Session 2010-11
Publications on the internet
General Committee Debates
Delegated Legislation Committee Debates

Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010
Town and Country Planning (Compensation) (No. 3) (England) Regulations 2010

The Committee consisted of the following Members:

Chair: Annette Brooke 

Berry, Jake (Rossendale and Darwen) (Con) 

Carmichael, Neil (Stroud) (Con) 

Chishti, Rehman (Gillingham and Rainham) (Con) 

Colvile, Oliver (Plymouth, Sutton and Devonport) (Con) 

Cox, Mr Geoffrey (Torridge and West Devon) (Con) 

Cunningham, Mr Jim (Coventry South) (Lab) 

Gilbert, Stephen (St Austell and Newquay) (LD) 

Hoey, Kate (Vauxhall) (Lab) 

Huppert, Dr Julian (Cambridge) (LD) 

Meale, Mr Alan (Mansfield) (Lab) 

Michael, Alun (Cardiff South and Penarth) (Lab/Co-op) 

Offord, Mr Matthew (Hendon) (Con) 

Seabeck, Alison (Plymouth, Moor View) (Lab) 

Shapps, Grant (Minister for Housing and Local Government)  

Simpson, David (Upper Bann) (DUP) 

Smith, Angela (Penistone and Stocksbridge) (Lab) 

Whitehead, Dr Alan (Southampton, Test) (Lab) 

Wiggin, Bill (North Herefordshire) (Con) 

Rhiannon Hollis, Marek Kubala, Committee Clerks

† attended the Committee

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Fourth Delegated Legislation Committee 

Tuesday 16 November 2010  

[Annette Brooke in the Chair] 

Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010 

4.30 pm 

Dr Alan Whitehead (Southampton, Test) (Lab):  I beg to move, 

That the Committee has considered the Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010 (S.I. 2010, No. 2134). 

  The Chair: With this it will be convenient to consider the Town and Country Planning (Compensation) (No. 3) (England) Regulations 2010 (S.I. 2010, No. 2135). 

Dr Whitehead:  We are here this afternoon because the statutory instruments have been prayed against. They are subject to the negative procedure, whereby if they are not objected to within 28 days, they come into effect. They effectively went into operation on 1 October, but there has been no opportunity to debate them before now. The prayer has at least ensured that such a debate has been possible. 

I am delighted to be able to commence our proceedings by setting out why I felt that the debate was necessary and why the issues surrounding the SIs, which are much wider than the bare text in the two measures, are important. We must think carefully about the intention behind the measures, and perhaps their unintended consequences—what the result of the measures might be, should they be confirmed following this afternoon’s debate. 

The secondary legislation is an attempt to address the problem of the discontinuity in definitions of a house in multiple occupation. Under the planning definition, HMOs with seven or more people—not, incidentally, students—would be regarded as subject to planning. Prior to secondary legislation that was passed before the last election, housing was within one use class, so no planning permission was required for change of use within the overall use class definition of housing. Therefore, changing a house from its previous use—perhaps for family occupation—into a HMO stayed within planning law, provided there were fewer than seven people in the house. It stayed within the single use class order, and therefore entirely escaped any planning intervention or examination by a local planning authority. 

There was a different definition of an HMO in housing legislation, however. It covers, for example, students and people who are not related to each other living under the same roof. However, in essence, that definition relates to the licensing of such homes—to the licensing of homes of three storeys, licensing when more than five people are living in a particular property or, under particular circumstances, the licensing of a wider range of HMOs, including those for students. 

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The two definitions were therefore not aligned, but there was clearly a definition under HMO legislation that meant that, as the public and several hon. Members observed, a wide variety of homes in particular parts of the country were changing their use, and potentially substantially changing the nature of various urban neighbourhoods and the amenities that go with them. However, that was happening under a procedure in which the local authority had no ability to intervene, or indeed to assist the residents of that local authority area who expressed concern about the changes and perhaps wanted to see what could be done better to balance those communities within the towns and cities where the changes were taking place. 

I accept that that development is not happening in all areas of the country by any means. In some parts of the country in which there are a small number of HMOs, or in which the proportion of HMOs remains very low, this neither preoccupies the residents and communities in those areas, nor causes a worry for the local authorities. Nevertheless, in some parts of the country, particularly university towns and cities, given the preponderance of students in HMOs in those cities, the development is a problem, although it is by no means confined to so-called “studentification” of areas, and we should not go away from our debate believing that it is. This is actually a question of what happens to neighbourhoods in which the nature of housing is changing, and of local authorities’ ability to examine those homes—for whatever use they are put to—to consider how a neighbourhood works on the basis of the changes, and to establish whether something can be done either to mitigate those changes and plan for them in the future, or to spread the effects so that the community and the neighbourhood is thereby better served. It seems to me that that is the central issue about aligning the definitions. 

The legislation was changed before the election, following a two-year consultation, to alter the planning definition of an HMO. The change led to the development of two different use classes within the definition of housing, meaning that there would be a family use definition and a multiple occupation definition. The change led to alignment with housing occupation, meaning that, if a house was plainly in multiple occupation, the definition of a HMO would be united across different forms of legislation. Importantly, however, because of the use class process, an attempt to develop a property into a HMO would be subject to the decision of the local authority, as a planning authority. It would not mean that that application would be refused, but it would mean that it would properly have to come before the local authority for consideration. Local authorities could then have started to develop strategies at local level to take account of such a change in definition. 

Indeed, that has happened in other parts of the UK, such as Northern Ireland, which have developed strategies based on that difference in the use class process. Those strategies allowed for the better planning of neighbourhoods so that communities could have a better balance of HMOs and family homes. They also allowed for consideration of where those family homes were, how HMOs and family homes would interact together, and how neighbourhoods could work better. That was my understanding of where we were prior to the introduction of the measures that we are considering. 

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During the two-year consultation to which I referred, a variety of options were put forward about what might be done, which ranged from nothing to various forms of further intervention. The option that received the least support by far—only 1% indeed—is that which we see in front of us today. 

It seemed quite clear that the changes that were put in place following that consultation were strongly supported. Their effects could have been very positive for local authorities and for residents who could see the balance of their neighbourhood changing, often before their eyes. 

The new Government, however, were concerned about what they saw as the blanket nature of the new process. There was a question of whether the planning activity that it would entail would represent an unreasonable and unsupportable imposition on authorities in which no one had expressed any particular concern about the problem locally. If that was the Government’s worry, I would have expected that the legislation could have been amended relatively straightforwardly. Quite simply, they could have introduced an opt-out from the change under the use class order if a local authority did not wish to use the planning power. 

Instead, the instruments before the Committee represent the worst of all worlds. As a result of the proposals, there will be two use classes for housing, but the any significance of that change is completely removed due to the process being absorbed into the general permitted development system. Therefore, the effect of the two classes is nugatory, except to the limited extent that article 4 directions can be used by local authorities effectively to reinstate that division. A local authority can therefore take action after an article 4 direction has been trailed for 12 months. That will happen on the basis that such planning comes under the local authority’s internal procedures, not national planning legislation. Despite the attempt to reduce the extent to which a local authority might be subject to legal challenge and claims for compensation following its action, the threat does not appear to go away. 

We had in place a very clear line of possible action for a local authority, but the attempt to reduce the scope of that clear line and concentrate on those local authorities where the power is really important—I can understand why that could have been the case—has resulted in an obscure opt-in for local authorities that are prepared to undertake the 12-month notice arrangement, and perhaps to risk legal action and claims for compensation. The whole process will be funded by local authority resources, and is not based on any planning charge. 

The instruments bring about a difference that is no difference, and we are effectively being returned to the status quo that we faced before the legislative change involving use class. We have been returned to that position on the basis of what turned out to be a three-week consultation with a limited number of participants, even though the previous consultation was extensive and delivered quite a different outcome. Even so, the majority of those who responded to the consultation within those three weeks were against the change. 

It so happens that on Thursday there will be a debate on HMOs, which was secured through the Backbench Business Committee by the hon. Member for Loughborough (Nicky Morgan), who is a Conservative Members. Many of her constituents are worried about

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the effect that multiple occupancy is having on the town, and particularly the role that students play in housing. She has circulated a note about the debate, in which she states: 

“I know this is an issue of concern in many constituencies—in my own because of the impact which large numbers of students living in a relatively small town have on the balance of our area…I am not sure yet which Minister will be replying.” 

I suspect that the Minister for Housing and Local Government will reply to the debate. Depending on the outcome of today’s debate, I imagine that he will have to go along to Westminster Hall and tell the hon. Lady and other hon. Members that he had debated that very subject on Tuesday, when he put through measures that will essentially stop local authorities in Loughborough and anywhere else from doing anything about the problem. He will not even be able to say, “I know that it’s a problem for a number of areas, so I will look into what can be done.” He will simply have to say, “It’s too bad. I have seen what could be done and have put a stop to it.” 

The Minister could make the debate a much more felicitous occasion, however, if he were able to go to say on Thursday, “Actually, we tabled the SIs that we considered on Tuesday for the purpose of identifying whether there are better measures through which we can address everyone’s concerns: the concern about blanket legislation and that about the continuing division of housing into two forms of use class.” He could propose that the Government would devise a method genuinely to meet those concerns through the introduction of a further SI setting out an opt-out process that local authorities could follow, should they wish. Such a measure would secure the approval of the vast majority of Members who have concerns about HMOs in their constituencies. It would be welcomed by the large number of local authorities who are dealing with the problem, and not just those authorities that have played a central role in trying to push the agenda forward. That could be done today, and I hope that it will be the outcome of this afternoon’s proceedings. If the Minister will announce such an outcome, I will be the first to arrive at the debate on Thursday full of congratulations for the foresight that he will have shown. 

4.48 pm 

The Minister for Housing and Local Government (Grant Shapps):  It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate the hon. Member for Southampton, Test on his relentless work in this area. I know that HMOs have occupied a good deal of his time in this place and that there is a clear concern about them in his constituency. Other constituency Members share a similar concern and he might be surprised to hear that I am one of them, because I have experienced exactly those issues in my own patch. 

I represent the constituency of Welwyn Hatfield, which consists of two separate towns. Hatfield has an enormous HMO problem as a result of the university of Hertfordshire’s decision to make the town its base a few years ago. Hatfield turned into a student town almost overnight, so this is a bread-and-butter issue for me at every constituency surgery. Welwyn Garden City does not experience any particular HMO problems, but it represents a good example of why blanket legislation is the wrong way to go with such issues. Half my constituency has the problem and requires protection from the planning

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system; the other half has no problem at all, and does not deserve to be caught up in bureaucracy and administration. 

That is the principal underlying thought behind the Government’s change to the HMO rules on 1 October. Blanket HMO-ing is not cost-free, as has been claimed. The changes that came into effect in April had a cost attached. We know that because the impact assessment made it clear at the time, naming the cost as a staggering £12 million a year in charges and costs to landlords. Some Members might have little sympathy for landlords, but those costs are ultimately passed on, and we know that the additional expense is shared by the tenants, whether they are students or others. A blanket HMO rule is not cost-free. 

The other point, which I thought the Labour party would have taken into account, is the sheer volume of planning applications required by the April change. The previous Government spent several years and a lot of energy—rightly, I think—trying to remove planning applications from the system in order to unclog it and allow more permitted development rights where appropriate. I congratulate the previous Government on that work. Indeed, they commissioned the Killian Pretty committee to discuss the issue and work out different ways to remove applications. 

Killian Pretty’s final report was an impressive document that outlined a variety of ways to remove up to 10,000 applications from the planning system. Again, to give credit to the previous Government, they started to follow through on some of its many recommendations—I think that there were 17 in total—for removing planning applications from the system. 

Then, in one fell swoop—with that single change in HMO legislation in April—the Government brought 8,500 planning applications back into the system. That is the nub of the problem with the HMO legislation left to us in April. For those of us who happen to represent places such as Hatfield, Southampton, Manchester or Loughborough, HMO-ing is an enormous problem, but for those who represent the vast majority of constituencies, it is not a problem at all. The figures are disputed, but we know that from another review set up by the previous Government, the Julie Rugg review of the private rented sector, which specified that student HMOs were a problem in 0.7% of wards in this country. 

Much as I would like to pass legislation that operates only for constituencies such as mine and those of the other hon. Members who suffer HMO-ing problems, I believe, as do the coalition Government, that it is our responsibility to create legislation that works for the whole country. I understand and appreciate that from the moment that Julie Rugg’s review was published, the figure of 0.7% was challenged. 

Alison Seabeck (Plymouth, Moor View) (Lab):  I hear what the hon. Gentleman is saying about the Rugg review. Why, then, is Milton Keynes challenging it on the basis that up to 30% of the area is directly affected by the spread of HMOs? 

Grant Shapps:  If one looks at the detail of an area such as Milton Keynes, it comes down to the question of what percentage of the ward is affected. Would a

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number of streets being included in a ward be a problem, even though it would not be the majority of the ward, or are we looking at a localised neighbourhood? 

I am prepared to accept that the figure may be more than 0.7%. For the sake of argument, let us assume that it is 1, 2, 3, 4 or even 5%—I do not believe that it is larger, as there is no evidence to support that. The point is that we cannot make legislation for the entire country based only on a minority area. There are better ways to do that and still protect minority areas such as the constituencies that we represent. It is wrong to create legislation that will not apply to 95%, 98%, or 99% of areas in the country, just because it applies to 0.7% or, for the sake of argument, up to 5% of areas. 

Dr Whitehead:  It ought to be placed on record that the Rugg review sets a limit of 10% of HMOs in any particular ward before it would be considered that any effect whatsoever had occurred as far as that ward was concerned. The figure of 0.7% arose as a result of calculations based on that arbitrary initial starting figure. The Minister would accept that the real effect in terms of neighbourhood difference occurs in a variety of ways, some of which relate to where the figure is effectively over 10%, and quite a lot of which relate to where it is under 10%. Although I share the view that it is by no means a universal phenomenon, or even a phenomenon in the majority of local authorities, it has generally been agreed that the real figure is far higher than Rugg considered in the report. 

Grant Shapps:  I am grateful to the hon. Gentleman. He is right to say that there is considerable debate about the figure in the Rugg review, which was set up under the previous Government. I am prepared to accept that the figure is probably higher than 0.7%, but I do not accept that it is anything more than 5%, and I will bring some evidence to bear on that point. 

Over the past six months, as one might imagine, I have taken representations from the hon. Gentleman and from other hon. Members. It occurred to me that, given the number of Members of Parliament who take an active interest in the subject and have approached me or otherwise made their views known, perhaps by signing the early-day motion, the figure may be around 5%. There is a justification in that. There are also hon. Members who represent constituencies such as mine where part of the constituency is affected but the other part is not. If things were the other way round, I would still want to approach the relevant Minister to make the point. The correct number is probably somewhere between the Rugg figure and 5% of the country. 

However, there are problems regarding the £12 million a year, the 8,500 additional planning applications and the relatively small proportion of the country that is directly affected. Interestingly, just as we have seen discontent in some authorities with the changes that we have made, there was discontent in other authorities—including, I think, prospective legal action—with the changes that the previous Government made in April. It is an area where it is hard to please everybody all of the time. 

Let me address the specific issue raised by the hon. Gentleman about the consultation process. As he rightly said, during the summer before last there was a long

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and detailed consultation that considered all those matters in great detail. He asked a perfectly legitimate question about why we did not repeat that entire process, and the answer is that it was because many of the arguments had already been teased out during the earlier consultation. We opted instead for a discussion with the relevant parties on all sides; I am not particularly trying to seek answers from one side of the debate or the other. 

The hon. Gentleman went on to ask why the decision was taken to go with an option that appeared to have very little support in the initial consultation. There is a reason for that lack of support. Because blanket HMO-ing did not exist at the time, it would be difficult to move to the situation that is now in place, which says that if something is needed it can be obtained, but one needs to use article 4 to get there. The reality is now that no investor could have bought a property in the last six months or so thinking, “I’ll convert that to an HMO.” So an article 4 solution would not have seemed possible back in April, following the initial consultation. It was made possible by there having been a short period during which it was not possible to buy a property and convert it, without planning, to an HMO. The window of opportunity was created only by the changes that had already been made. I acknowledge that this matter is not straightforward for hon. Members. For the reasons that I have explained, it is not straightforward for me, either. 

There is the issue of 12 months’ notice being required, to which I shall turn for a moment. The key point is that this has to be fair both ways round. It is not possible for a Government to pass legislation that gives no opportunity for challenge, so in reducing the requirements for using article 4, one of the things that we did was limit the period of compensation to 12 months. The other thing, which was already in play through the April changes, was that an article 4 direction requires no great cumbersome process. Some local authorities have perhaps got carried away or been under the misapprehension that the old system of using article 4 existed. 

It is worth hon. Members recognising that it used to be the case that people had to apply to the Secretary of State to use article 4. That is no longer the case. Although people have to notify the Secretary of State, those are two very different things. People are not asking for permission; they are simply letting the Secretary of State know, through one of the regional offices, that they intend to do that. 

That brings us to a critical point. I have heard representations from hon. Members today and on other occasions that it will cost a fortune to consult on and carry out an article 4 direction. It is not for me to provide hon. Members’ local authorities with legal advice—they have departments to do that—but when it comes to discussions with them, hon. Members should meet them with at least the knowledge of what is happening in other areas. I can therefore tell hon. Members that in Southampton—sorry, that is not correct. In Manchester, Portsmouth and Exeter—I wonder why not in Southampton—the local authorities have already got going with the process of using article 4. 

I have Manchester’s documentation with me. It is, literally, six pages. It contains a map with an outline on it, which says that this is the area—in this case, it happens to be the whole of the city of Manchester—within which the authority intends to use an article 4 direction.

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There is a very short justification: the work already exists in nearly all areas because these types of plan have long since been worked up. 

Hon. Members will be interested to hear that the consultation in the case of Manchester has involved, I understand, posting the document on the authority’s website and making it available in its customer services unit. That was it; there has not been any great complicated, lengthy process. It takes about 28 days. The 12 months can then start running. It seems to me that local authorities should, perhaps under some pressure from hon. Members, get on with the process of ensuring that the protection is made available as quickly as possible in areas such as Southampton, Milton Keynes and, indeed, Hatfield, where we know that problems exist and we are providing, through these SIs, a very sensible, clear and simple method of ensuring that localism reigns—that local authorities and local people have the power and ability simply to ask that article 4 be used in their area to protect it, without the bureaucracy and the cash required on an annual basis to HMO the entire country. 

I think that the other option proposed is unworkable. I can tell hon. Members that I did examine it. The idea that everywhere should be inside and then have to opt out, which would be the other way round to the way in which these SIs operate, is wrong. If there is a problem—even though we are debating the point, we are probably not terribly far apart—it cannot be right that 95% of areas, which are not affected by that problem, have to go through a bureaucratic process to get out of the legislation. In the post-bureaucratic world, where localism rules, it surely makes sense to say that if one has a problem, rather than moan about how article 4 operates, one should use the simple, inexpensive and quick process to get the area covered by the article 4 direction. Problems can then be resolved as part of an ongoing process. Let us not kid ourselves—HMO-ing does not resolve these issues in neighbourhoods such as ours. It should be done as part of the resolution of neighbourhood problems in such areas. 

5.5 pm 

Alison Seabeck:  I am delighted to speak under your chairmanship, Mrs Brooke, in my first statutory instrument debate on the Front Bench. I know that you will gently put me straight if I veer off line, but I shall try not to. I am also pleased to question the Minister in our first sparring match—I am sure it will not be our last. 

The two statutory instruments cover separate elements of the proposed change. I will begin with the Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010, the technical details of which my hon. Friend the Member for Southampton, Test set out at length, which I am sure was informative for the Committee. The order will remove the need for planning permission for those who seek to establish an HMO and change the use class of a property from C3 to C4. It amends legislation that was introduced by the previous Government to protect communities from the damage that large numbers of HMOs springing up can do to the peace and quiet, and property values in an area. 

The impact of unconstrained hyper-development is most obvious in some university and seaside towns, although not exclusively in them. I will come on to such

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issues later. I note that a number of Members on the Government Benches represent towns with higher education establishments, and that some represent constituencies with both elements. I wonder how their constituents will feel about their MP voting to strip them of the right to have a local say in this matter. 

Stephen Gilbert (St Austell and Newquay) (LD):  Is it not the case that far from stripping local communities of powers to tackle problems, we are empowering them to take advantage of the powers under article 4, as the Minister set out? 

Alison Seabeck:  That is a very nice thought and later I will give my reasoning why I do not think that the measures will empower individuals in the way that Government Members think. 

The previous Government allowed the freedom to turn HMOs back into family homes, and ensured that areas could be protected from the excesses that have been seen in some parts of the country. It is a genuine shame that the hon. Member for Leeds North West (Greg Mulholland) has not been given the opportunity to speak in this debate, as he said he would like to in the House last week. He is acutely aware of the nature of the problems that can be caused. Indeed, he asked me to mention that Liberal Democrat councillors in Leeds have tabled a white paper to the council, expressing the view that the changes are a mistake. He wanted that point to be voiced loudly to his colleagues on the Committee. 

Communities will have concerns on a range of issues, such as additional littering, antisocial behaviour and parking pressures. A number of areas in Plymouth will have serious concerns on that score. There are particular concerns about the loss of community balance. If properties are let on short-term leases, there is little community buy-in, with such tenants tending to have less of a stake in the area and being less likely to engage in what is happening there. 

The measures will make it difficult for local authorities, because they may not know where HMOs are situated. They might find out only when there is a nuisance or, worse, a tragedy. Furthermore, the private sector renewal budget for local authorities, which is £317 million this year, will be zero next year. How will it be possible to properly monitor the condition of HMOs within private stock and to offer help to responsible landlords? Do the measures not encourage rogue landlords? I heard what the Minister said about local authorities and powers within local communities and I will return to that later. 

It is relevant to refer to the recent changes in the housing benefit rules, which will stoke demand for shared accommodation and HMOs. One has to ask whether that is underlying the speed at which the statutory instruments have been brought forward. Not surprisingly—I do not blame them—landlords will be looking for investment opportunities to meet the unexpected surge in the need for shared-room accommodation. When considering the age range of 25 to 35 for the shared-room rate—it is in the housing benefit system, which suggests that they are the Government’s own figures—it seems that 88,000 people could move from their existing one-bedroom flats into HMOs. 

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The caps, and the cuts to the rate at which the local housing allowance is paid will result in a greater number of low-income individuals seeking bedsit accommodation at a cheaper rate than is currently available. The Minister may not have picked up on this yet, but evidence is emerging that landlords whose rent falls below the cap level for family-sized accommodation are already thinking of letting each room separately to achieve a higher income. That will encourage a growth in HMOs, perhaps in unexpected areas. Although many landlords are responsible and will seek voluntarily to maintain regulations standards, others will simply want to make a fast buck; they will sub-divide properties with plywood to cram in additional young people. The move to permit and encourage the spread of bedsits will entice more landlords into the market, drive up prices and, for many, put family home ownership further out of reach. The Minister may expect no pressure in areas outside student zones, but I have no doubt that we will see an increase in bedsits in a number of areas, and I do not mean seaside areas or student areas. I am sure that Members here today will know of areas in their constituencies that will be ripe for the picking as the changes come through and as the additional pressures are known. It will be the tenants forced to live in sub-standard accommodation and the communities made to absorb these developments who will bear the burden. 

I turn to the health risks posed by poorly managed HMOs. The more HMOs we have, the greater the problem. I start with the fire risk. Figures from the fire service indicate that those who live in HMOs are at greater risk of injury or death from fire. Only three days ago, a bedsit was destroyed in a fire in the constituency of the hon. Member for Reading West (Alok Sharma); and last Friday a 72-year-old man died in a fire in his bedsit in the constituency of my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly). The list goes on. The evidence strongly militates against the slackening of rules proposed by the Minister, which will open the market to additional HMOs. 

Grant Shapps:  I imagine that the hon. Lady is not suggesting that the change in legislation in October led to some of those terrible fires. I hope that she realises that HMOs alone will not resolve the problem, and that she agrees that such a link is a stretch too far. 

Alison Seabeck:  No, I have talked to the fire service, and it is very clear: the greater the number of HMOs in the system, the greater the risks. Unfortunately, those are not only fire risks; there are also general health risks, but I shall return to those later. The Minister may wish to read a report produced by a former colleague, Linda Gilroy, who was a Member before the hon. Member for Plymouth, Sutton and Devonport took her seat at the election. She undertook major research into the private rented sector. I recommend it; it is good reading. It flagged up many concerns about the ability of local authorities and fire services to monitor standards and provide protection to tenants and local neighbourhoods when local HMOs spring up. 

In addition to those problems, we are seeing redundancies in local authorities. In Southampton, five environmental health officers were made redundant this week. If that is replicated across the country, we will have ever fewer

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officers to monitor the growing number of HMOs that will result from the order. It is clear that the Minster is using article 4 as his get-out-of-jail-free card. As we heard, the order allows local authorities to specify areas in which the new rule will not apply, and to which compensation—the subject of the other statutory instrument—will not apply. 

Article 4 directions have already been invoked by a number of local authorities in advance of the order being introduced, because they know that the order would leave them open to a rush of potential landlords wishing to purchase properties, with a view to changing their use once the order has been agreed to. If an article 4 direction was not in place, it would open the door to compensation claims if the council subsequently decided to red-line an area and refuse permission for development. Indeed, many authorities may well conclude that the only logical response to the order is to give themselves article 4 powers across the whole of their area, and we heard from the Minister that Manchester and Portsmouth, among others, have already done so. There is a cost argument, as he pointed out, but it is quite simple to put something on a website. 

Milton Keynes and Newcastle, looking at the potential impacts and the claims against them for compensation, are estimating a minimum cost of £3 million, rising to £4 million or almost £5 million. The Minister might think that the estimates are wrong, but those local authorities are taking the issue seriously, and have gone to court over the matter, in the case of Milton Keynes. Clearly, their research indicates something quite different from the Minister’s. 

If that is the case, why have Ministers felt the need to move away from planning permission, given that Manchester has decided to cover its whole area? What evidence has the Minister received about the likelihood of a rash of article 4 directions in order to avoid paying compensation? What steps will he take to protect local authorities that delay the introduction of those directions from people who are moving into the private rented market and buying properties with the express intent of converting them for HMO use? How will he protect them from excessive compensation claims, if indeed they start to back up? 

I would be grateful if the Minister could answer some of the following questions. Can he let the Committee know how many local authorities he had contact with, in writing or through meetings, to discuss their concerns about the proposal? How many residents’ groups did he meet? How many landlord groups did he discuss the change with before introducing the measure? 

As the Minister believes the existing regulations to be unduly restrictive, does he believe that there should no longer be any limitations—other than where a local authority has applied an article 4 direction—on the creation of an HMO, even if it is in an unsuitable location? For example, in a mansion block comprising large, family-sized homes, or in a block specifically designed for elderly people, the conversion of a unit to an HMO occupied by several people with very different lifestyles could prove seriously disruptive to existing communities. This is where I question the localism of the measures. Those people would have no say—there would be no voice and they would have no recourse to anywhere—and they would simply find the properties taken over by people who might be quite antisocial in their outlook and behaviour. 

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Does the change of policy not run counter to the Government’s stated aims of improving people’s health outcomes? Is the Minister advocating that overcrowding and poor-quality accommodation are good for people’s health? Can he explain why he did not think it necessary to undertake an environmental impact assessment, especially considering that the general energy use and wastage in HMOs is higher than in family homes? Assuming that an HMO has four or five occupiers, there are potentially four microwaves, four televisions, four stereos and four rooms needing to be heated fully, whereas in a normal family home, a couple of rooms are heated, with heating often off or kept at a lower temperature in bedrooms. Why has the Minister decided on the statutory instruments without public consultation and in such haste? Haste is the big thing—I heard his comments on public consultation—because they are being brought forward quickly. 

How does the Minister envisage individuals being advised if their neighbour wants to create an HMO under the permitted development proposal? As I said earlier, will they first learn of it when the tenants move in, or when the first rave occurs? If localism rules, we have to question whether the proposal is taking the best interests of individuals into account. I am afraid that, pending the Minister’s answers, and depending on whether we think them satisfactory, Labour Members will press for a vote. 

5.19 pm 

Dr Julian Huppert (Cambridge) (LD):  It is a pleasure to serve under your chairmanship, Mrs Brooke. Unlike the last time I did so, I will be brief. 

It is clear that HMOs provide essential accommodation for many people. In my constituency of Cambridge, we have some 5,000 HMOs of different sizes, which means that roughly a quarter of the population is in HMOs in some way. I am concerned that we have had a rather grotesque example of stereotyping from the hon. Member for Plymouth, Moor View. It is not just students or ravers who live in HMOs; indeed, in Cambridge, many graduate students and young professionals do so, and we have a different perspective from areas with purely undergraduate students. 

HMOs have some problems, of course; I do not think that anybody disputes that. Many of them are best dealt with through environmental health, as they are in Cambridge. Environmental health is active in dealing with overcrowding, for example. We have problems with dodgy landlords, although they are not confined to HMOs; they are found in many places. We also have problems with nuisance tenants. Again, they occur not just in HMOs but in a whole range of other places, but HMOs bring together a certain element of that. 

I note the concerns in Milton Keynes, for example. We have had discussions on the issue, and I am grateful to have had a detailed briefing paper on that. Various hon. Members are concerned about the issue. They include the hon. Member for Plymouth, Moor View, my hon. Friends the Members for Leeds North West, and for Manchester, Withington (Mr Leech), and the noble Lord Shipley. I have had conversations and e-mails with a number of them. 

The question is how to achieve a balance. The secret comes down to the article 4 direction and how easy it is to obtain. I hope that the Minister will comment,

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because there are problems involved. The process needs to be simple, clear and relatively fast in order for councils to make use of it. I agree that that is the aim. Currently, it is too complex and slow, despite his comments; I hope that he will elaborate. There is also the issue of compensation. How much compensation does he think might be payable to councils if there are problems? 

Having said all that, I support the statutory instruments. We found in Cambridge that the system imposed by the Labour Government introduced a big burden. Cambridge has many properties that swap on a nearly annual cycle from family housing to HMO and back again, typically because the landlords, who might be a college or involved in some other organisation, rent either to a family or to a group of graduate students. That has caused problems and placed a large load on the council, particularly in late summer, when a huge number of planning applications can arrive. It also places a load on landlords. Cambridge has an active landlord accreditation scheme, which I hope is something that all Members support, and we take what it says seriously. The scheme’s steering group is extremely concerned about the change, saying that it will do damage without solving the problems that many people would like solved. 

I support the relaxation. I hope that article 4 can be made more useful, so that councils with a problem have a genuine rather than token tool for combating them. More broadly, local councils need much greater powers, which I hope will be given in the decentralisation and localism Bill, so that they can control excesses of whatever kind, whether of HMOs or of chain stores; we in Cambridge have been arguing for independent business zones. I hope that the Bill will provide the ultimate solution, and that the Minister can provide some comfort on article 4. 

5.22 pm 

Grant Shapps:  I am grateful for the contributions, not least because they provide me with the opportunity to sum up the concerns expressed. It is worth pointing out that the three applications of which the Secretary of State has already been notified have not applied to an entire district or borough. In fact, the hon. Member for Plymouth, Moor View will be interested to hear that the Exeter application involves a single ward. The measures are entirely flexible. That also answers the question asked by my hon. Friend the Member for Cambridge. The process can certainly be flexible; there is no reason for it not to be. 

Article 4 compensation has not been tested a great deal; obviously, it has not been used in relation to this change in the law, although it has been used in other areas. The maximum compensation, I think—I will correct this if I am wrong—is about £30,000. That is the maximum that has ever been paid. Very few article 4 compensations have ever been paid. I certainly do not recognise the figures running into millions of pounds. If the hon. Lady stops to think about it for a moment, she will realise that that would be almost impossible. Not only would the local authority, rather stupidly, have to turn down an application during the 12-month period, but during that period, the applicant would have to find a property, negotiate its sale, buy it, refurbish it, be turned down for an application that they presumably

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did not make in the first place and then claim compensation for being turned down. The idea that figures of millions of pounds will be involved is completely ludicrous, in the Government’s opinion. 

Dr Whitehead:  I just want to make a brief aside. Surely, the Minister must understand that one of the changes that does not take place when a property is taken from family occupation and becomes a HMO is that the property is refurbished—it is not. That is the problem at the moment. Properties that are made into HMOs simply have a number of people moved in, with the property still in whatever state it was, and that is how the HMO then works. The purpose of changing the legislation may be to get some handle on that issue, among other things. 

Grant Shapps:  I am grateful to the hon. Gentleman. We are really getting to the nub of this issue now, and there is a good degree of misunderstanding about how the compensation system works. Compensation is not payable on the basis of speculation about future profits that would be lost, and if he is arguing that there is not really much expense involved in switching over a property and making it a HMO, we have to ask what the compensation is actually for. In fact, not much compensation can be claimed at all. That is why I think that some of the scare stories about compensation have got completely out of control. These would have to be the abortive costs of expenditure incurred after the local authority had rather foolishly—given that it knows that it has a 12-month window here—turned down an application. I think that that would be slightly bizarre. Certainly, I find it very hard to believe that the compensation could run into the kinds of numbers that have been mentioned today. 

Dr Huppert:  Can my right hon. Friend clarify why a 12-month period was selected, when some of these problems could have been alleviated if the period was shorter? 

Grant Shapps:  It might have been tempting for the Government to say, “Actually, we will have no period during which notification needs to be given.” It is true that it is actually up to a local authority; a local authority can give a zero time period. Again, it would have to consult and take legal advice on that. 

We opted for 12 months because the Government have a responsibility to ensure that the rights of a potential developer are also considered when making changes in the laws, not least because we would be challenged in court if we were not reasonable with the amount of time provided. However, this does get to the nub of the argument, which is rather than endlessly complaining that the change in the law has taken place, the correct answer for Southampton and all the other communities concerned is to get on with consulting for 28 days and then they will be in a position to restrict the time during which compensation can be payable to a 12-month period. If other authorities had followed the good example of places such as Manchester or Exeter, they would already be well down the line. That seems to be the obvious answer. 

The hon. Member for Plymouth, Moor View challenges me to publish more details about the consultation. As I have said, we depended very much on the fact that this change was consulted on for a good long time under the

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previous Government. I am disturbed to find out that she does not read my answers to the many parliamentary questions that she asks me, or my answers to the parliamentary questions of other Opposition MPs, because that question has already been asked in a parliamentary question and I have indeed already published the full list, which is available in the Library. It contains quite a good deal of detail about the representations. However, I will send it to members of the Committee for clarification. 

I can also let the hon. Lady know that 14 key partners were consulted in the fairly brief consultation, right across the board—they did not hold any particular view or adhere to one side or other of the argument—and we listened to their thoughts on this change, too. 

Finally, I want to talk about the speed of this change. One would think, given the debate today, that this measure was not carried out on 6 April—I think that was the date. That was just about the previous Government’s last day, after 13 years in power. If it was such a screaming priority, why did it take until the last day of the last Government to do anything about it? I understand that for Opposition Members the ideas of localism and giving communities control and power over their own destiny, and not telling them from above that Minister knows best and therefore we will blanket HMO the whole country are anathema. The idea of giving residents the real power—in their own hands—to decide in some cases where a HMO should go, and where it is appropriate and where it is not, is anathema to the previous Government. 

Rather than taking 13 years to sort out this mess, we decided to do it—I guess—within 13 weeks. We think that it is right to act quickly; we think that it is right to give power to people locally; and we are proud to do all that. We will be very pleased if local communities, represented by their local authorities, get on with using these powers, as indeed they are now capable of doing, in the best interests of their own residents. 

5.30 pm 

Oliver Colvile (Plymouth, Sutton and Devonport) (Con):  I just wish to say briefly that my constituency has a big issue with HMOs. I declare a small interest, in that I have a shareholding in a public relations company that has been involved in development consultations and stuff like that. I will most certainly encourage my local authority in Plymouth—I hope that the hon. Member for Plymouth, Moor View will join me—to use the article 4 measures as quickly as it possibly can and to move forward on that basis. 

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Question put.  

The Committee divided: Ayes 9, Noes 5. 

Division No. 1 ]  


Berry, Jake   

Carmichael, Neil   

Chishti, Rehman   

Colvile, Oliver   

Cox, Mr Geoffrey   

Gilbert, Stephen   

Huppert, Dr Julian   

Shapps, rh Grant   

Wiggin, Bill   


Meale, Mr Alan   

Michael, rh Alun   

Seabeck, Alison   

Smith, Angela   

Whitehead, Dr Alan   

Question accordingly agreed to.  


That the Committee has considered the Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010 (S.I. 2010, No. 2134). 

Town And Country Planning (Compensation) (No. 3) (England) Regulations 2010

Motion made, and Question put,  

That the Committee has considered the Town And Country Planning (Compensation) (No. 3) (England) Regulations 2010 (S.I. 2010, No. 2135)—(Dr Whitehead.)  

The Committee divided: Ayes 9, Noes 5. 

Division No. 2 ]  


Berry, Jake   

Carmichael, Neil   

Chishti, Rehman   

Colvile, Oliver   

Cox, Mr Geoffrey   

Gilbert, Stephen   

Huppert, Dr Julian   

Shapps, rh Grant   

Wiggin, Bill   


Meale, Mr Alan   

Michael, rh Alun   

Seabeck, Alison   

Smith, Angela   

Whitehead, Dr Alan   

Question accordingly agreed to.  

5.34 pm 

Committee rose.