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21 Oct 2009 : Column 250WH—continued
10 am
Tony Lloyd (Manchester, Central) (Lab): I congratulate my hon. Friend the Member for Manchester, Blackley (Graham Stringer) on securing this timely and important debate. I do not want simply to run over all the many points that he has made. He has set out a very clear picture of life not just in Manchester but in large parts of the north of England and the industrial midlands. My hon. Friend the Minister will recognise many of the things that have been said, and I think that you, Mr. Betts, will understand from your own constituency the descriptions that my hon. Friend the Member for Manchester, Blackley has put forward.
The reality of my constituency is as good a place to start as any. East Manchester, to which my hon. Friend referred, was probably the first area where the selective licensing process was brought into operation, and it is not hard to trace the reason. East Manchester went into very serious decline with the collapse of industry in the Thatcher years. We saw the decimation of the industrial base in that part of the city, and a dramatic change in the composition and social demography of the area.
The housing stock in the area was overwhelmingly classic northern English terraced properties. Some were owner-occupied, and a considerable number were owned by housing associations, which, at the time, played a disastrous role in the decline of the area. They had grand schemes to grow their stock without any real sense of how to provide for that stock. That led to a huge number of voids among housing association stock. The private landlords, who were already there in significant numbers, increased in that period. Some of them were perfectly good landlords who wanted to maintain both their properties and decent relationships between their tenants and the wider community.
To say that there is a link between poverty, certain types of housing, housing benefit and bad behaviour is simply not true. The overwhelming majority of people in east Manchester lived, and wanted to live, perfectly decent lives. The pressure for change came from not the Government at the time or the local authority, but the type of residents' groups to which my hon. Friend referred. Those are the people who said to me, "We need something to deal with the small minority of rogue tenants." Although the numbers of such tenants were small, they could do enormous damage to the community in those areas. That narrow and specific focus was the driver for the type of legislation that was brought in.
My hon. Friend was absolutely right to say that bringing in such legislation was a long, slow, painful process-from 1997 to the passing of legislation in 2004 and its implementation in 2006. It took far too long. The ambition was not complicated; it was fairly straightforward and obvious. The sad thing is-I am glad that the Minister does not suffer from this-that if the focus and the way of viewing the world is only ever through the lens of the south-eastern housing market, it will always get things wrong for places such as Manchester, the west midlands and Burnley. In that sense we must recognise that policies must be different for different parts of the country. There may be parts of London that have similar features to the north, so within those terms, my hon. Friend's request that we recognise the need for the process to be selective is very important.
Let me deal with the east Manchester of today. In 1997, it was an area people wanted to leave. They used to tell me, "We want to get out. We do not want to live here any more." Those who had the money or the opportunity to leave for other reasons, such as different types of tenancy becoming available, would get out. People who were left in the area were those who, for different reasons, were hanging on grimly. Sometimes they owned properties that had collapsed in value, due to the collapse of the local housing market. They were very good people who felt, quite rightly, embittered by what had happened. They felt that the public process-the public authorities, the council and the Government-had not helped them.
Therefore, east Manchester in 1997 was an area that people wanted to abandon. The long-term future for the whole community was touch and go, but then this Government came to power and invested huge sums of public money in the regeneration process. The area is now totally transformed and is unrecognisable compared with what was once there. That is a tremendous success because people now want to come into the area-it is a very different kind of area. However, there are still some features that mean we require the maintenance of the legislation.
On Sunday, I was talking to a number of people in east Manchester. One owner-occupier told me that he had lived in the area since the 1970s. He had wanted to get out in the mid-1990s but was now very happy with the area, although there were still problems. Huge numbers of terraced houses still exist in the area, as do private landlords. There are many good private landlords-that is always worth repeating-but the bad private landlords, or possibly even worse, the indifferent private landlords are the problem. They may live 200 miles away and see ownership of the property only as a form of cash generation, and have no sense of responsibility. Such landlords are often the root of the problem, and they still exist.
There is still a huge turnover of people in different types of tenancy in that part of my constituency. The underlying reality is that from time to time, tenants are moved in-sometimes they are owner-occupiers-who do not respect the rights of their neighbours, and we need a proper and sufficient legal process to deal with them.
My conclusion is the same as that of my hon. Friend. We need two things from the Minister. One is a commitment to look at the operation of the legislation as is. Although it works, it is cumbersome and complicated and it can be refined and made much simpler. As the hon. Member for Castle Point (Bob Spink) said a few moments ago, when we deal with the difficult neighbour-whether they are tenants of a social landlord, in council or housing association stock, or a private tenant or an owner-occupier-we need legal structures that allow rapid and effective intervention. Preferably that will be by giving the offender sufficient and clear warning in the first place that action will be taken. The action should be sufficient to ensure that, where appropriate, the tenant will be moved on.
The licensing scheme is part of that process, but it is not the only thing. We have other legislation to deal with such issues. The Government rightly brought in antisocial behaviour orders and different sorts of legal mechanics. The licensing of private landlords, which
reminds the landlord of their own duties, is very important. Such measures were never about double standards. Controls exist to make the social landlord operate-although not always-in a responsible way. To bring the private landlord into that frame of reference is a sensible and reasonable thing, so we need to look at the operation of the relevant legislation to make it less cumbersome and more efficient, and its operation a lot quicker.
The second thing that my hon. Friend the Member for Manchester, Blackley is right to ask for is some certainty about the continuation of the legal process. We need that certainty. My area is emerging every day, every week and every month from the terrible situation that it was in 10 or 12 years ago. If it is to continue to emerge from that situation, we will need that type of legislative control for some time to come. When the five years are up, the legal process will not be finished and my area will not necessarily be totally stabilised, so local people will still need to know that those legal powers exist. We need certainty about the ability to go beyond the period of five years.
Of course, in the end the most important thing is that this type of control should be delivered locally. There is no logic whatever in Whitehall, despite all its great benefits and so on, being the driver of the process. Sometimes, even the town hall can be a long way away from the communities that my hon. Friend and I represent, although we have a good and competent council that reflects on the needs of local communities. We must ensure that the power to maintain the process is kept at local level, both in terms of implementation and timing-let us unfetter it to ensure that it is effective.
10.11 am
Sarah Teather (Brent, East) (LD): I want to begin by congratulating the hon. Member for Manchester, Blackley (Graham Stringer) on securing this debate. I am surprised that it is not better attended, because issues relating to the management of private sector housing are important to every right hon. and hon. Member in the House. I think that it would be a struggle to find a Member of Parliament who had not discovered that a considerable part of their casework involved dealing with the types of issues that the hon. Member for Manchester, Blackley and his neighbour, the hon. Member for Manchester, Central (Tony Lloyd), raised during their contributions to the debate.
The hon. Member for Manchester, Blackley spoke specifically about the issues of bad landlords and the impact that those issues can have on entire communities, rather than just on particular individuals who are struggling with badly maintained property, which was a point that the hon. Member for Manchester, Central picked up. I must admit that I have encountered similar issues in my own constituency, usually with an overcrowded house in multiple occupation whereby the house ends up with lots of rubbish in the front garden and there is lots of noise. Such problems almost always seem to be associated with overcrowding issues.
The hon. Member for Castle Point (Bob Spink) spoke about the problems that he has seen in his own constituency relating to people on benefits trying to gain access to decent quality private rented sector housing, which is a point to which I want to return later in my contribution. In his opening remarks, the hon. Member for Manchester,
Blackley said that of course it is not the case that not all landlords are bad landlords, and that much of the quality of housing in the private rented sector is very good. It is worth beginning with that point. MPs always end up with their views on this issue being skewed, because what always comes through their doors are complaints about the private rented sector. We see people who have problems with badly maintained property, and we have to deal with the issue of problem neighbours, but most people do not come to see their MP about problems with their landlord because they do not have problems with their landlord. It is worth placing on the record the point that both the Rugg review and the Government's response to that review highlighted the fact that something like two thirds of people in the private rented sector are quite satisfied with their property.
It is also worth placing on the record the importance of the private rented sector, particularly at the moment, as people are struggling to gain access to mortgages. It is inevitable that the private rented sector will play a bigger part at present and I think that it is healthy for the housing market overall that it does so. It is not a good thing to have a model that is focused wholly on affordable housing to rent in the social sector and on home ownership. There should be a better balance that includes the private rented sector. Indeed, when we talk about mixed communities and developments that are sustainable, we often focus on affordable housing for rent, low-cost home ownership and privately owned property, whereas private rented property should play an important role in those communities and developments.
Similarly, the hon. Member for Castle Point made a point, based on his experience in his constituency, about the difficulty of gaining access to affordable housing for rent. He said that the private rented sector ought to play a bigger part in providing housing for people who languish on waiting lists. In my constituency, they often languish on such lists for at least a decade. The hon. Members for Manchester, Blackley and for Manchester, Central both spoke about local selective licensing issues in their constituencies. They made very powerful points, as they said that there is no need for Whitehall to try to run those schemes. They can work very effectively on a local level, because they are designed to meet particular local needs. Both hon. Members made very powerful points about why those schemes have to be time-limited and I hope that the Minister will give them good news in that respect. Such time-limited schemes appear to be a very sensible way to try to deal with the type of local problems to which both hon. Gentlemen referred.
The Government have recently proposed a national registration scheme, which is the type of scheme for which the hon. Member for Manchester, Blackley has been campaigning. It is perfectly sensible that someone should know who their landlord is, or at least they should be able to find out who their landlord is. I do not see any reason why a landlord should not have to register their home address. Some of the frustrations that people experience in trying to deal with casework, either as a councillor, a Member of Parliament or as someone in a citizens advice bureau, when they are trying to deal with individuals who have difficulties with properties in a poor state of repair, stem from the problem of establishing direct contact with a landlord, who might be working through a managing agent.
There has been a wider debate about the extent to which the private rented sector should be regulated. In principle, I am quite sympathetic to some of the proposals in the Rugg review about a points-based system. However, I am quite anxious about how local councils are able to police such a system when they are already struggling to police issues related to HMOs through their enforcement processes. Local authorities around the country simply do not have the resources to police such a points-based system.
The registration scheme that was mentioned by the hon. Members for Manchester, Blackley and for Manchester, Central is, of course, different from the proposed national registration scheme, because the council in Manchester is right behind the scheme in the city, has signed up to it and wants to run it in the particular way in which it has been set up. That is very different from having a national registration scheme that is imposed everywhere as a one-size-fits-all solution. Inevitably, such a national scheme would run into difficulties if a local council did not experience the type of problems to which the two hon. Members referred, or if the scheme was badly designed or, as I have said, local councils simply did not have the resources to deal with such problems.
One point that was raised in the Rugg review was whether or not we should regulate agents and set criteria for the quality standard to which landlords must sign up before they sign up with an agent. By doing so, some of the burdens of regulation could be removed from local authorities. In their response to the Rugg review, however, the Government did not respond to that point, so I hope that the Minister will refer to it in his speech.
Having said that, regulation is not the only way to drive up standards in the private rented sector, and I want to make a few other points, both about issues that I was disappointed that the Government did not consider in their response to the Rugg review and about some recommendations in the review that they have implemented. First, on tax changes, it is not sensible that landlords should be able to realise the benefit of improving their property only when they sell it. It is much more sensible for them to be able to realise that benefit by offsetting the money that they have spent on such improvements against their income tax, rather than having to wait until they sell their property. The Government have sidestepped that issue and said that the Treasury will keep it "under review". I wonder what that means-perhaps the Minister could tell me.. Does it mean that the issue is under active review or that it is stuck on a shelf to be considered in 10 years' time?
The second thing that would clearly make a significant difference to the quality of housing in the private rented sector would be making it cheaper to undertake major repairs. A cut in the VAT rate for renovation and rebuilding would make a significant difference and enable landlords to improve the quality of their property. One thing that the Government have done, through the Homes and Communities Agency, is begin a process of trying to see how we can increase the amount of private investment in the private rented sector. Proposals to increase that type of investment are very sensible, if
long overdue. Many of experts in the field have been arguing for a number of technical changes to real estate investment trusts, which might make a difference to the amount of private investment coming into the sector. In particular, they have argued for changes to the amount of money that needs to be redistributed to shareholders. Do the Government have any response to that?
Thirdly, the hon. Member for Castle Point raised the issue of access for constituents on benefits. It is an enormous problem that I suspect all hon. Members have met. The main reason why most landlords do not particularly want to take tenants on housing benefit or a local housing allowance is not quality; it is that they are terrified that if the tenants' income fluctuates, their ability to pay rent will stop, perhaps for an extended period, while the local authority decides what to do with the tenant's application. Having benefits suspended can take an awfully long time to fix, during which time rent is not paid.
Some local authorities have introduced schemes to deal with issues of access arising from the need to give deposits and pay rent in advance, but usually those schemes focus only on people whose need is an absolute priority or who are classed as statutorily homeless, so the vast majority of people who are on a very low income and languishing on housing waiting lists have no chance of accessing them. A number of schemes are out there to address such problems. The most interesting one is a fast track scheme in the south-east that is a mixture of underwriting and advice. The scheme pre-approves would-be tenants for local housing allowance. Hon. Members will realise that tenants cannot obtain approval for local housing allowance unless they have a contract in place, and cannot obtain a contract unless their landlord understands how much local housing allowance the tenant will obtain. In partnership with the local authority, the scheme works out the tenant's level of housing allowance by going through their income and then, through the underwriting scheme, by paying a small fee-a tiny portion of what a deposit would be, let alone a deposit and rent in advance-the tenant can guarantee that the landlord's rent will be paid, regardless of whether the local authority suspends their benefits or they default on paying rent.
The scheme addresses a lot of problems with access to the private rented sector. Most importantly, it has an impact not just on the individual, who can then access property, but on landlords with higher-quality properties who were previously unwilling to take people on benefits and are now willing to do so. The race to the bottom that tends to occur in the private rented sector is halted in areas where the scheme operates. Because people on benefits get access to properties higher up the ladder, the landlords at the bottom with very poor-quality properties are left without anybody to rent them to, which creates an incentive to improve the quality of the properties. It is an interesting scheme. As we are discussing local management, I encourage local authorities to consider it and decide whether they want to be involved in the scheme or whether they could work with local businesses to introduce similar schemes in their area. Local regulation of the private rented sector is not simply a matter of licensing; it is also about improving quality in the local area. Local councils have a role to play, but Government could do a great deal with the tax and financial changes that I have suggested.
10.23 am
Robert Neill (Bromley and Chislehurst) (Con): I join other hon. Members in congratulating the hon. Member for Manchester, Blackley (Graham Stringer) on securing this important, valuable and timely debate. All of us, representing as we do constituents in different parts of the country, have had experience of some of the difficulties that can arise in the sector.
It is important to recognise-I am glad that it has already been said-that the majority of private landlords are responsible, do a good job and contribute valuably to the mix of housing tenure in this country. It is important at the outset of such discussions to put the issues into that context, otherwise historical images can sometimes unfairly skew the reporting.
That said, it is of course necessary to ensure that standards are maintained. It is important, therefore, that whatever system exists is both proportionate and targeted. It is also right, as hon. Members have done, to put the debate into the context of some of the broader issues that arise in our more stressed communities. I note the point raised by the hon. Member for Castle Point (Bob Spink) about the difficulties that can arise with behaviour on some estates. That does not apply simply to the tenants of private landlords; many of us across the board encounter that issue, and it is important that it is tackled.
I take the point made by the hon. Members for Castle Point and for Brent, East (Sarah Teather) about the difficulties of access to accommodation for people on benefits. It will chime with the experience of many hon. Members here. It certainly strikes me that there is some perversity in a system in which constituents of mine who qualify for benefits, on the face of it, have difficulty just getting into the system so that their deposit can be made available and they can enjoy a degree of security to assure their responsible private landlords that they will be able to pay. They have to contend with a pretty rigid bureaucracy. Although it is not directly the Minister's responsibility, I know that he will take that point back to his colleagues.
I find it strange that, for example, more than one individual in my constituency has come along whose circumstances have undergone virtually no change, as far as one can see, but who has had, in the course of a year, about three contradictory calculations of their benefit entitlements. When they try to pursue the matter, they are referred not to the local office in Bromley, where they could have day-to-day contact, but to the rather distant one in Stratford, which is the other side of the river and a long way away. They are told to ring a helpline, which generally gives them a recorded message, and they do not get a response. It is a frustration for vulnerable people. I think that Members from all parties would want to ensure simply that things work better within the available parameters.
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