Energy Bill [Lords]
The Committee consisted of the following Members:
Alison Groves, Committee Clerk
† attended the Committee
(c) provide for the establishment of a national or local register of domestic PR properties for the purpose of distributing information relevant to this Act to landlords of domestic PR properties and their tenants and for other purposes relevant to this Act.’.—(Luciana Berger.)
The Minister of State, Department of Energy and Climate Change (Gregory Barker): We have had a helpful discussion of the amendment, which would provide for a national or local register of domestic private rented properties. The Committee will recall that I said that that would place an unnecessary burden on local authorities. The sector is already governed by a well-established legal framework and we oppose a national register at this point in time. I am keen to avoid unnecessary burdens on local authorities, but that does not preclude local authorities from choosing to use a local register for themselves.
Gregory Barker: In the spirit of localism, which runs through the coalition like the writing through a stick of Blackpool rock, local authorities will certainly be able to do so, should they think it a good solution for their area. However, I think that many of them will not feel that that is necessary because, as I have said, they will have the energy performance certificate register to assist and guide them. This morning, I might have underplayed just what a fabulous tool the EPC database will be. It will be an interactive and live web-based tool. It will be updated 24/7 and will contain a map of local areas highlighting each property that has been EPC’ed on any given street, road or village, and a little coloured dot will denote the status of that EPC. Given that the database will be updated on an ongoing basis, it will be a much more impressive, useful and accessible visual aid than a dull and dreary database register.
Gregory Barker: Yes, we hope that it will. We anticipate that the database will cross-reference council tax details so that it will give an indication of tenancy. For data protection reasons, it will not tell us who lives in the home, but it will identify, as does the Land Registry and other records, exactly what is involved—[ Interruption. ] The hon. Member for Brighton, Pavilion has just entered the room, so she has missed that exciting piece of news. I should tell her that I have updated the Committee that the EPC register, far from being a dull and dreary catalogue of addresses found in a dusty library in the local town hall, will be an exciting, interactive, map-based tool on the world wide web. It will be available not only to local authorities, but to Netmove and a plethora of other 21st century internet enterprises.
Luciana Berger: I must press the Minister on whether the register will show if individual properties are in the private rented sector. He has talked about council tax. I have lived in a private rented property for many years, but I have never had to specify that I am a private rented sector tenant. Will the Minister confirm how this fantastic new tool will specify whether properties are in the private rented sector? The obligation is on only those properties in the private rented sector, and I am unclear about how the tool will distinguish between different sorts of properties.
Gregory Barker: We are confident that the tool will be effective. Council tax records are available to local authorities. We expect the tool to enable local authority users to differentiate by type of tenancy. We are in discussions with the builders of this 21st century database tool about how that will work in detail.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): I am trying to follow the Minister’s last point. How will local authorities be able to determine what is private rented accommodation and what is not?
Tom Greatrex: I am sorry to press the Minister on this point. I might be mistaken, but I am not aware of what records local authorities keep that would enable them to determine whether accommodation is privately rented so that they can differentiate it in the database with the yellow dot that he mentioned.
Gregory Barker: Obviously a property cannot be rented out without an EPC. All rentable properties will have an EPC and qualify, because it is an infringement of the law to rent out a property without an EPC, and subsequently a declaration will be required. There are data sharing issues. We are developing the model now—it is not fully built—but we expect that we will use the information available to town halls to cross-reference.
Graham Jones: I think that the Minister is trying to say—this involves another point—that councils draw on a variety of resources to find out which properties are rented. They will use the housing benefit list and so on and then aggregate the information along with the council tax register. That is what councils generally do,
Gregory Barker: The hon. Gentleman is absolutely right; that is useful. However, the point that he raises about the difficulties between district and county in non-unitary authorities is one that I took away from our debate last week. Having asked various officials in different parts of the Department and outside it, I must tell him that that has not been encountered as a major obstacle. We are optimistic that this will work. Obviously, if there are such obstacles in practice, we will tackle them. If a property is to be rented out, an EPC will be necessary. When an EPC is produced, the assessor will record whether the property is owned or rented, and private or social. The EPC itself will volunteer that information.
Dr Alan Whitehead (Southampton, Test) (Lab): The terrific list of EPCs that we will get fairly shortly will indicate the tenure of a property. Will the landlord’s name and contact address be on the register of EPCs? If not, will it be kept somewhere else or will it not be kept?
Gregory Barker: I am confident, although I will correct the hon. Gentleman if I am wrong, that that will not record the name of the owners—certainly not for public scrutiny, for data protection reasons. The idea is that there will be a heat map—no pun intended—of the area that will convey simple information without giving anybody’s name. It will specify the properties and which have EPCs. If a property has an EPC, it will be colour-coded to show what level EPC has been reached. EPCs will record whether the property is privately owned, rented or social housing. Given that, in order to rent out, one is obliged to have an EPC, that neatly gets round the problem.
Dr Whitehead: I have two further questions about the register. If someone has not provided an EPC but is renting a property out and that rental has not changed, how will that be found out from the EPC register? If landlords’ names are not placed on the EPC register, how would the register in any way help to prevent someone from renting a property if they do not reach the level for the EPC? Would it not be necessary to find out separately who that landlord was, which might require a register to be complied? Can the Minister shed any light on those two points?
Gregory Barker: Clearly this is not something that will happen overnight. I appreciate the hon. Gentleman’s point, but the idea is that the change will take place over the next five years. He is right that if somebody has been renting a property since before October 2008, there is no need for an EPC, so there is a problem if someone remains in tenure. The landlord’s name will not be on the EPC as such. However, given that we anticipate that up to 90% of properties will have changed tenancies by 2018, and will therefore have an EPC, we are dealing with the nub of the problem.
The change will roll out over the five-year period. When there is a change in tenancy, landlords will be required to have an EPC, if they do not have one already. If we add on to that the ability from 2016 for the tenant to request measures, and from 2018—regardless of the length or duration of the tenancy—the obligation on the landlord to achieve a minimum energy efficiency rating, it all adds up to a very robust regime. It is certainly much better than the passive, dusty catalogue that a national database would be. The EPC register will be usable, accessible and constantly updated, and it will be a big step forward in making sure that the green deal is used.
Caroline Lucas (Brighton, Pavilion) (Green): I am pleased to hear that exciting news, which I had unfortunately missed when I came in the room. The Minister says that the EPC register will be regularly updated, but given that the life of an EPC is about 10 years, how will that in itself be updated so that the information that is held is up to date?
Gregory Barker: I know that the hon. Lady has tabled a new clause in relation to that good point. We are proposing to look again at the validity period of EPCs because the present period of 10 years is clearly not fit for purpose. Her suggestion of a one-year period might be slightly onerous, but without wanting to anticipate the decision that we will make, we are minded to move much closer to the hon. Lady’s position than the status quo. This autumn, as part of the consultation on the recast of the energy performance of buildings directive, we will be looking at moving to a much more progressive regime, which is likely to be much closer to the hon. Lady’s position.
Luciana Berger: The Minister referred to the 2008 EPC legislation. We know that it applies when someone buys a home, but will he clarify whether it also applies when people rent property in the private rented sector?
Gregory Barker: My advice is that there has been such a requirement if renting since October 2008. With that exciting news ringing in hon. Members’ ears, I hope that the hon. Lady will withdraw the amendment.
Luciana Berger: I thank the Minister for sharing his news about his EPC register. I want to ask him some questions that I could not ask earlier. As can be seen from the number of contributions from Opposition Members, this is a critical part of the Bill. We believe that it is essential to have the register, whether it is national or local. I am grateful for what the Minister has said so far. Is he thinking of bringing forward amendments on Report to match his announcement this afternoon?
Luciana Berger: While we are delighted to hear about the step forward with the EPC register, there are obviously many issues with that. We are not clear that properties in the private rented sector will be identified in the EPC register, because those data are not collected when council tax payments are made. We are keen for the Minister to reconsider our proposals and bring something forward on Report.
Gregory Barker: Just to be clear, the information on the tenancy will be recorded as part of the EPC. Regulations in April 2012 to open up the EPC register will make data on rental available, but we do not believe that there is a need for regulation to bring forward the interactive EPC information tool. As I said at the beginning, we are not currently minded to go to the expense and trouble of a national database. We are putting all our focus and energy into the interactive EPC register.
Luciana Berger: I thank the Minister for his response. Having received those assurances, we will await further details following the announcement this afternoon. I beg to ask leave to withdraw the amendment
Graham Jones: It is a delight to serve under your chairmanship, Mr Crausby. I want to tease out a few points on how the database will work. The EPC will have to have a cost to it, and I should be interested to know what that will be. The Minister said that as part of the Government’s move towards localism there would be a local register, if local authorities wanted one. Again, would that just be an aggregation of data, or could local authorities compel landlords to add their details to it? I am concerned that the Minister has not told us how the data will be used, apart from in relation to some privacy issues.
There is a great consumer empowerment argument here. I have argued persistently that we should empower consumers. If that information is allowed to move into the private sector—into the public domain or public space—the green deal will be better, but the Minister does not seem persuaded by that argument. I hope that he will come back to me on the information that could be given—for example, on internet vertical search engines—on rental properties; that would be the ideal location for the information.
I am also concerned about the EPC database, which other members of the Committee have touched on. There is a real issue and a weakness with regard to non-compliance. Aggregating the data is all very well, but what happens in the case of non-compliance? How will the Minister deal with non-compliance, in terms of defective or missing information?
Luciana Berger: I want to make some brief but really important points. I am concerned about the fact that the Government are seeking to withdraw clauses 40 and 41. We are worried that that will sweep away the entirety of the provisions that enable local authorities to demand improvements from landlords. Government new clauses 32 and 33 do not address that. It is also contrary to the points that the Secretary of State made
Gregory Barker: We strongly believe that we do not need clause 40, as we have made provision for minimum standards. I appreciate the points that the hon. Lady made, but we are not able—even in a spirit of consensus—to support what she wants. We propose removing clause 40 from the Bill.
Luciana Berger: I reiterate the point that I made about the previous clause. Without clause 41, the Bill will not allow local authorities to do any work in default. If there is an absentee landlord who is abroad, it will be very difficult for the local authority to step in and make the energy efficiency improvements necessary, charge for them, and pass on that charge to landlords. If the local authority chooses to impose a fine, it is more likely to be passed on to tenants. Rather than energy efficiency improvements being made, tenants could see an increase in their rent. We are concerned that removing the clause will make it difficult for local authorities to enforce the Bill. The Minister said that the clause was clunky; we do not think so. Local authorities need the tools at their disposal to ensure that they can enforce the law. Removing clause 41 removes the opportunity for local authorities to do that.
Graham Jones: The Minister referred to taking powers away from local authorities. Will the Minister clarify who will police the scheme if the clause is removed? Tenants will be able to go to a tribunal, and the local authority will be able to take civil court action, which may lead to a fine of up to £5,000, but there is a move away from local authorities. Local authority environmental health officers currently police category 1 hazards under the housing health and safety rating scheme. That pretty much dovetails with the F and G category in the green deal, so there could be duplication if that is moved away from the local authority. It seems obvious to me that responsibility for policing the scheme must sit with local authorities, as they already have experience of the housing health and safety rating scheme, through environmental health officers. Will the Minister clarify those points?
Gregory Barker: I am afraid that that boils down to the same point. As with the previous clause, we believe that we have made provision for minimum standards and so do not require the additional points. Where possible, we are trying to regulate with a light touch. We are mindful of each additional regulation creating a burden or expense, so we will not support the clause.
‘(1A) Provision falling within subsection (1) includes, in particular, that where a notice has been served under this section requiring a landlord to make relevant energy efficiency improvements and that at the end of the period for compliance in
Tessa Munt: Amendments 124 and 125 are about the sanctions relating to the domestic energy efficiency regulations. I wanted a discussion on whether we should firm up the sense of the clause by replacing “may” with “shall” and including the words in amendment 124.
On reading the clause, it strikes me that the most sensible thing that the Minister could do is include the word “shall”, because the clause relates to securing compliance with requirements. Clearly, the measure is for those who are not compliant, as opposed to those landlords who will be. It strikes me that a lot of the Bill’s provisions give protection to landlords. There are various protections, appeals and mechanisms that protect landlords all round.
The measure seems to be slightly without balance. I am seeking to ensure that the Secretary of State must include provision for securing the compliance of landlords. The measure should not be quite so gentle. I ask the Minister for his comments.
Huw Irranca-Davies (Ogmore) (Lab): I am pleased to support the two amendments, to which my hon. Friend the Member for Southampton, Test, and I have added our names. We have great sympathy with the amendments. The hon. Member for Wells, who spoke to her amendment so well, referred to sanctions and trying to get the balance right. That is what we want to explore as well.
“The Green Deal is a win-win opportunity for landlords by removing upfront cost of work to upgrade the property by making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.”
That is what the amendments are about; they go to the heart of that point. I shall be very interested to hear the Minister’s response, because the amendments seem to be very much in the spirit of what he and the Secretary of State are trying to do.
If you could extend your leniency a little, Mr Crausby, perhaps I might ask the Minister some questions in light of the comments of the hon. Member for Wells, rather than us having a stand part debate. One of the
Let me turn directly to the two amendments in the name of the hon. Member for Wells and others. Amendment 124 would transform the Secretary of State’s power to make regulations into a duty to do so. I struggle to see why we would not want “shall”, rather than “may”. It seems that it would ensure exactly what the Minister intends to happen, and what we want to happen, so let us put it in there.
Looking through the history of the legislative work of these Committees, it is interesting to note that “shall” tends to outnumber “may” by something like five to one, and for very good reason: committees demand precision and intent. It might seem that we are talking about how many angels can dance on the head of a pin, but we are not. Accepting the amendment would be a clear signal from the Minister that he intends the regulations to be made, and not that he thinks they may be made. I hope that the Minister will agree to amendment 124.
Amendment 125 would allow local authorities to carry out energy efficiency improvements themselves and recover the cost from the landlord in addition to, or instead of, imposing a fine of up to £5,000. Such a fine for the landlord of one property, rather than a large, multi-property landlord, is quite significant.
Huw Irranca-Davies: Indeed, I am a small individual landlord—I inherited a property—and it would be a lot of money for me, despite what anyone might say. For others, however, it would not be such a great amount. A power for local authorities to step in to do the work if a property is not brought up to standard seems to be correct.
Graham Jones: What will be the difference for a local authority between the cost of pursuing a lengthy court action, albeit civil, for the £5,000, and the cost of work in default? The latter seems substantially cheaper and far more effective.
Huw Irranca-Davies: I agree entirely with my hon. Friend. I do not know the figures, but I am convinced that the Minister and his officials have them, because they will have done the analysis. From the signs, it seems much more cost-effective and timely to allow the local authority to step in and do the work when all else has failed.
We are not talking about a draconian power. Looking at the careful wording of the provision, it may not be exactly right, but it is pretty much there. Where a notice has been served and there has been a failure to comply, not only in whole, but in part, the local authority
Going back to the point made by my hon. Friend the Member for Hyndburn, the amendment seems to be a timely, efficient and cost-effective way of carrying out the necessary works, but only when the landlord, having been served a notice, has failed to comply in whole or in part. I hope that the Minister will be keen to show his support for these sensible amendments, or will explain why they are not required, because they seem to be completely in the spirit of what he and the Secretary of State have said. I remind him once again of the Secretary of State’s words:
Gregory Barker: Again, I do not think that Members on the two sides of the Committee are so far apart when it comes to the overall vision for the rolling out of the green deal, but we Government Members are more cautious about creating statutory duties with the full force of law. That will create additional burdens, particularly at the outset of the green deal, which will, as I have said a number of times, potentially run for two decades.
Claire Perry (Devizes) (Con): I realise that the “may” versus “shall” versus “must” debate is something others have heard time and again, but I confess that I am concerned about imposing a duty on local authorities which they may or may not be set up to carry out as part of their working practice. Before we even get to that stage, one of the things that concerns me is that in the poorest households, which many of us have talked about, we have issues about language and mistrust. Can the Minister enlighten us on what the process looks like, before we get to the stage of the local authority coming in? What safeguards will there be in the system? My final question, if the Chair will indulge me, is about my concern on social rented housing. Will this regime and, ultimately, enforcement apply to the social rented sector as well? Sorry, that was many questions in one intervention.
Gregory Barker: Many questions, but I am not so sure that there will be many answers. My hon. Friend raises some legitimate points. In many places where it is more likely that this legislation will be implemented, there will be a more complex social situation than would necessarily be the case when we are thinking of this in the vanilla terms on the amendment paper. Those places could be inner-city areas where English might not be as readily understood as a first language as it is in Committee. There could be different layers of complexity, such as multi-tenanted houses or short tenancies. We are cautious about imposing blanket obligations where there is the potential for a range of local circumstances. The effect could be very different from the intention of the Committee.
Huw Irranca-Davies: I want to give a reciprocal reassurance to the Minister and to the hon. Member for Devizes. The amendment would not create an obligation or a statutory duty; it would create a power. Under the amendment, a local authority could determine, according to local and individual circumstances, how it applies the power. It could deal with the issue of an individual
Gregory Barker: The hon. Gentleman is right, but amendment 125 would still grant local authorities the right to enter a landlord’s property and carry out improvements charged to the landlord, if they fail to comply with regulations, as I touched on earlier. The amendment would create a strengthened enforcement position, but we need to be careful, as I previously indicated, because it brings us on to a further layer of the onion of rights and obligations. These entry powers would engage article 1 of the first protocol of the European convention on human rights, which protects the right to property. I am concerned that powers in this case are not proportionate and would interfere with the rights of property owners. Also, the Protection of Freedoms Bill would rationalise powers to enter premises. Granting further access here would run contrary to the implementation of that legislation, which the Government are committed to.
Claire Perry: I thank the Minister for raising that important issue. There is a creeping sense that powers that sit in the statute book end up being imposed as regulatory burdens or at some sort of regulatory cost. If we have concerns about whether this is enforceable under the Protection of Freedoms Bill or the European Court of Human Rights, I suggest we vote against the amendment.
Gregory Barker: I thank my hon. Friend for that intervention. The fact is that, while it may seem simple to allow a local authority to do this, we would then expect a local authority to make a decision on whether it was right to enter an individual property within its area, and some small local authorities to make judgments on articles and protocols of the European convention on human rights and on proportionate interference that potentially runs counter to the Protection of Freedoms Bill. We could end up—entirely through the unintended consequences of well intentioned legislation—with a small local authority inadvertently wandering into a minefield of European legislation, which could tie up officers’ time and act as a huge distraction to rolling out the green deal in that area. It is not something that I would wish on local authorities, which would be taking up the powers that the hon. Member for Ogmore seeks to give them merely to fulfil a discrete action on an individual property. The potential to open up that minefield massively outweighs the benefits that could accrue.
Huw Irranca-Davies: I understand the Minister’s caution, but what is the response to the Local Government Association, which does not share those worries and which is calling for the power? It has clearly judged that the Minister can satisfy himself about the international, human rights and other obligations, and it will follow—there is so much in the Bill that will be dealt with in secondary legislation—whatever guidance, policies and regulations are introduced in the autumn and in the spring of next year. It has confidence that he can satisfy himself of that, and it will get on with the job. It wants the power.
Gregory Barker: I am not arguing with the LGA’s views on this Minister, but I do not necessarily agree with all its conclusions. I have not had the opportunity to discuss this specific line of the Bill in detail with the LGA, but it would be irresponsible to put such powers in the Bill, encourage local authorities to take them up and use them and then inadvertently let them wander into a European minefield. Being mindful of the cost of litigation and the potential to end up in Europe, the whole of a local authority’s budget for home improvements could be swallowed up in hugely distracting and expensive court cases. At this stage in the development of the green deal, it is simply not necessary to offer such powers.
Of course, that does not preclude us revisiting the issue in future years in the light of experience. I have, however, been told by my officials that, despite the words of the hon. Member for Ogmore—he may well have had a discussion with the LGA on the matter, but I have not—the LGA has not made representations to us about the issue. I will ask my officials to contact the LGA to clarify its position, but he possesses more information than we do.
Simon Wright (Norwich South) (LD): When the Minister engages with the LGA, he may also ask about the existing powers that are available to local authorities, including those under the Housing Acts, where they have the ability to intervene in making works and recovering costs. I believe that those powers are used sparingly, and I wonder whether the Minister could ask the LGA why that is.
Gregory Barker: That is exactly what we intend to do. In fact, when I discussed the matter with my officials before we came into Committee, the use of the Housing Acts and the ability of local authorities to deploy similar powers was something that we wanted to engage with the LGA and Department for Communities and Local Government officials on. I understand the intention behind the amendment of my hon. Friend the Member for Wells, and we are mindful of it, but it is a complex issue, and the last thing we want, having come this far and made so much progress, is to derail the proposal through unintended consequences. In year one or year two, if some ultra-keen, pioneering local authority inadvertently, because it wanted to be on the front foot, caused a court case in Europe through the use of the powers, that case could stymie the whole roll-out of community plans. Before accepting the need to legislate along the lines that my hon. Friend has suggested, we want to be a lot more comfortable. As I said, we have not had representations from the LGA directly.
Gregory Barker: That is exactly right. My hon. Friend probably has more expertise in such matters than I do, given her long-standing interest in the sector, so I would be very happy to keep her informed and to have her inform those discussions. This area is complex, and the potential impact of European and other domestic legislation
Amendment 124 would place a duty on the Secretary of State to make regulations on sanctions. That proposal is, again, unnecessary, as Government amendments debated earlier today already provide a duty to make minimum standard regulations. It is inconceivable that such minimum standard regulations would be made without provision within them to deal with sanctions, so there is no need for separate express provision on that point. We will bring forward the intent behind the amendments as part of secondary legislation. Embodying that intent in secondary legislation gives us greater flexibility to return and potentially strengthen the powers in due course, if they prove to be less than satisfactory. That extra flexibility will allow us to future-proof this framework, which, as I keep saying, will stretch well into the 2020s.
Government amendments 138 to 141 make consequential amendments relating to the sanctions for the purpose of domestic energy efficiency regulations, as a result of new provisions tabled elsewhere. Government amendment 138, in particular, clarifies that it will be the local authority that enforces the regulations.
It is often asked whether local authorities will get funding for such enforcement work, to which I can say that the coalition are absolutely committed to ensuring that the new burdens on local authorities are funded to avoid pressure on council tax. We recognise that the enforcement mechanism will place costs on local authorities, and we will assess costs in the usual ways. We will want to consider any possibilities for meeting costs from income generated, by which I mean from the fines that are levied on recalcitrant landlords. If the regulations are made, they will create a level playing field, and we intend that they will apply to the worst performing properties, no matter where they are in England or Wales.
There is also the question of whether a landlord would have to pay to appeal against the penalty. Further detail, which will be consulted on in due course, will be set out in secondary legislation. We expect, however, that the court or tribunal will have the discretion to award costs. Ultimately, it is about ensuring that we have the levers to make the most effective regulation. It may be most appropriate to make provision for appeals by amending existing legislation governing an existing court or tribunal.
I hope that I have reassured my hon. Friend on these important issues. We need to tread carefully. Our plans on them will evolve, and I am happy to continue to work constructively with her through the year to ensure that we arrive at the right solution. I hope that, on that basis, she will consider not pressing her amendments.
Tessa Munt: I am reassured, bearing in mind our discussions this morning, the items mentioned by the Minister in our discussions this afternoon and what he sees as the possible impact. If he is happy to carry on
Huw Irranca-Davies: I am not as reassured as the hon. Lady, so I want to add a few comments and to test the Minister further. On amendment 124, which would change “may” to “shall” and therefore put a duty on the Secretary of State to make regulations, which is what we are asking for, the Minister did not give a rationale of why that is such an onerous problem. I listened closely to his answer, but I may have missed it and, if so, I apologise. Will he reiterate for me why that is such a difficulty? I assume that the Secretary of State will not only be expected to make regulations, but, in the light of this and earlier debates, get on and do so, which is why the word “shall” is in the amendment. I may have missed the rationale, but could the Minister respond to that?
As the Minister will know, amendment 125 inspired a fair bit of debate in the other place, which is why we have brought it back. I seek reassurance from him on two things. First, he went into his detailed concerns about the possible unintended consequences of agreeing to amendment 125, not least in relation to human rights legislation. In that case, will he share the full legal opinion with us, not necessarily in Committee, but certainly in time for all Committee members to look at it and decide whether we are satisfied and reassured, because we have nothing in front of us? I trust the Minister implicitly on what he has said, but as a former Minister I want to see that opinion and to understand how a power, as opposed to a duty, on local authorities might raise the spectre of impacting on human rights legislation and possibly other legislation. I have to say to the Minister that we would need to have that information in time to give us the chance, if we are not assured, to bring the debate back in the other place.
Secondly, I am slightly reassured by the Minister’s offer to the hon. Member for Wells, whose name heads the amendment, to meet the Local Government Association. For the benefit of the Minister, I want to read into the record this quotation from the LGA:
“The LGA is proposing that any new powers include provisions for the local authority to decide whether to make physical improvements to an offending property or to issue a civil penalty to the landlord. This will help ensure that action the local authority takes results in a building stock with greater energy efficiency.”
Things might have changed and the view might have altered—I do not know—but I again ask the Minister: will he share promptly the outcome of the discussions that he intends to have with the LGA, which I anticipate will need to be in the next few days? If the LGA has changed its mind and says that it shares the Minister’s concerns and does not want to end up in legal disputes, not between the tenant and us or the landlord and us, but over human rights legislation, he should let us know so that we can make a decision. We need to have that information in time so that, if we are reassured, we can stop the ongoing debate before it even reaches the Floor of the Commons. Will the Minister respond on those two points, which are not too onerous, to give the Committee further assurances?
The hon. Member for Devizes raised the issue of the burden that might be placed on local authorities. As I have made clear, we are not introducing a duty that
Gregory Barker: As the hon. Gentleman will know from having been a Minister, it is not normal practice to share Government legal opinion—nice try. I seem to remember that he was member of an Administration that would have died in a ditch rather than share legal opinions, even when the whole country was clamouring to hear the advice that the Attorney-General gave the Cabinet about the Iraq war. We will not go down that rabbit hole just now [ Interruption. ] Perhaps we will.
Huw Irranca-Davies: The Minister is absolutely right about legal opinion but it was worth a try—I always have a try, just in case. Will he write to members of the Committee and expand on his detailed concerns about where he thinks the amendment would cause local authorities problems of a legal nature were it to be implemented?
Gregory Barker: I am happy to reflect on that point and get back to the hon. Gentleman and the Committee in writing. One must be a little more forthright about the LGA. I am endeavouring to be as consensual as I can, but ultimately, we are the Government; we take the decisions and lead on the issue. The hon. Gentleman is starting to push the envelope a little too far in terms of wanting a hand on the tiller. The LGA is important, and if there is anything of substance that we feel would be appropriate to share with the Committee, we will. If the hon. Gentleman really wants to share in these decisions, I invite him to sit on the coalition side of the Committee.
Huw Irranca-Davies: On at least two occasions during previous Bill Committees, as a Minister I invited Opposition Members to sit in discussion with the LGA—and others—and look at matters that were pivotal to the success of the Bill. If the Minister is saying that he does not regard Opposition Members as worthy of being part and parcel of such discussion, that is a disappointment. I am asking the Minister to share the concerns of the LGA with us, or alternatively to tell the Committee whether the LGA is satisfied with what the Minister is saying and no longer requires that power.
Gregory Barker: I can say clearly that we have had no formal representation from the LGA on the issue, and I will not prejudge our response to any further engagement with it. If it is appropriate—as it clearly was during the glory years when the hon. Gentleman was a Minister—we will come forward. I will not give a carte-blanche commitment to do that without first having the benefit of a discussion on the coalition side of the Committee. The hon. Gentleman will understand that.
On the issue of “may” and “shall”, I know that there is a degree of hesitation about the creation of a more liberal regime. We are a little more cautious about creating duties and obligations on the Secretary of State
(za) for a local authority to enforce any requirement imposed by or under the regulations;’.
Huw Irranca-Davies: I have one brief question in the stand part debate. Will the Minister return to the overarching issue of the use or potential abuse of section 21 powers? I understand from the nature of the debate that we just had that he did not feel he could turn to that immediately. I refer to the issue of the notice to quit. What discussions on that has the Minister had with his team? I shall continue to speak so that he can receive inspiration. How can we ensure that good, responsible landlords have nothing to fear, but that exceptional bad landlords, who have previously used section 21 powers to get rid of tenants for no good reason, do not also use them because a tenant has quite reasonably, under the terms of the Bill, asked for improvements? The landlord might think, “I will not tell you officially no, but we will wave goodbye in a couple of months”, and forward comes the section 21 notice. Will the Minister tell us about the discussions that he must have had with his team? What safeguards are in place for such tenants to ensure the right balance?
Gregory Barker: The clause gives the Secretary of State powers to make regulations in order to secure landlord compliance with domestic energy efficiency regulations. In short, it is about ensuring that those potential regulations have teeth. Landlords of the worst-performing properties who do not comply with a local authority notice or provide false information, could be subject to a civil penalty of up to £5,000 per property. That is consistent with the maximum level at which local authorities can impose fines on landlords for letting out substandard or hazardous accommodation and is a clear and proportionate deterrent.
The regulations must also include provision for landlords to appeal to a court or tribunal, and include details on the jurisdiction of the court or tribunal, the grounds for appeal, the procedure for appeals, the suspension of a penalty until the outcome of the appeal, the powers of the court or tribunal, and lastly on how any sum payable in pursuance of a decision by the court or tribunal is to be recoverable. In addition, the Secretary of State may revoke or amend existing subordinate legislation—I am coming to the hon. Gentleman’s point—governing a court or tribunal to make the provisions I have just listed. That will enable us to provide for appeals in the most appropriate way.
Graham Jones: The Minister has been generous in giving way throughout the Committee. He referred to the £5,000 fine under the clause and earlier said that he would allude to the division between the duality of prosecutions under the housing health and safety rating system for a standard assessment procedure rating of less than 35—going up to 38 for F and G-rated property, so they are almost coterminous. How does he expect the division to work? Will he provide clarity about a scenario in which a tenant is faced with an F or G-rated property and a local authority has the option to take a £5,000 fine or take action under the HHSRS?
Graham Jones: If a local authority is going to take action against a G-rated terraced property, for example, it could go to civil court for the £5,000 fine or, because an F or G-rating is nearly almost broadly the same as having a category 1 hazard, it could take action under the HHSRS as well. A local authority therefore has a dilemma because it has two options. What is the situation regarding the legislation? How does the Minister expect the two systems to work together?
Gregory Barker: It would be precipitate for me to interpret the position for them. It is for the local authority, which is availed of all the facts of the situation in particular local circumstances, to judge that for itself. We are obviously crossing into housing legislation, which comes under the Department for Communities and Local Government, in which I am not particularly expert and on which I have not been briefed. It is not Ministers in London but local authorities—fully availed of local circumstances and facts—that are in the better position to make those judgments.
To re-emphasise, the clause will ensure that potential regulations have teeth, but also provides for landlords to be able to appeal against any penalty. It is proportionate and effective, and on that basis, the clause should stand part of the Bill.
Gregory Barker: Government amendments 143 and 144 will provide the private rented sector with certainty that we will regulate to ensure that tenant energy efficiency improvement regulations come into force no later than 1 April 2016. Under the regulations, tenants will be able to ask for consent from their landlord to make relevant energy efficiency improvements under the green deal or ECO, and they may not be unreasonably refused. Like the minimum standard regulations, it is a big step forward, and the Secretary of State will have a duty to make the regulations.
Amendment 127 proposes that tenants’ rights regulations should be introduced no earlier than April 2014. However, with regulatory certainty, we need to provide landlords with a reasonable period—until 2016—to prepare and get up to speed with the regulations. I commend the Government amendments to the Committee, and I hope that during our discussions and debates on the issues, I have given hon. Members sufficient reassurance that the hon. Member for Wells will not press her amendment.
Dr Whitehead: I wanted to raise an issue about the use of “must” rather than “may”. The amendment strengthens what is essentially, as we discussed earlier, a subset of the framework regulations set out in clauses 3 and 6. The Minister might remember that we discussed landlords of landlords, an issue that could be covered in the framework regulations. Indeed, the framework regulations in clause 6 provide specifically for those regulations to
Is the Minister at all concerned about the fact that if the clause is agreed to as drafted, he will be required to provide two entirely separate sets of regulations, which will be laid before the House and, potentially, debated on two separate occasions? In terms of the neatness of the Bill and its ability in the fullness of time, hopefully, to incorporate my concerns, I have raised the concern that not all landlords have a relationship with a tenant in the way set out in the clause. That needs to be incorporated into legislation, or at least referred to in regulations, separately from a strict landlord-tenant relationship. The whole clause might therefore be incorporated into the provisions for the overall framework regulations in clause 6; that would save us time later as far as regulations are concerned, facilitate the extension of the definition of “landlord” and deal with the possibility of refusal and sanctions against a landlord or bill payer for not agreeing to a green deal in the way that we discussed.
Gregory Barker: I listened closely to what the hon. Gentleman was saying, but I cannot move further than the position that I have already articulated. I appreciate the sentiments behind what he is saying, but we have considered this in light of official advice, and in light of how we anticipate that the body of legislation will move forward. We are confident that the regulations that we propose to lay before the House will be up to the job, and we do not see any inherent conflict of the kind that he seems to anticipate. It is not something that we have skated past lightly.
I can assure the hon. Gentleman that Government amendments 143 and 144 will provide the private rented sector with certainty that we will regulate. Amendment 127, which proposes that tenants’ rights regulations be introduced no earlier than 2014, would still provide the regulatory certainty, but we need to allow landlords a reasonable period—until 2016—to prepare and to get up to speed with the regulations. I have already made that case, and I hope that the hon. Gentleman will understand where I am coming from.
Ian Lavery (Wansbeck) (Lab): Will the Minister provide clarification on the question of reasonableness in the legislation framework? It looks as though the bill payer will be well protected, but landlords might need some protection. For example, the green deal or ECO might need to be introduced on properties that the landlord could not improve because of conditions that are laid down in conservation areas, or for listed buildings. In such situations, the tenant might want and request the improvements, but the landlord would be prevented from making them because of the listed building status or conservation area status.
Gregory Barker: I am not a lawyer, or legally trained, but I know that “reasonable” has quite a strong legal basis. Being unreasonable is also something that the courts are used to dealing with, and it is readily defined on a regular basis across a range of legislation. The hon. Gentleman suggests that it would be unreasonable to install measures in a property that is in a conservation area, but I do not think that it would come down to not installing energy efficiency measures at all. I find it difficult to conceive of any property to which one would not be able to make some improvements that would still take into consideration its listed or conservation status. That would be taken into account in the green deal assessment; one would expect a professional green deal assessor—particularly in a given locality—to be used to proffering sensible advice that considers the status of the building or the area in which it is located, and to propose sensible measures.
It is one of the great hopes of the roll-out at scale of the green deal programme that we will be able to drive forward greater innovation in the technologies, innovations and treatments that are available for listed properties and properties that are in conservation areas, because at the moment it is a real problem. The hon. Gentleman has raised a legitimate concern, and we need to encourage the industry really to invest in finding solutions to the sorts of problems that he has mentioned. I would hope that the test of reasonableness will evolve quickly as the market develops and brings forward new technologies and interventions that are appropriate to the types of building that he has mentioned.
Claire Perry: I hope that I am intervening on the Minister; I have slightly lost track of where we are in the proceedings. I wanted to put on record my support for what the hon. Member for Wansbeck has said. The challenge is to encourage innovation not only in the industry but among council conservation officers. I represent a constituency with many listed buildings, which are not at all grand; they are often listed for quite interesting reasons. There is a real challenge in rural areas to ensure that councils can look at some of these measures. Even important things such as solar power or ground source heat solutions, which can be very cost-effective, would not be permitted in many conservation areas, and it would be heartening to hear that we are encouraging local councils as well as industry to look more favourably on such measures.
Gregory Barker: My hon. Friend makes an excellent point. It is, as much as anything, about ensuring a culture change and a change of mindset among many local authorities, so that they are much more prepared to embrace innovation. They have not done that before because there has not been that innovation, and the industry has been very slow to bring forward solutions for those sorts of properties. By creating this green deal framework and its large, attractive market, we hope that the private sector will rise to the challenge. I hope that reassures the hon. Member for Wansbeck.
Huw Irranca-Davies: I welcome what the Minister says about the interplay between heritage organisations, local authorities and the council officers who deal with heritage. I seek an assurance from him that during the development of the Bill there were discussions with organisations such as English Heritage and Cadw, so that they are aware of what this means for them. It would be interesting if a tenant accused a landlord of unreasonably refusing energy efficiency measures when the responsibility lay with the heritage officer from a different organisation. How does that Minister see that working out?
Gregory Barker: I can assure the hon. Gentleman that we have been liaising with a whole range of stakeholders and interested parties. In addition to English Heritage, the likes of the Royal Institute of British Architects have made important contributions and continue to inform our thinking as we move towards secondary legislation. One of the hallmarks of the whole green deal process and this sense of co-creationism has been the willingness of a range of outside bodies to engage in a positive way. I met the chairmen of the various stakeholder forums that look at innovation, skills training and regulatory practices yesterday, and their engagement is very important. I can certainly assure the hon. Gentleman that we are very engaged in talking to all the responsible bodies and others. I hope that I have given my hon. Friend the Member for Wells sufficient reassurance to persuade her not to press her amendment.
Luciana Berger: I want to put on record our unhappiness with Government amendment 144, which pushes regulations for tenants’ energy efficiency improvements back a year to 2016. I reiterate the point I made earlier: 2016 is the year of our fuel poverty eradication target. What is the Minister’s rationale for postponing the date
Gregory Barker: I have tried to wind up about three times now. In summary, we are retaining the proposals under the tenant energy efficiency regulations, but we are introducing them with regulatory certainty. We must therefore give landlords longer to prepare; hence the date change to no later than 1 April 2016. Bringing in regulatory certainty moves the agenda on and gives the Bill much more force than it had even at Second Reading or in the other place. I hope that my hon. Friend the Member for Wells will not press her amendment.
‘(6) The first tenants’ energy efficiency improvements regulations must come into force no later than 1 April 2016.’.—(Gregory Barker.)
The Chair: We have moved on as far as the Bill is concerned, but if the hon. Lady wishes to raise the issue as a point of order and put her views on the record, and if the Minister wishes to respond, I will accept that.
Tessa Munt: On a point of order, Mr Crausby, I wanted to comment and ask the Minister to clarify something. Clause 43 is about the power to make tenants’ energy efficiency improvements and the regulations that relate to that. Will the Minister please clarify whether others can make a request to a landlord on behalf of a tenant? The Minister will be aware that I have raised that point in connection with university students and others, including those who live in areas of deprivation. My concern is that it may not always be appropriate for tenants, or they may not have the ability, for whatever reason, to raise such issues themselves. It is important that there should be some ability for others—a university residence officer, a citizens advice bureau, possibly a local authority or anybody else—to be able to make the request for energy efficiency improvements with a tenant’s permission.
Gregory Barker: That is an important point and I am happy to be able to satisfy my hon. Friend. It is the intention of the Bill to enable third parties, with the permission of tenants, to request green deal assessments. Obviously, any green deal package of measures will have to meet with the agreement of the tenant or tenants in question. We can certainly envisage situations, such as those that she suggested, in which third parties act in the interests of a wider group individuals, such as university students.
The Chair: I am advised that amendment 127 falls. As it was grouped with other amendments, you had the opportunity to speak to it at the time. Your feelings on that are recorded, and I am sure that you will pick up the opportunity to make those points in debate on clause 44.
Tessa Munt: I will carry on with my previous comments. I am completely confused now, but never mind. I apologise for my naivety. Will the Minister please provide some clarity, as he did this morning on issues relating to marketing, letting agents and so on? I cannot see, either in clause 43 or 44, an explicit ability for a third party to make a request. That may be my failure, but I wonder whether the Minister could clarify how that would happen. How would those tenants be protected, and how might those agencies act on behalf of others?
Graham Jones: I have some queries that I hope the Minister can look at. He touched on them previously, and I hope that he can expand on them. They relate to subsection (2)(a) on permissions and exemptions. The obvious exemption, which he mentioned, is compulsory purchase order areas, but I want to press him further. Regeneration areas do not necessarily invoke a CPO, so how would that fit in? An objection may come from a landlord, for example, rather than a tenant. Will that have to go to tribunal?
What about landlords in the private rented sector using planning permissions to block green deal requests? What happens, for example, if a landlord applies for a loft conversion that might negate loft insulation? What about other planning consents that are designed to negate a green deal assessment? Will the Minister expand on what he means by permissions and consents in the exemptions, and on whether planning will be part of that? Beyond CPOs, will he comment on regeneration areas and more holistic regeneration that might affect the exemptions and permissions, if he has any thoughts on that?
The Chair: Order. If people want to speak at the appropriate time, they should make that absolutely clear. It is not really for me to ask whether there are any further contributions. Members should indicate by standing or by another clear signal. This is the last time that I will ask: are there any further contributions?
Gregory Barker: I am happy to clarify those points as far as I can. On the line of inquiry taken by my hon. Friend the Member for Wells, I made it clear that agents or representatives will be able to act or speak on a tenant’s behalf. As for how a person makes a request on behalf of a tenant, we will come to that. The Secretary of State, when making PRS regulations, can stipulate the form and content of a request from a tenant under clause 44(1); that is our intention. He can put in place provisions that make it clear that someone can make a request on behalf of a tenant. That is already stipulated in the Bill, and I hope that that reassures my hon. Friend.
The hon. Member for Hyndburn raised the issue of planning permission and other exemptions, and we will consult on that range of issues, which obviously cross over to other areas of statute and the responsibility of other Departments. We must ensure that they mesh together effectively for the sensible reasons that he mentioned. We believe that there would be an exemption if one could not get planning permission, as indicated. We have more work to do to thrash out this complex
Graham Jones: I thank the Minister for that offer. I am as committed to the Bill and to the pay-as-you-save green deal or energy conservation programme as he is. I am just concerned that landlords might find negation through the planning system; that is my primary concern.
In conclusion, the clause provides the necessary powers to set out further detail on how requests should be made and responded to and the circumstances in which landlords are exempt. It will ensure that our regulations will be targeted at the most relevant properties and that there is absolute clarity in the process for both tenants and landlords.
Sanctions for the purposes of tenants’ energy efficiency improvements regulations: England and Wales
‘(1) No section 21 notice (meaning a notice under section 21(1)(b) or (4) of the Housing Act 1988) may be given in relation to a tenancy at any time after a request in compliance with the regulations under sections 43, 44 or 45 has been made by a tenant of a domestic PR property under section 43(3) until such time as the landlord of the property has responded to the request in compliance with the regulations and—
(a) in circumstances where the landlord has refused the request, until such time as the court has ruled whether the refusal was reasonable or not; or
(b) in circumstances where the landlord has accepted the request, until such time as the relevant energy efficiency improvements have been made.’.
Tessa Munt: New clause 27 would give tenants some protection from eviction. Under section 21 of the Housing Act 1988 a landlord may legally end an assured shorthold tenancy by giving the tenant a minimum of two months’ notice, without having to give any reasons so to do. The new clause will stop a landlord from using those powers once a tenant has requested energy efficiency improvements under the provisions of the Bill. The new clause does not prevent a landlord from going through the process for other reasons, but it prevents them from doing so until either the measures are carried out or any dispute process or tribunal on whether the landlord has to make the improvements has run its course.
The new clause gives tenants making requests under the Bill protection from retaliatory eviction—something from which I hope I will not suffer myself, nor should I, because my landlady is lovely. The principle of stopping a landlord having access to section 21 powers in certain circumstances has been established in the Housing Act 2004, under which tenants are protected from retaliatory eviction where the landlord has failed to protect their deposit. The new clause would extend that principle to energy efficiency requests, which is reasonable.
Caroline Lucas: I want to say a couple of words in support of new clause 27. If the intention behind these provisions is to ensure that tenants drive the legislation and drive higher standards, we cannot give them that responsibility unless we also guarantee them some protection. The new clause would be effective in doing that and would ensure that tenants do not run the risk of eviction. Even the fear of eviction—it does not have to be a real probability—is sufficiently serious that we should try to reduce it as much as possible if we genuinely want tenants to drive the legislation.
While I have the floor, I want to make a more general point about clause 45. I am concerned that there is no specific sanction for landlords who do not respond to a tenant’s request for energy efficiency improvements; there is only the option for a tenant to apply for a court or tribunal ruling on the landlord’s failure to act. That is quite a big contrast with clause 42, which contains real sanctions for landlords who do not meet energy efficiency standards. The sanction in that case is a £5,000 fine.
I am concerned that we are creating disincentives for tenants to take the kind of action that would drive the legislation forward. There will be many tenants who simply will not be able to deal with the complexity, the inconvenience and the possible costs of a tribunal, particularly if the costs will be awarded against them if they do not win their case. That is a real disincentive for a tenant to take the kind of action that the clause allows them to take.
I want to know how the Minister will ensure that the tribunal system does not discourage tenants from taking landlords to court regarding energy efficiency improvements. I fear that many disincentives are built into the current system, and it is ambitious, strong and perhaps wealthy tenants who will be able to attend a tribunal or a court. Many tenants will simply be put off by the whole process, so there will not be the energy efficiency improvements that the Minister has in mind.
Luciana Berger: I want to reiterate the point about the precedent set in section 21 of the Housing Act 2004, which already ensures that tenants are protected from retaliatory eviction when their landlord fails to protect their deposit. New clause 27 would extend that same principle to tenants making energy efficiency requests of their landlords.
New clause 27 is important. The National Association of Citizens Advice Bureaux has carried out research showing that many tenants fear making requests of their landlords because they believe it will result in eviction. Without this new clause, the Government risk
There is further precedent for such protection. An early-day motion that was tabled in 2008 and supported by many Members who are now in government highlighted the problems tenants face when they make reasonable requests of their landlords to carry out repairs and essential maintenance to their properties.
Gregory Barker: I am grateful to my hon. Friend the Member for Wells for tabling new clause 27. I genuinely understand and appreciate the sentiment behind it, which is very important. It aims to provide greater protection for tenants from potential retaliatory eviction, which is a real issue, albeit one that we hope will apply in a relatively small number of cases.
I also want to see tenants making full use of the powers under the tenants’ energy efficiency improvements regulations in the Bill. I believe that the green deal is an extraordinary, indeed, unprecedented opportunity for landlords, as they will gain improvements to their property at no up-front capital cost to themselves. In fact, not only will there be no such costs; the improvements themselves will be paid for by their tenants. We therefore obviously expect any sensible, responsible and reasonable landlord to grasp this opportunity with both hands and to welcome the green deal, rather than seek to avoid it.
We have not touched on what I think could be a greater issue: when landlords want to upgrade the flats or houses of sitting tenants, and it is the tenants who unreasonably refuse access for any work. That is not necessarily because they are just begrudging of any such work, but because they do not want to clear out their loft, take time off work or be inconvenienced, or they are not mindful. So we must not simply assume that this is a one-way street—a case of “Landlords bad, tenants good”. This is a complex issue of human relations, with different motivations flowing. I believe that the number of landlords who will wilfully impede the upgrading of their own property will be small; nevertheless, it is an issue.
I recognise the concerns that exist— my hon. Friend the Member for Wells has raised them with me not only in Committee but outside it—and I want to dedicate further time to investigating them. We have taken her points very seriously. As a result of her interventions, I have written to the Department for Communities and Local Government to raise these issues, because they also relate to tenancy law. In addition to writing to my hon. Friends there, I will be setting up a working group to report over the summer on existing evidence, concerns and possible solutions. As someone who came to this issue with no prior real appreciation of the facts, it seems to me that among the different stakeholders and groups, there are divergent views about the evidence base that are seemingly at odds with each other. We need at least to arrive at a consensus on the evidence base before we consider solutions.
Tessa Munt: Will the Minister therefore consider some sort of amendment that would enable him, within secondary legislation, to allow this to happen, depending on the stakeholder groups’ deliberations? I understand
Gregory Barker: The measure would impact on housing legislation, and the honest answer is that I am not empowered to tread my size 10s all over matters that properly come under the DCLG’s discretion. This could be done only in partnership with, and potentially with the lead of, the DCLG because the measure impinges on existing housing and tenant legislation. That is why we attach such value to having an effective partnership with that Department, why there is a joint working group and why we will be working with our ministerial colleagues and officials there to arrive at a consensus over the summer.
I cannot pre-judge what our conclusion will be, but given that we are seeking Royal Assent for this legislation before the House rises for the summer recess, I cannot put such a measure into primary legislation. We need to do all these things before 2018, and I assure my hon. Friend that we will look at all avenues and legislate further if necessary.
Tessa Munt: Of course, it is actually 2016 when tenants might make such a request, so these things have a slightly shorter time frame than the Minister said. I suspect that there will need to be some ability within secondary legislation to link the measure in with whatever is going on in the DCLG or in housing legislation. It would help if the Bill included something on that; however, I am happy to discuss the matter with the Minister outside the Committee Room.
Gregory Barker: I am grateful for that because the matter is something we need to discuss. Perhaps my hon. Friend might like to engage with not just me, but our colleagues at the DCLG to see if there is something we can do. This is an issue and we want to get to grips with the evidence base, so that we can all agree on the specifics of the problem. Once we have done that, we can define the potential solutions.
On the clause 45 stand part debate, that clause gives the Secretary of State powers to make regulations to secure landlord compliance with tenants’ requests contained under clauses 43 and 44. That is an integral part of this section of the Bill because it will ensure that tenants have a route to challenge non-compliant landlords. We envisage that if a landlord does withhold his or her consent, the tenant will be able to take their case to a court or tribunal for a ruling. The court or tribunal will consider whether withholding consent is reasonable—in other words, permissible—under the regulations. The goal is to undertake the improvement works: the tribunal will rule on that point, and that will be binding.
Graham Jones: To press the Minister, there is the option to go to tribunal, but a G-rated property will fail the health and safety rating system. Going back to the £3,000 fee and the matrix of the situation, local authorities have a statutory duty to exercise primary legislation in seeking justice. They will lose cases if they use secondary legislation. Will the Minister comment on that? When
Gregory Barker: I do not quite follow the hon. Gentleman’s point. The tribunal will determine whether the tenant’s request is reasonable and valid under private rented sector regulations. If so, the ruling will mean that the landlord will have to install relevant energy-effective measures, or the tribunal would be able to levy a fine of up to £5,000.
Graham Jones: The landlord’s defence may be that secondary legislation had been used—because primary legislation is the Housing Act 2004 and the health and safety rating system—and therefore the case would be thrown out. That is the problem.
Gregory Barker: Again, I am not a lawyer, but I am looking at the shaking heads of officials. We simply do not expect that to be the case. I am happy to write to the hon. Gentleman to give him more detailed technical advice on the point, but the problem he raises is not one that we recognise.
Caroline Lucas: Will the Minister respond to the specific points I raised about the complexity and difficulty of entering a tribunal process, particularly if there is a risk, as there presumably would be, that the case could go against the tenant? That is a pretty big disincentive for a lot of tenants. Will he explain further how he will incentivise them?
Gregory Barker: Absolutely; that is an important point. Tenants will be able to ask local authorities, community groups, civil advocates or other third parties to act on their behalf, to request a green deal. In addition, from 2018 it will be unlawful to rent out a house that has less than an E rating. Tenants are already protected from a range of hazards, including extreme cold, under the housing health and safety rating system, as the hon. Member for Hyndburn said. There is a framework under which others will be able to take up their cases for them.
Caroline Lucas: I thank the Minister, but he seemed to address a slightly different point. He clarified earlier that a request for a green deal can be made by third parties on behalf of tenants, for example students. I am talking about a tenant in 2016 requesting that the landlord makes some changes and the landlord refusing. As I understand it, the tenant’s only recourse would be to a tribunal or court. For a great many people that will be a big obligation and very off-putting. They will not know their way through the legal channels. There is a very unequal power relationship between tenants and landlords; the landlord has all the power. This bit of legislation is not very realistic. Does the Minister think that tenants, who have a lot of other things to worry about, will push something to a tribunal and a court, when they have no real support and no certainty, if it goes against them, that they will not have to pay the costs?
Gregory Barker: I appreciate the hon. Lady’s point. Given that we are talking about a fine of up to £5,000 on landlords, I cannot conceive an alternative to a tribunal or court that would work and have the force of law, and that would allow the landlord to have a say. A malicious case could be brought by someone with a grudge. We can all think of instances in our surgeries when someone has considered bringing an unreasonable case. Any case, therefore, would have to follow due process and go along conventional lines.
Mr Steve Brine (Winchester) (Con): Let me follow on from what the hon. Member for Brighton, Pavilion said. These third-party organisations, community groups and voluntary organisations will help to roll out the green deal in specific council areas. Could they not also provide help and support in times of trouble to residents who are unsure of the tribunal process?
Gregory Barker: Certainly, there is a role not just for Citizens Advice but for community groups, such as the Greening Campaign, which sprang up in Winchester and is now spreading across the country. Community action and mutual support will be very powerful in encouraging and empowering individual tenants to take action against unreasonable landlords. Before bringing out guidance to accompany the secondary legislation, we will be consulting organisations on the best way to encourage and support tenants in this case. Although we cannot dodge due process, there are ways in which we can encourage vulnerable tenants to engage with third parties and community groups to overcome the expense and the sheer intimidation of going before a tribunal.
Huw Irranca-Davies: In respect of new clause 27, I want to be clear about one thing before the Minister makes his closing remarks. Revisiting primary legislation in a DCLG Bill or a future Bill from this Department is one thing, but is he saying that in the guidance and the regulations that may come forward we will have something explicit that captures the spirit of the new clause, or is he suggesting that there will be something further to encourage groups and so on? If it is in the spirit of the new clause, I am reassured. If not, I am lacking reassurance at the moment.
Gregory Barker: I am not familiar with the wording of new clause 27. We are starting to stray into the territory of DCLG, which has the tenant protection competence. It is not an issue for the Department for Energy and Climate Change.
Huw Irranca-Davies: With enormous respect—I know that the Minister is making a great fist of this Committee—he should be telling the Committee that he is working with DCLG to resolve the issue. I understand the different Departments’ work, but we expect to be told that the Minister is working with DCLG and that he will either bring forward a similar provision in regulations, or that the provision will be completely different, and we need to know.
Gregory Barker: I think I have already told the hon. Gentleman that we are working with DCLG. I have written to the Minister for Housing and Local Government, and we are setting up a working group. By any stretch of the imagination that would classify as working with the
Huw Irranca-Davies: I would ask why, because if the intent is there to deliver this, it could be done now. Will the Minister let us into the secret and tell us whether the measure is his departmental view of what should be encompassed in regulations, because that would give us some assurance?
Gregory Barker: We have not come to a final view yet, as we are still gathering evidence and working with stakeholders. We are clear that we need to reach a view, but we will not be rushed or make precipitate judgments just to get the matter on to the face of the Bill. We feel that it needs to be dealt with prudently, and my Department cannot take a unilateral decision. The realm of tribunals and tenant legislation is properly the realm of DCLG, but we are working with DCLG, and I am happy with our constructive, albeit early, dialogue.
Caroline Lucas: I am sorry to keep pressing, but this is important. In answer to my earlier comments about disincentives for tenants and ensuring that landlords will act, the Minister referred to the £5,000 fine covered in clause 42. However, there is nothing in clause 45 about any level of fine. Does the figure need to be repeated there? It needs to be a little clearer, at least to me. I am not clear whether the £5,000 fine will apply when a landlord refuses to bring his or her property up to the 2018 standard or when, after 2016, the tenant asks for improvements to be made and the landlord refuses. Will he be a bit more specific about when the fine will apply and, if necessary, can the figure be repeated in clause 45 to make it clear that it applies to both?
Gregory Barker: Having consulted my officials, I can tell the hon. Lady that the £5,000 fine will not apply to the tenant energy efficiency regulations in 2016, but it will apply to 2018. It is the 2018 backstop. If a landlord is in breach in 2018, he will face a fine of up to £5,000.
Caroline Lucas: I thank the Minister for that clarification, but it alters what he said earlier in answer to my concerns about clause 45. It now looks as if there will not be an option to make landlords pay a £5,000 fine, which might concentrate their minds. In that case, could we not have a backstop in this clause as well? It would equalise the power imbalance between tenant and landlord. Obviously, the fine would apply only if it could be shown that the landlord had wilfully and unreasonably withheld consent, but if the tenant’s ability to make that request in 2016 is to mean anything, it needs the stronger underpinning that a potential sanction on the landlord would give it.
Gregory Barker: The hon. Lady makes a sensible point, and I understand entirely where she is coming from. The 2016 legislation will still be covered by a tribunal. I apologise that I do not have the detail of the
Graham Jones: It is welcome that the decision of the tribunal will be binding, but how will it be binding? I am just thinking out loud. If a tenancy agreement precludes entry to a property to anyone other than the tenant, how will it be binding and enforceable? Perhaps the Minister can help me.
Gregory Barker: The hon. Gentleman makes a reasonable point. To be honest, I am not familiar enough with the detail of tribunal workings to give him a detailed answer. I am assured that, according to legislation and the way tribunals work, it is available to tribunals to enforce their decisions. Those are binding on the landlord. I have just been informed that a tribunal will order a landlord to improve a property. The best way I could describe that is as being akin to a court order. If the court order is breached, that becomes an offence and triggers a further level of seriousness. I am sorry that I cannot furnish the hon. Gentleman with further details, but that should give him a clearer picture of what we have in mind.
Mr David Anderson (Blaydon) (Lab): Who will the landlord appeal to if he loses the tribunal? Before the Minister gave way to my hon. Friend the Member for Hyndburn—I apologise if I am wrong—I think he was going to tell us that the landlord would have the right of appeal.
Gregory Barker: That is right. The appeal would be through the conventional tribunal process to a higher tribunal or to a court, as is the case with other tribunals. We are not proposing to set up a new legal system or a separate tribunal court. It will take place within the existing legal frameworks for appeals. Both landlords and tenants will have that right.
Caroline Lucas: I am sorry to keep coming back to this point. The Minister says that this will be done within the existing framework of tribunals, but as I understand it, they can take an horrendously long time. Leaseholders and freeholders arguing in tribunals about the rights and wrongs of an issue can go on for years. Given that some people will be in a tenancy for a year or two before they move on, I am not convinced that the existing legal infrastructure is fit for purpose for what is being proposed. I fear that the tenant will be put off going down this route. Looking at the length of time
Gregory Barker: Certainly, there is a backstop. If someone begins such a process in 2017—a year after the legislation comes in—they will only have 12 months to wait before a legal obligation takes effect. So, at the very most, there will be a two-year window. We would expect tribunals to be alive to that, to expedite their judgments promptly and to not wait for time to lapse.
We will make matters as simple as possible, and we can and will stipulate the procedure in secondary legislation. We can also stipulate the timing that will need to be adhered to. It is just a two-year window—we want to ensure that these things do not drag on. It would not be in the landlord’s interest to keep dragging their heels, because there will be this deadline, at which point they would have to take action anyway. I hope that we can expedite that.
The Chair: Does the mover of new clause 27 intend to press it formally to a vote when we get to the appropriate part of the Bill? We will not make a decision on it now, but it would be useful to know her intentions.
Gregory Barker: The Government amendments in this group deal with the non-domestic energy efficiency regulations. The Committee will note that we propose that the relevant clauses go largely unchanged, because they already provide for a minimum standard, but our amendments do four things. Government amendment 149 makes the date for regulating non-domestic landlords the same as that for domestic landlords: no later than 1 April 2018. That change will mean that all landlords have the same realistic time frame to plan for a minimum energy efficiency standard and to schedule works into their normal maintenance cycles.
Government amendments 146 and 149 also make it a duty, not a power, of the Secretary of State to make regulations no later than 2018. Government amendment 148 gives us the option to create a requirement that bites from April 2018 for all properties at once, or from when properties are re-let after April 2018. Finally, Government amendment 147 makes a technical change, removing a
Huw Irranca-Davies: The Minister will be pleased to know that although we have some questions, we are supportive of most of the amendments, with one exception that I will probe a little deeper. Government amendment 146 made me smile a little, as it reminded me of the difficulties that we have previously encountered in putting a duty on a Secretary of State to do any darn thing. I think that “darn” is parliamentary language, Mr Chairman; I was very careful there. The Minister has now tabled an amendment to the effect that the Secretary of State “must”—not “may”—issue regulations preventing landlords from renting properties until they have complied with the obligations. I am sure the Minister will want to explain in his response why that works here but did not work earlier, when we were pushing so hard. The amendment on the definition of a landlord is a technical one that we welcome and have no problems with whatsoever.
Government amendment 148 intrigued us, so I would like to test the Minister further. As we see it, it is important to minimise the impact on tenants and ensure, as we have just discussed, that they are not evicted. That is particularly important in the run-up to the regulations coming into force. If the landlord cannot continue to let, as well as let, the property until they have made energy efficiency improvements, existing tenants might be persuaded or forced out of their tenancies. Would it make more sense for the landlord not to be able to re-let or even to market the property—we have discussed the question of marketing the property, as opposed to letting—to ensure a smoother transition to the minimum efficiency standard, coupled with the tenant’s right to request?
I want to probe a little deeper the thinking behind Government amendment 149, which moves the deadline for energy efficiency regulations in the non-domestic sector from “no earlier than 2015” to 2018. Given the urgent need to improve PRS accommodation, there is a danger that the issue could be kicked into medium length—if not long—grass. That is the issue we are trying to probe by asking the Minister for further thought.
We understand that, but as we debated earlier, the tenant’s right to request will not come in until 2016, and the power of local authorities to issue a notice to landlords is removed in clause 40. We also discussed the issue of tenants asking for improvements, and the need for them to have certainty of protection against eviction.
Amendment 149 raises concerns not about the level of ambition in the Minister’s rhetoric—which we share—or what he has said to the Committee, but rather about the level of ambition in reality. I have asked the Minister to address my questions on earlier amendments, but Opposition Members will need particular persuasion to support amendment 149. We see the possibility of slippage, rather than a measure that has been bolted down firmly.
Gregory Barker: First, I will respond to the issue of “may” or “must” that the hon. Gentleman teased me about. Let me be clear: one measure imposes a minimum standard and the other is about sanctions. That is a clear example of the point raised previously about setting a clear standard in legislation, and the need to encourage change ahead of the implementation of the regulations. The standard should represent the finish line, not the starting line.
The green deal under discussion is more of a game changer for businesses than it is for residential customers. The potential for energy-saving interventions in industrial and commercial premises is often greater than it is in the home, but there is invariably a greater disincentive than there is in the home for landlords to take measures that would improve their properties. In the interests of transparency and reciprocity, I should declare my interest in commercial property, although I am sorry to say that I do not have any domestic property. From that point of view, I know that the green deal cuts through the Gordian knot whereby there is no incentive for a landlord to improve the property, meaning that they basically hand energy savings to commercial tenants.
With an eye to a re-let or the end of a tenancy term, landlords will look at ways in which they can legitimately improve their investments with no up-front capital cost to themselves. A service charge can be legitimately stretched only so far, and there is a limit to how far tenants will be prepared to shoulder additional burdens or improvements through such a charge. There is clear benefit to tenants in anchoring payments through the golden rule and providing a reduction in energy bills. If tenants are part of a larger group, that may help them to consider group carbon commitments and obligations. Commercial and industrial landlords will leap at that. I think there will be very few cases of buildings not being upgraded. Of course, one could think of a few examples—buildings in complex multiple occupancy, where there are very small offices of low value with a high turnover of short-term tenants. They will nevertheless still be governed by the backstop date that we have introduced.
The date change is essential to give certainty. Unlike the registration we originally introduced, there will be no review. We therefore need to give ample time for non-domestic landlords to prepare. That is particularly important in the non-domestic sector, as tenancies are typically longer. We have talked about the average tenancy cycle, but in the commercial sector tenancies are longer. We also know that many tenants will not welcome the disruption that the retrofit of a building will involve. On the potential for retrofitting commercial buildings, in many more instances than with domestic installations, that will involve lighting, air conditioning, heating, different ducting—quite intrusive measures that will disrupt the ordinary course of business.
I can understand that some tenants would be wary of allowing business to be interrupted, particularly at this point in the economic cycle. I have no doubt that as growth lets rip as we head into the decade, there will be appropriate points. It is responsible to leave it to landlords and their tenants to judge the best point over the next five years at which to intervene in individual properties.
Huw Irranca-Davies: How can we avoid what we saw with the roll-out of the Disability Discrimination Act 2005? As we approached the point at which everyone had to comply, there was an enormous rush of people trying to comply at the last minute, panicking, seeking advice and so on. Having debated various other ways proposed by Labour Members to put some of those milestones in—having not got those, but having a firm backstop—is the Minister confident that we will not have a rush as people say, “We now have to do it” in the final year or 18 months?
Gregory Barker: I am not familiar with the disabilities legislation, but there is a profound difference: the disabilities legislation was basically a burden on employers. It was right that they shouldered that burden, but there was no economic return in the short term. I am sure there would be in the long term in that they would have access to a wider work force, but there was not a direct, immediate, economic incentive. With the green deal, there is a direct economic incentive. It is in the interest of every landlord to improve their property, particularly as they come up to re-let.
We know that companies large and small increasingly want to save money. They look to the bottom line. Although the costs of energy as a proportion of overall overheads and production costs vary from company to company, it is nevertheless an important element. We know that Marks and Spencer implemented the plan A energy efficiency measures and up to £40 million dropped to its bottom line. The small mom and pop business has moved to better, more efficient accommodation—when leases come up for renewal, tenants expect more, particularly in such an economically competitive market.
The drivers in this legislation are entirely different from those in the disability legislation that the hon. Gentleman mentioned. I do not expect a lag. On the contrary, I expect that landlords will want to put in the measures sooner rather than later, particularly given the difficulties in the property market, where landlords are, by and large, as tenancies come to an end, looking for ways to maximise the value of their asset and to compete for attractive new tenants, and given that, historically, many parts of the country have high levels of vacancies. I think that there will be a real whoosh of interest in the commercial sector—much more than in the domestic sector—as people grab the opportunity with both hands. I do not think, therefore, that the hon. Gentleman’s scepticism is well placed.
Mr Brine: I am listening carefully to my hon. Friend the Minister and musing as I do so. He might not know the answer to my question—perhaps he could liaise with his officials and write a response to the Committee—but, while I know that he has done lots of work in the Department, has he done any work on the effect on the non-domestic rate or value of properties as a result of commercial properties being green-dealed?
Gregory Barker: My hon. Friend raises a good point and I reassure him that I have done work in the Department. [ Interruption . ] My hon. Friend looks a little shocked, but I assure him that that is the case. We are looking at the economic impact assessment, but, given that we expect a fairly uniform take-up of the provision and the whole commercial property sector to arrive together, the provision should be seen as a minimum standard or an increment to what is acceptable, rather than as a huge and exceptional increase in the value of a property. I think that it will be the de minimis. Tenants will expect decent accommodation in commercial premises to be far more efficient in the future.
Mr Brine: Does the Minister expect the trade organisations—the Federation of Small Businesses and the British Chambers of Commerce—to be the drivers of encouraging their members to take up the green deal? Local authorities and organisations that spring off them may well be the drivers in the domestic market, but that will not necessarily be the case in the non-domestic market, because local authorities do not set the rateable value. They collect it, but they do not gain from it.
Gregory Barker: Yes, I think we are likely to see—particularly in relation to smaller SMEs—groups such as the FSB taking the lead in encouraging landlords to take up the green deal and in encouraging tenants to encourage their landlords to do so. We are talking about a different sort of relationship in the commercial sector from that which can exist between vulnerable tenants who are economically deprived and their landlord. That differs from a customer-provider relationship. In almost all cases regarding commercial premises, the whip hand is with the tenant and the landlord seeks to make sure that their property is sufficiently attractive to ensure that the tenant renews, preferably on a nice, long, juicy lease. That is a different relationship.
By definition, a commercial client is a smarter and more informed customer, with more choices and more information at their disposal than some of the more vulnerable tenants in the social or private rented sector. We should not draw too many parallels between domestic and commercial sector tenants. I think that we will see a welcome and robust commercial discussion, and that it will lead to tenants and landlords competing to see how they can implement the green deal in the most ambitious way. We need to set the provision in legislation to provide absolute certainty and I think that the market will take off from there.
‘, “let the property” and “tenant”’ and insert ‘and “let the property”’.
‘(and “let the property” may be defined to include “continue to let the property”)’.
‘(7) The first non-domestic energy efficiency regulations must come into force no later than 1 April 2018.’.—(Gregory Barker.)
‘[Domestic energy efficiency regulations: England and Wales](5)’.—(Gregory Barker.)
‘or any regulations replacing those regulations’.
Gregory Barker: I am sorry if I sound slightly perturbed. The arrival of the Prime Minister’s Parliamentary Private Secretary, my hon. Friend the Member for New Forest West (Mr Swayne), at the back of the room put me off my pace. He has now retreated, I am glad to say.
The Government amendments to the Scottish private rented sector clauses largely mirror the changes to the English and Welsh provisions. There are, however, some key differences. First, Scottish Ministers intend to retain a power, rather than create a duty, to make regulations in the private rented sector. Secondly, the earliest date that Scottish Ministers could make regulations is 1 April 2015, in respect of the Bill’s domestic tenant and non-domestic provisions. Finally, Government amendments 160, 161 and 165 are minor technical amendments that replace “costs” with “expenses”—something that we are all familiar with—to provide consistency throughout the Bill. As this is a devolved area of policy, it is up to Scottish Ministers to decide if and how to legislate for energy efficiency in the private rented sector in Scotland.
Tom Greatrex: I do not rise to have a semantic discussion about the difference between costs and expenses in Scottish law, because that would be even more specialised than discussing the legislative consent motion process. However, given that I am the only Committee member with a Scottish constituency—and I do not wish to reprise our discussions on previous clauses, because by and large, this and the next set of provisions mirror them, as the Minister said—I want to put a couple of points on the record. As I understand this and the LCM process, we are effectively legislating for a devolved area—some Government Members may be surprised to hear that—given that the Scottish Parliament has effectively given its consent for us to do so through the LCM process. That interesting aspect of the West Lothian
There are some differences, which the Minister alluded to. The similarities are that Government new clauses 34 and 35 effectively replace clauses 53 and 54. They are therefore equivalent to the provisions that we have discussed on clauses 40 and 41 for England and Wales, and the same points that were made stand in relation to Scotland. Notwithstanding that this is a matter for Scottish Ministers, we are, as I have said, legislating on a devolved area. Although a degree of detail will be included in future regulations on such matters, concerns remain about the shortcomings of Government new clauses 34 and 35. They are the same concerns that were expounded previously, and in particular, there were points about serving notices on landlords whose properties are not up to standard, and on the lack of clarity about what minimum standards of energy efficiency are. I wanted to place those points on the record on behalf of those Members who represent Scotland, but not on behalf of Scotland.
Gregory Barker: I appreciate the hon. Gentleman’s points. Like him, I do not intend to rehearse arguments that we have already had in Committee. We drafted the clauses with the consent of the Scottish Executive, and we have had constructive engagement and a positive rapport at official and ministerial levels on this. I am pleased that the Scottish Executive have engaged with us in that way. This is a devolved matter. For their own reasons, they have opted for a slightly different approach, and it is not for me to gainsay them. Scottish Ministers are pursuing “may” regulation from 2015. The position in England and Wales is that we have “will” regulation from 2016 and 2018. We have added that extra element of certainty.
I assure the hon. Gentleman that we have ensured that Scottish officials have been kept well informed of relevant developments in the legislation and we remain in regular contact with them. There was an issue about social housing being excluded in Scotland. This is because by defining a private rented property in Scotland by using chapter 4 of part 1 of the Housing (Scotland) Act 2006, social housing in Scotland is excluded. We do not believe that that will be a major prohibiting factor. I hope those brief words of explanation will satisfy the hon. Gentleman.
(za) for a local authority to enforce any requirement imposed by or under the regulations;’.
‘, “let the property” and “tenant”’ and insert ‘and “let the property”’.
‘(and “let the property” may be defined to include “continue to let the property”)’.—(Gregory Barker.)
‘(3) Orders under this Chapter are subject to the negative procedure.
(4) Regulations under this Chapter are subject to the affirmative procedure.’.—(Gregory Barker.)