action on the ground, with a 40% reduction in social care delayed transfers of care just last month.
Nigel Huddleston (Mid Worcestershire) (Con)
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
Settlement funding has increased in recognition of pressures, including demand for children’s services. In addition, many local authorities have built up substantial reserves over recent years. It is absolutely right that they use those where necessary to protect high quality services for taxpayers.
Ms Rimmer
Baby P, Victoria Climbié, Shannon Matthews—I am sure the House remembers those names. Child safety is a major concern right across our country, with councils starting no fewer than 500 child protection investigations a day. St Helens Council has almost twice as many looked-after children as the national average and has pulled £5 million from reserves to fund their care. That is unsustainable. Does the Minister really realise what is at stake? What will the Minister do to ensure that councils have the money they need to support our vulnerable children, instead of washing his hands of this?
Rishi Sunak
This Government have ensured that all local authorities have increased resources to deal with all the various services they have to provide, including children’s services, on which, I am pleased to say, over £9 billion will be spent this year. The hon. Lady mentions reserves. She may know that last year reserves in her local authority were actually higher than they were five years ago.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
We all want to live in a Britain where young people are safe, well cared for and nurtured, but for too many real life is very different. They rely instead on council safeguarding services to give them the protection they need, the very services that are facing a £2 billion funding gap and that have already overspent by £600 million. The question is simple: when can we see real action, with real money going directly to children’s services?
Rishi Sunak
As I just said, £9 billion is going to children’s services just this year. As the hon. Gentleman knows, we are undertaking a fresh review of the relative needs and resources of all local authorities. As part of that work, there is ongoing work with the Department for Education to understand in detail the specific drivers for children’s services up and down the country. I look forward to his contributions to that piece of work.
Sandy Martin (Ipswich) (Lab)
Bambos Charalambous (Enfield, Southgate) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
Her Majesty’s chief inspector of education, children’s services and skills is responsible for the inspection of local authority children’s services. Last year, spending on the most vulnerable children increased to over £9 billion. I very much welcome the efforts of colleagues in the Department for Education and in local councils, who continually look for ways to improve their services.
Sandy Martin
Following the murder in Ipswich two weeks ago of a 17-year-old and the critical stabbing of a 16-year-old on Wednesday evening, does the Minister recognise the serious effects that cuts to support for looked-after children and other vulnerable young people are having on their ability to lead safe, productive and law-abiding lives?
Rishi Sunak
I am sure the thoughts of the whole House are with the families of the young children the hon. Gentleman mentions at this difficult time. Matters of policing and crime are for the Home Office, but the Government and local councils agree about the importance of high quality children’s services. He will know that a new inspection framework was introduced earlier this year. I am pleased that Suffolk County Council, his local authority, was rated good in its most recent inspection.
Bambos Charalambous
Has the Minister spoken to his counterparts at the Department for Education to discuss ways to improve the educational attainment of looked-after and vulnerable children? If not, why not?
Rishi Sunak
I thank the hon. Gentleman for that question. He will be pleased to know that just last week I met the Children’s Minister to discuss exactly the topic that he raised. In particular, one of the topics that we discussed was the care leavers covenant, which the Government are piloting and introducing to improve the educational and employment outcomes for children and young people leaving care.
Helen Whately (Faversham and Mid Kent) (Con)
Jeremy Lefroy (Stafford) (Con)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
My hon. Friend has been a long-standing advocate for rural funding in his county, and I am pleased to tell him that we will continue to pilot reform of the business rates retention system in the forthcoming year. We will publish details of the new pilot very shortly and would very much welcome Staffordshire’s application to become a pilot.
Christine Jardine (Edinburgh West) (LD)
Rishi Sunak
I thank the hon. Lady for raising this important topic. She will know that in the past I have spoken about greater provision of Changing Places in this House. Building regulations set the access requirements for new buildings, while the Equality Act requires providers to make reasonable adjustments. If someone feels they have been discriminated against, there are several means of redress, and the Equality Advisory Support Service can provide help and support in that process.
Mr Philip Hollobone (Kettering) (Con)
Clive Efford (Eltham) (Lab)
The discussions about any increase in funds for the NHS have been well publicised, but it is shocking that there is no extra money for social care. Was the Secretary of State aware that those discussions were taking place, and did he make any representations to increase funding for social care?
Rishi Sunak
As I have said, the Government are committed to providing a long-term, sustainable settlement for social care. That work has been ongoing for a while and is continuing. It includes the Secretary of State, along with the Secretary of State for Health and Social Care, and there will be a report in due course.
Tom Pursglove (Corby) (Con)
Corby and East Northamptonshire is at the forefront when it comes to building new homes, but there are currently a number of planning applications in the system that are completely unwanted and on green open space, although we more than exceed our housing targets. Does my hon. Friend agree that, in such instances, when local communities are doing all the right things, local developers should respect their wishes?
Mr Speaker
These are all magnificent questions, but I hope the House will take it in the right spirit if I say that I do not think many hon. and right hon. Members have yet read the textbook on pithy questioning available on general release from the right hon. Member for New Forest West (Sir Desmond Swayne). It would be a very useful Christmas present.
Rishi Sunak
The public health grant is not being ended; it is being folded into the business rates retention plan that the local government sector has welcomed and agreed for that process. Also, a new funding formula is being worked out with the Department of Health and Social Care specifically for public health, and I am sure we will welcome the hon. Lady’s contributions to that.
John Grogan (Keighley) (Lab)
Has the Secretary of State yet personally had the chance to consider the important matter of Yorkshire devolution, and will he agree to meet the Yorkshire leaders from all parties before Yorkshire Day on 1 August—the Secretary of State personally?
Parking Charges: Chippenham
Rishi Sunak Excerpts(7 years, 9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Mr Gray, especially in this Wiltshire-themed debate.
James Gray (in the Chair)
Order. It might be helpful to remind the Chamber that although it is a Wiltshire-themed debate and I am a Wiltshire MP, I am here as Chairman and therefore I neither agree nor disagree with anything that might be said.
Rishi Sunak
Point noted, Mr Gray.
I congratulate my hon. Friend the Member for Chippenham (Michelle Donelan) on securing this important debate. She has been an incredibly long-standing champion for parking in her local area. From the moment she arrived in this place—and before—not only has she advocated on behalf of her constituents, but she spoke passionately about the Parking (Code of Practice) Bill on which I had the pleasure of leading for the Government some time ago. That Bill would clamp down on rogue parking operators, and she made a powerful speech in that debate.
My hon. Friend is also a champion of small businesses, and in many debates she has spoken with authority and passion about the importance of supporting small businesses, just as she did today. I congratulate her on all those things, and I very much agree with the central premise of what she is saying: high streets and town centres are a crucial part of our local and national economy, creating jobs, nurturing small businesses, and injecting billions of pounds into the economy. Key to a thriving town centre and high street is accessibility, and effective parking is a key element of that. The ability of shoppers and visitors to park is integral to increasing and maintaining footfall on our high streets.
For many people, their day begins and ends with parking their car. Local authorities should analyse people’s need for parking provision, and adjust their strategies to support local need. Suitable parking provision is a matter on which local authorities must decide what is best for their area, as I am glad my hon. Friend acknowledges. As our communities are all diverse and unique, there should not be a one-size-fits-all approach, or a directive that comes from this office, and instead parking should be managed intelligently and be part of a wider holistic transport plan that is tailored to the needs of each local area.
The Government, together with key stakeholders and partners, promote the use of best practice and encourage the sharing of what does and does not work. We support the use of innovative techniques, such as flexible tariffs and the use of mobile technology, to create the most enjoyable experience for visitors to our towns and high streets. On that point, I am very happy to look at the Department’s current operational guidance, which it provides to local authorities, to see whether there is any merit in revisiting it and making sure that best practice is more widely shared, as was suggested by my hon. Friend. I will also have that conversation with the Local Government Association in my work with it on this topic and others.
Research by the British Parking Association and the Association of Town and City Management shows that flexible and intelligent tariffs are a factor in the success of parking management strategies for high streets and towns. Perhaps that is the type of research that my hon. Friend would like to be shared more broadly. Richmondshire District Council instigated free parking for the Tour de Yorkshire in May. That encouraged people to come and enjoy a fantastic event. As the peloton travelled through my constituency, it was a boost to local businesses, supporting community spirit.
Unrestricted free parking is not always a magic bullet: it can have a negative impact on town centre footfall if spaces are used more often by workers or commuters parking all day, meaning that spaces are not available for leisure users such as shoppers. There is a balance to strike. Intelligent tariffs, such as reduced parking charges or free parking, can be used effectively to incentivise people to visit their high street. My hon. Friend mentioned reducing the cost of parking to support local markets and events, or even during off-peak periods. That is a tool that the Government would urge local authorities to consider when developing high street parking strategies.
New technologies are supporting better access to high street and town centre parking. Technologies such as AppyParking give real-time reports of on-street and off-street parking availability, and they interface with payment apps used by local councils to offer a one-stop shop that allows users to find and pay for parking. Similarly, car parks are increasingly embracing technology to improve accessibility to customers. Larger parking companies, including NCP, now offer the ability to book spaces, giving motorists certainty that they can access high streets and economic centres conveniently.
My hon. Friend spoke clearly on the subject of high streets, and parking strategies that support our high streets and market towns are more important than ever. High streets are changing: we see it happening around us every week and the Government are committed to helping communities adapt. If a high street or market town centre is to flourish, local people, businesses and councils in an area need to work together to develop their own unique offer for the high street and town centre that resonates with the local community. It is not just about retail. People care about high streets because they are the centres of their community. Consumers are looking for a range of experiences when they visit a high street, from leisure to health services. I am pleased to say that the Government are taking forward a wide range of measures to support high streets and businesses.
In Chippenham, as my hon. Friend will know, there is a growth deal project to improve the train station. The project aims to enhance the station facilities and to develop the surrounding land for improved commercial and residential property, including increased car parking capacity. She was right to point out that local authorities should ensure that there is adequate provision for parking in town centres. My understanding is that, through that project, car parking capacity at the station will double, which I hope is welcome. In addition, there will be public realm improvements to signpost to the high street to improve access.
More broadly, since 2010 the Government have helped to create more than 360 town teams and have given more than £18 million to towns. That has included successful initiatives such as Love Your Local Market, and the Great British High Street competition. We also support Small Business Saturday UK. An estimated £748 million was spent with small businesses across the UK for Small Business Saturday UK 2017, which was up 4% on the previous year’s spend. I know that my hon. Friend, as a devout and passionate supporter of small business, will welcome those measures, and no doubt she has been involved in supporting them in her area. The Government also established the future high streets forum, which is chaired by the Minister for local growth, my hon. Friend the Member for Rossendale and Darwen (Jake Berry). The forum consists of developers, investors and retailers and provides leadership from the Government and the business community to support our high streets and town centres to adapt and compete in the face of changing consumer and social trends.
We also believe in celebrating success, including the wonderful work that communities put into their high streets, making them community hubs. The Great British High Street awards highlight some of the excellent examples of high streets up and down the country. Members may know that the last awards, in 2016, garnered more than 900 applications across 15 categories, and more than half a million people participated in the voting.
Because of the knowledge and insight with which my hon. Friend the Member for Chippenham speaks on matters relating to parking and the success of high streets, I have spoken to the local growth Minister, who has responsibility for high streets, and arranged for her to meet him at the earliest opportunity to convey her views on how parking should feed into the Government’s wider strategy on high streets. The Minister is working intently on the topic as we speak, and exciting things are to happen in the near future, so I urge her to meet him as soon as she can to feed in some of her ideas.
My hon. Friend asked about consultations, and I am pleased to tell her that the Government are developing the secondary legislation under the Parking Places (Variation of Charges) Act 2017. The Act provides for powers to simplify the procedure for lower parking charges. It also introduces a requirement for local authorities to consult businesses and communities on increasing charges, to ensure that local decisions are informed by local views. I know she will welcome that.
I think that we can all agree that parking provision is essential to making our high streets accessible, and to supporting them as vibrant economic centres. An intelligent and tailored parking strategy, taking account of local needs and designed to support high streets and town centres, should be central to local authorities’ transport plans. Suitable parking tariffs and, where appropriate, free or discounted parking are positive elements of such plans. We will continue to work with local authorities and key stakeholders to ensure that our high streets thrive in the future.
I end by echoing what I said in beginning: I thank my hon. Friend for securing the debate and for continuing the work that she does to champion her constituents, in this instance in relation to parking but, more generally, in the matter of supporting high streets and small businesses. She has been a tireless advocate of her constituents on those issues and I know that she will continue to press me and other members of the Government to ensure that they get the best possible deal.
Question put and agreed to.
Tenant Fees Bill (Fourth sitting)
Rishi Sunak ExcerptsTuesday 12th June 2018
(7 years, 9 months ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2018 - (12 Jun 2018)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Mr Sharma. I look forward to our making speedy progress today.
The Bill proposes a number of enforcement measures that offer a strong deterrent to irresponsible agents and landlords and, in doing so, protects tenants from unfair letting fees. Clause 6 places a duty on local weights and measures authorities—that is, trading standards authorities—to enforce the ban on letting fees and requirements relating to holding deposits. Trading standards have an important role in enforcing existing legislation on letting agents—such as the requirement on agents to display their fees transparently. With their existing local knowledge of the industry, trading standards are the clear choice to enforce the ban on letting fees. Indeed, 69% of respondents to the Government consultation agreed that trading standards should enforce the provisions of the Bill. We have also spoken to trading standards officers, who agree that enforcement of the Bill aligns with their responsibilities to enforce other legislation relating to fair trading and consumer protection.
Trading standards authorities are responsible for enforcement in their own local areas. Where a breach occurs in the area of more than one trading standards authority, a breach is considered to have occurred in each of the relevant local areas. Trading standards must have regard to any guidance issued by the Secretary of State or lead enforcement authority. The investigatory powers available to a local trading standards authority for the purpose of enforcing the Bill are set out in schedule 5 to the Consumer Rights Act 2015.
Daniel Zeichner (Cambridge) (Lab)
Will the Minister explain to the Committee what assessment he has made of the capacity of trading standards departments to implement the measures that he is discussing, and what additional resources he intends to give them to make that possible?
Rishi Sunak
I am very happy to answer the hon. Gentleman’s question briefly now, as I am sure that we will come to it when we consider the various amendments and clauses that deal particularly with capacity and resources. In a nutshell, we believe that the Bill and the enforcement measures in it will be self-financing with the fees that can be charged by local enforcement authorities and trading standards authorities; on top of that, they will receive seed funding in the first year of up to £500,000.
As I was saying, the investigatory powers are set out in schedule 5 to the 2015 Act.
Melanie Onn (Great Grimsby) (Lab)
The Minister just mentioned charges. Is he referring to the fines?
Rishi Sunak
Yes; I meant the fines that will be charged of up to £30,000 for a second offence and £5,000 in the first instance.
To return to the investigatory powers, they are laid out and provide the ability for trading standards authorities to investigate, inspect and enforce the provisions; they enable them to carry out their enforcement activity.
I hope that the clause will stand part of the Bill.
Melanie Onn
It is a pleasure to serve under your chairmanship, Mr Sharma.
As we have heard and read in the evidence from the likes of the Local Government Association, the Chartered Trading Standards Institute and the Chartered Institute of Housing, there are significant concerns about the enforcement powers being conferred on the local weights and measures authorities around the country. For the avoidance of doubt, we are talking in this clause about local trading standards teams. As I have mentioned before, they have a wide and varied remit. They enforce laws on behalf of consumers on matters such as age-restricted products; agriculture; animal health and welfare; fair trading, which includes pricing, descriptions of goods, digital content and services, and terms and conditions; food standards and safety; intellectual property, including counterfeiting; product safety; and, of course, weights and measures.
Trading standards cover more than 250 statutory duties, including providing businesses with advice. The CTSI says that the service is already overstretched and underfunded, with just £1.99 per head being spent. The situation has been recognised by the National Audit Office, which has said that there is a direct threat to the consumer protection system’s viability as a whole, yet here the Government seek to add another layer of responsibilities, technicalities and duties to those of the service without giving due consideration to the implications of the request, and simply assuming that their assessment that the scheme will be fiscally neutral after two years will come to pass. That seems a rather carte blanch approach to me—a “close your eyes, cross your fingers and hope for the best” kind of plan. It is not robust and it is not a process modelled on the evidence of the experts who operate in the roles, day in and day out. There is time for the Minister to correct this.
Our constituents will mostly know trading standards for tackling rogue traders. My constituency being a port town, we have a very active trading standards department, which regularly discovers dodgy goods that people try to smuggle in, including recently some dangerous counterfeit cigarettes, filled with anything up to and including asbestos, for sale cheap on the black market, with a street value of around £8,500. Trading standards are often the first in a position of authority to come across goods linked to organised crime and criminal gangs, and they provide essential eyes and ears within local communities.
Is the Minister confident that the addition of these tenant fees enforcement powers to trading standards’ responsibilities, with only pin money for start-up and roll-out, will not impact on its already essential role protecting consumers? How can he be sure, and what steps will he take to ensure that that is the case going forward? We heard of cuts to trading standards departments of 40% to 50% at a local level.
Across the country, the Chartered Trading Standards Institute tells us that there has been a cut of more than 50% of skilled officers. Does the Minister seriously think that trading standards will be able to effectively implement these new powers? If so, how? What priorities should trading standards officers have? If faced with tracking down an influx of poisonous fake spirits, surveilling for evidence to prosecute the sale of knives to under-18s or taking action against a landlord requiring a £150 prohibited fee from a tenant, which would he suggest the officers pursue as urgent?
If the Minister concedes that the loss of money is likely to be less urgent in its nature than the matter of illegal spirits or the selling of knives to teenagers, at what point does he anticipate that an officer ought to get around to looking into the issue of the prohibited fee? Given the restrictions on time and staffing levels, is not a TSO, rather than acting in an individual case, far more likely to deal with a single landlord facing multiple allegations of charging prohibited fees? It will be dealing with the big fish, rather than the small fry, that will be a reasonable and proportionate use of staff time. Has the Minister thought about the practicalities of enforcement? Has he compared it with how enforcement of housing matters is currently dealt with, or even tried to plug some of those gaps?
In order for the London Borough of Newham’s landlord licensing scheme to be effective, it had to bring together several different agencies, including the police, the UK Border Agency and specialist housing officers, and had to invest in systems to accurately identify those properties that were incorrectly licensed. While it has drawn in significant revenue for the Treasury and the council, it took a laser-focused determination from the political leadership in Newham to get their processes up and running to tackle landlords operating outside the regulations. Can the Minister guarantee that the same will happen to trading standards departments around the country, when it could be said to be somewhat of a Cinderella service? How will he monitor that, and what will his measure of success be?
The Local Government Association said in its evidence that, given the reduction in capacity of trading standards across many authorities, there should be flexibility for local areas to determine whether the ban is enforced by local trading standards or private sector housing teams. Does the Minister agree? The LGA went on to say that the Government had ignored the findings of the working group, which concluded that there should be enforcement of mandatory client money protection by local authorities, rather than trading standards. Is the Minister content to ignore the working group’s findings?
Has the Minister listened to the CTSI when it says that a self-financing enforcement model would potentially create a disincentive to provide regulatory compliance? That certainly seems to be the case with the current system around the display of fees. The fine acts as neither a disincentive for the businesses nor an incentive for the enforcement teams. The LGA pointed out that the Government’s theory that funds generated by fines will increase when non-compliance increases does not add up if companies close themselves down, only to re-emerge under a different name or structure in order to avoid a fine.
The CTSI also says that the costs of providing advice and guidance to a company that is subsequently compliant are not factored into the Government’s calculations. Of course, there was the issue raised by CTSI in our evidence session regarding the differences in the burden of proof and the framework of enforcement. The enforcers, in this instance the trading standards officers, will be required to prove offences beyond all reasonable doubt. What does this mean in practice for people—for families—who are already likely to be afraid about not securing the property that they want to live in and perhaps are under pressure to secure it because they have given notice on a prior residence, or are being thrown out of a property that they already reside in? Will this substantial basis of evidence encourage people to come forward, to make a complaint and seek redress? Let us remember that they are already in a significantly less advantageous position than the landlord or the lettings agent. They are not the experts in renting and even less so are they experts in the most recent legislative changes.
It goes back to the point I made earlier: the reality is that enforcement officers are far more likely to try to build up a stronger case with multiple complainants than deal with breaches on a single case-by-case basis. Does the Minister consider that this is serving tenants’ best interests? The remedy would not be sufficient in financial terms for the local authority, nor will the legislation be seen as fit for purpose by those it is intended to protect. Is he really content to preside over this? The CTSI says that most consumer rights breaches and the Estate Agents Act 1979 are obtainable on a balance of probability test. Why does he not consider amending the Bill to reflect this modest yet effective change? If it is the case that the higher the evidential requirement, the more work is involved and the more risk there is for the local authority, and the less likely it is that the Act will be easily enforceable, should he not just do the right thing and make the amendment now? I say that because one of the biggest frustrations of my constituents is around laws that are not enforced. Whether it is parking restrictions, dog mess or fly-tipping, they expect the rules to be fully and fairly applied. Where they are not, the blame comes back on an unfairly overstretched local authority, trying to do its best against the financial odds—financial odds that I know the Minister has recognised in previous comments that he has made.
I do hope that the Minister will take my comments on board. These are the views of royally chartered organisations, which work within the current legislative framework and can anticipate the difficulties of seeing this legislation in operation. It is only through proper enforcement with enforceable regulations that we can hope to see this law do everything the Minister has set out for it to do; otherwise, I am confident that it will be left wanting.
Rishi Sunak
There are in general three broad questions or buckets of comments. First, whether trading standards are the right institution to take on this task; secondly, prioritisation of resources for the things that trading standards have to do; and thirdly, a specific question about the burden of proof required for the penalties that are in place in this legislation. I will try to answer each of those three questions directly.
First, regarding whether trading standards are indeed the right body, which the hon. Lady questioned, there is unanimous agreement among leading industry bodies that trading standards are the logical choice. Indeed, the Chartered Trading Standards Institute itself, which the hon. Lady referred to, said that trading standards
“are well placed to enforce the ban”,
thanks to their local knowledge of landlords and letting agents.
Melanie Onn
Would the Minister accept that in the evidence we heard there was a reference to trading standards working closely with housing officers in particular, to better inform their local knowledge in an area that they may not have information relating to, because the trading standards authority has said that in terms of tenants they currently receive a small number of complaints in this area.
Rishi Sunak
I am generous in giving way, but in this occasion I may have been too generous, because I was just about to make that point. It is exactly because we recognise that in different areas there are different situations that we do not want to mandate a top-down approach. We have encouraged close co-operation. I do not want to pre-empt our debate on the next clause, which talks specifically about the powers for district authorities to enforce the provisions in the Bill. Also, on the particular question raised about client money protection and who ought to be the body enforcing that, 74% of respondents to the consultation said that that enforcement should primarily be by trading standards. It is important to note that trading standards can, under this legislation, discharge their responsibilities to the local housing authority, should they feel that is most appropriate for their area. I hope that addresses concerns on that point.
Melanie Onn
I thank the Minister for his response. The suggestion that there has been unanimous agreement across professional bodies on TSOs does not stand up to the evidence we heard. In all the submissions we had in writing, concerns were raised about the level of training available for trading standards officers, the level of experience they have in this area and their expertise, and they may well be better assisted by other organisations.
Rishi Sunak
I would be grateful to know if the hon. Lady is aware of an industry body that does not believe that trading standards should be the enforcement agency for this legislation. If she could name that industry body, who else does it propose should be the enforcement body?
Melanie Onn
I am commenting based on the evidence we heard last week. We heard from the CTSI and the LGA, which both raised those concerns. It is not about not having trading standards involved, because they clearly have an area of expertise, but there were concerns about their level of expertise, experience, training and resources.
The issue of resources was repeatedly mentioned in the evidence we received in writing and verbally. I appreciate the points the Minister made about resources and about looking to Torbay as the standard bearer for all enforcement and revenue-raising operations. I presume that we will look to Torbay in the future as the arbiter of whether this legislation is working.
On the burden of proof, the Minister says that nobody raised issues about that in the Select Committee’s pre-legislative scrutiny. However, it has come to light more recently. The high level of the burden of proof is something that we have heard about and that industry bodies have raised as a concern, given what they are used to dealing with as trading standards officers. It would be an error for the Minister to dismiss those comments lightly.
Melanie Onn
My hon. Friend makes an incredibly important point about being proactive and about the intention of trading standards officers or others to undertake that initial work, rather than just relying on the enforcement element of the legislation. I hope the Minister has heard those points, takes them seriously and receives them in the manner in which they are intended. We will not be pressing this matter to a vote, but we reserve the right to return to it on Report.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Enforcement by district councils
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
The clause places a duty on local trading standards authorities to enforce the ban on letting fees and the requirements relating to holding deposits. It gives district councils the power to enforce the provisions if they choose to do so.
Local housing authorities enforce other measures in private rented sector legislation, such as the provisions related to banning orders for rogue landlords and agents. We very much encourage close working between district and county councils in non-unitary authorities to ensure effective enforcement. That is why we are giving district councils that are not trading standards authorities the power to enforce this legislation. That will ensure that local housing authorities are able to take enforcement action should they become aware, while undertaking their other duties, of a landlord or agent breaching the provisions of the Bill.
District councils must have regard to any guidance issued by the Secretary of State or the lead enforcement authority. The investigatory powers available to a district council for the purposes of enforcing the Tenant Fees Bill are set out in schedule 5 to the Consumer Rights Act 2015, which the clause amends.
Melanie Onn
The Government included the clause following the Bill’s pre-legislative scrutiny. We understand that the devolution of powers between different tiers of local government is in the interest of promoting collaborative relationships with a range of stakeholders, but will the Minister explain how a district council will enable or access these powers?
The Bill provides district councils with the same powers as a weights and measures authority. The Government’s response to the Housing, Communities and Local Government Committee’s report on the Bill says that a district council may choose to be an enforcement authority, but the Committee’s recommendation refers to a weights and measures authority being able to delegate its powers to other tiers of local government where appropriate. Will the Minister explain what process he envisions district authorities having to go through order to be able to undertake enforcement roles in this context?
If weights and measures responsibilities are held at a county council level, and if additional funding for staffing or training has been directed there, but a district council wishes to undertake its own enforcement measures, will there be a requirement for that funding to be cascaded down? Or do the Government expect that funding bids will be made at the outset by those authorities that wish to be enforcers, and that there may then be overlap in the bidding and awarding of such funds?
The Committee’s report contained evidence that any system based purely on hypothecated funds would provide a challenging environment for councils, as it would not provide for up-front or proactive work. It is in the interests of local authorities, tenants, landlords and letting agents that fines are a last resort; it is the early work that will prove the most important.
Rishi Sunak
With regard to district councils enforcing the Bill, there is no special process that they need to go through; they have the same rights and powers as trading standards authorities, so they do not need any special permissions. They can get on and do that should they see fit.
With regard to the hon. Lady’s last point, just like trading standards authorities, an authority that enforces against the contravention of the Bill will of course keep any fines that are levied, which will help to fund that enforcement.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Financial penalties
Melanie Onn
I beg to move amendment 2, in clause 8, page 5, line 13, leave out “£5,000” and insert “£30,000”.
Rishi Sunak
After careful consideration of all the feedback received during the consultation and engagement process, the Government are of the view that the level of financial penalties provided in the Bill is the right one. Furthermore, the approach to financial penalties aligns with that in other housing legislation. Most would agree that a £30,000 fine for an initial breach of the ban, as the amendment suggests, is excessive and could cause significant devastation.
Melanie Onn
Can the Minister explain the circumstances in which he anticipates a £30,000 fine will be imposed against an initial offence?
Rishi Sunak
My understanding of the amendment tabled by the hon. Lady is that that is what it proposes—an initial breach of the ban would be £30,000.
Rishi Sunak
In the Government’s version, it would be £5,000, and that is what we are discussing. My understanding of the hon. Lady’s amendment is that the financial penalty for an initial breach would be £30,000 rather than £5,000. We propose to leave it at £5,000. I am happy to take an intervention if she wants to clarify.
Rishi Sunak
No—okay.
The Government’s aim has been to provide a sufficient deterrent for an initial breach of the ban that still allows landlords and letting agents who may inadvertently commit a breach not to be disproportionately penalised. We therefore resist amendments 2 and 3.
As hon. Members have noted, breaches of legislation related to letting agents, such as the requirements to belong to a redress scheme and to be transparent about letting fees, are subject to a fine of up to £5,000. However, we have listened to concerns that a £5,000 fine may not be enough of a deterrent for some agents and landlords, so clause 8 proposes a financial penalty of up to £30,000 for a further breach of the ban.
Importantly, that upper limit is consistent with the higher rate of civil penalties introduced in April 2017 under the Housing and Planning Act 2016. Given that the repeated charging of fees is a banning order offence, we firmly believe that the level of penalty needs to be consistent with the legislation under that Act, which brought banning orders into force.
It is too early to argue that the higher level of financial penalty at £30,000 has not been successful in offering a more significant deterrent to non-compliance. In the evidence that Alex McKeown of the Chartered Trading Standards Institute gave last week, she said that she believed that £30,000 would act as a “significant deterrent”.
Richard Graham (Gloucester) (Con)
There is a slight note in the debate of some who see landlords and agents as villains and enemies to be bashed at every conceivable opportunity. For many of us, however, the issue is about how we construct a partnership that gives tenants more rights and that provides a better sense of fairness in the relationship, but which ensures that there is a strong and functioning market and that we do not go back to the 1970s when the Opposition created a situation in which there was very little provision of private sector housing, of which we know that we will need a great deal more.
Rishi Sunak
I thank my hon. Friend for another thoughtful and measured comment. He is absolutely right: we are not in the business of demonising particular groups of people; we are interested in having a fair and functioning market. The balance that that requires has been a focus throughout all the deliberations on the Bill.
Melanie Onn
Would the Minister accept that the principle of the fines is not to demonise anybody, but to act as a successful deterrent?
Rishi Sunak
Indeed, I was quoting the evidence from the Chartered Trading Standards Institute that said that £30,000 was a significant deterrent.
Melanie Onn
If the CTSI says that £30,000 is a suitable deterrent, does the Minister think that that should be the minimum?
Rishi Sunak
Again, I fear that I have been too generous in giving way. I was about to make the point that it should not be forgotten that an agent or landlord convicted of an offence under the ban is liable for an unlimited fine, if that is the route of enforcement that the enforcement agency wants to go down; £30,000 is the alternative to a criminal prosecution where fines can be unlimited and people can be subject to banning orders, which I am sure all hon. Members agree are extremely serious and significant deterrents. The guidance that we will produce will support local authorities in determining the level of the penalty in any given case. I urge the hon. Lady to withdraw her amendment.
Melanie Onn
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
We have aimed to be ambitious and tough in our enforcement approach to provide a sufficient deterrent to the continued charging of fees. Clause 8 sets out the fact that a breach of the fees ban will be a civil offence with a financial penalty of up to £5,000. However, if a further breach is committed within five years, that will amount to a criminal offence. In such a case, local authorities will have discretion on whether to prosecute or impose a financial penalty. Clause 8 provides that enforcement authorities may impose a financial penalty of up to £30,000 as an alternative to prosecution, as we have discussed. The level of fine reflects the feedback that we received during the consultation period. I will not rehash the arguments for why we think that is an appropriate level.
A financial penalty cannot be imposed if the landlord or agent has failed to return the holding deposit because they have received incorrect information about the tenant’s right to rent property in the UK. That reflects a recommendation from the Select Committee on this particular point. Before imposing a financial penalty, enforcement authorities must be satisfied beyond reasonable doubt that the landlord or agent has breached the ban on charging tenant fees. Only one financial penalty may be imposed per breach and an enforcement authority can impose a penalty for a breach outside its area. This clause should be read with schedule 3, which sets out the procedure to be followed by an enforcement authority after it imposes a financial penalty. Financial penalties, I believe, will act as a serious deterrent to non-compliance.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Schedule 3
Financial Penalties Etc
Question proposed, That the schedule be the Third schedule to the Bill.
Rishi Sunak
It is important that there is consistency in the way in which local authorities impose financial penalties and that the process is fair. This schedule sets out the procedure to be followed.
Enforcement authorities must give the landlord or agent notice of their intention to service a financial penalty within six months of the breach occurring. This notice must contain relevant information about the reasons for imposing the penalty, the amount and the right to make representations. The landlord or agent then has 28 days to respond. If the enforcement authority decides to impose a penalty, it must provide a final notice setting out the amount of penalty, how much to pay, the rights of appeal and the consequences of failing to comply. An enforcement authority may at any time withdraw or amend a notice of intent or final notice. The landlord or agent must be notified of this in writing.
Landlords and agents have a right to appeal to the first-tier tribunal against a final notice. This appeal must be brought within 28 days of the final notice and is to be a re-hearing of the enforcement authority’s decision, but the tribunal may admit evidence that was not heard before the enforcement authority, if relevant. The final notice is suspended until the appeal is determined or withdrawn. The first-tier tribunal may confirm, vary or quash the final notice. It may impose a penalty up to the same maximum penalty as the enforcement authority could have imposed. If the landlord or agent fails to pay all or part of this financial penalty, the authority can seek repayment on the order of the county court. Similarly, if the authority requires the landlord or agent to repay the tenant any prohibited fees and they fail to do so, this can be recovered under an order of the county court.
I am aware that concerns have been raised about the resources of local authorities. I trust that the Committee welcomes the schedule, as it enables an enforcement authority to retain the proceeds of any financial penalty, as we have discussed, for future housing enforcement.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma, for our second day in Committee. As the Minister has set out, schedule 3 provides some clarity over financial penalties, including notices of intent, recovery of penalties and proceeds of those penalties. The Opposition support the schedule as drafted. We are seeking clarity, however, from the Minister on certain aspects, before we give our support for its inclusion in the Bill. I would like to focus on paragraphs 6 and 7, which deal with the specifics of appeals and the recovery of penalties.
As with any piece of legislation such as this, the right to appeal is extremely important. It is correct that this is reflected in the Bill. It is also vital that the conditions of any appeal are presented with the utmost clarity to prevent abuse or a miscarriage of justice. Pre-legislative scrutiny by the Select Committee rightly raised concerns about how the Bill defined grounds for appeal, arguing that a first-tier tribunal should decide appeals as complete rehearings, which should take into account all matters, whether known to the local authority at the time of its decision or not. We are glad that the Government took that into account and amended the Bill accordingly. However, a number of questions about appeals remain, and I hope that the Minister can offer some clarity in his response.
Rishi Sunak
It is a pleasure to respond to the hon. Lady. I am cautious, as I wish to stay on point, with your direction, Mr Sharma. The hon. Lady raised some review periods, which we will no doubt discuss more specifically towards the end of this sitting when debating the new clauses tabled by Opposition Members, and with regard to phoenix companies, which are specifically covered by clause 13. I will leave discussion on those matters to the debates on the relevant clauses.
On the hon. Lady’s broad point about the level of fines, I thank her for recognising that the Government took on board the advice of the Housing, Communities and Local Government Committee’s on drafting these clauses, and we amended the draft legislation. I hope that she appreciates that. As I said, we took on board the Committee’s specific recommendations about the first-tier tribunal and the process that will be followed.
More specifically, on the hon. Lady’s point about the level of fines that can be varied, as with all judicial matters that will be a matter for the tribunal or the judicial processes of the county court—whichever avenue the enforcement mechanism finds itself in. Guidance will be published on the appropriate level of penalty, dependent on a broad range of situations, which will serve as a framework for how local authorities will enforce that penalty. The first-tier tribunal will subsequently have regard to that. It will not be for the Minister or the Government to direct in every circumstance what the level of fine should be.
As the hon. Lady rightly recognised, it is appropriate, as it is across our judicial system, that the courts have the flexibility to determine things on a case-by-case basis. I hope she welcomes that flexibility, which was added to the Bill at the request of the Select Committee. I look forward to debating phoenix companies and other such matters with her when we debate subsequent clauses.
Question put and agreed to.
Schedule 3 accordingly agreed to.
Clause 9
Power to amend maximum financial penalties
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
The clause is straightforward and contains a power for the Secretary of State to make regulations amending the amount of financial penalty that a local authority can change. This is purely to reflect changes in the value of money.
Permitting local authorities to levy financial penalties of up to £30,000 for breaches of the regulations on fees is intended to serve as a significant deterrent to agents and landlords. Including a power to amend the maximum penalty ensures that the Government can address any issue where the deterrent effect has not kept pace with inflation. We consider that regulations by negative procedure are appropriate in this case, since the changes are intended only to reflect the value of money, not to alter the intent or effect of the legislation.
Subsection (3) enables the Government to make transitional, transitory or saving provisions in relation to the uprating, in order to ensure that there is a smooth transition from one upper limit to another. In summary, the clause will enable the legislation to remain relevant over time.
Melanie Onn
It is crucial for this policy and for the hopes within it to be impactful that the fines are sufficient to act as a deterrent. Opposition Members have raised concerns throughout Committee stage that they might not be.
Any punishments for wrongdoing by rogue landlords and letting agencies must be sufficient to be seen as more than simply the cost of doing business. That is not simply my opinion but that of a landlord advocacy group. Indeed, Richard Lambert, chief executive of the National Landlords Association, said earlier this year:
“The NLA supports making the punishment fit the crime because too many of the criminals who operate in the private rented sector”—
it is somebody within that sector who said this—
“see the current level of fines as little more than a cost of doing business and we would welcome greater consistency between civil and criminal penalties.”
As is clear from the amendments we have tabled, we have concerns that the Bill will not go far enough in ensuring that its aims can be fulfilled. The fines are a clear example of where the tension between aims and the probable reality of any impact is at its greatest. If fines can be as little as £5,000, as with the penalties for the display of tenants’ fees, that seems to act as a minimal deterrent to landlords. Surely the best that we should hope for is that those fines encourage the sector to operate well within that framework, and that they do not have to be levied. In the more lucrative markets, that is a very small sum. For larger landlords, it is small fry.
To add to that hypothetical, trading standards and local government up and down the country have had their budgets decimated. As we heard at the evidence session last week from Councillor Blackburn of the Local Government Association, as I have mentioned, there has been a 56% drop in trading standards enforcement officers since 2009—more than half of them have been lost. It is a vital sector, which will enforce the Bill, but without good trading standards officers, there is a real risk that the legislation, for all its good intentions, could lack impact on the ground.
There is a lack of expertise and resources, and those problems seem likely to get worse. Rogue landlords and agencies are likely to factor the likelihood of any claims being made against them into their business calculations, as Richard Lambert of the NLA suggested. As things stand, their calculations might suggest that taking a risk is worth it, particularly in areas where tenants are not as clued up, or where local authority services and budgets have been really affected.
Any changes need to be made by means of new primary legislation, but perhaps that is not the ideal approach; perhaps the Minister or the Secretary of State should be able to look at the matter again in conjunction with evidence about how the enforcement process has been going, and whether the fines are sufficient sticks to encourage that good practice across the board. It is clear that the Government want the policy to be part of transforming letting to make the tenant’s life much fairer than it is under the status quo, but for that to be done, there needs to be some real, critical engagement with the facts on the ground from the Government in future. For the legislation to have its proposed impacts, it is key that the Minister has an open mind about how it is best put into practice. The punishments have to fit the crime, and they need to be responsive to the realities of the letting market, which means that there must be space for rethinking that which is required.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Recovery by enforcement authority of amount paid
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
We want to ensure that when a tenant has paid an unlawful fee, they are repaid as soon as possible. Clause 10 enables an enforcement authority to require a landlord or letting agent to repay the tenant or other relevant person any outstanding prohibited payment or holding deposit. Similarly, if the landlord or agent required a relevant person to enter into a contract with a third party, they may be required to pay compensation. That may be ordered if the local authority imposes a financial penalty for a breach of the Bill. It does not apply if the tenant has made an application to the first-tier tribunal to recover the payment or if the amount has already been repaid.
Clause 11 enables the enforcement authority to require the landlord or agent to pay interest on any payment referred to in clause 10. That ensures that the agent or landlord does not receive any financial benefit from a prohibited payment.
Melanie Onn
For the Bill to have an impact, it has to be possible for prohibited payments to be recovered, and for those enforcing the legislation to fulfil their roles. We have already touched on our concerns about whether there are sufficient resources for local authorities and trading standards to function as the Government would like. These clauses highlight a particular potential issue in the legislation as it stands. The need for a criminal level and burden of proof for the civil financial penalties discussed in this Bill is a flaw that could well hamper its effectiveness. We all want to see legislation that is effective, that leaves tenants and landlords clear on what is permissible and what is not, that ensures that rogue traders are dealt with effectively, and that leaves tenants able to bring claims when things do go wrong.
Rishi Sunak
It is vital that strong action is taken against irresponsible agents and landlords who persist in charging unlawful and unfair fees to tenants. This will act as a strong deterrent and better protect tenants. Clause 12 provides that a landlord or letting agent who breaches the ban on fees commits an offence if they do so within five years of conviction or imposition of a financial penalty for an earlier breach. Agents and landlords who commit an offence are liable on conviction to an unlimited fine. An enforcement authority has, in each case, the discretion to decide whether to impose a financial penalty of up to £30,000 or to pursue prosecution. A financial penalty issued as an alternative to prosecution does not amount to a criminal conviction. Subsection (6) amends the Housing and Planning Act 2016 to provide that an offence under the clause is a banning order offence, which means that if a landlord or agent is convicted of an offence a local housing authority may apply to the court to ban them from letting housing and/or acting as a letting agent or property manager in England for at least a year.
In our consultation there was strong support for prosecuting and/or banning repeat offenders. We have listened, and the clause shows that we are serious about cracking down on rogue operators. If the court makes a banning order, the local housing authority must add the landlord or letting agent to the database of rogue landlords and property agents established under the 2016 Act. By giving local authorities the power to take robust action against the worst operators we better protect tenants and ensure that reputable agents and landlords are not undercut or tarnished by rogues.
Clause 13 provides that, as well as the business itself, an officer of a body corporate or a member with management functions can be prosecuted for a breach of the ban on letting fees. The clause addresses issues raised by the hon. Member for Croydon Central and is designed to ensure that individuals with responsibility for repeatedly breaching the ban on tenant fees can, along with their organisations, be prosecuted and banned from operating. That will help to prevent the establishment of so-called phoenix companies, whereby an individual moves from a firm that has been banned and opens up a new business only to continue disreputable practices.
Melanie Onn
I want to make a couple of points. On the rogue landlords database, have the Government conceded that they will open it up, making it far easier for tenants to assess whether their potential landlord is someone from whom they wish to rent a property?
The provision regarding phoenix companies is incredibly important and I am pleased that the Minister has taken the opportunity to include it in the Bill, but is he confident that it will work in practice? I have seen such companies operating in other industries, and I am concerned about whether individuals who are overseas can be prosecuted. Will it be easy to prevent such individuals from continuing to be landlords within phoenix companies? Although an individual may be named as part of a company in Companies House records, a phoenix company can arise in the name of someone else with whom that person has a close association. Parent companies and subsidiaries can be established and registered in other names, but an individual can have an association with each of the subsidiaries of a parent company that might not have direct influence on or knowledge of what those subsidiaries are doing. That might come about regularly, so on whom will justice be brought to bear for breaches of legislation?
Rishi Sunak
I am glad that the hon. Lady generally welcomes the approach to tackling something that I think we all want to see prohibited. We are confident that the provisions will work. Overseas landlords and letting agents are subject to all the existing requirements for being a member of a redress scheme, and we have consulted on those provisions and will extend them. It is mandatory for letting agents to be a member of a redress scheme. Without such membership they cannot function in the market and will be in breach of their legal obligations. Whether people are overseas or in the domestic realm, there are multiple levels of protection and they must comply with the regulations in order to let property.
Rishi Sunak
This clause, too, is relatively straightforward. It places a duty on enforcement authorities to notify other relevant authorities when taking action. That is necessary for a number of reasons, each of which the clause provides for. First, if a local trading standards authority takes action outside its local area, or a district council takes action, the relevant local trading standards authority is notified and work is not duplicated. The relevant local trading standards authority is then relieved of its enforcement duty, unless it is subsequently informed that the proposed enforcement has not taken place. Secondly, a record can be kept by the lead enforcement authority where a financial penalty has been imposed, withdrawn or quashed on appeal. That will inform whether any subsequent breach is dealt with as an offence. A trading standards authority must notify the local housing authority if it has imposed a financial penalty or made a conviction. That ensures that the relevant information is communicated to the right authorities at the appropriate time. As such, the clause has a key but simple role in ensuring that the enforcement of the legislation is carried out effectively and all relevant parties are aware of what is happening on the ground. I urge the Committee to support the clause.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Recovery by relevant person of amount paid
Melanie Onn
I beg to move amendment 13, in clause 15, page 10, line 36, after “that” insert
“, with the consent of the relevant person,”
This amendment provides that the consent of a tenant or the person acting on their behalf or who has guaranteed to pay their rent must consent to the use of a prohibited payment for rent payments or tenancy deposit payments.
Under amendment 13, the tenant would have to consent to their holding deposit or a prohibited payment being used to cover rent or deposit costs. We do not object to the principle of subsection (6), which the amendment seeks to change. The payment of a tenancy deposit or a prohibited payment into a deposit or as part of rent is entirely sensible and in many cases will be an optimal arrangement for both the tenant and the landlord. In the case of the holding deposit, this can be an important agreement between the tenant and the landlord that reduces the burden of paying a deposit, rent in advance and holding deposit all at the same time. Allowing a tenant to put that money towards a deposit can make it easier to pay what for many is a high fee and a significant amount, and prevent the holding deposit being held for as much as a week after an agreement has been made, when the tenant is likely to be short of money. We are therefore glad to see the principle in the Bill.
However, as the Bill stands, the landlord will have discretion as to whether to apply that payment. Although that does not seem to be a significant problem at first, and in many circumstances may not cause a problem, allowing landlords to do so indiscriminately could lead to difficulties for tenants in certain circumstances. The first problem arises from the fact that many people pay their rent on a monthly basis, through a fixed-sum standing order. Although standing orders are amendable, that can be a time-consuming process for the tenant. To deduct the prohibitive fee from a month’s rent, they must amend the standing order twice to account for the change. Government Members might feel that that is quite a trivial point, as making changes to bank payments is part of daily life, but we believe it will result in the tenant having to go out of their way for something that is not their fault. We must remember that when considering this amendment. It would be wrong for tenants to end up doing time-consuming work to receive their money in a timely and orderly fashion, given that they are not the ones who charged the fee.
A second problem that we seek to address with the amendment is how subsection (6) would apply to people with a joint tenancy. Taking the example of a joint tenancy in which the tenants pool the rent in one account and pay it to the landlord as a lump sum, if one tenant loses their key and is required to pay a default fee, which is later deemed to be prohibited, would the landlord be able to deduct that from the rent? In that scenario, taking the prohibited fee from the rent would not be a simple way of paying back the tenant. They paid the fee from their own pocket, but the rent deduction comes out of a pool for which all tenants are jointly responsible. Given that the deduction would not automatically be tied to the person who is entitled to it, the process could be abused by other people who are part of the pool. Although in most cases such agreements are set up by families or a close group of friends, it should not automatically be assumed that it is an easy or preferred way for the relevant person to receive their money.
It is their money. I have set out several scenarios, but a significant rationale for this amendment is the principle. Put simply, it is the tenant’s money, and they should have the final say about what happens with it. As it stands, subsection (6) allows landlords to do what they want with the tenant’s money that they have been required to give back and ought not to have had in the first place. I hope that Committee members will recognise that this is a practical and fair amendment. If someone has been wronged, it should be made as easy as possible for them to receive the repayment to which they are entitled.
Rishi Sunak
An important principle of the Bill is that any unlawful payment can be recovered in full by the tenant, as it is their money. Tenants can do that either by seeking direct recovery from the landlord or agent, or by going to the local authority or applying to the first-tier tribunal. It is important to note that they can also go to their agent’s redress scheme if they are seeking the recovery of a prohibited payment from an agent. Offsetting the prohibited payment against the rent or deposit will ensure the tenant is not left out of pocket. It is best practice for a landlord or agent to ask the tenant, or any person guaranteeing their rent, whether they are happy for any unlawfully paid fee to contribute towards a future rent or tenancy deposit payment. We are planning to encourage that through guidance, and we expect that most landlords and agents will do that. We do not currently see the need for specific provision to that effect in legislation.
That said, I have been considering this broad area for a while, and I want to ensure that what we have in place works. I hear what the hon. Lady said. The clause was designed to ensure that the repayment process is relatively automatic. We did not want to put extra steps, which might delay things, into the process. We are looking at some of the areas that she mentioned. With that in mind, if she will bear with me as I look through those things, I ask her to withdraw the amendment.
Melanie Onn
I am glad the Minister is listening. He said that the automatic expectation is that, to seek redress, tenants will go through a first-tier tribunal or go to a local authority just to get back what is theirs, which is in the hands of the landlords, despite the fact that the Minister clearly thinks it is best practice for landlords to have a good relationship with tenants. It is not inconceivable that the relationship has broken down if it is deemed that a prohibited payment has been made.
I was going to press the amendment to a vote, but given that the Minister has requested that we bear with him, I will not do so. I will hold him to his word. I will withdraw the amendment, but I reserve the right to table it again if we are not satisfied with what he comes back with. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Melanie Onn
I beg to move amendment 14, in clause 15, page 11, line 4, leave out
“all or any part of”,
and insert—
“a sum of money not less than and not more than three times”.
This amendment would enable tenants to claim back prohibited payments without assistance from the local authority, along with compensation from the landlord or letting agent worth up to three times the fee paid.
The amendment would entitle tenants who seek to claim back prohibited payments without assistance from the local authority to compensation from the landlord or letting agent worth up to three times the fee paid. During the evidence sessions, we heard often how the Bill needs more resources to enforce the new provisions that it will bring in and to fully achieve its aims. One thing necessary to improve the enforcement of the Bill is to provide further encouragement to tenants to self-report and to call out the use of prohibited fees by their landlords.
Trading standards will face practical difficulties in enforcing the Bill. They face a lack of resources across the country, which has meant their losing, as we have said, 56% of enforcement officers since 2009 and therefore lacking the expertise with letting agents that they would like. There is therefore a need to look at self-reporting as an addition to trading standards, and the addition of clause 15 to the Bill shows an acknowledgment of that by the Government. The amendment would strengthen that by providing tenants with compensation, when making a claim, for three times the initial sum charged.
A three times figure is already used to enforce deposit protection regulations, so both the three times figure and the idea of compensation for mistreated tenants has a basis in current property law. The amendment would act as an extra deterrent to landlords’ and letting agents’ breaking the law, by increasing the level of punishment, and would provide sufficient motivation and compensation for tenants to go through what could be a stressful and time-consuming tribunal process. As the amendment would help to enact the purpose of a Bill that both Government and Opposition want to be effective, I hope that both will accept it and thereby increase the enforcement power of the Bill.
Rishi Sunak
Tenants absolutely should get back any unlawful payments in full, whether direct from the landlord or agent, via the enforcement authority or through an order of the first-tier tribunal. However, we do not think it appropriate for the tenant to receive further compensation, given that the landlord or agent is liable for a significant financial penalty in addition to reimbursing the tenant.
It is also worth noting that the Bill provides further protection to tenants by preventing landlords from recovering their property, via the procedure set out in section 21 of the Housing Act 1988, until they have repaid any unlawfully charged fees. To add in compensation, as the amendment suggests, risks penalising agents and landlords multiple times for the same breach, which is not fair. We believe that our existing approach strikes the right balance and offers a serious deterrent to non-compliance. I ask the hon. Lady to withdraw the amendment.
Melanie Onn
Unfortunately, I will not withdraw the amendment. I do not feel entirely satisfied by the Minister’s comments on this and I do not think that he has addressed the issues around the negative position that tenants find themselves in compared with landlords, so I will press the amendment to a vote.
Question put, That the amendment be made.
Rishi Sunak
Clause 15 works with clause 10 to establish multiple routes for tenants to be able to recover any prohibited payments. It enables a tenant or other relevant person to apply to the first-tier tribunal for compensation where they have been required to make a prohibited payment or where a holding deposit has been unlawfully retained. We have listened to the Select Committee on this point and acknowledge that the first-tier tribunal is generally more accessible for tenants as it is less formal and costly than the county court. If a landlord or agent refuses to abide by an order of the first-tier tribunal, a tenant would be required to go to the county court to have the decision enforced and to recover their fees. We have made provision in clause 16 for a local authority to help the tenant with that. I ask hon. Members to agree that clause 15 stand part of the Bill.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16
Assistance to recover amount paid
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clause 16 is another straightforward clause. It provides that an enforcement authority such as a local trading standards authority can help a tenant recover unlawfully charged fees or a holding deposit that has been unlawfully withheld. That is because we recognise that tenants might require or would like assistance to navigate the county court process. The enforcement authority would help a tenant or other relevant person to make an application to the first-tier tribunal: for example, by providing advice or by conducting proceedings.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Restriction on terminating tenancy
Melanie Onn
I beg to move amendment 15, in clause 17, page 12, line 3, at end insert—
“(5A) No section 21 notice may be given in relation to the tenancy until the end of a period six months from:
(a) the day after the day on which the final notice in respect of the penalty for the breach was served; or
(b) the day after the day on which any appeal against the final notice is determined or withdrawn.”
This amendment would protect tenants against the issue of a section 21 notice when a penalty has been applied in relation to a breach under Clauses 1 and 2 of this Bill.
I believe the amendment would strengthen the provisions in the clause. As the Bill stands, landlords are unable to serve section 21 notices while there is still an outstanding balance of a prohibited payment or holding deposit to be repaid to the relevant person. The principle behind the clause is welcome. It would be wrong for a tenant to be served a section 21 notice while a landlord has failed to serve their obligations in terms of repaying money that was taken incorrectly. The same principle guides the inability of landlords to serve section 21 notices if they do not properly protect a tenant’s deposit, and more recently if they do not carry out their obligation to undertake any necessary improvements.
Such extra protections should improve a tenant’s rights and mean that rogue landlords cannot get away with retaliatory evictions if a tenant challenges bad practice. However, too often the principle is not matched in practice. This can be seen in the enforcement of the Deregulation Act 2015, which led to the banning of revenge evictions if a landlord was ordered to carry out repairs by a local council. A 2014 study by Shelter estimated that 200,000 private renters had been served with an eviction notice after complaining to their landlord about a problem with their home. The legislation should have led to significant action, given how widespread the problem of retaliatory evictions is, yet more than half of councils in the UK did not use the new powers in the Act a single time within a year of enactment. There is clearly a disconnect between what leaves this place as law and the reality of what is actually enforced.
Protection against section 21 evictions is vital for tenants who fear that standing up to a landlord could lead them to be evicted. It is worth remembering what landlords have to do to be exempt from serving a section 21 notice. These are landlords who do not protect tenants’ deposits, do not provide repairs in a timely manner, and who will charge prohibited fees under this new Bill. So these landlords have, at best, already shown a lack of knowledge as to their rights and responsibilities, and at worst are rogue and exploitative to the point where they will cross legal lines to avoid their obligations. This comes to the heart of why enforcement in this area is so important and needs to be done far better under current housing regulations, and needs to be enhanced in the Bill as it stands.
We know that the vast majority of landlords comply with regulations and discharge their obligations in a timely and professional manner. Those landlords would never threaten retaliatory evictions and would ensure that they followed the rules regarding serving a section 21 notice if needs be, but there are too many rogue landlords who look to shirk their responsibilities and exploit tenants at every opportunity. If a rogue landlord is willing to take a chance on a tenant’s not picking up on and reporting a prohibited fee, or to threaten a tenant with eviction when they ask for repairs, why would they suddenly act in a fit and proper manner when it comes to serving a section 21 notice?
During the evidence sessions, the NUS representative made the point that students often do not know their rights. They are often first-time renters and many will not have the experience of looking over a contract or challenging actions that are unlawful, which means that they may not be comfortable taking action against activities such as charging a prohibited fee or serving a section 21 notice. That could be particularly true if the Act required a tenant to take a landlord to court to prove that a section 21 notice was invalid, so tenants may end up leaving under an invalid section 21 notice when there is no reason for them to do so.
Too many rogue landlords get away with outlawed acts because there is not enough enforcement of the current laws that prohibit bad practice. The Government should consider carefully the evidence we heard in last week’s evidence sessions. It is fair to say there was a general feeling that there is not enough enforcement power in the Bill for it to do all the good it could do.
Enforcement could come through several different channels, such as increasing fines to increase the deterrent that rule breakers face, reimbursing a lead enforcement authority or reducing the barriers that tenants face if they report a landlord. Amendment 15 would mean that tenants were safe from retaliatory evictions that could result from reporting a landlord who charged a prohibited fee, for six months after the final notice of the penalty for the breach is served or the appeal is determined or withdrawn.
The amendment arises from what should be a guiding principle of good law making: in introducing new laws and regulations, we should learn from the mistakes of similar legislation and build a Bill that counters those flaws and pitfalls. To ensure that this Bill hits the ground running, it is important to look at other pieces of legislation that govern landlords to see where they have failed in the past.
We must learn from the effect that a lack of protection from eviction had on the repair of properties that were not in a fit or liveable state. As a result of that, tenants ended up living in houses with no protection from draughts, large damp problems and faulty electrics. No one should live in those conditions in this country, but tenants feared that if they complained about those problems, their landlord would serve them with a section 21 notice rather than carry out the repairs. Tenants were left with a choice between putting up with uncomfortable, unsafe and uninhabitable conditions and pressing their landlord to fix those issues when the landlord held the power to kick them out. No one should have to make that choice, because no one should be penalised for wanting a house that is habitable. Similarly, no one should have to make the choice between flagging a prohibited payment and keeping their landlord happy so that they do not get served with a section 21 notice.
To prevent tenants from retaliatory evictions when repairs are necessary, the Deregulation Act 2015 prevents landlords from serving a section 21 notice for six months after the council orders repairs to be made. Although there are problems with the enforcement of that Act, the principle of it acts to prevent retaliatory evictions. In particular, it prevents the serving of a section 21 notice for six months after the serving of an improvement notice, which gives tenants the same protection as they would have at the start of any tenancy. That is an extremely important addition to tenants’ rights, which helps to remove a barrier to self-reporting. There is too little extra protection for self-reporting tenants if the law simply states that the landlord can serve a section 21 notice the second they have managed to fulfil the obligation that they were reported for. That also covers self-reporting tenants who could be subject to retaliatory evictions if they report a landlord.
Just as it was sensible to extend the provisions concerning revenge evictions for repairs in the 2015 Act, it is sensible to learn from the past situation around repairs now and get the Bill right at the first time of asking, by bringing it into line with the thinking of that previous legislation and adding a six-month period in which landlords cannot serve a section 21 notice after a breach of the Bill.
Rishi Sunak
The Bill already protects tenants by preventing landlords from recovering their property via section 21 of the Housing Act 1988 until they have repaid any unlawfully charged fees. This approach is in line with legislation that already applies where the “How to rent” guide has not been provided or a landlord has not secured the required licence for a house in multiple occupation, so there is good precedence for our approach.
Further, clause 4 ensures that any clause in a tenancy seeking to charge tenants a prohibited fee is not binding on the tenant, so we do not consider that further provision is needed. The wording of this amendment would specifically mean that if a landlord appealed against the imposition of a financial penalty and this was upheld, that landlord would be restricted from using the no-fault eviction process for six months after the appeal was determined. That clearly is not fair. I therefore ask the hon. Lady to withdraw the amendment.
Melanie Onn
I thank the Minister for that response. It is unfortunate that he is not prepared to accept the amendment. It may well be the case that landlords will happily give people back the money they owe them and then still decide that they are troublemakers and seek to serve an eviction notice against them. While I accept the Minister’s comments regarding a landlord’s appeal, I think this is something that he should look at. If the Bill is about increasing and protecting tenants’ rights, this is a prime opportunity to do so. Despite that, I am happy not to press the amendment, but I reserve the right to discuss this issue further on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clause 17 has been included following a recommendation specifically from the Select Committee during pre-legislative scrutiny of the draft Bill, and I therefore hope that it commands broad support. It ensures that a landlord cannot evict an assured shorthold tenant via the section 21 no-fault eviction procedure if the landlord has previously required a tenant to make a prohibited payment and failed to repay this payment or apply it to the rent or deposit. We agree with members of the Select Committee that this affords tenants additional protection and serves as a further deterrent to non-compliance for agents and landlords.
Similarly, a landlord cannot use a section 21 procedure if they have breached the requirement to repay a holding deposit. This clause is intended to establish a further layer of protection and security for tenants and to act as a deterrent to landlords. The approach mirrors that used to promote compliance with other housing legislation, such as licensing for houses in multiple occupation and the requirements to give tenants a copy of the “How to rent” guide and valid gas safety certificates. I beg to move that the clause stands part of the Bill.
Melanie Onn
We have made our concerns around this clause quite clear, and we reserve the right to come back and discuss it on Report. I sincerely hope that the Minister’s intention does work in practice. I think he is applying some of the principles to landlords who would never wish to be in breach of any of this legislation, and he is not considering fully the issue of rogue landlords, who are the ones we are trying to tackle.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18
Duty to publicise fees on third party websites
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Thank you, Mr Sharma, for permission to group these three clauses. I will discuss them briefly in turn. Clause 18 amends section 83 of the Consumer Rights Act 2015. Section 83 places a duty on letting agents to publicise their fees and information about redress under client money protection schemes in order to provide greater transparency for landlords and tenants.
In the Government consultation on banning tenant fees, concerns were raised that these transparency requirements do not apply in relation to property portals, such as Rightmove and Zoopla. These websites are often the first port of call for tenants when searching for a home to rent. To ensure that tenants and landlords have easy access to relevant information, this clause extends the transparency requirements to third-party websites. I am sure that will be warmly welcomed.
Rishi Sunak
Clause 21 amends section 135 of the Housing and Planning Act 2016. It makes enforcement of the requirement for letting agents to belong to a client money protection scheme the responsibility of trading standards authorities. That has the effect in non-unitary authorities of moving the enforcement responsibility from district councils to county councils. Trading standards are best placed to enforce this provision due to their role in enforcing other legislation relating to letting agents. The change will ensure better alignment between enforcement of the provisions of the Tenant Fees Bill and client money protection.
In November to December last year, the Government consulted on the implementation of client money protection. I am pleased to say that the majority of the respondents—74%—agreed that enforcement responsibility should sit with trading standards rather than district councils, given their skills and experience. To ensure joined-up enforcement of relevant letting agent legislation, I beg to move that clause 21 stands part of the Bill.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Lead enforcement authority
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 23 and 24 stand part.
New clause 1—Enforcement: costs—
“The Secretary of State shall reimburse—
(a) a lead enforcement authority, where this is not the Secretary of State, for any costs incurred by the authority in the exercise of its duties under section 23 or section 24 of this Act, and
(b) an enforcement authority for any additional costs incurred by that authority in the exercise of its duties under section 1 or section 2 of this Act.”
Rishi Sunak
Clause 22 establishes a lead enforcement authority in the lettings sector to oversee enforcement of the Bill and associated letting agent legislation, including the transparency requirements in the Consumer Rights Act 2015, the requirement for letting agents to belong to a redress scheme and the forthcoming requirement for letting agents to belong to a client money protection scheme. Although, in the first instance, this responsibility lies with the Secretary of State, the clause gives the Secretary of State the power to designate a local trading standards authority as the lead enforcement authority. The clause also enables the Secretary of State to make provision, via regulations, to smooth the transition if there is a change in the lead enforcement authority.
In the Government consultation, there was strong agreement from respondents across the sector to the introduction of a lead enforcement authority; 86% of respondents were in favour, stating that this would lead to more consistent operation of the regulatory framework. We consider that trading standards authorities are best placed to act as the enforcers, given their other responsibilities for enforcing requirements on letting agents and consumer protection laws.
We recognise the overlap between the lettings and estate agent sectors and will work with National Trading Standards to ensure that the new lead enforcement authority works effectively alongside the existing arrangements in the estate agent sector. We intend to provide funding to support the setting up and workings of a lead enforcement authority.
Clause 23 describes the duties of the lead enforcement authority. Broadly, those duties are to provide guidance and support to local authorities in England with regard to their enforcement responsibilities in respect of relevant letting agent legislation. The lead enforcement authority will help to develop best practice in enforcement and ensure consistent application of the legislation.
The clause also enables the lead enforcement authority to disclose information to a relevant local authority to enable that authority to determine whether there has been a breach of, or offence under, relevant letting agency legislation. That power will, in particular, enable the lead enforcement authority to disclose information as to whether a financial penalty has been issued against a landlord or agent and thus whether an offence has been committed under the Bill.
We have taken into account feedback from the Select Committee, so the clause now places a duty on the lead enforcement authority to issue guidance to enforcement authorities about the exercise of their functions under the Bill. As discussed earlier, enforcement authorities must have regard to that guidance.
Clause 23 also provides a power for the Secretary of State to direct the lead enforcement authority to produce guidance about the operation of other relevant letting agency legislation and about the content of such guidance. The lead enforcement authority will be able to provide information and advice to tenants, landlords and letting agents to help them to understand the impact of the Bill and other relevant legislation.
The lead enforcement authority’s position as a central point of contact for local authorities will facilitate its duty to monitor developments in the lettings sector and, as necessary, to advise the Secretary of State. That includes the effectiveness and operation of the Bill and associated relevant letting agency legislation and related social and commercial developments.
Clause 24 makes provision for the lead enforcement authority to enforce the provisions of the Bill and other relevant letting agent legislation. We want the lead enforcement authority to play a proactive role in enforcement and to exercise best practice and provide support when it is appropriate and necessary for it to do so.
Individual trading standards authorities will remain primarily responsible for enforcing breaches of the fee ban. However, they may want to ask the lead enforcement authority for support. Alternatively, a local trading standards authority may not be taking enforcement action in line with its duties under the Bill, leaving tenants at risk of unfair loss. The clause gives the lead enforcement authority the power to take enforcement action in such situations.
Where the lead enforcement authority steps in and proposes to take action in respect of a breach, it must provide notice to the relevant local authority. The latter is then relieved of its duty to take enforcement action in relation to the breach, but the lead enforcement authority may require it to provide assistance. Relevant enforcement authorities will be required to report on their enforcement of the legislation and other relevant lettings legislation.
The lead enforcement authority will have a number of investigatory powers at its disposal to enforce the relevant letting agency legislation. As we discussed previously, those powers are laid out in schedule 5 to the Consumer Rights Act 2015, which this clause amends. That includes the power to require information where it reasonably expects that a breach has been committed.
I hope that clauses 22 to 24 stand part of the Bill and, with your permission, Mr Sharma, I will reserve the right to respond after the hon. Member for Croydon Central speaks to new clause 1.
Sarah Jones
New clause 1 sets out that both the lead enforcement authority and local enforcement authorities will be reimbursed by the Government for costs incurred in enforcing the Bill. That is necessary because the Bill as it stands will simply not provide adequate resources for proper enforcement. That view is backed up by experts from across the sector. We have already talked about the scale of the challenge, and my hon. Friend the Member for Great Grimsby has talked about the cut in enforcement officers and the—