8.30 pm

Lord Tope (LD): My Lords, for the avoidance of doubt, I should say that we are now discussing two groups of amendments together, and not, as stated on the groupings list, simply Amendment 47, which relates solely to major sporting and entertainment events. It is helpful to be able to discuss the whole issue at the same time. I support my noble friend Lady Hanham; as she said, Amendments 49ZA, 49C, 50A and 51 have my name on them, and we have worked together on this issue for what feels like a very long time. Indeed, it has been a very long time.

I express many thanks to Onefinestay, the short lets company, which has been very helpful and willing to come and discuss issues, to London Councils, which my noble friend Lady Hanham has mentioned, and particularly to Westminster City Council. I have had a lot of contact with Westminster. It is the London authority with the most experience—even greater than that of the Royal Borough of Camden—of the effects of the huge growth in this market. Indeed, it has a team entirely devoted to the enforcement of the legislation on short lets.

I particularly want to put on the record my grateful thanks, and those of my colleagues, to the Covent Garden Community Association, which contacted me shortly before we discussed this matter in Grand Committee; indeed, I referred to what it had to say when I spoke there. Since then we have been closely engaged, and it has worked hard to liaise with other community associations and amenity societies in central London. I am grateful to the Covent Garden Community Association for its interest—perhaps it is self-interest, but it is understandable self-interest—for the work that it has done, and because it has brought home to me and to others the effects of what is happening here on people who live every day with the situation.

This is not the happy situation that the Government sometimes allude to, when somebody simply goes on holiday for a couple of weeks and lets their flat for a

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little bit of income. It is very big business. We have heard innumerable horror stories, both collectively, from the Covent Garden Community Association, and from a number of individuals who have contacted me—and, no doubt, other noble Lords—to describe their day-by-day experiences. There are short-term lets where no one knows who is there from day to day and the people who are there do not know what the rules of engagement are, or how they should be living, and all the dangers that go with that.

My noble friend Lady Gardner has referred to the unsatisfactory way in which the Government have dealt with this situation, and I agree with her. As my noble friend said, the provision was introduced on Report in the other place; it was certainly in the Bill when it came to us for Second Reading. I expressed concern about it then—as long ago as 7 July. That is why lots of people on all sides started to contact me about it. We had a considerable debate about it in Grand Committee on 30 October, but still the Government were not clear about exactly what they were going to regulate.

My noble friend Lady Gardner said that she has consistently asked Ministers what will be in the regulations. On 8 December, in answer to one of her questions, the noble Lord, Lord Ahmad, said:

“In order to provide greater certainty before new legislation comes into force, we will issue guidance shortly that will clarify the Government’s view on planning and short-term letting in London”.—[Official Report, 8/12/14; col. 1593.]

That was on 8 December. Your Lordships know that the word “shortly” can mean many things in this House, but I am certain that on 8 December the noble Lord, Lord Ahmad, did not believe that we would have to wait until 6 February, just a few days before we had to deal with this on the last day of Report, before we had any indication from the Government of their intentions.

Why does this matter? It matters because the clause as it stands simply gives the Secretary of State the power to make regulations. However, it gives no indication of what may or may not be in those regulations. It is, in effect, a blank cheque. If those regulations were to be made by the current Government—as, presumably, was the intention when we had Second Reading back on 7 July, or even in Grand Committee on 30 October—that would be all well and good. However, for whatever reason, we have now got to the stage where there is simply not enough time for those regulations to receive parliamentary approval before the general election. I hope that when the Minister responds, he will confirm that that is the case. The regulations clearly cannot be laid until Royal Assent is received, which I guess will probably be mid-March. They then have to lay for 40 sitting days, during which time they can be prayed against, before the approval, or otherwise, of each House of Parliament can be obtained. There simply are not 40 sitting days left to achieve that.

I hope that the Minister will tell us whether it is this Government’s intention to lay the regulations immediately on Royal Assent before Dissolution, so that we at least know at last what the Government will, or will not, put in the regulations; or are we simply being asked to hand a blank cheque to whomever may form the next Government, and whomever may then be the Secretary of State, to do with as they wish? That could not be a

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much more unsatisfactory situation for anybody, whatever their view and whomever forms the next Government. Why we have taken nine months to get to this position, I do not understand. I do not envy the Minister having to try to explain it because I know that, whoever’s fault this is, it is most certainly not his. I thank him for trying very hard indeed to get some clarity on this. I suspect that had it not been for his very considerable efforts last week, we would not even have seen the policy guidelines last Friday.

We are now where we are. My noble friend Lady Hanham outlined the amendments we have tabled to suggest what should and should not be in the regulations. They have been drafted to reflect our views but with help from London Councils representing all the London boroughs, and most particularly following not daily but hourly discussion with Westminster City Council.

In short, the amendments want five safeguards to be built into the system. First, the premises must be the principal London residence of the owner offering the let. We seek a definition of “principal residence” and “owner”. Secondly, the owner must notify the council and let it know how long the stay will be. That means having a simple—we stress that word—and easy-to-use registration system. Otherwise, local authorities will have no possible way of enforcing whatever the regulations may state. Thirdly, the total lets in any one calendar year should not be more than 30 days. If we are talking about people being able to let their home for short periods while they go on holiday, 30 days in a year is not an unreasonable holiday entitlement. Fourthly, the council can request the Government to provide for local exemption from these provisions where there is a strong amenity case to do so. Finally, residents would not be allowed to continue letting if they were the subject of one successful enforcement action against a statutory nuisance. Our amendment defines the process for determining a statutory nuisance. I think I am right in saying that the Government intend to introduce those last two conditions; I hope that the Minister will confirm that that is the case.

Amendment 51 seeks to leave out Clause 33 entirely. When this issue was innocently put into the Bill on Report in the Commons last summer, I am certain that Ministers—and, I suspect, their officials as well—had no idea of its scale and complexity; I am sure that the Minister will not confirm that. It has been brought home to all of us who have dealt with it over the months that it is a very difficult and complex issue, and is one that is growing and spreading rapidly. At the moment, it principally affects a number of central London boroughs. This issue relates only to London because it relates to a London local authorities Act. However, the concerns and issues arising from short-term lets are spreading across the country. Popular visitor areas are already experiencing difficulties, perhaps not on the scale of Westminster, Kensington and Chelsea and Camden, but demand is growing so fast in this country and throughout the world that it can only be a matter of time before that is the case elsewhere. So this is clearly an issue that the Government have to tackle. They have to tackle it particularly in London for the reasons that we have given, but I suggest that they need to look at it in relation to the country as a whole.

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We have got to the stage where we are being asked to give a blank cheque to the next Government to determine whatever they may or may not wish to put in regulations. As we are where we are, I urge the Government to say, “Right, we have got to this stage, and we really need to pause and have a careful think about all this”. Above all, we need to consult the companies working with short lets which are not against regulation but clearly have a rather different view from those who have to enforce the regulations. However, they should all be consulted. The leader of Westminster City Council issued a public letter dated 3 February—last week—in which she clearly says:

“There has been no engagement with this local authority either at a political or an officer level on the detail of the regulations that are intended to follow this Bill”.

Those were the words of the leader of Westminster City Council in a letter to Ministers last week—I repeat, last week.

Therefore, much though I regret that we have reached this situation, the best thing would be for the Government to concede and say, “We will withdraw this clause, consider further and consult fully, and we or whomever the next Government are will come back after the election with carefully considered, thought-out and consulted-upon regulations that properly tackle the issue”.

8.45 pm

The Earl of Lytton (CB): My Lords, I support this group of amendments and declare an interest as a professional involved with property, and in particular as having some involvement with commercial and residential management—although not, by and large, in Greater London, I hasten to say.

This matter seems to have started from what might be described as a once-in-a-lifetime event, the Olympics, and the implications of a London-specific piece of legislation; namely, Section 25 of the Greater London Council (General Powers) Act 1974. I follow the point made by the noble Baroness, Lady Hanham, that London appears to be a special case. Why else would that piece of legislation be on the statute book in the first instance?

We are dealing with the potential impacts on the amenity of existing residents. The question of short-term lettings introduces the concept of “churn”—the turnover of occupants, the cleaners, the services, the deliveries, and the implications for security and people coming and going, possibly at odd times of the day and night. With that, there is the natural local authority concern and the issue of public interest in matters of safety and security, including overcrowding, the maintenance of standards, fire precautions and so on. Beyond that, there is the ability to police whatever is put in place to ensure compliance. I have a particular problem with that because, for every block of flats to which such circumstances might apply, if they happen to be in a particularly accessible area near somewhere in our metropolis where there are constant events, one can easily see that a certain proportion could be on this “churn” at any given time. There might be a real question regarding compromising the peace and tranquillity of those who wish to live, work and do all the normal things that normal residents do.

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I support the argument that there needs to be knowledge and a degree of control in the hands of the local authority through its planning, building regulations and environmental control functions. London is a special case; there is always something going on there, and that is why it is particularly important to have special regard for it. A less than 50% response—a minority of London boroughs responded—is not exactly an endorsement of what is being proposed by the Government. The noble Baroness, Lady Hanham, who has enormous experience from her involvement with an inner London borough, and the noble Lord, Lord Tope, who has great experience from a little further out, know that these are the issues, and their voices should be listened to. The noble Lord, Lord Tope, had a quick dig at the Minister about what the term “shortly” might mean. I was brought up in the west country, where there were two terms: one was “shortly”, and the other was “directly”. It was important to know that “directly” meant that there would be a quicker response than “shortly”. I hope that no one with west country roots will come back and tell me that I am wrong, but that is what I understood by those terms.

I apologise for continually referring to the noble Baroness, Lady Hanham, but she made a number of good points. I also pay tribute to the noble Baroness, Lady Gardner, for introducing the amendment in the first place and for being assiduous and persistent in plugging the general point. The noble Baroness, Lady Hanham, referred to the fact there is an increasing amount of investment property in London. That means that it is not necessarily governed any more by the wishes of those who live, work, shop and raise children in our metropolis. If we are not careful we will get to a tipping point, where the social profile and how to enforce and govern it get altered to the point of being something other than for those who live and work there. After all, they are the people with the democratic vote.

If we are not careful, this will go right to the heart of the structure of society. Of course, that erosion will be that much more rapid in areas with what we might call continual ongoing attractions, which might attract these short-term lettings—they will be cut most severely. To look at London as a composite whole is wrong. The noble Lord, Lord Tope, identified this as a phenomenon occurring elsewhere. For all I know it might affect areas near Glastonbury, the Hay-on-Wye Festival or any other place where these events go on in the countryside.

We are dealing with a class of lessor—people who allow their homes to be used as short-term lettings by others—who, it must be said, by and large lack the knowledge and expertise of renting in this sector. I do not think that many of them have the slightest idea of what is involved in the wear and tear on the property, what the critical capacity is of the hot water system for their block, or in any of the other matters that might be involved, such as the security at the front door when a large number of people, checked and unchecked, have access to the code to come and go.

I do not see what the Government are proposing as a deregulatory measure as at all deregulatory. It opens up a raft of potential further regulation. If it goes

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through without further ado I predict that we will be back again in not very many months, trying to patch over the cracks and deficiencies where things have started to go seriously wrong. They will go seriously wrong in the most critical areas of our capital, not in the relatively decentralised areas. There is a real question of how communities, local government or residence associations—or, for that matter, landlords or their agents—will be in a position to control this.

We need regulation, especially as some of the main players operating internationally on the web do so in an almost entirely unregulated environment, as far as I can see. That is putting aside the stories one hears of, which cause immense difficulties: about unpaid local taxation, problems of double booking and things like that, of people apparently thinking that they have a holiday let yet the owner knows nothing about it. All those have come to my attention. I do not know whether they are all completely apocryphal; I think they are probably not. We need some regulation, which really ought to be before this House.

I hope that the Minister will think again. I hope he will realise that, although one would have every wish to ensure that there were means whereby people could capitalise on, for example, Wimbledon fortnight by letting their homes to the wealthy from elsewhere, it would need to be done without it having a negative effect on other individuals, on those whom one might call normal residents and on the whole process of due diligence and the regulatory environment. In general, I am entirely in sympathy with Amendment 47 and the amendments in the group that follows it.

Baroness Gardner of Parkes: I am now rising to speak very briefly to the group—

Baroness Garden of Frognal (LD): I apologise to my noble friend but I think that under the rules of the House we are still on Amendment 47 and Amendment 48 has yet to be called. There has obviously been some confusion in that people are speaking to two groups of amendments. I think that Amendment 47 is still being debated.

Lord McKenzie of Luton: My Lords, we have got terribly confused tonight. I thought that we were speaking to the generality of the amendments and that that was the noble Baroness’s position. If that is the case and the noble Lord, Lord Leigh, wishes to make his contribution now, I will happily follow him.

Lord Leigh of Hurley (Con): I thank the noble Lord. I was planning to speak to Amendment 48, so my comments are directed to that group of amendments rather than to the specifics of Amendment 47. I declare my interests both as an investor in residential property and as president—

Baroness Hanham: I hesitate ever to come in on a point of principle but my noble friend Lady Gardner said that she wanted Amendments 47 and 48 to be grouped, and that is what we have done. Have we spoken to Amendment 47 separately? Is there any way in which we can get this settled? I have spoken to the group commencing with Amendment 48, not Amendment 47.

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I was waiting for the noble Lord, Lord McKenzie, to come in and speak to his amendments. It seems to me that my noble friends Lord Tope and Lord Lytton have also spoken to the group starting with Amendment 48. I am sure that there must be a quick way of getting this sorted so that we are all speaking to the group commencing with Amendment 48.

Lord Ahmad of Wimbledon: My noble friend makes a totally valid point and I apologise—there should have been some closure with regard to Amendment 47. Perhaps I may suggest that I respond specifically to the issues around Amendment 47 and then we can move on. I understand that the amendment, having been called, will need to be withdrawn. Therefore, if my noble friend Lady Gardner is minded to speak to Amendment 48, perhaps she can, first, withdraw Amendment 47, as that will be a useful way of moving on to the more substantive debate.

Baroness Gardner of Parkes: I will do so unless anyone wishes to speak.

Lord Avebury (LD): My Lords, I hope that we are not going to have another speech from the noble Baroness, Lady Gardner, on Amendment 48 when she has already spoken to it.

Baroness Gardner of Parkes: No, I have not spoken to Amendment 48.

Lord Ahmad of Wimbledon: Unless other noble Lords suggest anything else, what I propose may be the most practical way forward. If my noble friend is minded to withdraw her amendment, we can move on to the substantive debate. Because of the confusion, I suggest that that is what she does. If she wishes to speak to Amendment 48, that is her choice, although I think that many of her points have been covered. However, this is a self-governing House and it is for the House to agree to that. I ask her to withdraw Amendment 47 to allow us to move on to the substantive debate, but of course I succumb to the will of the House on that.

The Deputy Speaker (Lord Geddes) (Con): The noble Baroness has to indicate that she wishes to withdraw her amendment.

Baroness Gardner of Parkes: I thought that the Deputy Speaker had to put that to me before I sought leave to withdraw the amendment. I apologise. I am happy to beg leave to withdraw Amendment 47 on the grounds that it has been very well debated. It was intended to be a separate issue and I shall wish to speak to Amendment 48.

Amendment 47 withdrawn.

9 pm

Amendment 48

Moved by Baroness Gardner of Parkes

48: Clause 33, page 28, line 35, at end insert—

“( ) Regulations under subsection (1)—

(a) must not include circumstances where the premises in question have been used as temporary sleeping accommodation for more than 30 days in that calendar year;

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(b) must require persons renting out premises under those regulations to provide the local planning authority with the following information at least 7 days before each use as temporary sleeping accommodation commences—

(i) the date the short-let stay will commence,

(ii) the date the short-let stay will end,

(iii) the names and permanent addresses of the persons temporarily occupying the property, and

(iv) written evidence that the owners of the property (where applicable) have been notified and given their written consent;

(c) may permit local planning authorities to vary the requirement in paragraph (b) by establishing a fast-track procedure to enable persons renting out premises to provide the specified information with less than 7 days’ notice;

(d) may permit local planning authorities to levy an administrative fee on persons providing information under this subsection.”

Baroness Gardner of Parkes: I shall speak very briefly to this. Amendment 48 sets out the terms that local authorities believe are essential to be able to control things. Although it says “7 days” they are quite willing to introduce a 48-hour or even a 24-hour system to do that. That is all I need to say. It is a matter of the Government negotiating but we should have an option. Amendment 50 would enable local authorities to recover costs because enforcement procedure of any sort is terribly expensive and, of course, falls back in the end on council tax payers, or people do not get the service at all because it cannot be afforded. As for Amendment 51, I feel very strongly that Clause 33 in its present form is not good and I would be very much in favour of leaving it out.

The Deputy Speaker: Would the noble Baroness like to move her amendment?

Baroness Gardner of Parkes: Before I move my amendment I would like to thank others who have covered so many points that I therefore do not need to. I beg to move.

Lord Leigh of Hurley: I think I am speaking to Amendment 48. If not, I am sure that noble Lords with much greater experience will stop me. Before so doing, I declare an interest as the owner of residential property and as the president of Westminster North Conservative Association.

Clearly, we need Clause 33 because there is a significant problem out there at the moment. Noise and anti-social behaviour from short lets are in the top three complaints we receive when canvassing in Westminster North, and there is an undoubted problem with nomadic communities which make it very hard to plan resources—for example, schooling, rubbish collection and so on. Residents not knowing who their neighbours are increases security problems and we have ended up with a situation in which Section 25 of the GLC Act 1973 is ignored. There is hardly ever any action or prosecutions on it. We have ended up in the worst of worlds where there is a thriving business that is largely underground and a black market, whether housing benefit-funded tenancies or otherwise, run by organised criminals for the benefit often of other criminals.

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Having said all that, I am very much for deregulation. I served on the deregulation task force of the DTI in 1995 and would like to see something done to facilitate Londoners legally to enable their properties to be let out to tourists and others to the extent that they are away. We acknowledge that the market for short lets is strong and that people should be able to do what they want with their properties, and in the process take the opportunity to cut out these criminal middle men and try to legitimate the whole business. We need a pragmatic solution. I agree, as has been said, that one of the biggest concerns is where individual flats within blocks of flats are on short let. There needs to be an arrangement whereby leaseholders can all agree collectively on what they want to do on short lets, so that owners and occupiers are not suddenly blindsided by one or two flats being turned into short lets, where some, not all, are used for purposes for which they were certainly not intended. That has led to problems that have been commented on, particularly in the New York market.

Freeing up the market but protecting residents must be done, possibly by creating some sort of opt-in. Tenancy agreements must clearly list expectations and responsibilities. One of the major problems has been in respect of flats let without any gas safety certificates or fire-retardant furniture. Curiously, where people decide to let out rooms in their flat, as can be done, one can only imagine how that will lead to all sorts of unfortunate incidents.

Although Amendment 48 helpfully suggests that the restriction is 30 days, which is reasonable, I am not sure that the proposal requiring seven days’ notice “before each use” is practical. I just cannot imagine that it would work, and it would rather defeat the object of people wanting an immediate short stay.

I will spare your Lordships’ time in going through each of the amendments but I do not think that they are necessary. I wanted to preface my remarks by explaining that I am as fully aware as anyone of the problems and issues in the London market. When I canvass in Westminster North I see it regularly, but I believe that it is possible within the forthcoming regulations for our concerns to be resolved. I take this opportunity to encourage the Minister to come to the House with those regulations as early as possible so that we can see that they reflect the issues about which we are all so concerned.

Lord McKenzie of Luton: My Lords, I shall speak to Amendments 49A and 49B in this group. In doing so, I draw attention to my declaration in the register of interests as an owner of leasehold property. At this hour, I wish that it was not let out and was available, but there we are. These amendments would put in the Bill the right for individual local planning authorities to exclude from the deregulatory provisions of Clause 33 particular residential premises or residential premises situated in a particular area.

I thank the Minister for making time available in recent weeks for a series of meetings to seek to resolve the range of issues opened up by this clause. We are conscious that a variety of views have been pressed on the Government from Members of your Lordships’ House, operators in the market, London Councils and community groups, including the Covent Garden

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Community Association. As the noble Lord, Lord Tope, said, we should also thank onefinestay for spending time with us to explain the business that it has built and the steps that it goes through to seek to avoid loss of amenity in the areas in which it operates.

The concerns with the proposed deregulation have been most comprehensively described by London Councils in its current briefing. This might be summarised as the potential loss of residential properties because of movement into the more lucrative short-term let sector, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and challenges of continual enforcement—indeed, the effect of “churn”, which was spoken to by the noble Earl, Lord Lytton.

Westminster Council estimates that at least 3,000 properties in its borough are being used for short-term letting accommodation. Apparently, there has been a rise of 37% in just three months in Camden. Even if not experienced across London, we recognise that these are very real problems which afflict some areas under the current arrangements, let alone any further deregulation.

It might be helpful if I restate our position. We see no objection to individuals and families letting their homes for short periods, perhaps when they go on holiday, without the need for planning permission for so long as this activity does not prevent the residential premises from intrinsically remaining their home. This is also provided that the scale of the activity does not adversely change the character or amenity of the local neighbourhood.

We have at last before us a policy paper from the Government. Like the noble Baronesses, Lady Hanham and Lady Gardner of Parkes, we regret that this has come somewhat late in the day. It is their long-awaited response to last year’s consultation. It is a pity that we do not have draft regulations but have to accept reluctantly that this is all we are going to get during this Parliament. The paper captures many of the representations we have received over recent weeks. As the Minister will doubtless explain, the intention is to limit short-term letting to 90 days in a calendar year, have clear enforcement arrangements to protect amenity and address concerns over nuisance, with the flexibility being withdrawn if there is successful enforcement action against statutory nuisance, a provision for local authorities to request the Secretary of State to agree targeted localised exemption where there is a strong community case to do so, and a requirement that the property in question must be liable for council tax. Clearly, the devil is still in the detail, but all in all the Government have moved from their starting position and we should thank them for that.

We can support the flexibility applying only to someone’s home and for a limited period in each year. London Councils is seeking a limit of 30 days a year while the Government are proposing 90. We are inclined to the view that 30 days could be unduly restrictive when taken together with other safeguards, although back-to-back periods of 90 days means that a short-term let could extend for half a year, which in our view is too long. The Minister may want to say more about how it is envisaged that enforcement will operate, but

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we consider that while it is not for primary legislation, there should be at least an annual notification requirement from the householder to the local authority, I think along the lines suggested by the noble Baroness, Lady Hanham, when the first short-term let commences. This need not be an overly bureaucratic process, but it would help local authorities more readily understand the scale of such activity locally and may also be used to signify a possible income tax liability. London Councils seeks a broader safeguard by requiring notification of how long it is to be presumed that each stay will last. The “one strike and you’re out” approach, which we support, would seem to satisfy the difficulty expressed by London Councils over continually having to undertake enforcement procedures.

Where we part company with the Government, and hence our amendment, is on the right of local authorities to override the new flexibility. We do not consider that this should be subject to the agreement of the Secretary of State. Local authorities are in a better position than the Secretary of State to determine what is happening in their individual boroughs and the impact on the local neighbourhood. The use of the term “strong amenity case” suggests that the bar would be set high by the Secretary of State. That is not to say that local authorities can act in an arbitrary or capricious manner. Public policy should prevent this, and in any event, regulations could include the criteria which local authorities should take into account in applying an exemption.

It seems that we are very much in the era of the Minister declaring his support for localism. It was only yesterday in an exchange at Question Time when the noble Lord said:

“I am disappointed. Certainly, on this side of the House, we believe in localism, and this is about devolving responsibility to local authorities”.—[Official Report, 10/2/15; col. 1103.]

That followed an answer given the previous day when he said:

“As we said we would, we have stressed localism and local empowerment, and we have delivered on that”.—[Official Report, 9/2/15; col. 1019.]

I suggest that this is a chance to deliver further.

There is the beginning of some convergence on the different positions, and it is to be regretted that the manner and timing of the issue means that there is limited time to resolve the remaining differences. That is why we are strongly of the view that the safeguard we need to put in the Bill is the right of individual boroughs to pursue exemptions from whatever deregulation eventually emerges. It makes them the final decision-makers.

Perhaps I may comment briefly on some of the other amendments, in particular to Clause 33. Unlike the noble Lord, Lord Leigh, I would say that if the Government had not opened the box, it might be argued that matters should be left alone, particularly as the timing prevents this Parliament seeing things to a conclusion. There may be a case for now starting from scratch and leaving this to the next Parliament, but there is no certainty of the priority it would get. Having opened up the issue, there are clearly matters to address. The extent of short-term lettings in some

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areas, the nuisance it causes and the difficulty of enforcement arises now. The regulation of differing levels of enforcement by individual boroughs determined sometimes by capacity issues rather than policy is not a comfortable place to be. The twilight zone in which businesses operate is also unsatisfactory, at least for those operators who want to do the right thing.

In some of the other amendments, there are references to the nature of the residential property, for example with the terms “principal and permanent residence” and “principal London residence”. Our starting position was to think that this should apply only to somebody’s principal private residence. We thought about it a bit more and if you have the protection of a limited number of days, particularly if it is 30, that does not seem to matter too much, so long as it is clearly and demonstrably somebody’s home. How many homes you can have in London is an interesting question, but we are less concerned perhaps about that precise definition of residence. However, it seems to me that we do have a convergence on some issues. It is just a great pity that the delay in dealing with some of these issues means that we cannot reach a satisfactory conclusion during this Parliament.

9.15 pm

Lord Ahmad of Wimbledon: My Lords, first, I thank all noble Lords who have taken part in the debate, but make special mention of my noble friend Lady Gardner. I know that she had a fall yesterday and I am glad to see her in her rightful place today. We were concerned that on such an important issue we might not see my noble friend in her place. Much as some of the questions she has posed are challenging, I wish her well in any subsequent recovery. As we have seen again today, she has put forward some very compelling arguments in respect of her position.

I will also say from the outset that I of course understand that noble Lords are keen to ensure that any relaxation of legislation governing short-term letting in London is available only to residents, so that they can make their property available when they are away for a limited duration, not to allow non-residents to use property almost or exclusively for short-term letting. I confirm that this is exactly the aim of the Government’s proposals. We clarified our intentions for the reform of legislation on short-term letting of residential accommodation in London in a policy document that was shared with your Lordships, as my noble friend Lord Tope said, on 6 February. I am sure we can come up with varying definitions of “short” and what have you, but it is late in the day, so I will not dwell on that too long.

Section 25 of the Greater London Council (General Powers) Act 1973 provides that the use of residential premises for temporary sleeping accommodation for less than 90 consecutive nights is change of use, for which planning permission is required. London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. There are currently, as I am sure noble Lords appreciate, thousands of London properties advertised on websites for use as short-term accommodation. However, each potentially is in breach of Section 25 as it stands.

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In response to our Review of Property Conditions in the Private Rented Sector, the new policy document that I referred to sets out the Government’s approach to modernising the legislation so that residents can allow their homes to be used on a short-term basis without unnecessary bureaucracy. The Government have carefully considered the views put forward in responses, and I thank the noble Lord, Lord McKenzie, for acknowledging the time that I have certainly sought to take to respond to some of the concerns of noble Lords on this issue. In bringing forward our reforms, we will therefore seek to make provision for safeguards to protect London’s housing supply and residential amenity and provide the ability for local exemptions to be made which would exclude specified premises or areas from the changes.

The Government want to enable London residents to participate in the sharing economy and to enjoy the same freedom and flexibility as the rest of the country, without the disproportionate burden of requiring planning permission. This policy is aimed at helping residents, not at providing opportunities for change of use from residential to business premises. In order to address the issues raised and to respond to some of the concerns, the Government intend to restrict short-term letting of residential premises to a maximum of 90 days in the calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.

I also confirm that we intend to include the requirement that properties must be liable for council tax, to exclude business premises. I also assure my noble friend Lord Tope that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility, where there is a strong case to do so. In response to the issue around regulations, I say to noble Lords that the Government intend to consider the matters I have just mentioned in deciding the most appropriate way to bring these measures forward into law.

For completeness, it is appropriate for me briefly to mention Amendment 47, which sought to restrict the ability to let residential property on a short-term basis, without planning permission, to those times that coincide with,

“a major national or international sporting or entertainment event”.

It would be extremely challenging to define such events in a way that would exclude many other sporting or entertainment events that occur in London on a weekly or even daily basis; for example, European or international football matches and major concerts at venues such as Wembley and the O2 arena. I am grateful to my noble friend for withdrawing that amendment.

I will respond to some of the questions that have been raised. My noble friend Lady Gardner raised some concerns about Parliamentary Answers. It has been confirmed to me that I provided Written Answers to her Questions. Perhaps they were not as complete as she expected but I have checked the records; those Answers were provided and referred to the policy document and the fact that this would be made available before Report, which I hope has indeed been done.

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My noble friend Lord Tope raised the issue of not consulting, in particular with Westminster Council. I assure my noble friend that my officials have met with London Councils officials and representatives from a number of London boroughs, including Westminster.

My noble friend Lady Gardner raised the issue of tax liability. We expect people to pay tax where they are liable. The “Rent a Room” scheme to encourage people to take in lodgers provides a tax allowance on income received from renting out a room; it is a long-standing provision. My noble friend also talked about subletting in Camden. To confirm, a tenant will need to check with their landlord whether under the terms of their tenancy they can sublet. We do not seek to discriminate between people who own their property and tenants.

Amendments 48 and 49ZA would restrict the ability to let properties on a short-term basis, without planning permission, to no more than 30 days a year, as my noble friend Lady Hanham said. Amendment 48 would also prevent hosts being able to accept bookings from overnight guests at less than seven days’ notice, and would require them to notify the local authority of every single letting. It would allow local authorities to establish a fast-track notification process and introduce an administration fee. Amendment 49C would also require notice of short-term letting, and its intended duration, by the property owner.

We want to deregulate in order to provide the ability to let property on a short-term basis for 90 nights per year. This will provide residents with meaningful and proportionate freedom and flexibility in how they use their property. The Government believe that a limit of 30 nights is unduly restrictive. One of the major advantages of the internet is the ability to make transactions quickly and flexibly, and we want our reforms to facilitate this. A requirement for seven days’ notice would unreasonably limit the ability of hosts to offer accommodation to customers seeking to book at shorter notice.

Baroness Hanham: My Lords, for clarity, my amendment said 30 days. In speaking to it, I did not support the situation about the seven days’ notice, nor did I do anything other than say that we would want a short, light-touch registration, which could be up to as much as a year—very much supporting what the noble Lord said. It is important to get the nuances, which are slightly different, and I tried to make them clear but we were in a muddle about where we were.

Lord Ahmad of Wimbledon: The noble Baroness is always well placed to clear up muddles, as she has done so again. I fully accept that she spoke specifically to the issue of the 30 days.

Amendment 49, which would restrict the deregulation only to those properties which are the principal and permanent residence of the owner, and Amendment 49ZA, which would restrict the deregulation to the principal London residence of their owner, are unnecessary and overbearing. They would unreasonably prevent tenants carrying out short-term letting, which may be permitted within the terms of their lease. It would also prevent people short-term letting who may have another residence outside London, even though the London property would be viewed very much as their home.

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Amendments 49A and 49B would remove the ability of the Secretary of State to direct that specified areas should be exempt from the changes. The Government want to be able to grant exemptions but only in exceptional circumstances and where a strong case has been made by the local authority. Otherwise, we want to be clear that our aim is to provide the same rights for all Londoners in all local authority areas.

The amendments would create different regulatory approaches across the capital, potentially resulting in differences between local authority areas. Residents would find that their near neighbours had either greater or lesser freedoms to short-term let their property, without any apparent justification.

Amendment 49C would remove the deregulation measures where a relevant enforcement process had taken place. It would also require the Secretary of State to make regulations for local exemptions where there were strong amenity grounds. I can assure noble Lords that we intend to provide that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility where there is a strong case to do so.

Amendment 50 is also unnecessary in the Government’s view. It is already the case that anyone carrying out illegal short-term letting risks a planning enforcement fine of up to £20,000. It is already possible for local authorities to apply for costs in the event of unreasonable behaviour during an appeal against enforcement action.

I assure noble Lords that the Government’s intention is only to deregulate Section 25 to allow residents occasionally to let out their property on a short-term basis; for example, when they are away on holiday. We are not seeking to create new opportunities for short-term letting on a permanent basis. Our policy document shows how we intend to achieve this in a way which balances the reasonable aspirations of residents to let out their homes temporarily with safeguards to prevent abuse of our reforms.

For these reasons, it is the Government’s belief that Clause 33 should remain part of the Bill. I fully acknowledge that differing views have been expressed by noble Lords, but I think that it is the shared intention of the Government and your Lordships to allow letting of property for residents but not on a commercial basis. I hope that some reassurance has been provided by what I have said and I urge noble Lords not to press their amendments.

Baroness Gardner of Parkes: My Lords, I thank the Minister for his reply. He said that he doubted that his previous replies were negative or non-existent, but he should just check his Written Answer dated 7 January in response to my Question referring back to his earlier Answer—my original Question was for oral answer. There was simply no reply at all to Written Question HL3615, which was then repeated. I have gone back on it yet again and there is still no answer.

Lord Ahmad of Wimbledon: I will review those Answers with officials and get back to my noble friend specifically on them. If there are other points that she wishes to make, perhaps we could move on.

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Baroness Gardner of Parkes: My other point is that I am hoping that the Minister will be able to give us some comment or offer to enable us to be sure that the Government are willing to consult local authorities on this matter. That is a big hole in the argument. I notice that the noble Lord, Lord Leigh, drew attention to the seven-day notice period, but I point out to him that, earlier in the discussion, I drew attention to the fact that Westminster Council and, it believes, other councils are willing to offer 48-hour or even 24-hour registration to enable people to come, but it makes the point strongly that unless it knows who is there and for how long, it cannot police it. The Government’s suggestion of 90 days in a year will require officers to go for 91 days, on separate occasions, to be sure that no one exceeds the 90 days. That is totally unrealistic. It would be far better and simpler to have an online registration system to register your interest, then everything would be in order and you would know exactly who was in the place.

9.30 pm

We must ask the Minister to confirm that he intends to come out with those full regulations, and agreement from people on them, because it is unrealistic to expect everyone to say, “The Government are going to look after us all”. There was a reference to a £20,000 fine, but that is never applied just for lack of planning permission. These things are just creating a diversion from the essential point that no one will have any protection unless very satisfactory powers are agreed with local authorities. I ask the Minister to give me that advice—that he will be sure that there will be full consultation—and to confirm that at long last, the results of the year-old consultation will be published. Why have they never been published?

The Deputy Speaker (Lord Faulkner of Worcester) (Lab): Is the noble Baroness seeking to withdraw her amendment?

Baroness Gardner of Parkes: I am waiting for the Minister to reply before I do.

Baroness Garden of Frognal (LD): I hope my noble friend will agree that the Minister has already given his reply.

Baroness Gardner of Parkes: I am sorry to hear that, because he really has given no reply on so many points. I find that unsatisfactory but at this time of night, and with so few people here, I would not think it at all fair to test of the opinion of the House. I therefore beg leave to withdraw my amendment.

Amendment 48 withdrawn.

Amendments 49 to 51 not moved.

Amendment 51A

Moved by Lord Ahmad of Wimbledon

51A: After Clause 33, insert the following new Clause—

“Designation of urban development areas: procedure

(1) Section 134 of the Local Government, Planning and Land Act 1980 (urban development areas) is modified as follows in relation to an order under subsection (1) of that section designating

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any area of land in England as an urban development area that is contained in an instrument laid before Parliament on or before 31 March 2016.

(2) The section has effect as if after subsection (1) there were inserted—

“(1A) Before making an order under subsection (1), the Secretary of State must consult the following persons—

(a) persons who appear to the Secretary of State to represent those living within, or in the vicinity of, the proposed urban development area;

(b) persons who appear to the Secretary of State to represent businesses with any premises within, or in the vicinity of, the proposed urban development area;

(c) each local authority for an area which falls wholly or partly within the proposed urban development area; and

(d) any other person whom the Secretary of State considers it appropriate to consult.”

(3) The section has effect as if for subsection (4) there were substituted—

“(4) A statutory instrument containing an order under subsection (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”

(4) The duty to consult under section 134(1A) of the Local Government, Planning and Land Act 1980 (inserted by subsection (2) above) may be satisfied by consultation before this section comes into force.”

Lord Ahmad of Wimbledon: My Lords, the Government’s aim is to promote and support the regeneration of brownfield land and the creation of new, locally led garden cities. This is not news, nor is the fact that Urban Development Corporations can play a key role in driving forward the delivery of large-scale development. This is especially true in areas where previous ambitions have failed to progress.

Urban Development Corporations—UDCs—are statutory bodies which are established under the Local Government, Planning and Land Act 1980, whose objective is to regenerate designated urban development areas. Urban development areas and corporations are established by affirmative orders, which, if held to affect private interests, can be declared to be hybrid by the House and therefore become subject to the hybrid instruments procedure. Once declared hybrid, the order is open to allow private interests to petition. This has happened in respect of all previous urban development areas and Urban Development Corporations.

A hybrid procedure is time-consuming and can be costly for all parties, involving processes of representations and hearings over what can be a substantial time. The formation of an urban development area or an Urban Development Corporation does not, in the Government’s opinion, impact on the private rights of individuals and businesses in the area. The powers available to Urban Development Corporations are already available to local authorities, notably in development management planning powers and, where necessary, compulsory purchase. We therefore do not consider that the creation of an urban development area or corporation gives rise to a loss of rights. It is the Government’s view that the hybrid procedure is not necessary in the case of statutory instruments establishing urban development areas and corporations, provided that there is proper consultation with individuals, businesses and local authorities in the area concerned before the statutory instrument is presented to Parliament.

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The Government propose to create a statutory duty to consult. It would require the Secretary of State to consult,

“persons who appear to … represent”,

residents and businesses, local authorities and anyone else who the Secretary of State considers appropriate. The proposed duty to consult would increase the level of public scrutiny that proposals of this nature must undergo. It would ensure that anyone who wishes to can respond to a consultation and express their views and concerns.

Under the current legislation, there is no statutory duty to consult on the creation of an Urban Development Corporation. When the 1980 Act was passed, the affirmative and hybrid procedure was the only express means for local residents to influence government policy. Establishing a statutory duty to consult provides people with an opportunity to participate early in the policy-making process and voice concerns at the point at which they arise, rather than waiting for a chance to petition once a statutory instrument is laid before Parliament.

The way in which people engage with government has improved and changed greatly in recent years. The advent of new technology means that it is now quicker, easier and cheaper for members of the public to raise their concerns through consultation—more so than by bringing a petition in front of your Lordships’ House. Replacing the hybrid procedure with a statutory consultation duty would reflect this change in the way people now interact with government and the policy process. The Government therefore remain of the view that the negative procedure, subject to a statutory duty to consult, is the appropriate procedure for establishing UDCs.

I should like to place on record my particular thanks to the noble Lord, Lord McKenzie, for his participation in discussions on how to proceed on this matter. I know he shares my view that we want to see progress in taking this proposal forward. The inclusion of a 12-month sunset provision, with an expiry date of 31 March 2016, demonstrates our commitment to the regeneration of areas where development is waiting to happen. Any statutory instruments establishing an urban development area or Urban Development Corporation, if laid after 31 March 2016, would revert to the current, affirmative, procedure. It would be for a future Government to propose longer-lasting changes beyond the sunset date, and for the Parliament of the day to debate and decide on such changes. The Government have previously argued that such a change would be appropriate for all the reasons I have described, but we recognise that this issue will not be resolved in the current Parliament.

If the changes we are proposing to the Bill are approved, then, following Royal Assent, the Government will lay a statutory instrument establishing an urban development area and corporation for Ebbsfleet. The Government have already consulted on this proposal, and have published a report demonstrating the support expressed for our proposals in the consultation responses. Given the progress that has been made in recent weeks and months, and the strong case for an Urban Development Corporation at Ebbsfleet, it is perfectly reasonable that we should now move forward with

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establishing the Ebbsfleet Development Corporation as soon as possible. I therefore hope that this amendment carries your Lordships’ support, and I beg to move.

Lord Avebury: My Lords, if the provisions regarding short-term lettings were unsatisfactory, these provisions coming before your Lordships at this stage of the Bill are unsatisfactory in spades. The amendments that we are now looking at are in substitution of the new clauses reducing the power of Parliament over the order-making power to designate land as urban development areas and to establish Urban Development Corporations. The Delegated Powers Committee received those amendments originally on 25 October, and a memorandum explaining the nature and purpose of the proposals on 26 October, giving it time to report at lightning speed on 29 October. The report severely criticised the original proposals as a breach of the undertaking in the consultation document to obtain express parliamentary approval for these proposals, and called on the Government to withdraw them before the next stage in Committee.

The amendments were accordingly withdrawn but, unfortunately, as the Delegated Powers Committee pointed out in its further report published yesterday, the two new clauses that we are now considering still provide for parliamentary approval to be via negative, rather than affirmative, resolution until 31 March 2016. This means that until that date, interested parties would not have the right to petition against orders designating UDAs and establishing UDCs, as has always been the case in the past, leading to the hearing of evidence in a committee on the matters raised in the petition. The Government recognise that your Lordships would need time to consider and debate such a major reduction of our powers of scrutiny, but are insisting that in the case of Ebbsfleet—the only proposal likely to be affected by these amendments—they must pre-empt a more general debate.

I understand that in the consultation, some three-quarters of the respondents were in favour of this new town and one-quarter of them were against. That does not tell us whether any of the antis would have gone to the length of petitioning, but any who were minded to do so have been deprived of their rights although, as the Delegated Powers Committee points out, the Government gave no indication of this in the consultation. I am keen that Ebbsfleet should go ahead rapidly, but I regret the Government’s assumption that they could trample on the rights of scrutiny and the rights of private interests to be heard. They should have started the Deregulation Bill earlier in the Session or, at the very least, they should have found time for a debate on the proposal in the Minister’s letter that the negative procedure is appropriate for all UDC proposals, subject to a statutory right to consultation. I make no comment on the Government’s argument in the memorandum they submitted to the Delegated Powers Committee that the affirmative procedure leads to uncertainty, delay and a loss of business confidence which acts as an impediment to the process of regeneration that the UDCs are expected to deliver.

We are talking here about taxpayers’ expenditure of £1 billion on the infrastructure of these new towns, the first at Ebbsfleet in Kent, followed by others at

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Bicester, Ashford, Oxford and Northstowe in south Cambridgeshire. If the advice of David Rudlin, the winner of the Wolfson Economics Prize is being followed, they are the precursors to a further 35 similar new towns, giving a total of some 600,000 new dwellings, that will,

“take a confident bite out of the green belt”.

Ebbsfleet is entirely brownfield, as we have discussed, but that cannot be true of all 40 new towns that are planned. How do the Government intend to amend the National Planning Policy Framework to avoid inconsistency between the NPPF’s severe restrictions on development in the green belt and the new towns policy of taking a confident bite out of it? Or do they intend to make ad hoc decisions in each case as it arises?

Will the Minister say how the new towns will make a proportionate contribution towards meeting the dire national shortage of affordable homes? In the case of Ebbsfleet, Land Securities says that it has plans to develop up to 10,000 homes, but is there not a Section 106 agreement for the company to make a contribution towards infrastructure costs in lieu of any obligation to ensure that a given proportion of the homes are affordable? In his helpful letter of 9 February, my noble friend said that the UDC will not have plan-making powers but will have to determine applications within the context of the affordable housing policies set out in the Dartford and Gravesham local plan core strategies, both of which require private housing developers to deliver 30% of the units as affordable housing.

Land Securities is not building any houses itself, but will reach deals with housebuilders on parcels within the site. The Section 106 agreement that the company reached with Dartford Borough Council does not require any affordable homes, the money being allocated to schools. The local MP, Gareth Johnson, says it would be wrong to suggest that there will not be any affordable homes and that it would be a matter for the local development corporation, but surely that is not the way it works. Since all the land is owned by a single company and its objective will be to maximize returns for its shareholders, the LDC will have no say in the matter, unless it uses its compulsory purchase powers. Will there be anything in the rules of the LDC that will encourage it to use those powers to achieve a proportionate mix of affordable housing? How else does the Government think that Ebbsfleet and the other new towns will make any provision for people who cannot afford to buy?

I also asked my noble friend last week how the Government would ensure that LDCs would provide appropriate accommodation for caravan-dwelling Travellers, whose needs are even less likely to be a priority for developers. My noble friend said that they would be required to plan for the needs of Travellers in the same way as local authorities. Does that mean that they have to start from scratch with a needs assessment? Would it not be simpler for them to reach agreements with the local authorities contributing to their area to assume responsibility for a proportion of the needs that have already been identified and assessed by those councils?

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9.45 pm

The Liberal Democrats are committed to the principle of the new towns, but I am sure that we would be dismayed if they turned out to be middle-class ghettos. In London and the south-east particularly, young people on low wages, pensioners, the unemployed, recently arrived refugees or disadvantaged ethnic minorities have no hope of being able to buy, and the Government need to guarantee that those people are not permanently excluded from these new and attractive places to live.

Lord McKenzie of Luton: My Lords, we have agreed to support Amendments 51A and 51B despite the 17th report of the Delegated Powers and Regulatory Reform Committee. We opposed the original amendments in Committee and sought a rethink from the Government, which has come in the form of a sunset clause which would bring the provisions of these clauses to an end by 31 March next year so their use would be strictly limited.

We remain unconvinced that the negative procedure accompanied by a statutory duty to consult is the appropriate procedure for establishing a UDC, but agree that there is little time left in this Parliament properly to explore and debate this issue. We are also not unsympathetic to the strong points raised by the Delegated Powers Committee. We will not, however, stand in the way of the Government for this limited period, but we wish to see a revised approach for the future. A new generation of new towns and garden cities is essential to tackling our housing crisis, and the Government’s handling of the development of Ebbsfleet has fallen far short of what is needed to address the problem.

After many years of delay the Chancellor finally announced support for 15,000 homes at Ebbsfleet in his 2014 Budget, although that figure was significantly lower than the over 22,000 homes that had been planned for as recently as 2012. Even now, Ministers have failed to make clear how they intend to support development in light of a funding shortfall of well over £1 billion. Moreover, there is no commitment, as we have heard, to ensuring a minimum number of affordable homes.

My colleague the shadow planning Minister, Roberta Blackman-Woods MP, sought to amend the Bill to update the remit of new town development corporations to ensure that they are fit for purpose for creating a new generation of garden cities, but the Government voted that down and have taken a very short-sighted approach to planning garden cities.

The TCPA has argued strongly against taking forward this development by way of a UDC, which risks confusing the real differences in the nature of the challenges of regenerating existing places and that of building new communities. We have made clear that in government we would not go down the UDC route; as recommended by the Lyons review we would support the delivery of a new generation of garden cities delivered by garden city development corporations based on updated new towns legislation. However, having given the Government their way on this issue for this limited time, we hope that they will now make progress in delivering at Ebbsfleet.

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Lord Ahmad of Wimbledon: My Lords, I am grateful both to my noble friend and to the noble Lord, Lord McKenzie, for their contributions. I will briefly answer some of the questions raised by my noble friend Lord Avebury, and will of course write to him on what I am unable to cover. He asked a question on Gypsy and Traveller provision within Ebbsfleet. The responsibility under the Housing Act 2004 rests with the local housing authority, and it will be for the Ebbsfleet Development Corporation to discuss, with both Dartford and Gravesham Borough Councils in the context of their respective local plans—which remain the development plans for Ebbsfleet—and their Gypsy and Traveller accommodation assessments, what provision may be needed in the UDC area.

My noble friend also asked a question—to which I also responded to him in writing—about whether there will be any element of affordable housing. The development corporation will not have plan-making powers and will, therefore, as I said to him earlier, work within the context of affordable housing policies set out in the local authorities’ existing development plans. He also asked about Section 106 and land securities. There is a Section 106 agreement in place. He also raised issues about the DPRRC’s report. I am grateful for the advice that we have got from the DPRRC. I have written directly to my noble friend Lady Thomas and am happy to share this letter. On the substance of the proposals, I know that my honourable friend Brandon Lewis proposes to make a Statement in the House on the substance of progress at Ebbsfleet, as parliamentary time allows.

I am grateful to the noble Lord, Lord McKenzie, for allowing us to reach a sensible way forward on this. Based on that, and just for clarity, I commend the amendment to the House and hope that the new clause will be inserted into the Bill.

Amendment 51A agreed.

Amendment 51B

Moved by Lord Ahmad of Wimbledon

51B: After Clause 33, insert the following new Clause—

“Establishment of urban development corporations: procedure

(1) Section 135 of the Local Government, Planning and Land Act 1980 (urban development corporations) is modified as follows in relation to an order under that section establishing an urban development corporation for an urban development area in England that is contained in an instrument laid before Parliament on or before 31 March 2016.

(2) The section has effect as if after subsection (1) there were inserted—

“(1A) Before making an order under this section, the Secretary of State must consult the following persons—

(a) persons who appear to the Secretary of State to represent those living within, or in the vicinity of, the urban development area;

(b) persons who appear to the Secretary of State to represent businesses with any premises within, or in the vicinity of, the urban development area;

(c) each local authority for an area which falls wholly or partly within the urban development area; and

(d) any other person whom the Secretary of State considers it appropriate to consult.”

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(3) The section has effect as if for subsection (3) there were substituted—

“(3) A statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”

(4) The duty to consult under section 135(1A) of the Local Government, Planning and Land Act 1980 (inserted by subsection (2) above) may be satisfied by consultation before this section comes into force.”

Amendment 51B agreed.

Amendment 52 not moved.

Clause 39: Civil penalties for parking contraventions: enforcement

Amendment 53

Moved by Lord McKenzie of Luton

53: Clause 39, page 31, line 19, leave out from “given” to end of line 21 and insert “—

(a) by a notice fixed to the vehicle;

(b) by a notice handed to the person appearing to be in charge of the vehicle at the time; or

(c) where the enforcement officer is prevented from serving the notice by either of the methods in paragraph (a) or (b), by post,

in respect of a parking contravention on a road in a civil enforcement area in England”

Lord McKenzie of Luton: My Lords, in moving Amendment 53, I shall speak also to our other amendments in this group, Amendments 54, 55 and 56. I am grateful for the support of the noble Baroness, Lady Hanham, and from the noble Lord, Lord Tope, on these amendments.

Local authorities as we know are precluded from using their civil parking enforcement powers to raise revenue. It is suggested that enforcement by CCTV is particularly unfair because a motorist might be issued with a ticket as a consequence of a camera. The ticket arrives at their home some time after the event when they have no opportunity to examine the location when the alleged contravention took place. However, the Government’s consultation on local authority parking last year acknowledged the benefit of CCTV in enforcing moving traffic congestion where cars use bus lanes, do not exit box junctions, and so forth.

Our amendments go further, particularly in relation to the use of CCTV around schools. This matter was addressed forcefully in Committee by the noble Lord, Lord Tope, who pointed out the nonsense of allowing CCTV enforcement for 10 metres around a school—the zig-zag lines—but not beyond. Amendments 54 and 55 would include in the Bill exemptions from the ban, some of which the Government have already conceded should be provided. This applies to contraventions for stopping at bus stops and bus lanes, school entrance markings and red routes on the grounds of safety and the needs of bus services.

It is understood the wording of our wider use of CCTV within 100 metres of a school entrance may not always be practical, depending on the configuration of the road and other junctions. For so long as the principle is accepted, however, the wording could be

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tidied up at Third Reading. The arguments for preventing parking on the zig-zag lines at pedestrian crossings are similar to those made in relation to school entrances. Cars parked on the white zig-zags on either side of pedestrian crossings can obscure motorists’ view of those about to cross, especially children, the visually impaired and wheelchair users. This is particularly dangerous at zebra crossings where there are no traffic lights and motorists slow down only on seeing a pedestrian starting to cross.

Amendments 54 and 55 would extend the exemption to clearways. Currently there are junctions and other parts of clearways where parking is prohibited to protect pedestrian cyclists and motorists themselves. It is unclear why the Government have chosen to exempt red routes but not clearways, given that the same safety considerations are our concern.

Amendment 66 will ensure that the provisions of Clause 39 cannot have an effect until the equalities impact assessment and a regulatory impact assessment have been undertaken. If the Government continue to argue that the former is not necessary, perhaps they would make clear why. As for the RIA, it has apparently asserted that the measures have no impact on business. However, the LGA says that it has heard directly from private companies contracted to enforce parking, which assert that it does have an impact. Do the Government refute that assertion? I beg to move.

Baroness Hanham: My Lords, I have added my support to all the amendments in this group. The anomaly between the treatment of zig-zag lines at school gates and those by pedestrian crossings is ridiculous. Both involve strong safety issues, and the Government should be able to see their way to including pedestrian crossings, at the very least. They also need to review the regulations about the amount of land taken up as a result of a school entrance. That aspect does not make sense; the amount is far too little compared with what is there at present. That is a technical matter that needs rearranging. The rest of the amendments all seem good common sense. I want to get rid of CCTV, but we cannot get rid of it completely if that will cause a safety hazard.

Lord Tope: My Lords, I too have added my name to these amendments, and I am sorry that the hour of the night that we have reached does not encourage us to give them the full debate that they deserve. I too am looking forward to the Minister’s explanation of why it is necessary to have CCTV enforcement on zig-zag lines outside schools, but apparently not on zig-zag lines by pedestrian crossings. I hope that he will say that the Government recognise that that is rather silly and, as they cannot find a sensible answer to the question why they are doing it, that there will be CCTV enforcement on zig-zag lines by pedestrian crossings.

The noble Lord, Lord McKenzie, will recall the debate—if that is the right word—that we had in Grand Committee, when we had only just received the draft regulations. I think that we all, including the Minister who replied on that day, recognised that the problem outside schools is rather more on the roads adjoining the zig-zag lines. I do not understand why the Government seem unwilling to allow CCTV enforcement on yellow

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lines adjacent to zig-zag lines outside schools, where there really is a problem. I would like to see a Minister go to a school in my former ward and explain to the people there that the rules cannot be enforced by CCTV on the yellow line, but can be on the zig-zag line. I remember my ward fondly, and I am certain of the answer that both the residents and the parents would give that Minister if he were brave enough, or stupid enough, to go and offer that explanation.

Amendment 56, to which the noble Lord, Lord McKenzie, has referred, deals with impact assessments. As he said, the LGA wants clarification of the grounds on which an EIA—equalities impact assessment—is not to be done, because it understands that one is required under equalities legislation. The noble Lord also mentioned regulatory impact assessments. As he said, the Government say that they have not produced one because they do not believe that their proposals would impact business.

However, I have in my hand a letter addressed to Eric Pickles, dated 30 January, from 11 companies that say that,

“these proposals DO directly affect our business and as such the government should conduct a Regulatory Impact Assessment in accordance with its own procedures”.

Some of those 11 companies are recognised as major companies in the parking industry, and they all say that this will have a significant impact on them, and call for a regulatory impact assessment. It is probably no small feat to get 11 companies all to affix their signatures to a letter, and we all look forward to the Government’s reply to the debate.

10 pm

Baroness Oppenheim-Barnes (Con): My Lords, I shall speak very briefly in support of Amendment 53. I am holding in my hand a piece of paper received by somebody very close to me regarding a parking contravention on 30 December 2014. It was received for the first time this morning. It says that the notice was issued on 15 January and that the penalty needs to be paid. However, it had been sent in the post and was not received, and neither was the first notice received. As a result, the fine is now £200.

It would be quite wrong for me to use the Floor of your Lordships’ House to make a complaint on my own behalf were it not for the fact that so many people have complained about this sort of thing happening and because I happen to know, and have heard the Secretary of State say, that this is an important issue of human rights as far as photography of people or cars in relation to parking contraventions is concerned. It is already the law, certainly in the state of California in the United States, that such photography is a breach of human rights. I hope that my noble friend will be able to reassure me on this point. Incidentally, the person concerned was me.

Baroness Williams of Trafford (Con): My Lords, as regards the use of CCTV generally in parking enforcement, it is clear that the operational guidance on parking issued by the previous Government in 2004—that is, that CCTV should be used only where parking warden enforcement is impractical—has been

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largely ignored. It is now used on an industrial scale. For people such as my noble friend Lady Oppenheim-Barnes to be issued with a penalty charge way after the event is simply unfair. Independent parking adjudicators have also agreed that it is unfair. Such practices also undermine the revitalisation of high streets and shops and cross the line of public acceptability. If parking is too expensive or prohibitive, shoppers will drive to out-of-town supermarkets or simply shop online, leading to ghost-town high streets.

The point was raised about exempting the zig-zag lines on a pedestrian crossing as opposed to those outside a school. High streets, where pedestrian crossings are generally situated, are well patrolled by both police and enforcement officers. In any event, parking on a zig-zag line is not just a breach of parking regulations but incurs three points on your licence. That is why, in terms of differentiating between schools and high streets, the safety issue outside schools led the Government to think that the latter case was a suitable exception.

The first amendment in this group concerns the serving of parking tickets. There may be occasions where it is impossible for a civil enforcement officer to physically stick a ticket on to a vehicle or serve a notice at the scene of the incident. The Government are aware of this and have made provision in draft regulations to ensure that service by post is possible in such circumstances. On that basis, I hope that the noble Lord is content to withdraw that amendment.

Noble Lords are also seeking to increase the number of areas where local authorities can continue to use CCTV to enable the issuing of tickets by post. I have given a couple of examples of where the Government have made exemptions, or indeed where they have not. I think that noble Lords and all interested parties will have their own views on where CCTV should or should not be used. The Government accept that sole reliance on CCTV evidence to enforce on-street parking regulations is suitable in certain circumstances. However, if we accepted every argument for increasing the exemptions, we would be back where we started. We have given careful consideration to the list of exemptions and based our decisions on the views of those who responded to the consultation, one being on the issue of the safety of children outside schools.

The noble Lord also offers a new definition of the term “around schools”. This definition would be neither appropriate nor practical. The 100 metres specified in the amendment, or any specified distance, would be arbitrary. Within that distance, it is likely that roads will bend or side roads will branch off the school road. It is unclear how this will be dealt with. Any definition needs to be practical as well as reflect policy concerns.

Amendment 56 would make these powers subject to impact assessments before they were brought into force, which is both unnecessary and undesirable. The Government are proud of the stance they have taken to reduce the impact of rules and regulations on businesses and policymakers. Government guidance published in 2013 clearly states that impact assessments are required only for measures that regulate or deregulate business or concern the regulation of business. This

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clause applies only to local authorities that carry out parking enforcement, and no impact assessments are therefore required.

This whole issue is a matter of principle for the Government, not of balancing impacts. Drivers often receive a parking ticket through the post several weeks after the alleged contravention. They are given no opportunity to examine the parking location at the time the incident is alleged to have taken place, thereby making it difficult to challenge the alleged contravention. That is fundamentally unfair, and the Government strongly believe it should be remedied. I urge noble Lords to withdraw or not move their amendments.

Lord McKenzie of Luton: My Lords, I thank the Minister for that reply and thank other noble Lords who have participated in this debate. Given the hour, I shall not prolong the matter, except to say that I am still unclear as to which of proposed paragraphs (a) to (g) in Amendment 54 the Government support and which they do not. I acknowledge that my description regarding the inclusion of CCTV around schools perhaps needs to be refined, but the principle holds.

The impact assessment was not the issue. It was that parking enforcement may be a responsibility of local authorities but in many instances it is contracted to the private sector—hence the list that the noble Lord, Lord Tope, referred to. I thought that the Minister said that the issue of whether there should be an equalities impact assessment was a matter of principle for the Government. I am not sure that I heard her correctly, but it would be a rather strange explanation if she did so. I remain unclear as to why an equalities impact assessment is not to be forthcoming. However, given the hour, perhaps we should read the record and follow up in correspondence. I beg leave to withdraw the amendment.

Amendment 53 withdrawn.

Amendments 54 to 56 not moved.

Amendment 57

Moved by Lord Low of Dalston

57: After Clause 39, insert the following new Clause—

“Prohibition of parking on verges, central reservations and footways

(1) The Road Traffic Act 1988 is amended as follows.

(2) After section 19 (Prohibition of HGVs on verges, central reservations and footways) insert—

“19A Parking on a road anywhere other than on the carriageway

(1) A person who parks a vehicle wholly or partly—

(a) on the verge of an urban road,

(b) on a footway comprised of an urban road, or

(c) on any other part of an urban road other than on the carriageway,

is guilty of a civil offence, subject to the provisions of subsection (3).

(2) An offence under this section shall be treated as a traffic contravention for the purposes of Part 6 of the Traffic Management Act 2004 and regulations made under it.

(3) Subject to subsection (6), a highway authority may by resolution, or in the case of the Secretary of State by such notice as appears to him to be appropriate, authorise, from a date

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specified in the resolution or notice, the parking of vehicles on or over a footway or any part of a footway as referred to in subsection (1).

(4) Nothing in this section shall apply to any road within Greater London.

(5) In this section—

“carriageway” and “footway” have the same meanings as in the Highways Act 1980;

“urban road” means a road which—

(a) is a restricted road for the purposes of section 81 of the Road Traffic Regulation Act 1980;

(b) is subject to an order under section 84 of that Act imposing a speed limit not exceeding 40 miles per hour; or

(c) is subject to a speed limit not exceeding 40 miles per hour which is imposed by or under any local Act;

“vehicle” means a mechanically propelled vehicle or a vehicle designed or adapted for towing by, or to be attached to, a mechanically propelled vehicle but does not include a heavy commercial vehicle within the meaning of section 19 of this Act.

(6) The Secretary of State may make regulations as to any exemptions from the prohibition contained in subsection (1).”

(3) The Traffic Management Act 2004 is amended as follows.

(4) In Schedule 7, after paragraph 4(2)(g) insert—

“(ga) an offence under section 19A of the Road Traffic Act 1988 (parking on a road anywhere other than on the carriageway);”.”

Lord Low of Dalston (CB): My Lords, I rise at 10.05 pm to move the amendment. I am most grateful to the noble Lord, Lord Tope, who moved it for me in Committee, when I was unable to be present, and to all other noble Lords who spoke in favour of it then. It would introduce a general prohibition on pavement parking outside Greater London, where this has been the rule since 1974, with a power for local authorities to make exemptions on a street-by-street basis. After the noble Lord moved the amendment much more ably than I ever could, there is not a lot more to be said. It seems to be a no-brainer but, for the benefit of noble Lords who were not in Committee—there cannot be many of them left by now—I shall summarise the arguments briefly, given the lateness of the hour. That was not, I fear, a consideration that seemed to trouble many of the previous speakers, who have spoken unusually expansively for the time of night.

Five points need to be made. First, pavement parking is dangerous for pedestrians, especially parents with pushchairs and prams, wheelchair users and other disabled people who are forced into the road in the face of oncoming traffic, which, in the case of blind and partially sighted people, they cannot even see.

Secondly, it is costly. Pavements are not designed to take the weight of vehicles, so they crack and the tarmac surface subsides in consequence. This is also a hazard to pedestrians, who may trip on broken pavements, especially if they cannot see what has happened. Local authorities spent more than £1 billion on repairing kerbs, pavements and walkways between 2006 and 2010. Some £106 million was also paid in meeting compensation claims from people tripping and falling on broken pavements during the same five-year period.

Thirdly, the present legal position is extremely confusing. Parking is regulated by local authorities issuing traffic regulation orders under the Road Traffic

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Regulation Act 1984, prohibiting parking in specific areas. This has led to a patchwork of different approaches being taken by different local authorities, which is very confusing for motorists. We need the consistency of a standard regime throughout the country. Given the hazardous nature of pavement parking for pedestrians, and the fact that a general prohibition with local power to exempt seems to have worked well in Greater London, it seems sensible that this should be the rule that prevails throughout the country.

Fourthly, an amendment along these lines has massive support outside this Chamber. Some 69% of 2,552 adults in England, Scotland and Wales surveyed by YouGov in March 2014 supported a law on pavement parking, as do some 20 organisations, including those representing local government, pedestrians, motorists and transport interests generally, as well as disabled and elderly people. The status quo presents challenges for drivers as well as pedestrians and cyclists. The British Parking Association and the RAC Foundation support the call for change. Some 78% of local councillors believe that there should be a ban on pavement parking. It would be hard to think of any other amendment that united such a diversity of interests that are normally at loggerheads.

Finally, as I said, the regime that this amendment would introduce appears to have worked perfectly well in Greater London for more than 40 years.

In Committee, the main objection to the amendment seemed to be that it was better to leave the question of pavement parking to local discretion. However, I have already pointed out the huge objections to this in terms of cost and consistency. I think the Government’s objections were principally founded on the fear that the amendment would take away all local discretion, but this is not the case. All the amendment does is reverse the presumption as between national standard and local discretion.

The Minister expressed reservations about this on the grounds that introducing the new regime would be costly and disruptive. But, as I have argued, the present system is costly in terms of repair bills and legal costs. Traffic regulation orders cost between £1,000 and £3,000 to introduce, when account is taken of consultation, signage and advertising. A national law on pavement parking would give local authorities the discretion to act as they see fit in a more cost-effective way.

As I said, the case for the amendment is strong. I beg to move.

Lord Tope: My Lords, I added my name to the amendment with great pleasure. Indeed, as the noble Lord said, I moved it in Grand Committee in his unavoidable absence. I did that in particular because of the experience that I had for 40 years as a London borough councillor. As it happens, my council chose to start enforcing the ban in our area in my first year as leader of that council. The area that was most directly and strongly affected by that happened to be the town centre ward that I represented for those 40 years. Many of the properties in my ward were built before the motor car was invented, and certainly before it was ever envisaged that anybody living in the houses in those roads would ever own a car, let alone two cars. Many of the streets were too narrow to allow cars to

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pass in both directions without parked cars being on the pavement, so we had to deal with all the exemptions, many of them in the ward that I represented.

Therefore, I support the amendment, particularly for the reasons given by the noble Lord, Lord Low, but also because, as a councillor, I have had many years’ experience of the implementation and enforcement of this ban. As the noble Lord made clear, it is not a blanket ban; it permits sensible exemptions that then have to be properly marked on the pavement and with a sign. Therefore, I support the ban enthusiastically. I know that it can work where there is a will, and I know that it has worked for many years in the area that I know best. We really should be moving to a situation where, just as in London, the presumption is that parking on pavements and verges is illegal unless it is specifically exempted. Motorists would then know that they should not park on a pavement, for all the reasons that the noble Lord, Lord Low, has given, unless it was clear that they were permitted to do so. That is the opposite of the presumption that exists in the country outside London at the moment, and it is an extremely important road safety and pedestrian safety measure that we should implement.

10.15 pm

The Lord Bishop of Worcester: My Lords, I support the amendment, whose importance has been ably and eloquently demonstrated by the noble Lords, Lord Low and Lord Tope. It is quite clear that the present situation is costly and complex, as has been said. I should like very briefly, given the hour, to demonstrate how in Worcester—one of the few cities in the UK that has tried to tackle the problem of pavement parking —there have been difficulties because of the current situation.

As is well known, the history of parking enforcement is complicated. Parking on pavements was made a criminal offence under the Worcester City Council Act 1985, but under the Road Traffic Act 1991 it was decriminalised, so that could no longer apply. Despite that, Worcester City Council has continued to try to tackle the problem, and in January 2014 civil enforcement officers began enforcing the most serious cases using existing traffic regulation orders. Worcestershire County Council was originally asked for a city-wide traffic regulation order, but this would have required hundreds of street signs wherever parking on pavements took place, and that was considered untenable. That simply demonstrates how difficult the present situation is. The county council suggested that the city council should look at the issue on a street-by-street basis and generate individual traffic regulation orders, but the city council thought that this approach would be untenable as well.

It seems to me that all that demonstrates the need for a national system. It is worth bearing in mind that those who are blind and disabled feel particularly strongly about this. A blind Paralympian who lives in Worcester said recently that walking down the city’s clogged-up streets is like playing Russian roulette.

Lord McKenzie of Luton: My Lords, we must all be aware of the dangers and inconvenience of parking on pavements and the risk that this can pose for pedestrians.

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These risks can be especially acute for those with a sight impairment or those who have a mobility difficulty and rely on using wheelchairs or buggies. The problems are compounded, too, for those who have responsibility for children and who try to navigate the pavements with prams. The consequence is that all too often pedestrians are forced to navigate busy and dangerous roads instead. For some, of course, pavement parking can restrict their right of way completely. As the noble Lord, Lord Low, said, we need to be mindful that pavements are not generally constructed to carry the weight of heavy vehicles and pavement parking can cause the break-up of the surface, adding further hazards, even when the offending vehicles are not present. This amendment seeks to address those concerns outside London by making it an offence to park wholly or partly on a verge, footway or any other part of an urban road. But this blanket ban can be overridden by resolution of the highway authority or by the Secretary of State.

We acknowledge the weight of opinion and the power of the argument which supports this approach. We share the need to address inconsiderate and dangerous parking and to seek to restore to pedestrians their right to proceed unimpeded. But at the same time, we have to recognise that there are some streets where some pavement parking may be inevitable—to maintain the free flow of traffic, to allow loading and unloading, or to allow for vulnerable passengers to be disembarked. Moreover, the premise of the amendment is that all people who park their car on the pavement are doing the wrong thing and should be made guilty of a civil offence. We do not accept that.

If we are to redress the balance and tackle the problem of inconsiderate pavement parking, how is this best achieved? We need to work through how it can be delivered in practice. We are keen to empower councils to tackle problem parking. If there are any barriers or bureaucracy preventing this we would be keen to look at ways we can change the legislation so that that is not the case. We do not think that the blanket ban is the best way to go. We consider that individual authorities, which know their areas best, are better able to determine the extent and timing of any ban. For some, an initial blanket ban may be the immediate answer, but others may want something more selective which addresses the most urgent problems first. In some cases, there will need to be liaison between authorities so that approaches are co-ordinated. We support the thrust of what the noble Lord is seeking to achieve, but we think there is another approach so, with regret, we are not able to support him today.

Baroness Williams of Trafford: My Lords, I thank all noble Lords who have contributed to the debate on the amendment. It demonstrates that there is no perfect system to allow traffic and pedestrians to move around entirely satisfactorily.

I shall start with the points made about London. Pavement parking in London is banned but people still do it. Enforcement of properly targeted local bans outside London would be more effective than a blanket ban that does not reflect local circumstances. On the more general points, local authorities already have the

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power to introduce footway parking restrictions where they consider it appropriate. They are in the best position to decide on local parking restrictions and need to consider all road users when taking such decisions. A national ban of the type proposed would require local authorities to remove all existing restrictions, then renew their urban areas where footway parking should nevertheless still be permitted, consult the community and erect new signage and markings. There could be a significant burden on local government.

The amendment proposes banning footway parking but would allow authorities to permit it where it is desired by simple resolution. Circumvention of the traffic regulation order—TRO—process would take away important protection for the public. The statutory TRO process requires authorities to undertake consultation and advertise their proposals before councils take final decisions. A noble Lord made the point about the TRO process being expensive and cumbersome. It is not true to say that the process is a barrier. Some local authorities make up to 200 orders a year for a variety of traffic management purposes with an average authority making between 50 and 60 orders per year.

The Department for Transport’s guidance to local authorities makes it clear that during the appraisal of their parking policies an authority should consider whether pavement parking is problematic in any part of that area. If it is, and it is not covered by an existing traffic regulation order, the authority should consider amending the existing order or making a new one. The noble Baroness, Lady Kramer, wrote to all English traffic authorities on 27 June to remind them of their existing wide-ranging powers to prevent people parking on the pavement where it is a problem.

The noble Lord, Lord Low, made a point about damage to pavements. The Government are committed to investing in our local highways, including the footways. We are providing local authorities in England with more than £3 billion over four years from 2011-15 for the roads and footways for which they are responsible. In addition, in June 2014, the Government announced that they were committed to providing just under £6 billion for local highways maintenance over the six-year period from April 2015 to March 2021. This equates to £976 million per year to local authorities for highway maintenance.

In conclusion, the Government have concerns about the burden on local authorities of managing a change of this scale, a point to which the noble Lord, Lord McKenzie, alluded, especially when those authorities have comprehensive powers to ban footway parking. I have undertaken to have a discussion with the noble Lord, Lord Low, before Third Reading but I would at this stage ask him to withdraw his amendment.

Lord Low of Dalston: My Lords, I am very grateful to the Minister for her reply and to all noble Lords who have spoken, in some cases with very telling illustrations of the workability of the amendment. It certainly is not the belief of those who support this amendment that all pavement parkers are behaving anti-socially. The amendment’s inclusion of scope for local discretion to exempt specific areas from the general ban recognises that. I am sure that with good will we can find a formula which caters for the concerns

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both of those putting forward the amendment and the concerns which have been expressed about the erosion of local discretion. In response to the Minister’s indication that she is happy to have a discussion before Third Reading, at which I hope we can work together to find that formula, I am happy to withdraw the amendment.

Amendment 57 withdrawn.

Amendment 57A

Moved by Lord Tope

57A: After Clause 39, insert the following new Clause—

“Civil enforcement of traffic contraventions

(1) Part 6 of the Traffic Management Act 2004 (civil enforcement of traffic contraventions) is amended as follows.

(2) After section 87A, as inserted by section 39(3) of this Act, insert—

“87B Use of an approved device in car parks

Nothing in this Act shall prevent the use of an approved device in a car park which is the subject of a civil enforcement order where the intention of such use is to better manage space turnover and user convenience.””

Lord Tope: My Lords, I will try to be brief. The same amendment was tabled in Grand Committee but did not really get any debate. I have brought it forward here at the request of the British Parking Association to have it on the record and to have the Government’s response on the record.

Local authorities, through the use of camera technology, including CCTV and automatic number plate recognition, want to provide new solutions for customers using their car parks. This includes an option either to operate barrier systems automatically by using ANPR and improve access for people with disabilities or to remove barriers altogether and improve traffic flows at these important locations. These systems can also better monitor space turnover, provide customers with more flexible payment opportunities, such as park now and pay later, and reduce the need for enforcement action.

This amendment would bring local authorities into line with other private sector car park providers, which are already using it, making it easier for all motorists to use any car park. ANPR technology, with its customer service benefits, such as pre-booking at airports for example, has been available for some years in private sector car parks and its use for enforcement action on private land, such as supermarkets and motorway service areas, was legitimised by the Government in their Protection of Freedoms Act 2012.

The British Parking Association understands that two of its local authority members are seeking a judicial review of the Government’s recent decision not to allow this new technology. The amendment would eliminate the need for such action by protecting motorists from any attempt by a “rogue” local authority, should there be such a thing, to use technology simply to raise revenue, as the conditions for use which it sets out must be to help space turnover or customer convenience.

We actively support the introduction of new technologies, including cameras and ANPR, when managing parking in regulated car parks. The Government

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themselves have a “digital by default” policy and new technologies and innovation are opening up significant opportunities for customer services and other improvements for motorists in the way parking services are managed and provided. This amendment would put publicly owned car parks on the same basis as privately owned car parks. I beg to move.

10.30 pm

Lord McKenzie of Luton: My Lords, we support this amendment.

Baroness Williams of Trafford: My Lords, I should make it clear right from the outset that the measure in this Bill is about on-street parking, which is the preserve of local authorities. The issue of ANPR is totally separate and the Government are not going to regulate companies in a Bill that seeks to deregulate.

The noble Lord’s amendment seeks to introduce a new clause which would ensure that measures in the Traffic Management Act 2004 do not prevent local authorities from using an approved device in their off-street car parks. The amendment would apply to the entire Traffic Management Act. The Traffic Management Act sets out the framework for local traffic authorities to manage all aspects of their parking policies. To disapply the entire Act in relation to car parks would create an impossible situation where the legislation that prescribes how local authorities should operate is undermined by itself.

I think that the noble Lord may in fact be concerned about the specific measures in Clause 39 and is apprehensive that these will be extended to local authority off-street car parks. I can assure him again that the measures in this Bill apply only to on-street parking. The Government are not seeking to extend these provisions to off-street parking and have no plans to do so. It would be unnecessary to set out in primary legislation policy areas that the law should not apply to.

Permitting local authorities to manage their off-street car parks with camera technology is something that I know some organisations are keen to see happen. However, the Government have not set out their position on this. We have brought forward a range of parking measures designed to help local shops, support drivers and give communities a greater say on parking policies. These proposals have been established for 18 months and have been consulted on. At no point have we indicated any intention to legislate on off-street car parks.

To bring into the Bill at this late stage measures on a different aspect of parking policy would not give sufficient opportunity for people to consider their implications or to offer an opinion. We believe that this is something on which we should consult before any changes are made to the law, and I would urge the noble Lord to withdraw his amendment.

Lord Tope: Well, my Lords, I take it that that is a no. I am grateful to the noble Lord, Lord McKenzie, for his support, and who knows, in the months to come he may have an opportunity to indicate that.

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I am rather disappointed with the reply from the Minister, who perhaps in part through her briefing has not wholly understood the points being made here. I note her point about the impact on businesses, but that did not seem to matter on the previous amendment when we actually had a letter from 11 businesses talking about the impact it would have on them. However, I will of course beg leave to withdraw the amendment and I will consider the issue further.

Amendment 57A withdrawn.

Clause 41: Removal of duty to order re-hearing of marine accident investigations

Amendment 57B

Moved by Lord Prescott

57B: Clause 41, leave out Clause 41

Lord Prescott (Lab): My Lords, is it my impression that the Minister is not here to reply to his letter and my debate in Committee about the safety of passengers and seafarers on vessels? This is a clause about safety on ships and inquiries, and I will seek to show that the “Marchioness” disaster was due to the negligence of the Department of Transport in dealing with that sad loss of 51 people. I mean no insult to the noble Baroness who will be replying, but I hope that I can record my argument, even given the lateness of the hour. The Minister then might, when he wakes up, read what has been said today because presumably there will be another opportunity to look at it when the Bill comes back at Third Reading.

My objection is a strong one relating to safety—this is not about parking, cars or whatever else, it is about safety on our seas and, in particular, on that river outside, the River Thames. The current proposal suggests that any rehearing into the loss of a ship, which may have occurred years ago, will now be at the discretion of the Minister and not be a duty. We are replacing a department’s duty and obligation to hold a hearing into the loss of a ship with a discretion. Evidence shows that discretion is not the best way if you want to get the best out of an inquiry.

Other ships have been lost and taken a long time to be found, such as the “Derbyshire”, which I mentioned in Committee, the fishing trawler “Gaul” and the “Marchioness”. Each time, particularly with the “Marchioness”, the Government refused to have an inquiry. It was normal practice and, indeed, the duty at the time when the “Marchioness” went down to hold a public inquiry as to the causes. So that we are in no doubt about it, all I am saying has been confirmed by the Thames Safety Inquiry report by Lord Justice Clarke. I should know, because when I became the Secretary of State I appointed him to meet the demands of the relatives who died on the vessel in the Thames that there should be a proper public inquiry. He spells out the reason for a public inquiry in the report, referring in turn to the report into the “Herald of Free Enterprise”:

“In every formal investigation it is of great importance that members of the public should feel confident that a searching investigation has been held, that nothing has been swept under the carpet and that no punches have been pulled”.

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That is precisely what happened with the inquiry set up by the Department of Transport, headed at that time by Mr Cecil Parkinson. The ship went down and the normal cry came out for an inquiry, as had happened in a number of other cases. However, the Government made the decision that there would not be a full public inquiry or examination of the facts. They chose to use the maritime investigation board, which is under an obligation in law to investigate immediately the loss of a ship and then to report and act. It does not examine the circumstances of the loss. The Government insisted that it should be this maritime body that investigated, and it was the only inquiry that they implemented. What I find difficult about that is that the Government’s argument at the time was, “Look, we have the maritime inquiry; we cannot have a public inquiry because that might interfere with any public prosecutions or criminal actions that may be undertaken”. However, that does not fit with what happened with “Piper Alpha” or with other ships that went down, where they immediately set up a public inquiry and made clear that that did not matter. It was the same with the King’s Cross fire—the same department, almost in the same period, said, “We are having the inquiry, and are not stopping it simply because of any criminal investigations”. So I then think, “Why is the department doing it in certain circumstances but not in this one?”. To be truthful, it was in the process of changing the regulations for inquiries, but the duty that was imposed on the department still existed when the “Marchioness” went down and 51 people died.

The first question must be: why did the department not use the powers that were there and the duty on it to investigate and hold a public inquiry? That was all people were asking for. The department refused, constantly. It refused for 10 years to have a public inquiry. That started right at the beginning, which I will come to in a few minutes. So I ordered an inquiry.

Ministers, including the noble Lord, Lord Gardiner, wrote to me after Committee—this is why I am particularly annoyed—protesting that I had said that they had hidden the truth about the loss of a vessel. That is a serious charge, so I invited them and the Secretary of State, who wrote to me as well, to read the Lord Justice Clarke report and come and discuss it here in the Lords when we debate these issues. I am a bit surprised that they did not turn up. I have a feeling—I do not know him too well—that he sat on that Bench for a few minutes and then presumably shot home to have a little sleep and not attend this debate. Perhaps he was not here, perhaps it was not him; it did look like him—another good-looking fella like the guy at the end there. The point is, he is not here for the debate. My accusation is a serious one and everything I say is backed up by Lord Justice Clarke’s safety inquiry. He started his inquiry wondering why there had not been an inquiry under the previous Administration. There is a chapter called, “Should a Public Inquiry Have Been Ordered?”, which gave me the quote I have just read. Another chapter asks, “Was This a Suitable Case for a Public Inquiry?”, and he said it certainly was: 51 people died; King’s Cross was less than that and they had a public inquiry. Lord Justice Clarke came to the conclusion that there should have been

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inquiry, there was good reason to have an inquiry, and the report contains a chapter called, “Why Was a Public Inquiry Not Held?”. That is the question.

At the heart of this debate is the argument of discretion. The department exercised discretion—in this case without carrying out the duty; it was to change some months later but it did not do the inquiry—so Lord Justice Clarke looked at the reasons given by the department. All the evidence was given and he looked at the papers. He was told by the legal department that you could not have an inquiry. That is exactly what the civil servants said to me when I came in in 1997, and it is referred to in this report. I held the inquiry. I did not take the advice of the department. I made a decision. I said it was the duty to do this. What happened then? He said that the department took the view that the criminal inquiry prevented it from having an inquiry. Lord Justice Clarke said that it did not. He examined it all in detail and said that it did not make any difference. There was a duty on the department to have an inquiry. It had been done before.

That is critical because the clause that I am seeking to remove is about not every vessel but those vessels that are found a number of years later, such as the “Derbyshire” and the “Gaul”. The amendment says if you apply to have a hearing into the circumstances—which we did for the “Derbyshire” and the “Gaul” but not for the “Marchioness”—you have to have the inquiry. But here the department chose not to recognise its obligation and duty. The amendment says I am changing the duty for a second hearing on the loss of a vessel to discretion.

I have to say to myself: does that make it better or worse? Does it make it easier, as deregulation is claimed to do, or does it mean you save money in case somebody else calls for an inquiry—as the families could—and the Secretary of State can say, “It’s my discretion, I will not do it”? But if you look at the circumstances of a loss, it is not only the safety, it is about the relatives who are left grieving and want to know what happened. The reality was, as Lord Justice Clarke showed, that compared to the maritime investigation, which took two years to be published when it should have been done immediately and made few recommendations, this inquiry looked at all the same circumstances and made 70 recommendations to improve safety on the River Thames. It said that the excuse of criminal law intervention was totally wrong and indeed had not been observed by the department before.

The coroner’s laws were reformed. It was discovered in the case of the “Marchioness” that the coroner had ordered that the hands and feet be cut off and therefore would not show the people the bodies. When the relatives said, “Can we see the bodies?”, he would not let them see them because he felt they would be upset. Well, I suppose they would be upset, but all those laws were changed by the Lord Justice and many others.

10.45 pm

This Bill is seeking to say that it will no longer be a duty on the Minister to have a rehearing but that it will be at his discretion. When discretion applies in departments—I had my share of it—all sorts of pressures are put on by departments. It was the legal department which said to me, “Mr Prescott, you can’t do it”.

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I went to the Lord Chancellor, a good legal adviser, who soon told me, “Of course, you can have it”, so I did impose the inquiry. There was one very good reason why the department did not want me to have it and it is in this report: the department was found to be negligent. When the vessel went down, I was in opposition at the time and I said, “There must be negligence in the department”, because it was a cruiser, a launch, that had been a dance deck. When the “Bowbelle” came alongside and collided with it, the captain could not see, because, since they had built a dance deck, he could not see from the forward bridge that something was coming up because they were all dancing. The department had agreed to the change in the status of the vessel and I had to apologise in the House of Commons for the department’s failure to carry out its job—the report mentioned other authorities as well.

What the inquiry shows you about the truth and the evidence is far different from what you were told by the maritime investigation branch. As the Lord Justice asked, why did the department not do that? I know that the relatives were very upset, largely because it took a long time, and they advocated an inquiry for 10 years until I came along and gave them one, as I promised I would. The report shows that, when you compare what is done by the department with what is done by a public inquiry conducted by a judge, you get a far different examination. I suggest that the maritime investigation was more about sweeping it under the carpet, whereas the public interest and the relatives required an inquiry. What the Bill is proposing is a return to that very system. By the way, what the inquiry also found out was that the skipper of the “Bowbelle” had had a few drinks and the look-out had had a few drinks, but it was not admitted at the time, particularly to the maritime people, so the ship collided and they were found to be negligent.

Relatives who had been waiting 10 years for an inquiry were denied time and again. Parkinson denied it; every Secretary of State denied it—even the present Secretary of State, McLoughlin, who was then a junior Minister, denied it and said that everything had been done properly by the maritime people. Members here in the Lords, who have to do debates from time to time, gave exactly the same story as the department had fed out.

The Government are proposing to change the legislation to prevent it being a duty on the Secretary of State and to leave it to their discretion. With discretion, Ministers come under awful pressure, and in the Department for Transport they are not there for very long—I must have been the longest in the Department for Transport. Basically, I fear that the truth is going to be hidden when relatives are entitled to know the full truth. You will not get the truth simply from a maritime investigatory body—that can find out the facts about the ship—but if you want to know the circumstances, why the vessel went down, that is a matter for a proper public inquiry. What the Government are doing here is making it possible to continue the same process, which is totally unacceptable.

The relatives said to me, and I found it difficult to answer against them, that the Prime Minister, Mrs Thatcher, on the very next day, had Mr Portillo

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and other Ministers into her room to discuss it. Of course, the Prime Minister would be concerned at the loss of a vessel—it was of great public concern—but we now know from the inquiry that she agreed with the Department for Transport not to have a public inquiry and for Ministers just to back the view that the maritime board was right. I know that they said it was Blue Circle’s offence—that was the owner of the ship—and it was never really taken to court and, of course, it contributes to Tory Party funds. People think like that sometimes. They could be quite wrong. But I would certainly have liked to hear tonight from the Minister some reply to some of these things. He said that he was coming—I wrote to him and we had an exchange of letters. I assumed that he might be here. I am hoping now that he might just read what we have said today. I entered this debate to have an exchange, like most others do here. “Oh, we’ll have an amendment. Then we’ll get persuaded to withdraw it”—exactly as I will do tonight. But I was hoping to get a debate. That is what a second debate is about. That is why we have moved from those committees on to the Floor: so that we can discuss it.

Lord Gardiner of Kimble: My Lords, I am reading from the Companion, and I am afraid that the noble Lord should sit down while I do so. It says:

“Arguments fully deployed either in Committee of the whole House or in Grand Committee should not be repeated at length on report”.

The noble Lord is on nearly his 17th minute and I think that we are starting to contravene what is in the rules of the Companion.

Lord McAvoy (Lab): Will the Minister perhaps answer the point that we have repeatedly heard arguments tonight from Tory Peers which were quite clearly used in Committee for any length of time? They may not have taken as long as my noble friend has, so far, but collectively they have kept the whole thing going on their own particular interests.

Lord Prescott: I certainly agree with that. I have sat here all night and I now know more about parking, and God knows what. I am talking about the lives of people and the safety of our ships. I have to remind the Minister that we are an island nation. I would not have had to repeat what the Minister knows but the only reason that I have taken longer is that I think a noble Lord here in the House said that I should perhaps explain to the House what it was, because he was not there at the time. I have taken that choice and I have ended. I take the point, and I am sorry if I have caused any kind of problems with time, but quite frankly it is an important issue. I hope that the Minister will have the courage to turn up at the next stage in the House. He has that responsibility and he should face up to it.

Lord Greenway (CB): My Lords, I declined to follow the noble Lord, Lord Prescott, down this route at Second Reading because I wanted to talk about other things and, unfortunately, when it was his turn to speak on this clause in Committee, I was chairing the All-Party Parliamentary Maritime and Ports Group

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upstairs. This is the first time that I have had a chance to speak on this subject and it looks as though I am third time unlucky, because I have been beaten by the clock as well, so I will be very brief.

The noble Lord, Lord Prescott, who did great things for British shipping in bringing in the tonnage tax when he was Secretary of State, speaks with enormous passion on this subject as a former seafarer. I, like him, share this passion for the sea and ships, which I have had all my life. However, in this instance my passion has been tempered by rational thought. We are looking here at something comparatively simple. This duty that is to be removed is the duty to reopen a maritime inquiry where new and important evidence has been discovered. In the case of the “Derbyshire”, which the noble Lord mentioned, there is no question at all that a Secretary of State would reopen an inquiry. However, there are occasions where it may not be such a good idea. After all, let us not forget that such inquiries cost £6 million to £8 million. They tie up busy people such as lawyers and maritime experts for quite a considerable time. In the fiscal circumstances in which the country still finds itself, if we can save any money then we should look at that quite seriously.

I will not go into the safety aspect because safety is in some ways an entirely different matter. Thankfully, the need to reopen these inquiries has happened on only three or four occasions. The need has got less since the Marine Accident Investigation Branch was set up in 1989. It has reduced the need for these inquiries. The whole system of looking into maritime affairs has been changing quite rapidly over the last 20 or 30 years. We have a different system in place and, in my opinion, I feel very happy that Clause 41 should remain part of the Bill.

Lord Tunnicliffe: My Lords, it is my responsibility to respond for the Opposition Front Bench on this issue. In order to save time, I carefully studied the debate in Committee. Having listened to my noble friend Lord Prescott, we continue to support his position.

Baroness Williams of Trafford: I start by thanking the noble Lord, Lord Prescott, for his enormous patience here this evening. He had to listen to several debates on parking before we came to his issue. I think that the Minister who should have responded to him might have been a woman—

Lord Prescott: It was not.

Baroness Williams of Trafford: It was not—okay, I stand corrected. I hope he will not be too disappointed by my response.

The purpose of this clause is very straightforward. It is to give the Secretary of State discretion in whether to reopen a formal investigation into a marine accident when new and important evidence that was not available at the time of the original investigation becomes known. Given the wide-ranging discussion that we have had, perhaps it is worth setting the clause in its broader context to dispel any fears that it will adversely affect maritime safety. That is obviously the prime concern of the noble Lord, Lord Prescott, as he said at the beginning of his speech.

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Prior to 1989, if there was a marine accident, the Secretary of State could choose to order a preliminary inquiry and, whether or not a preliminary inquiry was held, to order a formal investigation. The latter was a kind of public inquiry, and as well as seeking to identify why an accident had occurred and how to improve safety at sea, it could also apportion liability and blame, and impose penalties on those at fault. Whereas the Secretary of State had the discretion to decide whether to order a formal investigation, he was obliged to reopen a formal investigation if either of the following was the case: if new and important evidence that was not available at the time of the original investigation became known; or if there appeared to be grounds to suspect a miscarriage of justice.

These arrangements had been in place under the Merchant Shipping Act 1894 and were largely re-enacted in the Merchant Shipping Act 1995. However, by the time of the 1995 Act, the normal arrangements for investigating marine accidents had changed considerably. In July 1989, the Marine Accident Investigation Branch was established. The Marine Accident Investigation Branch is functionally independent of the Department for Transport. This removes the conflict of interest identified in the “Herald of Free Enterprise” formal investigation, which was that the department had been both the regulator and investigator for the maritime industry.

All marine accidents must be reported to the Marine Accident Investigation Branch and although it must investigate the most serious of these, the chief inspector has the discretion to investigate others too. Virtually all shipping accidents investigated since 1989 have had only a Marine Accident Investigation Branch safety investigation. The entirely separate formal investigation process remains available should it be deemed necessary. Since 1989, it has been used only twice, once being the formal investigation into the “Marchioness” disaster, called by the noble Lord, Lord Prescott, in February 2000, as he has told us. Because of the near-universal reliance on the highly regarded Marine Accident Investigation Branch investigation process, when the need to reopen a formal investigation has arisen, the accidents concerned have been increasingly historic.

Three reopened formal investigations have been called since 1997. The first concerned the “Derbyshire”. Twenty years had elapsed since the loss of the ship when its report was published. In the most recent case, that of the “Trident”, 35 years had passed. As there have been so few formal investigations in recent years, any reopened now would be about an accident that occurred at least a quarter of a century ago. In fact, the likelihood is that that any new and important evidence that might be found today would relate to an accident of 50 years ago or more.

Over that time, the design of ships and their equipment, and industry crewing and operating practices, are likely to have changed significantly. The chances of there being any relevant lessons to learn for the benefit of today’s seafarer would be much reduced. Again, considering the reopened formal investigations since 1997, the “Derbyshire” report made 24 safety recommendations and the “Trident” just one. Given the changes that have taken place in how we investigate marine accidents,

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the duty to reopen a formal investigation when new and important evidence is found is simply much less relevant to maritime safety than it was when it was on the statute book in 1894. For the vast majority of accidents, the exemplary work of the Marine Accident Investigation Branch—identifying the causes of accidents and issuing recommendations without fear or favour—ensures the future safety of mariners and the protection of the marine environment.

Clause 41 has absolutely no bearing on these Marine Accident Investigation Branch safety investigations or whether their findings should be reviewed if new evidence is found. For exceptional cases, where a thorough public airing and examination of the facts is needed, it is right that the public inquiry-style process provided by formal investigations and reopened formal investigations remains available for Secretaries of State to use. It will remain available under Clause 41. Indeed, I reiterate the position of Her Majesty’s Government that if similar circumstances as applied in the case of the “Derbyshire” arose again, we would strongly expect to reopen the investigation. Clause 41 simply enables the Secretary of State to take a considered view on the likely benefits of reopening a formal investigation in circumstances where new evidence comes to light, just as she has discretion in whether to open a formal investigation in the first place. On that note, I urge the noble Lord to withdraw his amendment.

11 pm

Lord Prescott: Given the circumstances I have explained, I will go through the practice of withdrawing the amendment at the moment. I beg leave to withdraw the amendment.

Amendment 57B withdrawn.

Clause 94: Extent

Amendment 57C

Moved by Lord Wallace of Saltaire

57C: Clause 94, page 73, line 17, after “(10),” insert “(Preventing retaliatory eviction), (Further exemptions to section (Preventing retaliatory eviction)), (Application of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period)),”

Amendment 57C agreed.

Clause 95: Commencement

Amendments 58 to 58B

Moved by Lord Wallace of Saltaire

58: Clause 95, page 73, line 27, at end insert—

“( ) section (Tenancy deposits: provision of information by agents);”

58A: Clause 95, page 73, line 27, at end insert—

“( ) section (Tenancy deposits: non-compliance with requirements);”

58B: Clause 95, page 73, line 30, at end insert—

“( ) sections (Designation of urban development areas: procedure) and (Establishment of urban development corporations: procedure);”

Amendments 58 to 58B agreed.

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Amendment 59

Moved by Lord Wallace of Saltaire

59: Clause 95, page 73, line 36, after “regulations” insert “made by statutory instrument”

Lord Wallace of Saltaire: My Lords, when we come to the end of the scrutiny of any Bill, we come to issues of consequential amendments, territorial extent and commencement. On Clause 94, the question of territorial extent for some of the clauses of the Bill needs negotiation with the devolved Administrations. Some of those negotiations and consultations are still under way, so I take the opportunity to commit to bring back at Third Reading any changes needed to the territorial extent subsections where discussions with the devolved Administrations are not yet complete.

Several government amendments seek to amend Clause 95 on the question of the commencement provisions. The clause specifies, as usual, which provisions are to come into force on the day the Act is passed; which provisions are to come into force, in this case, two months after that day; and which provisions are to come into force by order made by the Secretary of State. It also provides for certain clauses to come into force on Royal Assent for the limited purpose of switching on the power in those clauses to make subordinate legislation.

Amendments 57C to 58B are consequential on new clauses added to the Bill in the course of its consideration. Other amendments move some existing clauses from one part of Clause 95 to another to reflect the department’s current commencement plans. There are also a number of consequential and drafting amendments linked to the other changes in the clause. I hope these amendments are acceptable to the House. I beg to move.

Amendment 59 agreed.

Amendments 60 to 66

Moved by Lord Wallace of Saltaire

60: Clause 95, page 73, line 38, at end insert—

“( ) section 44 and Schedule 12;”

61: Clause 95, page 73, line 39, leave out “sections 47 to” and insert “sections 48 and”

62: Clause 95, page 73, line 40, leave out “Part 6” and insert “Parts 2 and 6”

63: Clause 95, page 74, line 6, at end insert—

“( ) section 28;”

64: Clause 95, page 74, line 8, leave out paragraph (e)

65: Clause 95, page 74, line 11, leave out “section 46” and insert “sections 46 and 47”

66: Clause 95, page 74, line 14, at end insert—

“( ) sections 69 and 70;”

Amendments 60 to 66 agreed.

Amendment 67 not moved.

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Amendments 68 to 71

Moved by Lord Wallace of Saltaire

68: Clause 95, page 74, line 18, leave out “section 87 and”

69: Clause 95, page 74, line 24, leave out subsection (4)

70: Clause 95, page 74, line 27, leave out “comes” and insert “and, as respects Wales, paragraphs 34, 35 and 40 of Schedule 21 come”

71: Clause 95, page 74, line 28, at end insert—

“( ) Where a provision of a Schedule comes into force in accordance with subsection (3)(o) to (s) or (5), the section to which that Schedule relates comes into force (so far as relating to that provision) at the same time.”

Amendments 68 to 71 agreed.

Amendment 72 not moved.

Amendments 73 and 74

Moved by Lord Wallace of Saltaire

73: Clause 95, page 74, line 34, at end insert “or, as respects Wales, paragraphs 34, 35 and 40 of Schedule 21”

74: Clause 95, page 74, line 38, at end insert “(other than transitional, transitory or saving provision that the Welsh Ministers have power to make under subsection (7))”

Amendments 73 and 74 agreed.

Stamp Duty Land Tax Bill

Stamp Duty Land Tax Bill

Second Reading and Remaining Stages

11.04 pm

Moved by Lord Newby

That the Bill be read a second time.

Relevant document: 16th Report from the Delegated Powers Committee

Lord Newby (LD): My Lords, the Chancellor’s Autumn Statement last December announced an important and comprehensive reform to stamp duty land tax—SDLT—on residential property. With effect from 4 December, the structure, rates and thresholds of stamp duty land tax have changed for residential properties, and stamp duty has moved from a “slab” to a “slice” arrangement. Each new SDLT rate is now payable only on the portion of the property value that falls within each band. That is in contrast to the old system, under which tax was due at one rate for the entire property value.

Stamp duty land tax is an important source of government revenue: it raised £6.5 billion in 2013-14 to pay for the essential services that government provides and supports. However, the old system was increasingly seen as unfair and inequitable, especially for those looking to move on and up the housing ladder.

Under the new structure, no buyer purchasing a property will pay any SDLT at all for the portion of the property up to £125,000. Buyers will be charged 2% for the portion from £125,000 to £250,000, and 5%

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for the portion from £250,000 to £925,000. Those buying a house worth over £925,000 will be charged 10% for the portion of the price between £925,000 and £1.5 million. From £1.5 million onwards, buyers will pay 12% SDLT for the proportion of the price above that threshold.

Moving from a slab to a slice arrangement is right in terms of fairness and economic efficiency. The new arrangement will cut SDLT for 98% of people who pay the tax; and no one who buys a home worth up to £937,500 will pay more compared to the previous system.

The stamp duty system as it then stood was a flawed system. It had been criticised by policymakers, industry and think tanks. The “slab” system created a significant hike in taxes at particular thresholds. It created the absurd situation where if you paid £250,000 for a house you would end up paying £2,500 in stamp duty, but if you paid £250,001 you would have to pay £7,500—three times as much. In reality, of course, nobody did. In 2013-14, there were over 30 times as many sales between £245,000 and £250,000 as between £250,000 and £255,000. That represented a significant distortion in the housing market, given the average UK house price of around £275,000, and one which is removed by the Bill.

Not only does the Bill eliminate the previous flaws in the stamp duty system, but it does so in a way which gives a helping hand to those at the bottom of the housing ladder. A family buying a Help to Buy property at the average cost of £185,000 will be £650 better off—a significant sum, especially at a time when cash is most likely to be tight. As I said, nobody buying a home worth up to £937,500 will pay more SDLT under the reformed system, and many will be left with substantial sums in their pockets. Overall, 98% of purchases nationwide will pay the same SDLT or less. That is 99% in Scotland, Wales and Northern Ireland, and 91% in London.

These reforms came into force at midnight on 4 December, to avoid creating undue distortions in the housing market. This stand-alone Bill was introduced in the other place on 4 December, and its provisions have had statutory effect under the Provisional Collection of Taxes Act since the end of the Autumn Statement debate on 3 December. The Government ensured that if a person had exchanged contracts before 4 December but completed on or after that date, transitional arrangements were in place to ensure that they would not lose out.

We also paid particular attention to how this change would affect Scotland. From 1 April 2015, land and buildings transaction tax is due to replace SDLT in Scotland. However, up until that point, these reforms apply to all residential property transactions in the UK, including Scotland. That will ensure that home buyers in Scotland do not miss out on a potential tax cut before their own tax comes into operation.

This change was met enthusiastically by industry, with the CBI labelling it,

“a shot in the arm for families and growing firms”.

It sits as part of a wider scheme of government policies that are designed to boost home ownership and homebuilding, relieving the pressures on the housing market and helping to make people’s aspirations a reality. I beg to move.

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11.09 pm

Lord Northbrook (Con): My Lords, first, I declare my property interests as per the register of interests. The Stamp Duty Land Tax Bill proposals set out in the Autumn Statement are broadly welcome. Stamp duty was an area that was ripe for reform to assist first-time buyers and all those purchasing at below average or, where relevant geographically, average prices. As has been said, the new rules give a useful saving in duty if the house that is being bought is less than £937,500 in cost. Also welcome is the axing of the so-called slab system and its replacement by a progressive income-tax style levy. According to the Financial Times Lucien Cook, residential director of estate agency Savills, said that buyers of average homes outside London would pay “much lower” levels of stamp duty. He said:

“In particular, first time buyers and second steppers will find it easier to raise the deposit needed to obtain mortgage finance, removing one of the major hurdles in the current market”.

Mortgage brokers said that reforms would stimulate sales around the current stamp duty thresholds in particular. As already stated by my noble friend Lord Newby, above the level of £937,500, the total rate of stamp duty will increase. At the higher end of the market, it will tend to tilt the balance towards foreign ownership even more. As one estate agent, David Adams of John Taylor, told me, a buyer from Hong Kong who pays income tax at only 15 per cent is unlikely to be deterred in his London purchase, whereas the UK buyer at, say, the £2 million price level may be put off from making a purchase due to the extra stamp duty.

Does it matter that there is more foreign ownership of our housing stock? If it means that there are fewer transactions by UK buyers, a problem can filter down to lower levels of the market. UK residents may prefer to improve their existing house rather than fork out extra stamp duty on a new one, thus creating a logjam in the market. While the changes will encourage first-time buyers, it remains to be seen how they will affect the housing market as a whole. If house prices continue to rise, which is a distinct possibility due to low interest rates, particularly in London and the south-east, it could put pressure as well on the private rental sector, since potential purchasers will continue to be priced out of the market.

The cost to the Exchequer of the change is estimated to be £4.1 billion over the next few years, but other measures in the Autumn Statement cancel it out. As Paul Johnson, IFS director, has also queried, why has the same slab structure not been applied to non-residential property?

By this Bill, the Chancellor sensibly hoped to put pressure on the Labour Party to abandon its plans for a mansion tax. The legislation increases the rate of duty markedly to 10 per cent for house prices above £925,000 and 12 per cent for the amount above £1.5 million. However, the Opposition seem determined to press on with their mansion tax policy, which has been criticised by many of their own side. The policy could mean people having to sell their properties to pay the tax, which is a particularly vindictive form of taxation, so we could end up with higher stamp duty and a mansion tax.

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One further area that I feel the Government should tackle is where UK properties owned by foreign individuals remain underoccupied. There is a strong case in my view for operating a version of the Swiss taxation system whereby these owners can pay a lump sum based on a quintuple of the rent assessable on the property. Can the Minister pass on this idea to HM Treasury? While effectively a mansion tax is charged on property purchases by offshore companies, there should be some similar levy on domestic UK properties bought by non-domiciled individuals who leave their house empty for a huge portion of the year.

The Government should also consider more tapered taxation rules in other areas, such as capital gains tax where, as has often been suggested by my noble friend Lord Lee of Trafford, short-term gains should be taxed at a higher rate and long-term gains at a lower one. That could actually increase the yield on the tax, which has fallen considerably since it was increased to 28 per cent for individuals. Such a move could mean more transactions in the property market, where secondary residences are involved, and a higher tax yield to the Government.

Finally, might it not have been better, from a government revenue viewpoint, to insert more council tax bands? This year the Centre for Economics and Business Research published some research stating that adding three extra brackets for high-end properties would generate an extra £4.7 billion a year in tax revenue, rather than a predicted stamp duty revenue loss of £4.1 billion over six years. If the Government did this, and in future reduced stamp duty rates, there could be more transactions, thus increasing revenue and freeing up the market.

None of the above would solve the problem of housing supply, which is beyond the scope of this debate. Overall I welcome the Bill, and I hope that an increased volume of transactions will reduce the cost to the Exchequer. The reduction in duty is welcome in a key area of the housing market.