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Mr. Baron: I do not follow the logic of the hon. Gentleman's argument that changing the definition of HMOs will affect the housing market or crime figures. He seems to be blaming the HMOs and the restricted definition of them, and saying that they are responsible

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for rising house prices and crime figures. Is that what he is suggesting?

Mr. Best: It is an incredible coincidence if adjoining areas do not have the same crime rate and victim status. There has been an increase in the average price of properties in other parts of Leeds of about 60 per cent.; in Headingley prices have gone up by 90 per cent. in the last six or seven years. Those are not insignificant indicators of the availability of profits from the misuse of property to which the hon. Member for Billericay wants to return.

We want a change; we want proper use of property and safe accommodation for students, especially in my constituency, where—unlike other areas in which there are HMOs—there is an exceptionally high demand for properties. It is necessary to be able to deal with the special peculiarities of the property market, which the market cannot resolve on its own. What is proposed, especially in new clause 7, is an intelligent sensitive intervention in the marketplace, which would benefit all those who are currently using these properties.

5 pm

Mr. Jonathan Sayeed (Mid-Bedfordshire): The hon. Member for Leeds, North-West (Mr. Best) spoke about the effect of transient and termly residence in the area in which he lives. He spoke movingly, not just now but on Second Reading, about a populous family-oriented area that has become almost a dormitory town at some times of the year. I understand what he says, but I do not think that the Bill—part 3 in particular—is the proper way of dealing with that planning problem. The requirements for the licensing of HMOs should have a different effect—to provide quality, safe and properly insulated accommodation for people who hitherto have not had that degree of protection. It is not a panacea for a particular planning problem.

The Government have resolved to alter the provisions of the Bill that would license houses in multiple occupation. We know that they have failed to fulfil their promise in their manifestos both of 1997 and of 2001 that they

    ''will provide protection where most needed: for tenants in houses in multiple occupation. There will be a proper system of licensing by local authorities which will benefit tenants and responsible landlords alike.''

Despite the extensive consultations on the licensing of landlords in low-demand areas, the Government do not seem to have been in a great hurry to meet their pledge, especially considering that it was first made in 1997. The House, supported by the Conservative party, has established that the licensing of houses in multiple occupation is a worthy concept. However, my party has persistently and consistently reiterated our concerns about the detail of part of the Bill.

I have expressed my gratitude already to the Bill's promoter for his efforts to address various concerns of members of Her Majesty's Opposition, and I am pleased that the hon. Member for Brighton, Kemptown (Dr. Turner) has attempted to provide a maximum threshold for maximum registration fees and, in effect, to give an appeals procedure. The broad intention of part 3 is to increase the health and safety

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standards of houses in multiple occupation. That is why, although I understand the problem and sympathise with the point made by the hon. Member for Leeds, North-West, this is not the Bill to deal with that problem.

We know that higher standards are necessary in HMOs. Some 10 per cent. of all HMOs—and 20 per cent. of flats and bedsits—fail standard tests, and 80 per cent. of HMOs lack fire escape facilities. As the House noted on Second Reading, for people who happen to live in an HMO of three storeys or higher, the danger of fire is 17 times greater. More than 1.5 million people live in HMOs in England alone, and Shelter has described their housing conditions as

    ''among the poorest and most dangerous in the country.''

The Government's document ''Fuel poverty: The New HEES'' highlights the health and safety deficits in the private rented sector. It says:

    ''As a proportion of housing in a sector, the incidence of fuel poverty is greatest in the private rented sector'',

and it puts the figure at 39 per cent. Experts believe that that amounts to 709,000 households in England alone, which means that more than 1 million people probably suffer fuel poverty in that sector. The UK figure will be higher, and may amount to more than 1 million households, and 1.5 million people.

The Government tabled amendments that sought to delete the provisions relating to licensing houses in multiple occupation. The amendments were an odd reversal of their pledges and policies. I am pleased to note that they have reconsidered part 3 and have tabled more constructive amendments, such as new clause 7. I will discuss the implications of that new clause later.

In the Government's most recent statement on the national licensing scheme on Second Reading of the Homelessness Bill, Lord Falconer of Thoroton said:

    ''We accept all the arguments advanced in favour of it. It is simply a question of finding time—[Official Report, House of Lords, 12 November 2001; Vol. 628, c. 406.]

In view of the Government's previous reluctance to accept part 3, I suggest to the Minister that there is no time like the present.

The Minister has said:

    '' Ministerial colleagues in the DTLR have made clear that they are seeking agreement to bring forward as soon as possible a housing Bill that will deal with the whole context of measures, not just the limited measures included in the Bill.''—[Official Report, Standing Committee C, 24 January 2002; c. 18.]

However, the Government have promised those measures since 1997. A start in the right direction would not only reflect better on the Government but, more importantly, would decrease the number of deaths in HMOs. The Conservative party broadly supports licensing houses in multiple occupation. However, we will continue to press home our concerns about certain aspects of the provisions.

I have already recognised that the promoter of the Bill has agreed to instigate a maximum cost threshold by which local authorities should abide. We mentioned our concern that good landlords should not be penalised, and that the cost must be kept under constant review. If the costs of licensing become a key

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aspect in decisions about whether to continue as landlords or to enter the buy-to-let property market at all, the Bill will have failed. The hon. Member for Brighton, Kemptown stipulated that a registration fee should not exceed £112 per letting agreement for a five-year period. That capped figure is reasonable. Will the Minister confirm that he agrees with it?

We also need further information from the Government on start-up funds that may be available to local authorities to assist with establishing a licensing system. We want to ensure that the legislation protects tenants and landlords, but we do not want it to become burdensome to local authorities. It is important that the implementation of the legislation is thorough and efficient. If it is, bad landlords will have to reform or go out of business.

I also mentioned my concern that local authorities may refuse planning permission to landlords who wish to change the use of a property from an HMO to a single dwelling unit if the price of compliance is too high. My hon. Friend the Member for South Norfolk tabled amendments that would ensure that the owner had the right to revert the HMO to single dwelling status if the costs of refurbishing it to the standards required by the licensing scheme exceeded 50 per cent. of the annual rental income of the property. I ask the Government to consider that.

We also need appropriate time scales for the implementation of licensing requirements. Will the Minister confirm that there will be an effective appeals procedure? The Government have claimed that registered social landlords are governed under other regulatory schemes that ensure that health and safety standards are met, so they do not need to be covered by the Bill. The Minister needs to reassure the Committee that any similar scheme is at least as rigorous as the HMO licensing scheme. I am vehemently opposed to burdens being placed on private rental landlords that are not imposed on registered social landlords. I urge the Government to consider the inclusion of RSLs in the Bill, or to confirm that the demands on them are no less onerous under the Bill. That such confirmation is necessary cannot be in doubt. RSLs need to be controlled as effectively as private landlords because they cater for some of the poorest people in our society, who are in the greatest need of protection.

Other points need ministerial clarification. Hitherto, part of the definition of an HMO was that it was

    ''occupied by persons who do not form a single household.''

The Bill sought to change that definition to a house

    ''occupied by adult members of more than two families.''

The Government now seem to insist that the definition in the original legislation remains. We need to know the regulatory impact of the amendment. I understand that the Minister wants to avoid a repetition of the Barnes v. Sheffield city council case, in which the court held that a property let to a group of students did not constitute an HMO. In that case, the court gave consideration to factors such as whether the persons

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living in the house came to the property as a single group or whether they had been independently enlisted. The Government are understandably keen to avoid similar variable interpretations of what was obviously a hazy definition.

New clause 7 affirms that a single household exists

    ''only where there is a prescribed relationship between each member of the group and one or more of the others (as the regulations may require)''.

I need the Minister's help in understanding what the regulations require, and the definition of a prescribed relationship. There is a danger that the interpretation of the regulations may give rise to absurdities. Is a group of close friends or colleagues, for example, to be treated differently from an unmarried couple? My hon. Friend the Member for Billericay has posed other examples.

There is potential for considerable contention that could go as far as the courts unless there is demonstrated equity in the definition of those who are in the prescribed group. The Minister should perhaps consider another definition of a single household, such as one based on whether the inhabitants have signed more than one tenancy agreement. That may ensure that the regulations are not unnecessarily onerous for fit and proper landlords, while getting to the heart of the Bill's aim of providing a degree of security to people in HMOs that they have not previously been offered.

My hon. Friend the Member for Billericay spoke, from his considerable experience, about the dangers of redefining an HMO. We will all see that there are considerable difficulties in that redefinition of HMOs when the Minister tells us what the regulations prescribe. I do not say that it should never happen, but I just wonder whether we have given it long enough to ensure that we are producing a good piece of law.

5.15 pm

Part of the Bill says that local authorities retain the discretionary right to ascertain whether some HMOs should be registered. I am convinced that that sort of discretionary power for local authorities will remain a problematic part of the licensing system. In order to reduce the potential for problems, would the Minister consider providing updated guidance to local authorities, which would also serve as guidance for the appeals procedure—a procedure that I hope he will endorse?

It is imperative that each local authority should subject its landlords to a nationally uniform registration scheme. Therefore local authorities should operate the same reporting procedures, and the appropriate paperwork should be consistent throughout England and Wales. If local authorities work according to completely different procedures, no one will be able to prove whether one local authority is placing heavier burdens on landlords than another. With that in mind, it would make sense to run a pilot licensing system in a town that has problems. I suggest Brighton, Kemptown or Brighton as a whole. I have already tried this on the hon. Member for Brighton,

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Kemptown and he is rather keen on it. We have a willing volunteer for a trial.

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