Housing and Planning Bill

Public Bill Committee, 24 November 2015.

Alan Meale (Labour, Mansfield)

We will start with the question that clause 6 stand part of the Bill. Members will be aware that we did not debate that at our previous sitting. Since then, the Opposition have tabled an amendment to remove the clause from the Bill, and although it is not selectable, the subject can be debated.

Clause 6 - Compliance directions

Teresa Pearce (Labour, Erith and Thamesmead)

It is a pleasure to serve under your chairmanship again, Sir Alan.

The Opposition propose that clause 6 does not stand part of the Bill, for reasons I will outline. Committee members will recall that, the last time we met, we had an interesting discussion, ably led by my hon. Friend the Member for Dulwich and West Norwood, as to why we should remove the clause to make the Bill more palatable.

My hon. Friend made a number of excellent suggestions for amending the Bill. She highlighted the fact that there are many strong arguments, which have been put forward by a number of bodies, as to why there should be local input into decisions about the number of starter homes that are necessary. She mentioned that there is a dramatic variation in housing needs across the country—something shown time and again by various witnesses from local authorities, which had diverse local requirements.

My hon. Friend mentioned the fact that the Secretary of State could distort a local housing market if too many starter homes were put up too quickly. She cited the Home Builders Federation evidence, which observed:

“There is potential for market distortion if the numbers of Starter Homes that ministers are targeting to be built actually come onto the market. The effect is likely to be highly localised and could impact upon the saleability of units on new sites”.

That highly localised effect on the housing market shows again the importance of local consideration of planning and building.

The mix of tenures was also raised. There should be a mix of homes, and that should be determined by what is necessary. That should be done at the discretion of local authorities, which are best suited to appraise local needs.

Although the Minister said in our previous sitting that the Secretary of State would have to give reasons for issuing a compliance directive, we are not sure that there are sufficient safeguards to protect local decision making. Moreover, we do not feel that that is a sufficient safeguard to protect councils from being judged as failing when non-delivery could be outside their control. Councils must work in and for the best interests of local people. They will be the ones that are judged as not having met local need, when in fact matters could be outside their control. As the National Housing Federation points out, local authorities must have

“freedom to plan to meet objectively assessed local housing need in their area, as required by the National Planning Policy Framework. This should include the ability to plan for Starter Homes, shared ownership and rented housing…based on the evidence in their Strategic Housing Market Area Assessment. This would ensure that Starter Homes are built, but that the balance between Starter Homes and other forms of affordable housing would vary according to what best meets the needs of local people”.

That view was echoed by the Local Government Association, which stated:

“Councils need the powers and flexibility to shape the supply of genuinely affordable homes to meet needs of different people in their area, in line with their local plan and the National Planning Policy Framework”.

In the face of repeated expert advice that clearly puts a strong emphasis on the significance of localism and responding to local need, why are the Government moving forward with a clause that undermines those things? The Minister gave us reassurances about the need for clause 6 to remain, but they were not strong enough. That is why we now propose that it does not stand part of the Bill, so that local authorities can determine the mix of tenures and the different forms of affordable housing that are necessary for their areas.

The clause is problematic not only because it takes decision making from local authorities, but because there is a lack of clarity in terms of determining how compliance directives will be necessary. The clause would allow the Secretary of State to issue a compliance directive to local planning departments if they do not adequately carry out their functions in relation to starter homes, but it does not clearly demonstrate how that adequacy will be judged or even what it means. Does it relate to a certain number of starter homes based on population, on those who have registered an interest in the scheme or the area, or on the median incomes of an area and house prices to reflect how many could feasibly afford a starter home? We simply do not know and the ambiguity leaves the decision entirely in the hands of the Secretary of the State, with no formal guidance.

The concern about the lack of clear monitoring rules and guidelines is only made worse by subsection (1)(b), which appears to give the Secretary of State personal powers to issue a compliance directive when he does not like the policies in a local plan. It is extraordinary that the Government are taking away from local decision makers in such a way, apparently basing things entirely on the Secretary of State’s decision.

The explanatory notes make things no clearer:

“If a local authority is failing to comply with its starter homes duties and has a policy contained in a local development document which is incompatible with these duties then the Secretary of State may make a compliance direction directing that the incompatible policy should not be taken into account when certain planning decisions are taken.”

There is no real, tangible explanation of what that vague “incompatible” means.

What is the point of having a local plan based on local needs if in reality the Secretary of State may override it? The clause has the potential to be incredibly damaging to localism and any devolved planning powers. The assurances of the Minister have not been enough to convince us that local decision making has been safeguarded. For those reasons, we are moving that the clause does not stand part of the Bill.

Brandon Lewis (Conservative, Great Yarmouth)

It is again a pleasure to serve under your chairmanship, Sir Alan.

I will outline matters briefly, because people want to make progress today. The clause provides for a compliance direction to be issued by the Secretary of State if the local authority is failing adequately to comply with its starter homes duties and if it has a policy contained in a local development document, such as a local plan, that is incompatible with such duties.

Any compliance direction would say that the incompatible policy must not be taken into account when certain planning decisions are taken. It must set out the Secretary of State’s reasons for making the direction and must be published. A copy must be given to the local planning authority and the direction will remain in force until revoked by a further direction given by the Secretary of State, therefore ensuring that local authorities have full understanding, as well as a chance to make their case.

The compliance direction will be used only in limited circumstances. I am happy to put that on the record. It is for when the local planning authority is in breach of its starter homes duties. As outlined a number of times on Thursday, the chapter is very much about creating a new product, recognising the challenges for first-time buyers and the Government’s determination to do what we can to help them reach their aspiration to own their own homes.

The duty to promote starter homes and to grant planning permission in accordance with the starter homes requirement is a statutory requirement. If the local authority does not do that, it will be in breach of the law. The compliance direction mechanism is designed to provide a clear sanction if the duty is breached. The Secretary of State will decide whether to issue the direction based on the information in the monitoring reports that are required to be produced under clause 5.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful to the Minister for giving way and I apologise to my hon. Friend the Member for Erith and Thamesmead for not hearing more of her opening remarks. Will the Minister give us a sense of the type of situation in which he or the Secretary of State would feel that a compliance direction was needed? Clearly, one would be if no starter homes had been set in motion, but suppose five had been set in motion? Would that require a compliance direction? Or would the Minister expect 10 or 100 before a direction was issued?

Brandon Lewis (Conservative, Great Yarmouth)

The hon. Gentleman was unable to join us last week, but I suggest that he looks back at Hansard for last Thursday’s debate, where he can see exactly what we outlined on our expectations for starter homes. He may link that to what I have said in the past few minutes.

Starter homes are a national priority to help a generation into home ownership. We therefore need to ensure that all local planning authorities are on board with delivery. The compliance direction will apply to an incompatible policy in a local development document, which does not include neighbourhood plans or the London plan. It will mean that the incompatible policy may not be taken into consideration as part of the determination of planning applications.

Clause 7 - Interpretation of this Chapter

Brandon Lewis (Conservative, Great Yarmouth)

Clause 7 sets out the meanings of the terms used in the starter homes clauses. It makes clear what the terms mean in the application of the clauses and will assist with their implementation.

Clause 8 - Definitions

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move amendment 88, in clause 8, page 5, line 1, at end insert—

“or

community-led housing schemes as defined at Schedule [New Schedule 1: community-led housing schemes]”

It is a pleasure to serve under your chairmanship, Sir Alan. Given your huge experience, you will know the disadvantage that Back-Bench Opposition Members are at in comparison with the massed ranks of the Government with all their civil servants behind them. In saying that, I hope you will protect me from any bullying by Government Members.

In moving amendment 88, I probe whether the definitions in clause 8 are sufficiently tightly drafted to allow the full range of would-be self-builders and custom house builders to benefit, while not creating loopholes for bigger beasts of the housing market to exploit.

It is interesting that the Conservative party, which is so committed to the free market, should be so actively seeking to meddle with the free market in the clause by creating almost a mini-market within the overall housing market. However, it would be a digression to go down that route.

To give the Committee a flavour of my interest in the clause and to amplify my concern, it might be worth imagining a situation where every member of the Committee lives in the same planning authority area—say Harrow, which is probably the best planning authority in the country and certainly the best place to live, with some very high-quality political representation, especially in the western part of the planning authority area. Let us assume we all live in the same planning authority area and have done so for a number of years. We are all living in houses that we do not see as suitable for our needs going forward and so want to be part of building a better home for each of us. We all get along famously, so we decide to work together and support each other’s efforts to get a better home.

If we were to build our homes under the self-build route, they would clearly, by their very nature, be somewhat different. I am a new man at the moment—I appreciate that is a controversial concept and my partner is not necessarily a supporter of it. As a new man, I do not need anywhere to watch the television. I simply do not have the time any longer to do that, because of childcare arrangements.

My property would be, by definition, very different from those of other Committee members who are not new men or do not have childcare responsibilities. The Minister looks like a man who would want a hot tub in his self-build property. Again, his would be a very different property from those that the rest of us want. The hon. Member for South Norfolk is the very definition of the type of Member who would want to create a mini-castle. Certainly, he would want a wide, sweeping drive to accommodate all his cars.

Richard Bacon (Conservative, South Norfolk)

It is a great pleasure to serve under your chairmanship, Sir Alan. Although my mother used to worry when, as a small child, I expressed the desire to live in a castle, I do not want my self-build to be a castle, but I do want it to contain a library based on the one in Eastnor castle in Herefordshire, which I recommend that the hon. Gentleman visits.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful to the hon. Gentleman for that kind intervention. I will come to the subject of libraries shortly.

I think I have demonstrated that, if we were to go down the self-build route, each of us would build a different type of property. Nevertheless, we might need to work together to achieve that. We might need the help of my hon. Friend the Member for Leicestershire-ish way, I believe—[Interruption.] I am sorry, I mean my hon. Friend the Member for Bootle. [Interruption.] I am a London MP—bear with me. We might need the help of my hon. Friend, with all his council experience, to approach the local planning authority. He knows how planning authorities work, so he could register our collective self-interest. That is one small way in which we could work together, although we would nevertheless build the properties ourselves.

If we were to go down the custom build route, we might again need my hon. Friend to register our interests with the planning authority. My hon. Friend the Member for Dulwich and West Norwood, who is not in her place, has experience of the planning system and would be useful in helping us to find custom house builders. Again, Government and Opposition Members would probably require different types of custom house builder. I gently suggest that Opposition Members would need larger libraries, because we are much more committed to evidence-based policy. The hon. Member for South Norfolk probably does not need such a big library. That is one difference in the type of specialist custom house builders that we might want.

Given the harmonious relationships that have developed in this Committee under your chairmanship, Sir Alan, we could all come together to form a housing co-operative—let us call it the Toffs and Oiks Housing Co-operative—to build a new series of properties in which to live. However, would that qualify under clause 8? Could we register an interest with the local planning authority to build homes?

Why might we go down the housing co-operative route, as opposed to the traditional self-build route or the traditional custom build route? It might be easier to raise finance if we were acting collectively and sharing risk. That might make us more attractive to a potential financier. We might build the houses ourselves or contract them out and design how the properties look, but it would be hard to describe that as traditional self-build or traditional custom build. I seek to probe the Minister about whether a housing co-operative would qualify under the terms of the Bill. Indeed, many rightly acknowledge that the self-build and custom build parts of the housing development market are niche areas. The Government and, indeed, the Opposition, rightly want to see that part of the housing market becoming less niche and more mainstream. Again, the housing co-operative movement—which shares many parts of the definition that one might use to describe a self-build or custom build property—is regarded as quite niche. It may be covered by the definitions in clause 8, but at the moment it is not clear.

My worry is that co-operative and community-led housing organisations—which organise the building of homes and recruit people to become founder members or move into those homes—might be excluded by the very tight drafting that civil servants have been instructed to prepare for clause 8. In Germany, France and the Netherlands, member-run building groups of individuals co-operate to build homes. I am told that in a town called Almere in the Netherlands, some 4,000 homes have been commissioned or built by residents in the past 10 years. Similarly, in Berlin, 5,000 homes built by member-run building groups have become available in the past five years. These homes are self-built and, arguably, custom built, but building them was a co-operative effort. Quite understandably, the Government are seeking to ensure support from the local planning authority for self-build and custom build housing. Would those examples in Germany, France and the Netherlands have qualified for that support under this definition of self-build and custom house building?

There is a small but flourishing community-led housing sector in the UK. It is characterised by its very local nature, and often by its small-scale community dynamism. The essence of my argument is that we need to make sure that we encourage such community-led housing to flourish. Such initiatives rarely start out with high levels of planning and corporate expertise—or, indeed, with high levels of finance. Again, this is surely something they share with those who want to build their own homes and need a bit of additional support to do so.

Community-led housing or housing co-operatives not only have the advantage of providing housing for individuals and their families; they also encourage people who benefit from such building to take some responsibility for their community, for the rules under which it operates and for the conditions and the environment in which they live. Again, surely these are similar advantages to those that self-build and custom house building also deliver in the longer term. While there is clearly a pressing, powerful need for more housing, surely there is also a need to do what we can to foster a sense of community among those who end up living in the homes that we all want to see built. It is surely a good thing to encourage people to take responsibility for their communities and for the rules that are set, the rents that everybody has to pay, the levels of maintenance and other activity in the area.

In short, housing co-operatives encourage a sense of self-help. I hope that that motivation would appeal to Government Members just as much as I hope it does to hon. Members on this side of the Committee. Surely we should not always have to look to the council, the housing association or the long-established private developer in the market to deal with the problems our country faces—in this case the shortage of housing. By definition, housing co-ops require a collective responsibility for the local housing shortage. They allow neighbours’ bad behaviour to be challenged and they encourage other community issues to be resolved.

Housing co-ops are not to everyone’s taste. I suspect that, by definition, they will always remain a relatively small part of the housing market, but surely they have the potential to do much more. If they were covered by the definition in clause 8, they could get that little bit of extra help from the local planning authority. Surely the Minister and Government Members would see that as a good thing.

I will give two tangible examples of housing co-operatives that have moved on from the Toffs and Oiks Housing Co-operative example I used earlier. An interesting project is under way in Lewisham, where, thanks to the initiative of Lewisham council and a local community land trust, residents have the chance to build 33 sustainable affordable homes on the Church Grove site. Residents will be involved from the outset in the design and construction of their homes, with guidance from the relevant professionals—architects and trades people. Residents are involved in the design and construction, so surely the self-build characteristics are met, but they are also working with relevant professionals, so surely the definition of custom house builders is met too. They can meet their potential neighbours before they move in and together can make collective management and maintenance decisions that will help to shape the community that will live in those homes. The scheme offers different levels of building experience. Some people who are perhaps unemployed at the moment might get on-site training and new construction skills. Others, perhaps those who are more elderly, might be able to do more on the administrative and governance side.

The scheme is surely self-build and custom house build, but not of the traditional type that might be immediately associated with the definition in clause 8. The scheme will include homes of between one and four bedrooms in a range of tenures—social rent, affordable rent, shared equity and shared ownership. The final mix of properties constructed will be adjusted to suit the mix of residents who eventually commit to living there. That reflects the flexibility associated with self-build and custom built homes that come to mind when looking at the current drafting of the definition in clause 8.

The trust in Lewisham has 200 members, including some prospective residents, while tenants for the social rented sector will probably be drawn from Lewisham council’s housing list. It is a self-build scheme, but also involves a wider range of partners and is distinctly community-led. It is not the average self-build or custom built home, so will the Minister say whether that example would be covered by the existing definitions? I worry that it would not, because this is not an example of someone organising the design and construction of their new home themselves, nor is it clear that it would qualify as a custom built home. This is not about one specific person working with a specialist custom house developer, although many of the characteristics associated with self-build and custom house building would be obvious to anyone looking at the detail of this example.

The second example, which is perhaps more familiar to the Committee, is much of the housing on the south bank of the Thames, in the Coin Street area. Coin Street Community Builders helped to rebuild the Oxo tower, one of the most iconic buildings on the south bank of the Thames and the former site of the London docklands. The development came about in the 1980s, when there was a dying community of families, many of whom had worked in the docks. A developer came along with a proposal for a huge hotel and office block on the river front, which would have blocked off those remaining residents’ access to the river front.

There was a strong body of local people opposed to that development who successfully persuaded the planning authorities to oppose it. Such traditional opposition might have petered out thereafter, as it does in so many other examples, but out of that community opposition came a group, Coin Street Community Builders, which has gone on to be responsible for the building of large amounts of housing in the Waterloo and South Bank area. I gave the example of the Oxo tower, which has about 100 units of what would probably be termed social or affordable housing in what is now one of the most attractive locations in central London. The people living there are from the local community. Many were part of the original Coin Street Community Builders effort and played a role in the design of the properties that they now live in. Together they represent a co-operative called Redwood Housing Co-op.

Coin Street Community Builders have built many such homes in the area. They are not owned by individuals, but the benefits of home ownership are delivered through people having the responsibility to work together to run the housing co-operative organisation, manage its finances and source staff for the organisation. That encourages people to take pride in their community, recognising their responsibility to each other. Again, this is an example of self-help. Surely we should be encouraging such self-help.

Community-led housing gives power to those living in their properties. It gives them a legal right to help to shape how it operates in the future. Individuals in community-led housing or housing co-operatives are not simply tenants; they are also active owners, albeit collective owners, of the co-operative. I hope that the Minister might be tempted, in an ideal world, to endorse amendment 88 and, implicitly, new schedule 1, but if not, will he clarify whether he sees housing co-operatives as covered by the definition in proposed new section 1(A1) of the Self-build and Custom Housebuilding Act 2015?

Alan Meale (Labour, Mansfield)

Before I call Mr Bacon, let me tell Members that we have the opportunity of going further down this route towards Valhalla, as the hon. Member for Harrow West has pointed out, but I indicated to the hon. Member for Easington a bit earlier that he could take his jacket off, and it was remiss of me not to have made the same announcement to all Members. If they wish to do so, they may.

Richard Bacon (Conservative, South Norfolk)

Thank you for that advice, Sir Alan. I feel that on such an important subject I ought to be wearing a dinner jacket, like Lord Reith reading the news.

It was a pleasure to listen to the hon. Member for Harrow West—albeit at such length that the pleasure was alloyed—but I do not think his amendment is necessary. The Bill provides for “associations of individuals”, so the question one has to ask is: what would a court say about a housing co-operative in such a case? Would a court deem a housing co-operative to be an association of individuals? I think it would.

Gareth Thomas (Labour/Co-operative, Harrow West)

Perhaps I should have gone on a little longer and drawn the hon. Gentleman’s attention to clause 8(2) which, referencing his own Private Member’s Bill, talks about omitting,

“bodies corporate that exercise functions on behalf of associations of individuals”.

That is one of the things that initially triggered my concern that housing co-operatives or community-led housing might, inadvertently perhaps, be affected by the definition in proposed new subsection (A1).

Richard Bacon (Conservative, South Norfolk)

I would certainly not want to omit housing co-operatives inadvertently. I will listen with interest to what the Minister says about that, but it seems unlikely that they would not be regarded as associations of individuals.

May I say how important housing co-operatives can be? The hon. Gentleman rightly pointed to activities on the continent, such as at Almere in the Netherlands and in Berlin. As the founder of the all-party parliamentary group on self-build, custom and community housebuilding and place-making, I strongly support community activity to increase the number of dwellings, because the system as a whole has failed for 50 years. Volume house builders as a whole have failed to cause supply to rise to meet demand, as have too many of our housing associations, because while some are nimble and innovative, some are bloated. An official recently said to me that trying to contact a person in a large housing association was like sticking a knitting needle into blubber: it went on and on and he could not get a response of any kind.

Gareth Thomas (Labour/Co-operative, Harrow West)

I find myself in agreement with the hon. Gentleman. I have experience of a housing association that is incredibly difficult to get hold of and is not treating some of my constituents as well as it should. He supports co-operatives as one part of the self-build and custom house building world, so does he want the Minister to be clear that they will be covered under the terms of the definition?

Richard Bacon (Conservative, South Norfolk)

Yes, I do. In Berlin, people have come together, often led by an architect who has identified the site, people and finance, and worked in co-operation with the local authority, very much in a community-driven way, to produce housing co-operatives that people join. By becoming a member, they are entitled to a dwelling. As the co-operative grows, they can move to a different dwelling that is the right size for them—as they get older or become members of larger families—and they can continue to do that throughout their lives. I therefore support the idea of housing co-operatives.

I will correct the hon. Gentleman on one thing, though. To take the example of Housing People Building Communities in Liverpool, which I visited recently, he described owners as active, albeit collective. Of course it is possible to have co-operative action by communities that results in individual ownership, and that is what has happened in Liverpool. I support the idea of housing co-operatives being covered by the Bill. The difference I have with him is that I think they already are.

Brandon Lewis (Conservative, Great Yarmouth)

As I said on Thursday, I always think it best to start by outlining what we agree on before moving to what we perhaps do not agree on. I agree with the opening comments of the hon. Member for Harrow West. I am sure we agree that he believes that he is the best representation that Harrow could have. I say gently that I hope that his other opening remarks were meant with some tongue in cheek, because otherwise Conservative Members will have found them pretty offensive.

I am sure that all members of the Committee will have spent many hours during mornings, evenings and weekends working through issues behind the Bill to ensure that what we are presenting will be transformational in how we make housing supply and increase home ownership. If the hon. Gentleman looks back at Thursday’s Hansard report—I appreciate that he was not with us on Thursday, as he obviously had other commitments—he will find that amendments were withdrawn and ideas were taken on board from both sides of the Committee in that proper tradition of working together where we can agree in the best interests of all. In that spirit, I hope to give him and my hon. Friend the Member for South Norfolk some words of comfort and reassurance about what the clause seeks to do.

The Government very much support community-led housing schemes, and the hon. Gentleman was right to outline the importance of co-operatives and those schemes. His amendment would add housing built by community-led housing groups for the good of the community to the clause. However, the individuals who first live in such properties would not necessarily have an input in their design, and I argue that that is not self-build or custom house building, nor should it be considered as such.

Where a group of people want to build or commission their own homes next to each other to enable them to live as a community, legislation already allows for that, as my hon. Friend rightly identified. Indeed, supporting such people in the way we see elsewhere around the world, and in Europe in particular, is the reason why “associations of individuals” is included in the definition, as he rightly pointed out. I categorically assure him that groups of people coming together in whatever format—whether loosely and informally or in a more formal organisation—to develop a genuine self or custom build property into whose design and build they have an input is intended to be included in the definition.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful to the Minister for his opening remarks thus far, but I wonder whether I could push him a little further. When he writes to every planning authority—as I have no doubt he will—perhaps he can be clear that housing co-operatives in the format that he has described, using the language that he has used, would be covered under the definition of self-build and custom house building. They would then benefit, crucially, from being able to indicate their interest and from being on the register and would have to be contacted by the planning authority if suitable land became available.

Brandon Lewis (Conservative, Great Yarmouth)

Obviously our words in the House are widely read by people far and wide, and I am sure they will pick up on that. In any communications that we send out following Royal Assent, I will very happily make it clear that any group of people coming together, if they are genuinely looking at custom building and self-building and having an input into the design, where the owner and occupier will have been part of the process, would qualify as custom build and self-build.

I would go a bit further in qualifying that. Traditional community-led housing schemes can include members who are not interested in self-build community house building and therefore would not benefit from joining the register. In those cases, I do not see why individuals within community groups who are interested in self-build and custom house building cannot join together, as individuals or a group, or, if they wish for land close to each other, as an association of individuals, as the qualification outlines.

The overriding rationale of self-build and custom house building is that the person who lives in the finished property has a choice over the design of that property. My hon. Friend the Member for South Norfolk spoke powerfully about this on Second Reading. As he outlined, this is also about moving the housing market. Even where a developer is involved, it is about moving into building property that is focused on the customer’s needs, with the customer being involved in that outline, rather than the traditional build method that we have seen previously in this country.

Richard Bacon (Conservative, South Norfolk)

Because I was speaking to the amendment of the hon. Member for Harrow West, I did not deal directly with the point the Minister is now making, about the effect of clause 8(1) on the definition of “wholly or mainly” in proposed new section 1(A2) of the 2015 Act. I would be happy to have your guidance, Sir Alan, on whether now is the appropriate time to intervene on the Minister on this point, or whether I should do so in the clause 8 stand part debate. I have a query for the Minister, although I do not wish to amend anything.

Alan Meale (Labour, Mansfield)

There probably will be a stand part debate on this clause, so you could talk about it then.

Brandon Lewis (Conservative, Great Yarmouth)

I look forward to that conversation with my hon. Friend.

Let me finish by saying that although we all see the benefit and goodness of a community group building for unnamed individuals or for the greater good of the community—it is incredibly worthwhile in itself, and I am sure all of us across the House would encourage it—it is not self-build and custom build. For that reason, I hope the hon. Member for Harrow West will withdraw his amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I welcome the Minister’s efforts to move at least partly in my direction. There are opportunities for us to discuss the state of the housing co-operative world more generally through other amendments that I have tabled. Let me gently raise again with the Minister my concern about clause 8(2) and the example I gave of the Lewisham initiative, where a local community land trust working with the council is coming together to provide homes at local level. There are members of the land trust who want to live in the community-led housing scheme, but it is effectively a corporate body being set up to do this work. Would it be covered?

Brandon Lewis (Conservative, Great Yarmouth)

To qualify for self-build and custom build, individuals who are going to own and live in the property need to be part of the design and production of that property. If the organisation is commissioning properties for people who are not part of the design panel, they would not by definition be self-build and custom build.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful to the Minister for that. In which case, helpful as his comments have been, it sounds to me as though some housing co-operatives, but not all, could be covered by the clause. Given the forces arrayed against me, I will perhaps accept the Minister’s words of encouragement for one part of the housing co-op sector and return to my concerns about the need to support the wider housing co-op sector later in proceedings on the Bill.

Amendment 88 was very much a probing amendment. I say gently to the Minister that this is a very bad Bill overall, but, in accordance with the spirit of Committee proceedings, we can make it slightly less bad through our debates; I hope my remarks are seen in that spirit. I welcome at least part of the Minister’s remarks, which were helpful. I therefore beg to ask leave to withdraw the amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I beg to move amendment 84, in clause 8, page 5, line 29, at end insert “and without unreasonable cost”.

Gareth Thomas (Labour/Co-operative, Harrow West)

Before my hon. Friend gets into the substance of the concern about the clause, which he has helpfully set in context, he will remember, having read the Hansard extracts from the debate on the private Member’s Bill introduced by the hon. Gentleman the Member for South Norfolk, that our then housing spokeswoman, the hon. Member for Wolverhampton North East (Emma Reynolds), raised concerns about access to finance for those wanting to go down the self-build route. Might my hon. Friend encourage the Minister to give us an update on the extent to which finance is genuinely available for self-build and custom house building, and, indeed, the housing co-operative field, which is covered by the self-build and custom house building definitions in the Bill?

Matthew Pennycook (Labour, Greenwich and Woolwich)

My hon. Friend makes a very good point. Access to finance is a very real issue—it is perhaps less of an issue than land and land assembly, but it is an issue none the less. Amendments 81, 82 and 83 will touch on that area, and I hope we will hear from the Minister in response.

The concern that the Bill might place unreasonable burdens on local authorities was touched on by a number of witnesses in written and oral evidence to the Committee. For example, the chair of the board of the Planning Officers Society, Mike Kiely, raised such concerns in his written submission, in which he stated that the right-to-build provisions could place a considerable additional burden on local authorities. Similarly, the CPRE expressed the concern that the new duty may be too onerous in many areas. If the Bill is to achieve its objective of scaling up the sector, it is vital that local authorities view prospective self-build and custom house builders as partners in helping to meet housing need, not as a burden.

However, we want to make sure that the Bill strikes the right balance between a common national framework for the full right to build and local discretion. There is a danger that few people will join registers, particularly if they are not well publicised by local authorities or if the eligibility criteria are too restricted. Some in the industry have raised that concern directly with me. If we are to see large numbers join local registers, as I hope we will, we need to make sure that local authorities do not face disproportionate or unduly onerous costs or debts as a result of meeting their new duty. Different parts of the country have different housing and land markets, and there will be some, particularly in rural areas, where the costs of servicing plots could be disproportionate or, in some cases, simply impractical. We know that many local authorities can expect to make a profit from the sale of the land at market value in due course, but there will also be increased costs, as the impact assessment accompanying the Bill makes clear.

We appreciate that, in the short term, the Government intend to provide support to cover the costs of developing the register, under the new burdens doctrine. We would appreciate clarification of whether they intend to provide support to cover all the associated costs of developing and implementing the register, including servicing plots of land, and also whether the fees—which, as part of clause 11, can now be recovered in connection with a duty—can be legitimately used to cover the cost of servicing plots of land for the purposes of the duty.

In instances where the local planning authority is not exempt from the duty, as permitted by clause 10, and where full recovery of costs is not possible, our concern is that some LPAs could be hit with unreasonable costs. We believe it is important to ensure that the costs remain proportionate, whether they are for servicing plots of land in the ownership of the authority itself or whether they relate to cases where the granting of suitable development permission opens the authority up to servicing costs on land owned by others. Where they are not, or where servicing is simply impractical, local authorities have a means of avoiding unreasonable costs and debt.

Amendment 84 would achieve that by revising the proposed definition of “serviced plot of land” to cover land that has access to a public highway and connections to electricity, water, waste water and other services, or that can be provided with those things in specified circumstances, or within a specified period, and without unreasonable cost. That would protect local authorities by allowing them to avoid the high upfront servicing costs that might otherwise be involved in fulfilling the full right-to-build duty in some instances.

Brandon Lewis (Conservative, Great Yarmouth)

The hon. Gentleman commented on some of the finance issues, particularly relating to mortgage lenders. I should outline in opening my response to him that the Government have made a £150 million custom build serviced plots loan fund available to enable greater access to serviced plots. I encourage local authorities to work with private or third-party partners to take advantage of that funding to move these issues forward.

Last Friday, I visited one of the custom build areas, in Stoke, which is one of the vanguard areas for the pilots, and met a couple of families and visited one of the homes. I spoke to the chief executive of the mortgage lender—a local building society—who outlined his desire to go further with custom build lending. He said small and local building societies were particularly keen to do that, because it gives them a clear niche in the market, where they can be competitive against the larger companies, which obviously want to work on a more national, organised scale. That gives small local lending companies—we all want small and medium-sized enterprises of all types to grow—a real opportunity and a real niche, and I would encourage people to look at that option.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am always encouraged by references to building societies, and I welcome the Minister’s experience. Just to be clear, would the local authority in Stoke have been able to benefit from the fund, to help make self-build plots available? That is the point the Opposition are trying to probe the Minister on.

Brandon Lewis (Conservative, Great Yarmouth)

Yes. That is what I am saying. I would encourage any local authority, particularly as we go forward beyond the vanguards, to work with private and third sector partners or other vehicles—including, potentially, co-operatives if they qualify for self and custom build—to take advantage of that funding. The pilots have been doing some phenomenal work. On average, we had 80 people coming forward on the register in just the first three months of the scheme, which is an indication of the appetite to take this forward. That backs up the comments by the National Custom and Self Build Association, which we support and want to deliver on, building on the work done by my hon. Friend the Member for South Norfolk in his private Member’s Bill, to see that part of the sector double in size over the next few years.

Matthew Pennycook (Labour, Greenwich and Woolwich)

Will the Minister clarify one important point, because it is instructive as to how the registers will operate? Over what period did those 80 people come forward? How many people are on the local registers in the 11 vanguard plots now? How many joined in the first few months?

Brandon Lewis (Conservative, Great Yarmouth)

As I said, it was 80 in just the first three months, which is a clear indication of the appetite. We want to make sure that we do what we can—partly through the clause and partly through my hon. Friend’s Bill—to double the number of people who take up this opportunity.

I welcome and understand the intention behind the amendment to protect local authorities from excessive costs, but I would argue that a plot of land that required excessive costs to service would probably not be suitable for self or custom building. People wanting to build or commission their own homes usually want to be able to start building as soon as they have purchased their plot of land. That is why the Bill requires local authority to permission suitable serviced land to ensure that the plots are—I use the definition advisedly—shovel-ready. Land that requires excessive costs to put in the basic services should not count as suitable land, and the local authority should seek alternative sites to permission to comply with its duties. For that reason, I ask the hon. Gentleman to withdraw the amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

Perhaps the Minister could clarify where that is in the Bill. Proposed new section 2A(2) puts a duty on local authorities to

“give suitable development permission in respect of enough serviced plots of land”.

Clause 8 defines what those serviced plots of land are. Nowhere in the Bill can I see that the protection of the kind he has just outlined would be an option for local authorities. For example, if they have a register of 800 people with a mind to build their self-build homes, but have fewer plots than that, they might be forced into bringing impractical or costly serviced plots of land into use. Nothing in the Bill seems to protect local authorities in that way from unreasonable costs.

Brandon Lewis (Conservative, Great Yarmouth)

We do not expect local authorities or developers to make a loss on land, services or on sales for custom building. It is right that the costs incurred for serviced plots should be borne by the custom builders.

Richard Bacon (Conservative, South Norfolk)

I wish the hon. Member for Greenwich and Woolwich were wrong, and that there were no protection and nothing in the Bill, and that the overriding duty of local authorities, with no exemptions, were to provide serviced plots at scale, because that would make the biggest difference. In fact, does the Minister agree that the protection sought by the hon. Gentleman is already in clause 10, “Exemption from duty”? There are circumstances—I will ask the Minister about this later—in which the Secretary of State may direct that the local authority is not subject to the duty to provide development permission.

Brandon Lewis (Conservative, Great Yarmouth)

My hon. Friend is absolutely right, which is why I hope the hon. Member for Greenwich and Woolwich withdraws his amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I have to disagree with the hon. Member for South Norfolk. Clause 10 is about exemption from the duty as a whole, not from the duty to service particular plots of land. He is making a different point. That said, although we might return to the subject, given some of the Minister’s assurances, at this point I am happy to beg to ask leave to withdraw the amendment.

Richard Bacon (Conservative, South Norfolk)

I will not detain the Committee for too long. Given that the clause is the first in chapter 2 on “Self-build and custom housebuilding”, I want to say how much I welcome the Government taking further the provisions of the Self-build and Custom Housebuilding Act 2015, which was my private Member’s Bill, to establish the right to build and to make it a practical reality that serviced plots are delivered at scale, so that we have in this country what has been a great lack: the building of houses as if customers mattered. In most markets supply rises to meet demand. The reason it does not do so in the housing space is that customers are not at the centre, as the hon. Member for Greenwich and Woolwich has said. Historically, customers have not been at the centre as they need to be.

I want to make one other important point about the role SMEs, which the Minister mentioned in speaking to the previous amendment. Up and down the country many builders merchants provide timber, plumbing and electrical supplies, and other building materials. The purchase of such supplies locally for a house, whether self-built or built to commission by a local builder, does a great deal to put money into a local economy. The Minister probably knows Brett Amphlett of the Builders Merchants Federation, who helped with my Adjournment debate and my private Member’s Bill, and nor would I be surprised if the Minister had visited a builders merchant to find out the good work that such businesses do to promote local sales to keep money in the local economy.

We need a revolution in the way in which housing is done in this country. We have to create a situation in which the supply of houses rises properly to meet demand. A key part of that will be serviced plots at scale, which is why I agreed with the Minister’s earlier comments.

Gareth Thomas (Labour/Co-operative, Harrow West)

It is always great to have a fellow revolutionary in Committee. Perhaps the hon. Gentleman should drift over to the Opposition Benches, at least for this part of our proceedings. I agree that self-build and custom house building could be part of a housing revolution, but surely in order for that to happen there has to be much greater access to finance to enable self-build and custom house builders to develop. Does he not agree that the decision by the Chancellor of the Exchequer to impose a levy on building societies to take some of their capital away potentially makes it harder for them to make finance available to self-build and custom house builders? Will he be a revolutionary on that as well?

Richard Bacon (Conservative, South Norfolk)

The reason I am not on the Opposition side is that they are not revolutionary enough in this space. When I think about the Labour and Co-operative parties I wonder what could have happened in the past 50 years if the Co-operative party had done to housing what John Lewis has done to retail. I am afraid there has been a lot of talk but not enough action over those 50 years.

I have a lot of sympathy with what the hon. Member for Harrow West said about mutual building societies, having worked on a successful anti-demutualisation campaign for the Britannia building society years ago. However, this is probably not the place to dwell on regulation of mutual building societies.

Gareth Thomas (Labour/Co-operative, Harrow West)

I will stick a membership form in the post.

Richard Bacon (Conservative, South Norfolk)

Since the debate is only on stand part, I shall make just one other point—about the nature of the protection in the new subsection (A2) that clause 8 would insert into section 1 of 2015 Act. Under that subsection, the definition of “self-build and custom housebuilding”

“does not include the building of a house on a plot acquired from a person who builds the house wholly or mainly to plans or specifications decided or offered by that person.”

That is sound. The Minister referred to it in commenting on an earlier amendment. It should prevent gaming of the system by those who want to present their product as if it is a custom house-building product without allowing the customer to specify and determine properly what gets built. Custom house building is not about allowing the customer to choose from a small number of pre-baked designs. It is about the customer deciding and specifying what gets built.

The clause is sound and sufficient. By the way, I sought and obtained the support of the Federation of Master Builders for my private Member’s Bill, but could not even get a meeting with the Home Builders Federation. The fact that the Home Builders Federation thinks that the clause goes too far is sufficient reassurance for me that it is good enough as it stands. None the less, I should welcome the Minister’s reassurance.

Alan Meale (Labour, Mansfield)

I apologise to the Minister, because I should really have called him to speak first, before the hon. Members for South Norfolk and for Harrow West, informative though their speeches were.

Brandon Lewis (Conservative, Great Yarmouth)

I would not for a moment presume to speak before my hon. Friend the Member for South Norfolk on matters of self-build and custom building. His speech on Second Reading showed the House his passion, knowledge and expertise, not least in the pioneering work that he has done to drive an agenda culminating in his private Member’s Bill.

I was honoured and proud to be a small part of that, as the Minister supporting the Bill in Committee. I have a vague memory that we might even have been in this very room—if I remember correctly, we even finished with mince pies. It was a great experience, with cross-party support, and a good example of the House moving things forward. It is important to drive the agenda to bring about big change.

My hon. Friend made a good point in his closing remarks. The clause would for the first time create a clear definition of self-build and custom house building. The creation of a legal definition will enable us to prevent the gaming of the system for which there is arguably potential. We can agree on my hon. Friend’s core point about the customer deciding and specifying what gets built—they should not simply have a say in a standard template.

I have spoken before about the difference between custom building and walking on to a building site to speak to the developer about buying on plot 5, and being told, “As you have got in early you can choose the colour of the kitchen and maybe the carpet colour in the bedrooms.” That is not self-build or custom building, in which the customer is a part of the design process.

My hon. Friend is also right that the measure helps us to do something—although as the hon. Member for Harrow West pointed out, we are playing just one part—for small builders, particularly on access to finance, including through the builders finance fund and by working with mortgage lenders. He made a fair point about making lending accessible to people who want to enter the field. That is why I stressed the point about people who want to work with small, local societies that have a key part to play, where there are niche opportunities and expertise. That helps small and medium-sized businesses.

If my hon. Friend’s work does anything, it will drive and grow the market, and the larger it gets the more attractive it will become to lenders generally, which is a good and helpful thing. Other parts of the Bill will potentially help with access to finance as well, particularly when we think about planning in principle, which we will get to later on. All these things come together to be part of the work we do to help small and medium-sized builders.

Richard Bacon (Conservative, South Norfolk)

Will the Minister address my final concern on the clause? Is he content that the Bill provides a strong enough motivation to be on the register in terms of linking the presence on the register to land allocation decisions?

Brandon Lewis (Conservative, Great Yarmouth)

My hon. Friend makes a very good point. I think it does. We will issue guidance that makes it very clear to local authorities and ensures the proposals are driven forward to deliver exactly what we want, which is a clear identifiable ability to get access to land. That is good for small and medium-sized builders. That kind of development will be perfectly suited to a small and medium-sized business. The hon. Gentleman is quite right: I have visited the Builders Merchant Federation’s members and we have benefited from seeing the work they do to support their local communities. Local builders are good for everybody. They drive jobs locally and they tend to build high-quality homes because their reputation relies on it. They build at a good pace, in contrast to the building rate of the larger developers. That is good for all.

Self-build and custom house building includes homes built by people themselves and homes built on behalf of individuals, where professionals are commissioned to do the work by the eventual owner occupier. The common theme is that the individuals have significant input and choice over their finished home and intend to live in it as their main and sole property.

The second part of the definition is to exclude the sale of off-plan homes, where the developer agrees to minor changes to the property but where the finished home is wholly or mainly the original specification, into which the buyer had no input. That tends to fit the description of most new build properties around the country. However, the definition of self and custom house building includes where someone has bought a shell of a building because they will have significant input into the final internal layout and specification.

Turning to other Members’ points, clause 8 provides the definition of a serviced plot of land. That is land that has access to a public highway and connections for electricity, water and waste, or can be provided with those things in specified circumstances or within a specified period. The clause provides for regulations to amend the definition of “serviced plot of land” by adding further services to the list—I am sure many Members will be thinking about broadband. That allows services such as broadband to be included in the future as and when required.

Grahame Morris (Labour, Easington)

It is a pleasure to serve under your chairmanship, Sir Alan. I want to make a few brief points, because I know time is precious. I have already raised a number of issues that are relevant to my constituency with the Minister in the Adjournment debate. Like my hon. Friends the Members for Harrow West and for Greenwich and Woolwich, we are very keen to join the revolution that has been promoted by the hon. Member for South Norfolk. There is common agreement across the Committee about the benefits of not just the grand design but the ambition for self and custom build for everyman that the Bill espouses. Some 100,000 properties over the lifetime of the Parliament seems incredibly ambitious, but will bring many benefits, not least to the building supply sector, in terms of employment and meeting housing needs.

Will the Minister respond to the points raised by my hon. Friends about the obligations to be placed on local authorities? Notwithstanding the existing or potential demand for custom and self-build, there is a concern related to subsection (4) and the various conditions that are placed on the definition of a serviced plot of land. Subsection (4) would define a serviced plot of land as one that,

“(a) has access to a public highway and has connections for electricity, water and waste water, or

(b) can be provided with those things in specified circumstances or within a specified period”.

Will the definition place any additional burdens on local authorities or service providers to connect properties or serviced plots of land at costs which they cannot meet? My own local authority is facing immense costs as a consequence of budget cuts from central Government. On the eve of the spending review, we are making some difficult decisions.

Matthew Pennycook (Labour, Greenwich and Woolwich)

My hon. Friend is making a good point. That is what I tried to get at, and we got part of the way there. Does he agree that it would be useful to have, not only a better understanding of what burdens might be placed on local authorities, but an idea of how much money, if any, has been allocated by the Department to cover any new burdens that the Bill will impose on local authorities?

Grahame Morris (Labour, Easington)

That is a really good point, which I hope the Minister will address in his closing remarks.

Gareth Thomas (Labour/Co-operative, Harrow West)

A slight alarm bell got set off in my head when the Minister talked about the power to make regulations potentially to include broadband. Harrow is in central London, and one would think it had good access to broadband, but that is not the case at the moment. There is a very mixed performance by BT and other providers. Given that it is Ofcom’s responsibility to direct the provision of broadband, one worries that the Minister might feel gung-ho one day and draft the regulations to include broadband, when it is not the local authority’s responsibility to provide such a crucial facility; it is Ofcom’s or, indeed, the private sector’s responsibility. It would be useful to probe the Minister a little more on his intentions for those future regulations.

Grahame Morris (Labour, Easington)

I am grateful to my hon. Friend. Again, the Minister might respond to that point in his concluding remarks.

Finally, I remind the Minister of the Adjournment debate we had at the close of the last Parliament, in which particular problems were highlighted in the former colliery village of Horden in my constituency as a consequence of the withdrawal of the housing association Accent, due to housing market failure. The Minister suggested, on that occasion, that we look at what was termed “homesteading” on a large scale. Sadly, that was not possible, perhaps because of some of the issues raised by the hon. Member for South Norfolk about access to finance, whether the necessary skills and leadership were available at that time and perhaps the lack of a housing co-op with the dynamism to take it forward. I think we will address a little later some of the issues that have arisen since that debate, with rogue landlords and problems as a result of a failure to adequately address that. I would welcome any assurances the Minister can give.

Brandon Lewis (Conservative, Great Yarmouth)

There is obviously a process that the Government go through in agreeing with local government the new burdens that will still apply. With regard to our general position on plots and the cost of servicing them, I refer the hon. Gentleman to the comments I made earlier about our expectations. I am happy to give him further feedback on that over the next few days.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I would like to press the Minister on the specifics of this. He said that under the new burdens principle, local authorities will be covered. How much has the Department allocated to cover new burdens that might arise as a result of the Bill? That is not in the impact assessment. Has the Department bottomed out that area and allocated actual funds?

Brandon Lewis (Conservative, Great Yarmouth)

I shall be brief, because I know we want to make progress today. If the hon. Gentleman looks at the rest of the clause and, indeed, the comments I made about the previous amendment, he will see that he needs to look at this in the whole, and that will answer his specific question.

Let us look at what we are learning from the vanguards. As I said, I visited Mr and Mrs Sproston in Penkhull in Stoke just last week, and saw the six new homes that have been delivered on that particular site. Under the new administration, the authority wants to deliver the pilot and find a way to make it work for people. It is a really exciting opportunity that both lenders and the residents are getting behind, and I therefore encourage them to go further with it.

Clause 9 - Duty to grant planning permission etc

Matthew Pennycook (Labour, Greenwich and Woolwich)

I beg to move amendment 86, in clause 9, page 5, line 42, after “permission”, insert

“to meet housing need generally including”.

Gareth Thomas (Labour/Co-operative, Harrow West)

My hon. Friend will remember our debate on clause 8, when a spirit of consensus about the importance of housing co-operatives almost broke out. Were his amendment accepted, it would provide another opportunity for the hon. Member for South Norfolk to demonstrate his revolutionary zeal in support of housing co-operatives. It would go some way towards plugging the shortage of support for the expansion of housing co-operatives, which at all levels—finance, local authority support and builder support—has historically restricted the growth of that important but, sadly, niche part of the housing market.

Matthew Pennycook (Labour, Greenwich and Woolwich)

My hon. Friend makes a very good point. The amendment simply seeks to draw the Government to put their intentions on the record. If we are going to meet the housing crisis, we require action across all tenures and a housing mix, and co-operative housing is a large part of that. Our concern—we will no doubt come back to this theme—is that the Bill addresses only specific tenures of housing and does not meet housing needs across all tenures.

Gareth Thomas (Labour/Co-operative, Harrow West)

I support my hon. Friend’s amendment. I want to consider the example of a military veteran who does not want to build his own home, engage with a custom house builder or be part of a housing co-operative, but is on the local authority’s register. In most cases, he is due a very long wait. Were my hon. Friend’s amendment accepted, it might give him some hope that, despite the long waiting list that is the reality for most housing authorities, there is a chance that sufficient homes will be built at a faster rate and that he might be allocated a permanent home, albeit not one of the types of tenure that we have discussed in Committee so far—a starter home, a self-build or a custom build. My hon. Friend has put forward a very helpful amendment, and I am interested to hear from the Minister how it would not help, since I assume he will oppose it. Why would the amendment not be in the interests of that military veteran wanting a permanent home, albeit using another form of tenure, for which the Minister has not demonstrated an enthusiasm?

Alan Meale (Labour, Mansfield)

Mr Bacon, I apologise: I should have called you last time, but your svelte figure deceived me.

Richard Bacon (Conservative, South Norfolk)

Sir Alan, I have lost so much weight, but have a lot more to go. I am afraid I do not agree that the amendment is helpful. I know we are short of time and I would not have spoken were it not for the phrase “to meet housing need”.

Three years ago I was at a conference at the QEII Centre with local authorities and people from the National Self Build Association. Several local authority leaders of different political parties were asking questions. One of them, a Conservative from a wealthy area in the south-east, was very excited because he had already managed to deliver housing, including the cost of the land, for £140,000 to £150,000 per unit. Another local authority leader, whose party I will leave you to guess, Sir Alan, but he was not a Conservative, sat there with hands folded and said he would have nothing to do with it. I chatted to him afterwards and asked why not. He said, “Because it will not help me meet housing need.”

The reason I got into this area and wrote the Self-build and Custom Housebuilding Act 2015 is because I am sick and tired of people in local authorities saying they know more about housing need than the people who need housing. That is why it has to change. With respect, I do not think the amendment helps that process. When I want advice on how revolutionary I am, I will certainly not go to the hon. Member for Harrow West. None the less, I give way.

Gareth Thomas (Labour/Co-operative, Harrow West)

I thought we had established consensus but now the hon. Gentleman seeks to spoil the positive atmosphere that was developing between us. People in my constituency come to see me about housing issues. I am sure they are supportive of self-build and custom house build, but they also want the local authority, housing associations or private developers to be able to provide decent homes.

The amendment does not seek to exclude self-build or custom house building; my hon. Friend the Member for Greenwich and Woolwich simply seeks to make a range of other tenures available. I counsel the hon. Member for South Norfolk that one failing of revolutionaries in the past has been blinkeredness. I hope the hon. Gentleman will not fall for that weakness on this occasion.

Richard Bacon (Conservative, South Norfolk)

What the hon. Gentleman calls blinkeredness, I call focus, and this very good clause would be cluttered up by the amendment. What annoys me is this. We have heard a lot in the Bill and oral evidence about the need for housing need to be taken into account, but there is nothing to stop a local authority that wishes to do so from helping the formation, establishment and growth of a housing co-operative. If local authorities are concerned to protect housing in perpetuity, they can do so by that route, in a way that is exempt from the Bill. There is nothing to stop them doing that.

I have learned two particular things, among several, while studying this area—one about land and one about finance. There is no shortage of land; there is a shortage of accessible land. There is no shortage of finance; there is a shortage of financeable propositions. If local authorities, in conjunction with their local people, were to come forward with good strong business cases for grounding and growing housing co-operatives there would be no shortage of financiers willing to come forward to help finance those propositions. The problem is there has been a shortage—

Gareth Thomas (Labour/Co-operative, Harrow West)

Will the hon. Gentleman give way?

Richard Bacon (Conservative, South Norfolk)

I will not give way because we must make progress. The problem has been a shortage of financeable propositions, and that is what the Bill is helping to change.

Brandon Lewis (Conservative, Great Yarmouth)

The amendment is aimed at ensuring that authorities give suitable development permission to housing across all tenures, not just custom build. We heard earlier what that does for a military veteran who is not interested in custom build. I would say a couple of things to that military veteran.

First, they should think about self-build and custom build under these new provisions. I visited a company called Beattie Passive in the constituency of my hon. Friend the Member for South Norfolk, which can develop and help somebody like that learn how to build their own home and deliver it for about £30,000, making it a very affordable proposition.

We come back to the debate we had, in part, on Thursday. Members should read this part of the Bill not as the entire solution to what we want to do to get house building back to where it should be after we inherited an awful legacy, but as part of the work we are doing. The Bill is part of the work and this clause is just part of that. In the same way, starter homes are part of the solution, as is custom build. It builds on the fact that we have exceeded our target for affordable house building over the past four or five years and we are now in the process of the new scheme to deliver 275,000 affordable homes. That is the fastest rate in more than two decades and, of course, in terms of council housing we, as a Conservative-led Government, have a strong record of delivering more in five years than the previous Labour Government did in 13. I am extremely keen that we continue to press ahead with further reforms to the planning system to drive up housing supply.

Through the national planning policy framework and the Localism Act we have put local plans at the heart of the system. Such plans set out a vision and a framework for the future development of the area, including where to locate new housing to meet the needs of the community, but we must be realistic about what can be achieved and when. That applies to the provision of infrastructure, and when sites might come forward for development. Linking this action to the earlier comments, I clarify for hon. Members on both sides of the Committee that we recognise that this is a new burden and, as such, money will be set aside. The process for this and the work of local authorities, not least in the 11 vanguard areas, is not complete, so I will not give specific numbers today, but I assure hon. Members that it will be sufficient to ensure that local authorities are not disadvantaged by the introduction of this policy.

Gareth Thomas (Labour/Co-operative, Harrow West)

The Minister has mentioned the 11 vanguard authorities a number of times and has given the example of his recent visit to Stoke. I would welcome hearing whether any of those vanguard authorities are in London. Given the scale of housing need in London, what has the experience been of the vanguard authority in London, if there is one?

Brandon Lewis (Conservative, Great Yarmouth)

I do not think there is a vanguard authority in London, but if the hon. Gentleman is offering to put Harrow up to take this forward for London, I would be very happy to talk to him about that opportunity.

Local planning authorities are already required to meet the full, objectively assessed needs for the market for affordable housing in their area. Although that includes the demand for custom and self-build housing, many local authorities are still not proactively planning to meet the demand for custom and self-build in their area. As we want this area to double over the next few years and to deliver that through this Parliament, it is important that we drive this forward and have that focus, as my hon. Friend the Member for South Norfolk said. Placing a statutory duty on relevant authorities to commission sufficient serviced plots in line with demand will ensure that pent-up demand is also starting to be addressed. The proposed amendment would set an unrealistic expectation and burden on local planning authorities.

In addition, local planning authorities simply may not have sufficient land available to meet their need, or sufficient landowners willing and able to come forward for development within the allocated time. The proposed requirement in the national planning policy framework to have a five-year supply of deliverable land is a more effective tool. Among the vanguards, it is also interesting to see that areas of natural beauty and national parks were coming forward wanting to play their part. Even in areas where land can be challenging, we have vanguards wanting to do their bit. The Bill is intended to ensure that there is more permissioned serviced land available which is suitable for self-build and custom house building.

As we have heard, the numbers are still low. Custom build still only constitutes around 10% of all housing, and there are considerable benefits in promoting this type of housing further: it will diversify the sector and encourage development on sites which are too small to be of interest to the major house builders and perfectly suited, therefore, to small and medium-sized businesses around the country. It will provide business for the smaller builders and developers who are happy to offer those bespoke properties. Our ambition is to double the figure to 20%. Our proposals seek to embed custom build as a legitimate form of housing supply, as part of the wider housing mix, while still keeping expectations at a manageable scale compared with 100% of housing need. So I ask the hon. Member for Greenwich and Woolwich to withdraw his amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

Aside from the Punch and Judy stuff over the historical record, which I had hoped we could avoid, it was very interesting to hear from the Minister.

Brandon Lewis (Conservative, Great Yarmouth)

I appreciate the point that the hon. Gentleman made. I am very happy to progress on that basis, but when he says that he does not want to play Punch and Judy politics, that does mean that he and the other hon. Members on his side do not quote figures that simply do not give the facts of the housing market that we inherited.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I simply quoted the figures on how much housing need there is and how much is currently being built and completed, which, as the Minister well knows, falls far short. The hon. Member for South Norfolk raised a very interesting point. He said that powers are already available to local authorities to meet the need for self-build and custom build housing, and that there is the land and the finance.

Richard Bacon (Conservative, South Norfolk)

I was not actually talking about self-build and custom build. For the record, I was saying that local authorities which wish to help in the initiation, establishment, grounding, founding and growing of a housing co-operative can do so. There is nothing in law to prevent them from doing that. That is what I was talking about.

Matthew Pennycook (Labour, Greenwich and Woolwich)

The hon. Gentleman makes my point for me. There is nothing to prevent local authorities from doing this, and yet they are not. That is why the Government feel that there is a need for a stronger duty as part of the Bill. The point I sought to make in the amendment is that this also applies to lots of other tenures and types of housing where there is unmet need, and there could be benefits to promoting that type of housing through other measures. I do not think that this is an area on which we shall agree, and we shall no doubt come back to this. On that basis, I beg to ask leave to withdraw the amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I beg to move amendment 81, in clause 9, page 5, line 43, after first “the”, insert “effective”.

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss the following:

Amendment 82, in clause 9, page 6, line 15, after “entries”, insert “with effective mortgage finance”.

Matthew Pennycook (Labour, Greenwich and Woolwich)

Finance and the financing of self-build and custom build has been mentioned a number of times in this morning’s debate. There is consensus that projects of this type can be extremely problematic to finance. Only certain lenders offer self-build mortgages, so the mortgage market in this area is limited. Despite welcome Government support and recent improvements, it is a sector that is still very much feeling the effect of the exit of many of the larger players in the wake of the credit crunch. Moreover, self-build mortgages—or stage payment mortgages as they are technically known—are not like traditional home loans. Typically, funds are released in four to six stages in arrears after each stage is complete and re-inspected, rather than as a lump sum at the beginning of the project. As a result, while a significant proportion of current self-builders do not need mortgage finance to start building because they have the equity in hand from the sale of their existing home, many still struggle with sufficient capital to move beyond the foundation stage.

If we are to see a marked uplift in self-build and custom build, as both sides of the Committee would like, we will need to remove as much risk as possible from the whole process. Opposition Members hope that clauses 8 to 11 will achieve that, if they succeed in delivering the necessary momentum that this sector needs. We also need to get more lenders entering the self-build market, and to make available more specialist finance products. We hope that the Government will continue to explore what can be done to reduce the considerable constraints that still face those interested in securing finance for this type of home.

Gareth Thomas (Labour/Co-operative, Harrow West)

My hon. Friend makes an important point about the need to make finance available. If I may, I will bring him back to my earlier intervention, when I said that the proposed levy on building societies that the Chancellor wants to impose risks limiting the amount of capital that building societies can lend for mortgage finance, and potentially makes it harder for those building societies to offer finance for self-build housing. It would be helpful to hear a little from the Minister about how he will address that particular problem, and whether there are any conversations going on between the Department for Communities and Local Government and the Treasury to try to offset this problem; otherwise, the Minister’s very laudable aim of an expansion of the self-build sector might be curtailed by difficulties in accessing finance.

Matthew Pennycook (Labour, Greenwich and Woolwich)

My hon. Friend makes a good point. There is a specific weakness in that area, but there is also the wider problem of access to finance for self-build and custom build. To give the Government their due, they have put support in place, but it would be useful to hear what more is currently being done to ensure that more of those who want to take this route can be supported to do so. Alongside efforts to make finance more accessible, the Opposition believe that, given the burdens the Minister recognised that the new, full right-to-build duty places on local planning authorities, there is a case for ensuring that the authorities in any given authority area reflect the effective, rather than notional, demand for self and custom build. By that, we mean the number of people or groups who are in a position to fund their project past foundation stage rather than the sum total of individuals or groups who are vaguely interested in taking that route and may begin the process of exploring whether they can access the necessary finance some years down the line.

Clause 11 already provides for the entering of persons who have failed to meet particular eligibility conditions in a separate part of the register and makes it clear that further refinements to the eligibility criteria may be brought forward in regulations. However, our amendments would make it clear that those on the register who genuinely seek to build or commission their main home and have the finances to do so should be entered in a separate part.

Amendments 81, 82 and 83 would ensure that local authorities are required to provide suitable planning permission on serviced plots of land for those with a reasonable prospect of building their own home in the immediate future. It would not exclude those who are yet to demonstrate that they have obtained effective mortgage finance from the register entirely; they could still be entered in a separate part of the register to which we would expect local authorities to give reduced priority. That would ensure that local authorities, in so far as they must now respond to local demand for self and custom build in a fuller way, will respond to the effective, as opposed to notional, demand in their area for these types of homes.

Brandon Lewis (Conservative, Great Yarmouth)

I am pretty much in complete agreement with the hon. Gentleman. In fact, the only demand on the register should be effective demand. It is important that local authorities are confident that everyone on the register for self-build and custom house building is in a position to finance their project. The amendments, however, are unnecessary because we will achieve our mutual aim of ensuring effective demand through locally set eligibility criteria for the registers. We can build on some of the work done with the 11 vanguards and how locally led is the way to go. We asked all local authorities to submit expressions of interest, so I want to put on record our thanks to the 11 who have worked with us on that over the past few months.

Gareth Thomas (Labour/Co-operative, Harrow West)

I appreciate that the Minister may not be able to say so at this point, but, perhaps later in our proceedings, will he say what lessons can be learnt from the 11 vanguard authorities to deal with the scale of the housing crisis in London? There is potentially quite a bit of interest in self-build and custom house building in London, but the cost of land and other factors driving the housing crisis may make it even harder for those who want to do that. It would be helpful to hear a little more on whether the lessons from the vanguard authorities are helpful in any way for the specific London element of the picture.

Brandon Lewis (Conservative, Great Yarmouth)

Obviously, it would have been good if a London authority had wanted to play a part by being one of the vanguards, as that would have given a direct outcome. However, some of the vanguards cover areas of high value, and the experiences in areas such as Stoke, which may have lower land value but is still a city with the challenges of land in and around it, and even those such as Cherwell—and, although not part of the vanguard, some of the work being done around Bicester to make custom build more viable in specific areas—show recognition that we have put in place a £150 million loan fund to which developers can apply to service plots for self and custom building to help make that more achievable and affordable for people. Hopefully, London local authorities will want to come forward as they start to appreciate that.

Clause 11 provides for regulations that enable relevant authorities to determine their own eligibility criteria and it is intended that one part of the locally determined criteria will be a financial solvency test. I suggest that enabling local authorities to apply such a test before acceptance on the register is a more effective means of achieving effective demand than the amendment, not least because that will enable each authority to specify in detail what reassurance it thinks it needs about the financial position of people seeking to join its register in its area.

The tests will be tailored to the specific requirements of that local area and may take into account the fact that not all self and custom house builders will require mortgage finance. For this reason, I hope the hon. Member for Greenwich and Woolwich will be able to withdraw the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I was briefly provoked by the Minister’s response to my intervention. I say to him gently that it is incumbent on the Minister setting up an initiative—given the scale of the housing crisis in London—to have worked a little harder to try and get a vanguard authority in London. Why, for example, did Bromley, Bexley, Westminster or Richmond not seek to become a vanguard authority? The Minister, with his links into Conservative associations in those areas, surely could have persuaded the leaders to apply to become vanguard authorities, with all the helpful lessons for the housing crisis in London that their self-build experience might have demonstrated.

Matthew Pennycook (Labour, Greenwich and Woolwich)

Just when I thought consensus had broken down, harmony seems to have reappeared. I am reassured by the Minister’s comments. I think he makes a good case for how financial solvency tests in a local authority area may be more effective than mortgages. We look forward to seeing those in due course and on that basis, I beg to ask leave to withdraw the amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I beg to move amendment 85, in clause 9, page 6, line 35, at end insert

“except where extant permission can be revived”.

Brandon Lewis (Conservative, Great Yarmouth)

First, I would like to reassure the Committee that under the current drafting of the legislation, land which has been granted planning permission prior to the start of the first base period but where that planning permission has now lapsed, can count towards compliance with the duty. That is part of what we are learning from the programme of vanguards. Picking up on the earlier point raised by the hon. Member for Harrow West, I would say that this was widely published at the time but it is disappointing that nobody in London came forward—neither his own authority nor the others he noted. I hope they will also learn from what has been going on. For example, the National Custom and Self Build Association is publishing a comprehensive toolkit on their website on 9 December, and hopefully all authorities, including those in London, can benefit from that.

The reason that these permissions can count towards compliance with the duty is that a person would need to submit a new application in order to extend the time limit on an extant permission in order to implement the existing permission. So an application for an extant planning permission would, if granted, be considered as a new permission, and therefore count against the number of permissions required. I hope that with that explanation the hon. Gentleman will be able to withdraw the amendment.

Matthew Pennycook (Labour, Greenwich and Woolwich)

I thank the Minister for the clarification that extant applications will be counted as new permissions. A theme that has emerged from this morning that I would like the Minister to take away is that it would be useful to know much more of the detail about the experience of the vanguard authorities. He mentioned earlier that there have been 80 people on the register within the first few months, but that does not tell us the differences between those 11 vanguards, or what the experiences might be in different parts of the country with different factors at work. It would be useful for the Committee to have numbers and to have a better sense of what those vanguard authorities are doing and what the experience has been. On the basis of the Minister’s comments, I beg to ask leave to withdraw the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

Sir Alan, I have sought a stand part debate to raise the issue of the price of land. It may seem odd, having been broadly in support of clauses 8 and 9, to suggest that we need a debate on the merits of clause 9, but I worry that, on the basis of evidence that the Opposition presented to the Lyons review, the cost of land may be a significant deterrent for many would-be self and custom house builders, and that granting permission in principle may inadvertently drive up the cost of land. That is the issue I want to persuade the Minister to mull over. In its evidence to the Lyons review, the National Custom and Self Build Association said that the cost of acquiring land was the most significant barrier to more self and custom house building, and that 50% of would-be self and custom house builders had a budget of £200,000 or less with which to fund both the construction of their home and site acquisition.

Part of my reason for being interested in whether there had been a vanguard authority in London was the huge cost of land there relative to many other parts of the UK. There may be less scope for self-builders to believe that they could build in London than in the Stokes or the Bicesters, to which the Minister referred. Thinking about the cost of land in Harrow, I struggle to believe that many self-builders could build property for under £200,000 if they have also had to acquire the land.

We know that when planning permission is given for a site, it usually drives up its value and my concern is that if permission in principle is given, even on a plot that has been designated for self-building in future, it would drive up the cost of that land and limit the number of would-be self-builders or custom house builders who might want to build on it. Surely none of us wants to see the number of would-be self-builders restricted, or for them to have to look at areas of the country other than Harrow.

This morning, we have had a pretty good debate about the benefits of self and custom building and there seems to be broad consensus on both sides of the House, and particularly in the Committee, for expansion of such building. The danger is that we have been talking about the emperor’s new clothes, and that lack of finance and professional support—I am thinking of housing co-operatives—might detract from people’s ability to crack on with building their own home or getting involved with a custom house builder. My worry is that the National Custom and Self Build Association is right in saying that the cost of land will continue to be the most significant deterrent to going forward. Are we in danger of creating an additional hurdle to the cost of acquiring land by supporting the granting of permission in principle and therefore, albeit inadvertently, driving up still further the cost of acquiring land?

I worry that we missed an opportunity in clause 8 to make clause 9 even better in terms of housing co-operatives. Our earlier debate made it clear that some would-be housing co-operatives could benefit from clauses 8 and 9. Again, I encourage the Minister to think a little further about the benefits of housing co-operatives, and about what more the Department can do to encourage local authorities to look with enthusiasm at the potential of housing co-operatives to address some of the housing need in their area.

With that in mind, I return to a point that the hon. Member for South Norfolk made almost as an aside. He said that, given the exemption from right to buy, housing co-operatives could flourish as a result of the Bill. Many co-operatives are worried about other parts of the Bill, including the reduction in rental income and what that will mean for their finance and ability to expand further, and the additional administrative costs that might be generated by pay to stay. Will the Minister comment on the impact of those aspects of the Bill on housing co-operatives? That would be helpful. I hope he will focus on whether he thinks that the granting of permission in principle for self-build housing plots will inadvertently drive up the cost of land and therefore make it even more difficult for would-be self-builders and custom house builders.

Richard Bacon (Conservative, South Norfolk)

I have one concern about clause 9; I hope the Minister will be able to reassure me. Clause 9(1) will insert new section 2A into the Self-build and Custom Housebuilding Act 2015. Proposed new section 2A(6)(c) says that,

“development permission is ‘suitable’ if it is permission in respect of development that could”—

could—

“include self-build and custom housebuilding.”

I recognise that having a specific percentage in the measure would be unhelpful and impractical, because local circumstances vary so much, but it could have been drafted to say that development permission was suitable if it was permission in respect of development that included self-build and custom house building. That would be practical. I would like to hear the Minister’s thoughts on that. Perhaps he will take the matter away and consider whether we might tweak the clause at a later stage.

Brandon Lewis (Conservative, Great Yarmouth)

I will touch on the comments of the hon. Member for Harrow West before coming to the core of the point on clause 9. We will discuss some of the issues that the hon. Gentleman raised later in our proceedings; he tempted me to touch on points that are not covered by the Bill at all, but I will not test your patience by doing so, Sir Alan. I reiterate my earlier general comments about co-operatives. They have an important part to play as part of the housing mix, but that is separate from the issue of custom house building. If co-operatives are doing self and custom house building the measures will apply to them and, I hope, will be beneficial for them.

On the comments made by my hon. Friend the Member for South Norfolk, the Bill aims to get more permissioned serviced land into the system and ready for development. Although local authorities cannot force landowners to market their plots exclusively to those on the register, guidance will encourage them to keep those on the register aware of any land suitable for self and custom house building that has been permissioned. We do not want to do anything that would hinder land becoming available for much-needed housing more generally; putting planning restrictions on land about the type of housing that may be built on that land could do that. Instead, the clause creates opportunities for those interested in self and custom house building.

I have sympathy for my hon. Friend’s point, however. I know that he is driving towards making sure that the land is put forward. I have met representatives from the National Custom and Self Build Association in the past few weeks to discuss some of the issues. I think we are getting the balance right, but I am sympathetic to his point and will look at it again.

The Self-build and Custom Housebuilding Act 2015, which my hon. Friend championed through Parliament, requires relevant authorities to hold a register of individuals who want to acquire a plot of land to build their own home in an authority’s area, and to have regard to that register when carrying out their housing, planning, regeneration and land disposal functions. Clause 9 inserts new section 2A into the Act; that will require authorities to give development permissions suitable for self and custom house building to enough serviced plots of land to at least match the demand on their register. Regulations will detail how long relevant authorities have to permission sufficient land.

The number of people who join the register in each base period will dictate the number of permissions required. The first base period starts on the day on which local authorities are required to open their register and will end the day before this clause comes into force. Subsequent base periods will run for a period of 12 months beginning immediately from the end of the previous base period. Requiring relevant authorities to permission sufficient serviced plots of land to match demand in their area will make it easier for prospective self-build and custom house builders to find suitable land. It will promote an increase in housing supply generally and provide much-needed work for smaller house builders, who were hardest-hit by the recession and for whom the recovery has been slower. That will go some way, we hope, to deal with the issue of supply and demand raised by the hon. Member for Harrow West—

Alan Meale (Labour, Mansfield)

Order. It being 11.25 am, the debate is adjourned until 2 pm. I make an appeal to all Members: when I took over this Committee last week, we were moving from clause 2. We are now just about to get to clause 10. We have 145 clauses and five half sessions to go. Our job is not debate but scrutiny. The sooner we get on with that, the better. Will Members please make future questions concise, to the point and not repetitive?

Alan Meale (Labour, Mansfield)

In line with this morning’s decision, Members may remove their jackets if they wish to do so. Minister, do you want to continue with your summary, or do you want others to be called?

Brandon Lewis (Conservative, Great Yarmouth)

To help move things along, I am happy for the Question to be put.

Gareth Thomas (Labour/Co-operative, Harrow West)

I triggered this debate in order to ask the Minister to dwell on the concern that if permission is given in principle, even just for self-build designated slots, there is a risk of pushing up the price of that land—the acquisition of land is currently one of the biggest deterrents to broadening the self-build sector. The Minister gave an interesting justification for clause 9 standing part of the Bill, much of which I am sure is perfectly reasonable, but he did not answer the particular concern I raised. I would be grateful if he might dwell on that point and come back to me.

Brandon Lewis (Conservative, Great Yarmouth)

I dealt with that issue in the long conversation we had this morning, and I made a point about the basics of supply and demand. I will go a little further to help the hon. Gentleman by saying that planning permission in principle is on land that is identified on a brownfield register or in a potential neighbourhood or local plan. The land is therefore already potentially designated for housing. The argument that planning in principle has any further effect on the value of the land is completely false.

Clause 10 - Exemption from duty

Brandon Lewis (Conservative, Great Yarmouth)

Clause 10 inserts a new section into the Self-build and Custom Housebuilding Act 2015 enabling relevant authorities to apply to the Secretary of State for an exemption from the duty to grant permission for sufficient land to match demand. There are some areas where the demand for self-build and custom housebuilding may far outstrip land supply. To ensure that we continue to protect the environment and build only in a sustainable way, we must be able to exempt relevant authorities that, with the best will in the world, are simply unable to grant permission for sufficient land to meet demand.

The detail will be set out in regulations, but the intention is that where demand on the register is a significant proportion of the land available for housing, as set out in the five-year land supply, the authority may apply to the Secretary of State for an exemption. Authorities that are exempt from the duty to grant permission for serviced land to match demand must still, of course, have regard to the demands on their registers when carrying out their housing, planning, regeneration and land disposal functions.

Richard Bacon (Conservative, South Norfolk)

I will be brief. I fully understand the need to be able to have exemptions in some circumstances. The law will need to take account of very different circumstances in different local authorities with very different levels of land supply and demand. The City of London comes to mind as an obvious example, although there will be other intensely urban areas where this is also an issue. Can the Minister give an assurance that this will be a tight test and that not only will the requirement for authorities to have regard to their obligations still obtain, but it will be within the Secretary of State’s power under the proposed regulations to make the granting of an exemption to a local authority conditional upon it satisfying certain conditions that the Secretary of State might lay down, such as a partnership with another local authority that has more land?

This is a slightly different example, but it is relevant. The City of London sponsors an academy in the London Borough of Southwark. The City, being a very small borough, does not have enough students for a high school of that kind, but it sends some of its students to the high school on land supplied by Southwark. Does the Minister think there is room for that kind of partnership and that conditions could be imposed on local authorities before the Secretary of State agrees to make an exemption?

Roberta Blackman-Woods (Labour, City of Durham)

I have a brief question for the Minister. Does he have any idea of how many local authorities are likely to be exempt and on what grounds? That would help us to make some sense of the clause.

Brandon Lewis (Conservative, Great Yarmouth)

My hon. Friend the Member for South Norfolk made a good point, and we will ensure that we take his comments forward when drawing up the regulations. When an authority finds itself exempt and the regulations detail an exemption process, we will require it to demonstrate how, if an exemption is granted, it will continue to support those on its register. That could be satisfied by it working in partnership with neighbouring or nearby authorities in the way my hon. Friend outlines.

Obviously, as it is an exemption policy, I would not want to prejudge who might or might not be looking for an exemption. I appreciate that there will be challenges in some areas, as the hon. Lady pointed out, and that places such as London might struggle to meet demand for self-build, as was pointed out by the hon. Member for Harrow West, who is not in his place at the moment. That is why we have included a power for the Secretary of State to make regulations specifying the circumstances in which an authority may apply for an exemption when the time comes.

Clause 11 - Further and consequential amendments

Brandon Lewis (Conservative, Great Yarmouth)

Clause 11 makes further and consequential amendments to the Self-build and Custom Housebuilding Act 2015. In particular, it creates an additional power so that regulations may provide that the relevant authorities can set their own conditions of eligibility. These are expected to be restricted to a local connection test and, as we outlined and discussed, a financial solvency test.

The clause also provides for regulations to enable the register to have two parts. The second part would apply to anyone who had applied to be registered but failed to meet specified conditions of eligibility. We expect this to be used so that anyone who fails a local area connection test when an authority has chosen to apply one must be entered in the second part of the register.

Entries in the second part of the register would not count as demand when determining the number of service plots that a relevant authority must permit. However, authorities would have to have regard to those entries when undertaking their planning, housing, regeneration and land disposal functions, ensuring that, for example, when an authority has introduced a local connection test, people can still join part of the register, allowing someone who currently lives in the area where land for development is limited also to register in nearby areas where land might be more widely available—that touches on the point my hon. Friend the Member for South Norfolk made—even when those areas have their own local connection test.

The clause also enables the Secretary of State to provide in regulations that local authorities can recover fees connected with their duty to provide sufficient suitable development permissions. Regulations may also stipulate the circumstances in which no fee is payable. For example, when making these regulations, we may consider whether it is appropriate to charge those people on the second part of the register. It is expected that these fees will be set at a level that broadly reflects the costs incurred by the authority when undertaking its duties under the 2015 Act.

Richard Bacon (Conservative, South Norfolk)

I crave your indulgence, Sir Alan, for just a moment longer. I agree with the Minister. Plainly, there must be some criteria for eligibility and a sensible approach to the recovery of fees. There must indeed be a local area test and it would be sensible if a local authority could exclude people from the operative part of the register if they did not meet the local area test.

However, I seek the Minister’s assurance on a specific point. The test will be applied relatively narrowly so as not to exclude people. I referred in the oral evidence session to the Community Self Build Agency website, and I will quote from it now because it is totally relevant. It states:

“I was encouraged by the local council to apply for the CSBA Scheme, I rang them and said: ‘I am disabled, unemployed, on benefits and I know nothing of building.’ They said: ‘You fit all the criteria!’ I have never looked back.”

I would not want this exclusion and the ability to be placed on the second part of the register to exclude people who, unaided and not as part of a scheme, might not be eligible or might not meet the financial conditions but who, if they were part of a sponsored scheme, might indeed meet the conditions of eligibility.

It has been proved that the most dispossessed and downtrodden, who are told that they cannot have any hand in their own future and cannot help themselves, can do so with a bit of help, and they should not be excluded from the operative part of the register. What assurance can the Minister offer that the eligibility criteria will not be used in a way that reduces opportunity to take part in schemes where jointly the eligibility criteria could be met?

Brandon Lewis (Conservative, Great Yarmouth)

Areas that are more generally exempt must still have regard in the register that has been carried out to general housing, planning and local disposal issues.

My hon. Friend makes a more focused point, with which I have sympathy. As we go forward and develop the regulations, local authorities will be encouraged to notify people on both parts of the register of opportunities to purchase sites suitable for self-build and custom build. That will be set out in guidance. There will be opportunities through regulation and guidance to ensure that we cover all those opportunities.

We want to ensure that custom and self-build land is available for everybody who is eligible and potentially could develop their home in that way. I will take my hon. Friend’s points on board as we go through the regulations and guidance. I hope that reassures him that we will do everything we can to ensure that everybody has the chance to take forward the revolution that he has inspired in self-build and custom house building.

Clause 12 - Introduction to this Part

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 2, in clause 12, page 8, line 17, leave out “letting” and insert “property”.

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss the following:

Government amendments 3, 4, 9, 12, 19, 22 and 45 to 49

Government new clause 8—Meaning of “property manager” and related expressions.

Marcus Jones (Conservative, Nuneaton)

It is a pleasure to serve under your chairmanship, Sir Alan, and to take the baton from my hon. Friend the Minister for Housing and Planning.

The Government value the private rented sector; it is an important part of the housing market, housing 4.4 million households in England. We want to support good landlords and agents who provide decent, well-maintained homes and avoid unnecessary further regulation on them.

Good landlords respect their tenants’ rights and comply with all the appropriate obligations and legal requirements. Good landlords will benefit from what we are doing. Standards and compliance with the law across the sector will be set on a level playing field, and good landlords will no longer face unfair competition from the rogues who ignore the law and their obligations.

A small number of landlords and agents do not properly manage their lettings or properties. They exploit their tenants and the public purse through housing benefit. They rent out substandard, overcrowded and dangerous accommodation. Those landlords and agents do not respond to legitimate complaints made by tenants. They ignore their obligations and some are prepared to accept prosecution and a fine rather than maintain properties in acceptable conditions.

As clause 12 explains, the objectives of part 2 of the Bill are threefold. It introduces new financial sanctions against rogues who break the law, by extending the rent repayment order provisions introduced by the Housing Act 2004. It also enables local authorities to identify rogues operating in the private sector in their area and place them on a database, which other local authorities in England will have access to. Finally, it provides a regime for removing the worst offenders from the sector through banning orders.

The amendments tabled by my hon. Friend the Minister for Housing and Planning are intended to make it clear that the provisions in part 2 relating to the database and banning orders apply to persons engaged in the business of property management, irrespective of whether they are also letting agents. New clause 8 explains what property management work is. Amendments 45 to 47 and 49 disengage property management from letting agency work, so that both are defined as separate and distinct activities.

Amendment 48 provides a new overarching definition of property agent, which covers both letting agents and property managers, as a person could act in the capacity of either or both. Amendments 2, 3, 4, 9, 19 and 22 are consequential on amendment 48, each replacing references in part 2 to “letting agents” with “property agents”.

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 5, in clause 12, page 8, line 24, leave out “or who has breached a banning order”.

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss the following:

Government amendments 13, 15, 16, 50 to 55, 34 to 39 and 42 to 44.

Government new clause 3—Offence of Breach of Banning Order.

Government new clause 4—Offences by Bodies Corporate.

Marcus Jones (Conservative, Nuneaton)

Continuing to rent out property in breach of a tribunal order prohibiting a person from doing so is a serious matter, which is why measures are in place in the Bill for such a breach to attract a financial civil penalty. It is also why provisions are included to enable tenants, or local authorities where housing benefit has been paid, to apply for a rent repayment order against the landlord for up to a year. We consider breaching a banning order to be serious not only because an order of the tribunal is being flouted, but because the landlord is profiting from it. Given that banning orders are made against only the worst landlords, their continuing to rent out property could put tenants’ health and safety at risk.

The Minister for Housing and Planning, my hon. Friend the Member for Great Yarmouth, has therefore tabled new clause 3, which provides that the breach of a banning order is a criminal offence and enables the prosecution of a landlord in the magistrates court. A local authority may instead impose a civil financial penalty, provided for in clause 17 as amended by amendments 15 and 16. Tenants and local authorities will still be able to apply for rent repayment orders when a landlord has committed the offence of breaching a banning order. However, new clause 3 provides that the court can impose a fine, which is not subject to a limit, on a person who is convicted of such a breach. Alternatively, or in addition, the court can sentence the person to a term of up to six months. The fact that a person can be sent to prison for letting out properties in breach of a banning order should deter anyone from doing so, and it marks a commitment shared across the House to tackle rogue landlords.

New clause 4 is intended to prevent persons escaping personal liability if the company they operate breaches a banning order. The clause provides that if the offence was committed with the consent or connivance of an officer of a company, or because of that person’s negligence, the officer can be prosecuted and punished as well as the company. An officer of a company is defined as a director or a company secretary, or someone acting in a similar capacity.

Amendments 34 to 39 and 42 to 44 make changes to the rent repayment order scheme set out in chapter 4 of part 2 because breaching a banning order is to be a criminal offence. That will mean that clauses 35 and 36, which set out special rules for repayment orders following a breach of a banning order, are no longer required. Amendments 5, 13 and 50 to 55 are all consequential on making breaching a banning order a criminal offence.

Marcus Jones (Conservative, Nuneaton)

Clause 12 summarises the provisions in part 2 of the Bill. It explains that this part is about tackling rogue landlords and letting agents. The Government value the private rented sector. As I have said, it is an important part of our housing market, housing 4.4 million households in England. We want to support good landlords who provide decent, well maintained homes for people, and avoid unnecessary further regulation on them. Most private landlords provide a decent service to their tenants, but we know that there are a small number of landlords and letting agents who do not manage their lettings or properties properly, sometimes exploiting their tenants—and the public purse, through housing benefit—by renting out substandard, overcrowded and dangerous accommodation.

These landlords and letting agents often do not respond to legitimate complaints made by tenants. These are the rogues that this part applies to. We want to ensure that such rogues can be placed on a national database, so that local housing authorities in whose area they operate can identify them and their behaviours and standards can be properly monitored. We also want to ensure that the worst rogue offenders can be removed from the rental market altogether, through banning orders. Rogues who let out unsafe or unhealthy properties or engage in illegal practices such as violent entry, harassment or unlawful eviction of tenants will no longer be able to financially benefit from such activities. Part 2 extends the rent repayment order regime so that, in appropriate cases, tenants—and former tenants—can reclaim rent, and local authorities can reclaim housing benefit payments, from landlords who have engaged in those types of unacceptable activities.

The majority, good landlords, will not be affected by this part. However, they will benefit from it, since standards and compliance with the law across the sector will be set on a level playing field and good landlords who work hard for their tenants and comply with the law will cease to face unfair competition from the rogue landlords, who ignore the law and their obligations.

Teresa Pearce (Labour, Erith and Thamesmead)

We welcome this initiative on rogue landlords. I would like to ask the Minister a question. The impact assessment talks a lot about the very small number of rogue landlords. Although they are in the minority, do we have any information about how big that small number may be? It is easy to send out surveys to landlords and get them to send them back, but it is the good landlords who complete those surveys, and the rogue or criminal landlords do not engage at all. Further, given that the private rented sector is increasing, especially in cities, do we have any information about whether the increasing amount of private rented accommodation is increasing the number of rogue landlords? As the sector increases, does it get better, or do we have no evidence on that?

Marcus Jones (Conservative, Nuneaton)

I thank the hon. Lady for her questions. First, she mentions the number of rogue landlords and the impact assessment. We have looked at that very carefully and consider that about 10,500 rogue landlords may be operating. This Government is firmly on the side of good landlords and tenants and we want to drive those rogue landlords out of the system. That is what the proposed clauses in this part do.

On banning orders, which I shall come to in clause 13, we expect that about 600 will be applied for to the tribunal as a result of the measures that this Bill brings.

Clause 13 - “Banning order” and “banning order offence”

Marcus Jones (Conservative, Nuneaton)

Clause 13 explains that a banning order made by the first-tier tribunal property chamber can ban a person from being a landlord or being involved in residential letting agency or property management for two or more of those things. In relation to properties in England the reference to “person” in this part of the Bill includes a company as well as an individual. As explained in clause 15, a person can only be subject to a banning order if they have been convicted of a banning order offence. Subsection (2) provides that the Secretary of State may define banning order offences by regulation. We have not included specific offences in the Bill because we want the flexibility to add further, or remove existing offences as the new law beds in and beyond, to ensure that the offences are relevant and up to date. However, subsection (3) explains what matters may be taken into consideration when setting out in regulations what are banning order offences.

The banning order offences will all be existing offences which already have serious consequences for those who are convicted. It is envisaged that a banning order offence will include repeated offences involving breaches of health and safety requirements under the Housing Act 2004, such as a failure to comply with an improvement or overcrowding notice. It is also envisaged that a banning order offence will include unlawful eviction of tenants or violence or harassment towards them by the landlord or letting agent. A banning order may also be sought where a person has been convicted in the Crown court of a serious offence involving fraud, drugs or sexual assault that is committed in or in relation to a property that is owned or managed by the offender or which involves or was perpetrated against persons occupying such a property.

Clause 14 - Application and notice of intended proceedings

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 6, in clause 14, page 9, line 12, at end insert—

“(1A) If a local housing authority in England applies for a banning order against a body corporate that has been convicted of a banning order offence, it must also apply for a banning order against any officer who has been convicted of the same offence in respect of the same conduct.”

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss Government amendments 7, 8, 10, 11, 17 and 18

Marcus Jones (Conservative, Nuneaton)

Clause 14 explains that before a local housing authority applies to the first-tier tribunal for a banning order, it must give the person against whom it proposes to make the application a notice of intended proceedings.

Gareth Thomas (Labour/Co-operative, Harrow West)

I draw the Committee’s attention to the Register of Members’ Financial Interests. Why should only a housing authority be able to seek a banning order? Why should not a tenant, for example, make an approach to the relevant tribunal?

Marcus Jones (Conservative, Nuneaton)

I thank the hon. Gentleman for his question. I will come to that during my comments on these amendments.

Amendment 8 provides that the local housing authority must tell a person how long it will ask the tribunal to make a banning order for. The minimum period is six months but there is no maximum term. This will enable the person to make representations about the length of the order. The authority must take account of such representations before making an application to the tribunal.

Amendment 6 provides that where a local housing authority intends to apply for a banning order against a company, it must also apply for an order against any officer of that company who has been convicted of the same banning order offence as the company. This would prevent such individuals continuing to trade in a personal capacity in activities from which the company is barred. Because the local housing authority is required to apply for an order in those circumstances, amendment 7 provides that no notice of intended proceedings need be given to the officer. However, such notice must be given to the company. Nor does this mean that an order is automatically made against the convicted officer. It is for the tribunal to decide, in all circumstances, whether a banning order ought to be made against the individual.

Amendments 10 and 11 are related to amendment 6. They provide that a banning order can be made against the officer of the company, notwithstanding that the officer was not a residential landlord or property agent when they committed the offence. Amendment 18 closes a potential loophole in clause 21 so as to prevent a company subject to a banning order transferring property to another company where both companies have officers in common. Such a transfer would need approval from the first-tier tribunal. The measure prevents the officers of a banned landlord company from setting up another company to take over ownership of the banned company’s portfolio and continue trading under another name.

Amendment 17 is a technical amendment to remove unnecessary wording. The hon. Member for Harrow West made a good point in asking why an individual cannot make the application in the same way as a local authority can. The reason why local authorities are the only bodies that can apply for a banning order is that they are responsible for enforcing housing standards under the Housing Act 2004. Tenants will be able to make complaints to their local authority and ask them to apply for a banning order where the landlord has relevant convictions. Tenants will also be interested parties before the first-tier tribunal. I will come later to the fact that tenants can also claim for rent repayment orders to recover rent overpaid, as well as rent paid in good faith where the landlord is not keeping that good faith.

Gareth Thomas (Labour/Co-operative, Harrow West)

I do not understand. Why should not the tenant be able to do so as well? I get the logic of saying that the housing authority should have the prime responsibility for doing so, but why should not a tenant who is feeling particularly victimised be able to make their own approach directly? We on Opposition side of the Committee are often accused of being in favour of the big state or the nanny state. I ask the Minister gently whether he is not in danger of being accused of the same thing by not being willing to empower tenants to take their own route to seeking justice.

Marcus Jones (Conservative, Nuneaton)

The hon. Gentleman must understand that this Government have done an awful lot to pass power into the hands of the individual, but ultimately, in this case, there is an issue of public law protection and of ensuring that rogue landlords are held to account. We feel that the best body to do so is the local authority, which will be able to take on rogue landlords to the benefit of the tenants wronged as a result.

Teresa Pearce (Labour, Erith and Thamesmead)

I beg to move amendment 104, in clause 14, page 9, line 20, at end insert

“and must make all reasonable effort to consult with any affected tenant of the person the authority is intending to proceed against.”

Stewart Jackson (Conservative, Peterborough)

What estimate has the hon. Lady made of the indicative costs of the proposal? As she knows, when local authorities proceed properly with selective licensing consultations under the Housing Act 2004, the cost can be prohibitive. In areas such as mine, which has a lot of people who do not speak English as their first language and a lot of transitory people domiciled in the private sector—[ Interruption. ] Will the hon. Member for Harrow West will let me finish? In that situation, the costs were quite substantial. Has the hon. Lady given that some thought?

Teresa Pearce (Labour, Erith and Thamesmead)

I have given thought to that, which is why I talked about “reasonable effort”. The original amendment said that the local authority “must” consult. It now asks for a “reasonable effort”, which is open to interpretation. Of course, there are costs in doing things properly, but we are trying to rid the private rented sector of rogue landlords who commit criminal offences by keeping people in properties that are unfit and unsafe. There is a cost, but the cost of not doing something could be far higher for the local authority.

Are banning orders only a way to punish criminal landlords or are they a way to improve standards in the sector by working with landlords and tenants to drive out rogue landlords? It will be fundamental to the success of banning orders for tenants to be brought in on the process. Not all tenants will want to play a part in the process and that is fine. The aim behind the amendment is for local housing authorities to consult affected tenants, ensuring they have the opportunity to have their say. If tenants have been subject to wrongdoing by a landlord, they will be able to provide further and wider evidence to the local housing authority. The landlord may have been prosecuted for one offence but could have demonstrated a consistent disregard for the tenant’s security and safety. That could be factored in by the local housing authority in the first-tier tribunal. It works both ways. The local housing authority and the first-tier tribunal could factor in positives experiences from tenants, although I suspect that those cases will be few and far between. In all cases, it will allow for the local housing authority and the first-tier tribunal to build up a more coherent case for or against a banning order.

I hope the Minister looks favourably on the suggestion because it would make this section of the Bill work better. For those reasons, we are moving that the clause be amended to include a requirement for the local housing authority to consult directly with any tenants of the rogue landlord or letting agent against whom it is hoping to make a banning order.

Gareth Thomas (Labour/Co-operative, Harrow West)

I rise to support the amendment and to add one or two brief thoughts. What would my hon. Friend, who spoke to the amendment in a very consensual style, think about a local authority that has not rushed into taking action against landlords because, for ideological reasons, it does not think it should or because the burden of other legislation in this time of significant cutbacks is too much for it to prioritise taking action against rogue landlords? The amendment would create that additional bit of pressure to ensure that local housing authorities always think of the need to consult tenants on an annual basis about whether rogue landlords are in action and whether the authority should act on that.

Let us take South Norfolk Council as an example. Presumably whenever the hon. Member for South Norfolk sees housing authority staff, he sits down and talks with them at some length about self-build and custom house building. Presumably, given his importance and the esteem in which he is held, it requires a considerable effort by those staff to deal with his inquiries. What my hon. Friend’s amendment will do is gently rebalance perhaps the enthusiasm within South Norfolk housing authority to focus on the needs of tenants, as well as dealing with his concerns. As I alluded to, there might be an authority—a Bexley or Bromley, perhaps, in London—that is so pro-landlord that it cannot envisage rogue landlords operating in its space.

Given that the Minister is determined—it seems to me, at least—to adopt the nanny state approach and not allow tenants themselves to go to the first-tier tribunal, my hon. Friend’s amendment would at least force local authorities to consider whether there is a need to take action. In that sense, it would be a useful annual prod to get local authorities to do a bit more in this area.

Stewart Jackson (Conservative, Peterborough)

The Committee will know that in his previous glittering political career the hon. Member for Harrow West did not get a chance to speak to the House that often, because he was the Opposition spokesman on international development, and he is certainly making up for it today.

We are trying to get a consensus. What we should realise is that good local housing authorities have a good network, and checks and balances, to know who the rogue landlords are. In the normal course of events, they have good relationships and good communication with tenant groups, community groups, local councillors and others, so I am reluctant to support a measure that is not permissive but overly prescriptive. I speak as someone who has a local authority currently going through selective licensing, which is absolutely exhaustive and first class—it is happening under the auspices of Peterborough City Council—and I also represent a seat that has a significant number of rather challenging tenants using the private sector lettings field. Therefore, I see at first hand that good housing enforcement officers are already getting out there, talking to tenants, identifying the rogue landlords and going after them. Making an overly prescriptive amendment to this clause is essentially superfluous and will not add to its effectiveness.

Gareth Thomas (Labour/Co-operative, Harrow West)

I have never associated the hon. Gentleman with the nanny state tendency in his party, so I wonder whether I might divert him from what is an interesting point to suggest that, as well as there being good housing enforcement agents in his own authority, there must surely be tenants who on occasion might have the capacity or the desire to go to the tribunal themselves and seek action against bad landlords. Why does he not support those tenants having the right to do so?

Stewart Jackson (Conservative, Peterborough)

Not everyone would agree that I am part of the nanny state, but I am a social conservative rather than a social liberal.

Gareth Thomas (Labour/Co-operative, Harrow West)

What does that mean?

Stewart Jackson (Conservative, Peterborough)

It means that there are opportunities, under the Environmental Protection Act 1990, the Housing Act 2004 and now this legislation, for people to go through the proper procedures, which will stand up in a court of law or a tribunal, to identify, deal with and ameliorate the issues caused by rogue landlords. To conclude, I have to tell the hon. Gentleman that I do not think the amendment will add anything to the efficacy of the Bill. I support the Government’s clause as it stands.

Marcus Jones (Conservative, Nuneaton)

The Government agree wholeheartedly that the impact on the tenant is a key consideration when it comes to a banning order. Clause 15(3)(d) provides that, in deciding whether to make a banning order, the tribunal must consider

“the likely effect of the banning order on the person and anyone else who may be affected by the order.”

Clearly, that would include the tenant.

Clause 20 introduces schedule 3, which provides that a management order may be made in cases where a banning order has been made. That will allow the local authority to take over management of a property and could allow a tenant to continue living in a property while a banning order is in place. The local authority may, for example, wish to use that power in situations where there is a vulnerable tenant whom it does not wish to see displaced. That further protects the tenant in the event of a banning order being made and ensures that they do not suffer for further offences committed by their landlord. It is also worth noting that the tribunal can include exceptions when making a banning order, such as to allow time for a tenant to find alternative accommodation.

A requirement for consultation with tenants might also lead to tenants being subjected to pressure from an unscrupulous landlord to oppose a banning order. That would not serve the tenant or the interests of justice well. I say to Opposition Members that consultation with the tenant could well lead to significant delays in the process. As I said to the hon. Member for Harrow West, there is no problem with tenants speaking to their local authority and bringing matters of concern to the local authority’s attention. Given the protection already afforded in the Bill for the interests of affected tenants, I hope that the hon. Member for Erith and Thamesmead will agree to withdraw the amendment.

Teresa Pearce (Labour, Erith and Thamesmead)

I beg to ask leave to withdraw the amendment.

Marcus Jones (Conservative, Nuneaton)

Clause 14 explains that before a local housing authority applies to the first-tier tribunal for a banning order, it must give the person against whom it proposes to make the application a notice of intended proceedings. That notice must explain that the authority proposes to make the application and why. It must invite the person to make representations about the proposal and not less than 28 days must be given for doing so. The authority must consider any representations received in deciding whether to proceed with the application. The authority cannot make the application until the notice period has expired and it has considered the representations it has received, if any.

Subsection (5) places a time limit on making an application by providing that the notice of intended proceedings cannot be given any later than six months after the person’s conviction for the banning order offence to which the notice relates.

Clause 15 - Making a banning order

Marcus Jones (Conservative, Nuneaton)

Clause 15 sets out the matters that the first-tier tribunal must have regard to in deciding whether to make to make a banning order against a person. Subsection (1) provides that the tribunal may make the order if the person has been convicted of a banning order offence and if the person was a residential landlord or letting agent at the time the offence was committed.

Subsection (2) provides that the tribunal can make the order only if the local authority has served a notice of intended proceedings on that person and considered their representations before making the application under clause 14. If the tribunal is satisfied that the preliminary requirements are met, it must then decide whether to make a banning order and, if so, what order to make. Subsection (3) sets out the matters that the tribunal must consider when reaching those decisions. It must consider the seriousness of the banning order offence of which the person has been convicted, and whether that person has any other convictions for banning order offences. The tribunal must also consider whether the person is, or has been in the past, entered on to the database of rogue landlords and letting agents. Finally, the tribunal must take account of the likely effect that such an order would have on the person who would be subject to it and anybody else who might be affected, such as the tenant.

In addition, where making the order, the tribunal may make exceptions, as I shall explain when we come to the next clause. Under clauses 16 and 20, a local housing authority can make a management order when a banning order is enforced. These measures will ensure that tenancies do not necessarily need to be brought to an end on the making of a banning order. In certain circumstances it may be appropriate for these tenancies to remain in force and to be managed effectively by the local authority.

A banning order is an extremely strong tool and its impact is far-reaching. It can prevent a landlord or letting agent from continuing to trade, and its effect would remove much needed rental stock from the market. On the other hand, it is a necessary tool to combat those rogues who have committed serious offences and who, despite being given a chance to improve, continue to operate and to profit by providing poor quality accommodation and following bad management practices, and who put the health, safety and welfare of their tenants at risk. The Government estimate that around 600 applications for banning orders a year will be made to the first-tier tribunal. It will be for that tribunal to take into account the matters to which I have referred in subsection (3), and to decide from the circumstances of the case whether making the order is appropriate and, if so, what form the banning order should take.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful for the opportunity to come in here. After the touching and moving tribute that the hon. Member for Peterborough paid me, I feel duty-bound to intervene on this clause too. I draw the Minister’s specific focus and attention to subsection (2), which is the requirement that the banning order be made on application by a local housing authority only. I do not want to dwell on whether or not a tenant should have been allowed to do that, but perhaps I might ask the Minister to reflect on whether certain organisations other than the planning authority might have been allowed—or might still be allowed—to bring forward an argument to the tribunal for a banning order against a person. In this case a housing advice charity or a major charity such as Shelter would perhaps get access to information about very poor landlords who the local housing authority might not know about.

I am minded in moving this point to draw the Minister’s attention to a parallel situation in consumer law. Individual consumers cannot go to court when there is an allegation of price fixing of consumer products, but organisations such as Which? can do so on their behalf. I wonder whether there is a parallel here that the Minister might want to contemplate. Perhaps in a certain, narrow number of cases a designated organisation—clearly one of good repute, with expertise and experience of going to the first-tier tribunal, so that it is not clogged up with poorly thought-through cases—might be able to bring forward an argument on behalf of a group of tenants to make the case for a banning order. Perhaps individual housing authorities might not want to bring a case where a rogue landlord is operating across a series of housing authorities, whereas an organisation with a London-wide remit or a national remit might be more willing to spend the resource to gather evidence to go to the first-tier tribunal.

I absolutely see the argument that the housing authority should have the prime responsibility, but perhaps the Minister could reflect on whether a small number of additional organisations could be designated by the Secretary of State to take forward cases where there is not an obvious fit to an individual authority area and where they clearly have particular expertise.

Marcus Jones (Conservative, Nuneaton)

I hear what the hon. Gentleman says. The organisations that he refers to are powerful organisations in the sector and are generally listened to by the Government, local authorities and other organisations. These organisations are powerful in their own right and can make representations to local housing authorities in relation to cases that they may come across or wider issues. The organisation that he refers to can also make representations to the first-tier tribunal when it makes its deliberations. There is therefore the opportunity for those organisations to support both their members and the people whose lives they are designed and set up to make better.

Gareth Thomas (Labour/Co-operative, Harrow West)

What the Minister says is absolutely true. I would encourage him to dwell on this and perhaps return to the point on Report. Why will he not allow a Shelter, or the Harrow Law Centre, for example, to bring forward their own argument on occasion? They work with housing authorities on cases that the local authorities bring forward; why can they not initiate action themselves? I am bringing the Minister specifically to the cross-borough point. Why is he not willing to consider Shelter, for example?

Marcus Jones (Conservative, Nuneaton)

Again, I hear what the hon. Gentleman says. He is bringing me back to the point that we discussed earlier when I set out quite clearly why the Government think that local authorities are the best placed to deal with this issue.

In London there may be numerous issues across different boroughs. We have a situation where those local authorities will be able to access the database of rogue landlords and therefore be able to get the information that goes across borough. It is incumbent on those local authorities not just to work in the best interests of people renting in the private sector in their borough, but to work with adjoining boroughs and pick up on the issues that also affect tenants in the borough in question, because landlords do not just operate on administrative boundaries; they operate on a wider basis. While I hear what the hon. Gentleman says, I think that the Bill is in a good place in this regard.

Clause 16 - Duration and effect of banning order

Teresa Pearce (Labour, Erith and Thamesmead)

I beg to move amendment 112, in clause 16, page 10, line 3, leave out “6” and insert “12”

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss amendment 105, in clause 16, page 10, line 3, at end insert—

“(2A) A landlord or letting agent subject to a banning order must undertake accredited training, as approved by the local housing authority, before they are able to let a property again.”

Teresa Pearce (Labour, Erith and Thamesmead)

We want to amend clause 16 in two ways. First, we want to ensure that a banning order lasts at least 12 months rather than six. Secondly, the amendment seeks to equip banned landlords with the knowledge and skill to go back into the property market once the banning order has expired.

A similar vein runs through both amendments. They are both intended to strengthen banning orders, which is a measure that we support. In their written and oral evidence, many organisations, such as the Residential Landlords Association and Crisis, discussed the need to strengthen banning orders and provide further consequences for landlords who wilfully breach their legal obligations. That is why, with amendment 112, we are seeking to amend clause 16 to ensure that a banning order lasts at least 12 months, rather than six.

The amendment would give rogue landlords who are subject to a banning order an extended period away from the sector, which we believe would provide many benefits. First, it would give the rogue landlord a further penalty for their actions. Secondly, alongside the measures suggested in other amendments, it would provide a greater deterrent to such landlords before they engage in criminal activity. Thirdly, it would provide the sector with a longer period without the rogue landlord operating in the sector, which we hope would encourage other landlords to come forward, fill the gap and drive up standards, which is what we all want.

Six months is not a particularly long time; it does not provide enough punishment or deterrent. If the unamended clause stands part of the Bill, rogue and criminal landlords will be back committing other offences, and I fear that the intention of banning orders—to drive up standards in the sector—will not be met. A minimum length of 12 months will provide a greater deterrent and a more appropriate punishment. Will the Minister outline what research was conducted before the six-month minimum was decided? Why is that length of time considered appropriate?

Amendment 105 would equip banned landlords and letting agents with the knowledge and skill to manage a property properly by introducing accredited training, to be approved by the local housing authority. Rogue landlords would be required to undertake such training before their return from a banning order. The amendment would drive up standards by ensuring that those serving a banning order undertake accredited training and by reminding them of their obligations, duties and requirements as landlords. It would hopefully see them return to the sector as good landlords.

Amendment 105 would also provide for a more professional sector. Accredited training could help to set standards to which landlords should keep, and we believe it would drive up standards throughout the sector. Will the Minister outline what work is being done to create a more professional sector and to provide training to landlords? The amendment would also safeguard tenants. What assurances would a tenant or prospective tenant have when letting from a landlord who had previously been convicted of a housing offence and served a banning order? Had such a landlord undergone accredited training, tenants would have more confidence.

We appreciate that local housing need is different in different areas. By giving local housing authorities the discretion to deem what accredited training is suitable, amendment 105 would suit differing housing needs. For those rogue landlords who do not want to do the training and do not want to be good landlords, it would act as a filter to prevent them from returning to the sector. Finally, it would also provide further strengths to local housing authorities and the first-tier tribunal, as they could consider any recurrent failures by landlords who had already undertaken accredited training but were back before local housing authorities for a further banning order.

The amendments would strengthen banning orders so that they provide a greater deterrent to rogue landlords who might commit criminal activity. They would further penalise the few landlords who do undertake criminal activity and safeguard tenants, all while driving up standards in the sector, which is what we all want.

Marcus Jones (Conservative, Nuneaton)

Amendment 105 would require landlords and letting agents who are subject to a banning order to undertake local authority-approved training before a ban is lifted. This morning, Labour Members talked at length about clauses in the Bill placing new burdens on local authorities, but we will put aside the logistical issues for the moment.

The amendment focuses on the training of landlords and property agents. I am sure that the hon. Member for Erith and Thamesmead knows that a banning order is a serious step. A local authority will not seek a banning order, and the tribunal certainly will not grant one, if the landlord or property agent was simply ill-informed about their responsibilities. An order will be granted only after considering, as set out in clause 15(3),

“the seriousness of the offence of which the person has been convicted”

and any previous convictions for a banning order offence. The problem is not that the landlord is not aware of their responsibilities, but that they have already failed to meet them. I do not believe that accredited training will help with that.

The hon. Lady asked about training. A number of organisations, including the National Landlords Association and the Association of Residential Letting Agents, provide significant training for their members. I looked on the Association of Residential Letting Agents’ website earlier and it had clear advice and guidance on how to be a good and responsible landlord.

On amendment 112, clause 16 sets out a minimum term of six months for a banning order. Banning someone from acting as a landlord or property agent is a serious step. It is right that the tribunal have considerable discretion when making a banning order including over the length of the order, so as to take into account all of the relevant circumstances. The amendment would extend that minimum period to 12 months, removing the discretion of the tribunal to make a banning order for a shorter period. This chapter on banning orders seeks to impose stronger penalties on the worst offenders. I have heard the hon. Lady’s strength of feeling and I think that is shared by many members of the Committee.

Teresa Pearce (Labour, Erith and Thamesmead)

The legislation states a minimum of six months. Is a maximum period envisaged? Would the Minister consider that in certain circumstances it would be right for the court to give a much longer banning period than six months?

Marcus Jones (Conservative, Nuneaton)

I hear what the hon. Lady says and I hope that she takes my comments on the minimum period in the spirit of consensus intended. I reassure her that we will look at this very carefully on Report. On her point about the maximum time for the banning order, there is no maximum; actually, the ban could be for life. I hope that reassures the hon. Lady and that she is reassured about the minimum period of a banning order. On that basis and in the spirit of the good-natured debate we have had, I hope she will consider withdrawing the amendment.

Teresa Pearce (Labour, Erith and Thamesmead)

I am pleased to hear that the banning order is a minimum period and that it could be for life. We will have to examine it as it progresses to the courts to see how effective this is. Clearly we all want the same thing, which is to improve standards and rid the sector of the people who are exploiting tenants and often exploiting housing benefit as well.

To return to amendment 105 about accredited training, the Residential Landlords Association offers accredited training to its members, but the people we are considering here would not be part of that training. They would not be interested in that training; they are just interested in taking the money. So I understand what the Minister says but we are looking at clause 16, about duration and effect of banning order—what we want for the effect of banning order is not just to take people out of the sector for a while but for them to be changed characters if they are to come back. Some training or proof that they have improved their standards would be beneficial. However, given the reassurances from the Minister, I beg to ask leave to withdraw the amendment.

Teresa Pearce (Labour, Erith and Thamesmead)

I beg to move amendment 103, in clause 16, page 10, line 9, at end insert—

“(5) The court may issue a rent repayment order as provided in Chapter 4 of this Part during prosecution of a landlord or letting agent for a banning order offence.

(6) The court may issue a rent repayment order as provided in Chapter 4 once prosecution of a landlord or letting agent for a housing related offence has commenced and before proceedings have concluded.”

Alan Meale (Labour, Mansfield)

Order. Mr Thomas, it is a discourtesy to be speaking. Will you calm down? You move amendments, you speak to the debate, you raise questions and you debate a number of issues. Please calm down. I call Teresa Pearce.

Teresa Pearce (Labour, Erith and Thamesmead)

Thank you, Sir Alan. The current alternative, as proposed in the Bill, will be for one court case for the criminal conviction and then for the local housing authority to apply for a rent repayment order, requiring a whole new court case. That would lead to greater pressure not only on court time but on the time of local authorities that would have to complete the processes necessary to bring it to court. The court could have the power to provide for a rent repayment order when prosecuting a landlord or letting agent for a banning order offence and a housing-related offence.

In addition, that alternative would put further pressure on tenants, many of whom would be unable to seek redress for a rent repayment order through the financial hurdles they need to cross. In written evidence Crisis and the Housing Law Practitioners Association showed support for amendments that would give judges the power to issue a rent repayment order. Crisis noted the lack of claims made for rent repayment orders elsewhere in the sector and noted:

“Currently very few claims are made for RROs, largely because prosecutions are very low and tenants find it difficult to apply to the First Tier Tribunal to do so. Crisis would be supportive of amendments that would give judges the power to issue a RRO when they prosecute a landlord. This would help reduce costs/burdens to local authorities and tenants, who would have to make a claim to the First Tier Tribunal for a RRO following a successful prosecution.”

The Housing Law Practitioners Association suggested in written evidence that, in addition, courts

“should be given power to make a ‘banning order on conviction’. Civil restrictions flowing from criminal convictions are now a very common aspect of our law…It would provide a quick and simple route for those ‘clear’ cases where it is obvious that the landlord/agent should be banned, e.g. a conviction for unlawful eviction, violence against a tenant, fraud against the housing benefit authorities…It will also help to ensure that the residents of any local authority which is reluctant to exercise the new powers (perhaps because of budgetary constraints) receive some protection against rogue landlords”.

It is clear to Opposition Members that it would be beneficial for an amendment to allow courts to provide a rent repayment order when prosecuting for a banning order or housing-related offence. For those reasons, we would like the Minister to consider allowing courts to issue a rent repayment order at the same time as they are prosecuting.

Marcus Jones (Conservative, Nuneaton)

The amendment would insert a subsection that would enable the courts to make a rent repayment order against a landlord or property agent while a prosecution for a banning order offence is under way but prior to conviction.

Giving courts those powers presupposes guilt and undermines the presumption of innocence required for a fair trial. The amendment’s proposals also pose logistical challenges, in particular in the involvement of two distinct sentencing bodies. Rent repayment orders are civil sanctions issued by the first-tier tribunal and are issued on application by a local authority or the tenant. Magistrates courts deal with housing offences that are criminal. Since the magistrates courts do not deal with civil sanctions against rogue landlords and property agents, the amendment would burden them with a new and unnecessary responsibility. If the magistrates court did not convict, the court would also have wasted its time.

I would like to respond to a couple of questions the hon. Lady asked. She asked what discussions we had had with the Ministry of Justice about the additional burden on the court system. I reassure her that a justice impact assessment has been completed in that regard, and the policy has been cleared across Government. We have also discussed the Bill with the first-tier tribunal services, and are content that what we are trying to do works.

Gareth Thomas (Labour/Co-operative, Harrow West)

I understand the concern about civil and criminal law and the first-tier tribunal as opposed to the magistrates court, but if a landlord were taken to the magistrates court and convicted of poor practice towards a tenant, why could the magistrates court not refer the case to the first-tier tribunal to consider the rent repayment order? At least in that way, it would achieve the spirit of what the amendment tabled by my hon. Friend the Member for Erith and Thamesmead seeks to tease out.

Marcus Jones (Conservative, Nuneaton)

I hear what the hon. Gentleman says. In that regard, as he knows, the magistrates court can hear the case. If the court decides that the person who has breached the banning order is guilty, it can impose a criminal sanction against the individual or individuals involved through a fine or, as I mentioned earlier in my comments, a prison sentence. We must draw a distinction between that and a civil penalty that can be applied for in the county court. At that point, as he knows, local authorities can bring the civil action to trial and obtain a rent repayment order.

The hon. Gentleman’s point is interesting and requires further consideration. I am thinking through the matter on my feet, but it requires more careful consideration, and I am certainly willing to listen to his comments and take them away from the Committee.

Teresa Pearce (Labour, Erith and Thamesmead)

This is more of a probing amendment, so I am happy to withdraw it, but I ask the Minister to keep a close eye on the issue. We do not want the fact that some people find it difficult to access the courts to mean that they do not get the justice that they deserve. For instance, a couple of my local courts are overcrowded with cases at the moment, and people are having to wait a very long time for an inefficient service. I would not want that to get in the way of what we are trying to achieve in the Bill. I beg to ask leave to withdraw the amendment.

Alan Meale (Labour, Mansfield)

With this it will be convenient to consider Government new clause 2—Revocation or variation of banning orders.

Marcus Jones (Conservative, Nuneaton)

Clause 16 provides that a banning order must specify the length of time for which the person is banned from the activity specified in the order. As we discussed earlier, the minimum term is six months. It also provides that the banning order can contain exceptions, which can be time-limited or for the duration of the order. The exceptions may apply in cases, for example, where a landlord needs time to bring existing tenancies to an end, or where a letting agent needs a grace period to wind down its activities.

New clause 2 ensures that in appropriate cases, the person subject to the banning order can have it revoked or varied where the convictions relied on to obtain the banning order have been overturned. The tribunal must revoke the banning order. If some but not all of the convictions have been overturned, or if the convictions have become spent, the tribunal may revoke the order. The tribunal will also be able to vary an order, for example to reduce the length of the banning order or make exceptions to it.

Clause 17 - Financial penalty for breach of banning order

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 14, in clause 17, page 10, line 15, leave out

“that applied for the banning order”

and insert

“for the area in which the housing to which the conduct relates is situated”

Teresa Pearce (Labour, Erith and Thamesmead)

I beg to move amendment 101, in clause 17, page 10, line 22, leave out

“, but must not be more than £5,000.”

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss amendment 102, in clause 17, page 10, line 22, leave out “£5,000” and insert “£20,000”

Teresa Pearce (Labour, Erith and Thamesmead)

Amendments 101 and 102 go together. Clause 17 sets out the financial penalty for breach of a banning order and we are seeking, first, to remove the limit for the breach of a banning order, and, secondly, to change the maximum fine from £5,000 to £20,000. As was said earlier, we support the measures to tackle rogue landlords, to ensure security and safety for tenants and to penalise criminal landlords. We believe that banning orders should help drive up standards and protect tenants, but for banning orders to work they must penalise and target the few criminal landlords who bring down the name of the private rented sector. Those who breach a banning order deserve to be penalised appropriately.

For a criminal landlord, who may have committed a crime such as violently securing entry or harassing their occupiers, to be given a banning order and to breach it and only to face a fine of £5,000 is wrong. It is not in keeping with the spirit of this part of the Bill to tackle such rogue landlords. If a landlord has committed such an offence and gets caught letting a property in breach of that banning order, he will be fined less than he would if he got caught speeding on his way home. If a rogue landlord owns multiple properties, particularly in London, where market rates are obviously much higher, he could raise the funds to pay that fine in just a few weeks, so I believe there is no deterrent. Why was £5,000 thought to be an appropriate maximum financial penalty? By removing the upper limit, the Bill would provide a greater deterrent to those considering breaching banning orders. It would penalise further and recover extra moneys from criminal landlords, which would help drive up standards by ensuring that criminal landlords do not return to the sector.

Secondly, we are proposing to change the maximum to £20,000 from £5,000. That will create a further deterrent to criminal landlords considering breaching a banning order and will penalise those who do. As I said, if a rogue landlord owns multiple properties, particularly in London, where the market rates are high, it would not take very long at all for them to raise the money to pay £5,000. We believe that £20,000 is much more of a deterrent. The figure of £20,000 was drawn from the financial penalty for letting a licensed house in multiple occupation to more than the maximum number permitted. Therefore, we believe that there is a precedent for that level of fine. I would like to hear from the Minister why £5,000 was considered to be appropriate and what his view would be on a higher figure.

Gareth Thomas (Labour/Co-operative, Harrow West)

I support my hon. Friend’s amendment and I shall quote a number of examples which have received coverage. They are examples of rogue landlords and how they have been dealt with by the courts.

I draw attention to an article in the Conservative party’s newspaper of choice, TheGuardian. According to that article, figures released last summer through a freedom of information case against the Ministry of Justice reveal that there were just over 2,000 convictions of rogue landlords between 2006 and 2014—that is, nicely, the last four years of a great Government and the first four years of a dismal Government for us to look at. The resulting fines in those 2,000 cases were just £3 million—less than £1,500 per conviction. One of those convicted was a man called Andreas Stavrou Antoniades, a landlord who converted a north London terrace into nine flats. He was given the maximum fine at the time, some £20,000—the equivalent of little more than two month’s rent from one property. The article goes on to say that the campaign group Generation Rent has suggested that criminal landlords rake in some £5 billion in rent a year.

The Minister has said that there are, in his estimate, some 10,500 rogue landlords. Clearly, if there is consensus on the Committee that we want action against those rogue landlords, we need housing authorities to move quickly. If they are going to take action quickly against rogue landlords, inevitably there will be a desire within housing authorities to know that the sanctions imposed on those landlords have real and significant teeth that will be a real deterrent the often very rich individuals who benefit from very poor behaviour, and get them to change their behaviour.

At the moment, particularly in London, where rents are so expensive, we run the risk of fines just being written off as a business expense. I encourage the Minister to look with favour on my hon. Friend’s amendment, to send a much stronger and stiffer signal to stop criminal and other bad behaviour.

Marcus Jones (Conservative, Nuneaton)

I hear what the hon. Member for Erith and Thamesmead has said. In the spirit of co-operation, as was the case earlier, I also hear what the hon. Member for Harrow West has said, albeit he said it in a fashion that was not as subtle and conciliatory as that of the hon. Member for Erith and Thamesmead, who is on the Opposition Front Bench.

These amendments would increase the financial penalty for a breach of a banning order, either by making it unlimited or by raising the upper limit to £20,000. It is right that the breach of a banning order carries a strong penalty. This Committee has already considered Government amendments to make the breach of a banning order a criminal offence and, as we discussed earlier, a banning order—if taken to its ultimate conclusion—can end in a ban for life against a rogue landlord. However, these amendments would mean that a breach of a banning order could still result in a civil penalty as an alternative alongside the option of the criminal prosecution, which I mentioned earlier and which we discussed at greater length earlier.

I have certainly heard the strength of feeling from the Opposition Front Bench and from the hon. Member for Harrow West. We are considering this issue carefully. Obviously, we want penalties that are set high enough to ensure that they make a real difference and have the desired effect on rogue landlords. So, we hear the arguments that a limit of £5,000 may not be sufficient, and on the basis that we are willing to look at what the hon. Lady has put forward and consider it on Report, I hope Opposition Members will agree to withdraw the amendment and enable the Government to consider these points further, and the level of the penalty, before the Bill comes back on Report.

Teresa Pearce (Labour, Erith and Thamesmead)

Given what the Minister has said—I am taking him at his word—it seems that we may have some agreement here, and given that he seems to have intimated to the Committee that the Government will look at the level of the penalty and perhaps increase it, I beg to ask leave to withdraw the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I beg to move amendment 94, in clause 17, page 10, line 27, leave out subsection (7).

Marcus Jones (Conservative, Nuneaton)

The amendment, as drafted, would have the effect of removing the power to make regulations specifying how local authorities are to deal with fines received under this clause. I have looked at the clause put forward by the hon. Gentleman and I think there is a little confusion. He refers to “fines” within his clause, but I think he may mean civil penalties. That said, local housing authorities will be able to retain the penalties that they receive as income. Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under clause 17 are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with an authority’s private housing sector function, but we will discuss the details of how the income is to be applied with the key interested bodies before we make those regulations.

Teresa Pearce (Labour, Erith and Thamesmead)

Is the Minister saying that those penalties would be ring-fenced for the specific purpose of bringing the private rented sector up to a reasonable standard? Is that what he is intimating?

Marcus Jones (Conservative, Nuneaton)

We are saying that those penalties should go to the local authority. We want to consult with interested bodies, particularly the local authorities, in relation to how we make these regulations and how they work; whether we ring-fence or not and whether the money is put toward the private rented sector housing function of an authority or not.

As I have made clear, our intention is that the money that is recovered should be used. This is the basis on which we shall discuss this with interested parties: it should be used for the private rented sector housing function within the particular authority in question.

Gareth Thomas (Labour/Co-operative, Harrow West)

In the spirit of the Minister’s response, I see no reason to press the amendment to a vote. Consultation is a wonderful thing, but I struggle to see why the Minister needs to consult. Why can he not write it clearly into the legislation that the money recovered will go to the local authority? However, I recognise that is the Government’s intention and I welcome the clarification. I beg to ask leave to withdraw the amendment.

Marcus Jones (Conservative, Nuneaton)

Clause 17 provides that the local housing authority that made the application for a banning order may impose a financial penalty against the person for whom it was made, if that person is in breach of the order. Subject to the right of appeal, the financial penalty that can be imposed for a breach is at the discretion of the local housing authority. As I said previously, that is subject to a maximum of £5,000. However, under subsection (4), if that breach continues for more than six months, a further penalty can be imposed in respect of each additional six-month period. This would mean, for example, that if a landlord had been granted an exception for six months, as referred to in clause 16(4), to bring existing tenancies to an end, but at the end of that period had not done so, the landlord would be subject to the first financial penalty. However, if six months later he had still not brought the tenancy to an end, he would be subject to a second financial penalty.

Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under the clause are to be dealt with, as we discussed in the debate on amendment 94. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions.

Schedule 1 - Financial penalty for breach of banning order

Marcus Jones (Conservative, Nuneaton)

Schedule 1 sets out the procedures for imposing a financial penalty. The authority must serve a notice of intent on the person to whom it intends to charge the penalty, but notice must be served within six months of the authority having sufficient evidence of the breach or, in the case of an ongoing breach, within a period of six months from when the breach last occurred.

The notice must specify the amount of the penalty the authority proposes to charge; the reason for imposing the penalty; and that there is a right to make representations within 28 days. After the period for making representations has expired, the local housing authority must decide whether to impose the financial penalty and, if so, the amount. If it decides to impose the penalty, the authority must serve a final notice specifying the amount of the penalty, the reason for imposing it, how it is to be paid and by when.

The final notice must also provide information about the right to appeal and the consequences of failing to pay. Payment must be made within 28 days of the service of the final notice unless there is an appeal against it. Paragraph 10 of schedule 1 deals with appeals against the final notice. An appeal is to the first-tier tribunal and can be made against the decision to impose the penalty or against the amount, and must be made within 28 days of the service of final notice. If an appeal is made, final notice is suspended until the tribunal makes a decision or the appeal is withdrawn. The tribunal may confirm, vary or cancel the final notice. Paragraph 11 provides that if the person fails to pay the penalty, the local authority can recover it through proceedings in the county court.

Finally, clause 17(9) enables the Secretary of State to issue guidance that local housing authorities must have regard to when imposing financial penalties for breaching banning orders.

Schedule 3 - Management orders following banning order

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 56, in schedule 3, page 76, line 22, leave out “In”.

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss Government amendments 57 and 58.

Marcus Jones (Conservative, Nuneaton)

The purpose of clause 21 is to prohibit a landlord who is subject to a banning order from selling, gifting, assigning or leasing residential property to a prohibited person. Subsection (1) therefore provides that no unauthorised transfer to a prohibited person of an interest or an estate in land is permitted. Subsection (3) provides that a transaction is unauthorised unless it has been approved by the first-tier tribunal. Where an unauthorised transfer has taken place, the contract would be void and unenforceable under subsection (2).

Subsections (4) and (5) explain who “prohibited persons” are. They include persons associated with the landlord, such as: a relative; a business partner of the landlord; a person associated with such a partner; or the business partner of a person associated with the landlord. “Prohibited persons” also includes a company of which the landlord or an associated person is an officer, or any other company in which the landlord or an associated person is a shareholder or has a financial interest, or, where a landlord is a body corporate, any body corporate that has an officer in common with the landlord.

As the header of this part of the Bill states, the measure is about “Anti-avoidance”. The clause is designed to prevent landlords subject to banning orders from continuing to control or influence the management of a residential property through companies or people with whom they are closely associated, but who are not themselves subject to banning orders. The legislation is not intended to prevent the person from ever being able to transfer property to a prohibited person, but they would need to satisfy the tribunal that the transfer was genuine and that there was no intention to let the property. A parent could therefore gift a house to a son or daughter who intended to occupy the property.

Alan Meale (Labour, Mansfield)

What the Minister has said is slightly wrong. We are currently considering amendments 56, 57 and 58 to schedule 3.

Marcus Jones (Conservative, Nuneaton)

Sir Alan, I apologise to you and to the Committee.

Amendment 58 is concerned with an appeal against the second management order, where a final management order would otherwise run out before the appeal is decided. The amendment provides for the final management order to continue in force until the appeal is decided. Amendments 56 and 57 are related drafting amendments.

It may be helpful if I briefly mention what schedule 3 does. It applies in a modified form the management order provisions in part 4 of the Housing Act 2004 to properties that are subject to a banning order. Although a local authority has the power to make this new type of management order, it is not required to do so and the banned landlord and certain other interested parties, such as a joint owner and mortgagee, can appeal to the first-tier tribunal against an order.

Management orders can be used, for example, to secure that tenants whose landlords have been banned from letting property are protected during the continuance of their contractual tenancies. The orders can secure that vulnerable tenants do not need to be rehoused because their landlord has been barred from being involved in the management of the property. They also ensure that properties need not sit empty because they are subject to a banning order against the legal owner but can continue to be rented out.

There are two types of orders: interim management orders and final management orders. No local housing authority should incur additional costs because it has made a management order. Any surplus income can be retained by the authority and used for purposes that will be specified in the regulations made by the Secretary of State. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions, as the Committee has discussed.

Clause 21 - Prohibition on certain disposals

Clause 22 - Database of rogue landlords and letting agents

Marcus Jones (Conservative, Nuneaton)

The clause requires the Secretary of State to create and operate a national database of rogue landlords and property agents in England. The purpose of such a database is to enable local housing authorities to identify persons who are banned from being a landlord or from being involved in residential letting agency property management for work. It can also be used to identify other landlords and property agents who have been convicted of a banning order offence but who are not currently subject to a banning order. This will enable local housing authorities to identify rogues operating in their areas so that they can monitor them and target enforcement action against them when necessary. Subsection (2) provides that local housing authorities are responsible for populating and maintaining the database. Subsection (3) requires that, in connection with that, the Secretary of State must ensure that the database can be updated and edited.

Clause 23 - Duty to include person with banning order

Marcus Jones (Conservative, Nuneaton)

I beg to move amendment 20, in clause 23, page 12, line 5, leave out from “must” to end of line 6 and insert

“make an entry in the database in respect of a person if—

(a) a banning order has been made against the person following an application by the authority, and

(b) no entry was made under section 24, before the banning order was made, on the basis of a conviction for the offence to which the banning order relates.”

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss the following:

Government amendments 21 and 23 to 33.

Government new clause 6—Removal or variation of entries made under section 24.

Government new clause 7—Requests for exercise of powers under section(Removal or variation of entries made under section 24) and appeals.

Marcus Jones (Conservative, Nuneaton)

Clause 23 makes it mandatory that a person against whom a banning order has been made must be entered on to the database. It is the duty of the local housing authority that made the successful application for the banning order to make the entry. Amendment 20 clarifies that a person may not be entered on to the database under this clause if they are already on it in relation to the same offence under clause 24. The effect of amendment 21 is to clarify that more than one entry in the database can be made in respect of one person, in order to deal with situations in which a person is entered on to the database for one offence but subsequently commits further offences. Once a person is entered on to the database for the first banning order offence, the details of any subsequent banning order offence can be added to the database.

Amendments 23 and 26 to 33 are consequential on amendment 21. New clause 6 sets up a process whereby a person may in certain circumstances have the entry against them removed from the database or the length of it reduced. A person’s entry must be removed if all the convictions for which they are entered on the database are overturned. The entry may be removed if some but not all of the convictions have been overturned, or if the offences have become spent. In those circumstances the local housing authority may also reduce the length of time the entry is to be maintained on the database.

New clause 7 provides that a person whose details have been entered on to the database may apply in writing to the local housing authority that made the entry for it to be removed. The person can also ask for the length of the entry to be reduced. If the local authority decides not to comply with the request in the application, it must notify the applicant in writing of the reasons for its decision and give details of how to appeal. An appeal against the local housing authority’s decision not to comply with the request goes to the first-tier tribunal, and the applicant has 21 days from receiving the decision notice to appeal, unless the tribunal exercises its discretion to allow a late appeal. The tribunal may order the local housing authority to remove or reduce the length of the period of the entry.

Marcus Jones (Conservative, Nuneaton)

The clause makes it mandatory that a person against whom a banning order has been made must be entered on to the database. It is the duty of the local housing authority that made the successful application for the banning order to make the entry. The entry must be maintained for the duration of the ban and must be removed when the person ceases to be banned.

Clause 24 - Power to include person convicted of banning order offence

Marcus Jones (Conservative, Nuneaton)

The clause enables a local housing authority to make an entry in the database in respect of a person who has been convicted of a banning order offence, but only if the person was a residential landlord or property agent at the time the offence was committed. The proviso is to ensure that a person who is convicted of an offence that is in its nature a banning order offence but who was not acting as a landlord or property agent when the offence was committed cannot be placed on the database. The entry in the database must be for a fixed term and must be removed after that term has expired.

Subsection (4) provides that the Secretary of State must issue guidance to local housing authorities setting out the criteria to which they must have regard when deciding whether to make a database entry in relation to a person and when deciding the term of such an entry. For example, such guidance may cover topics such as the nature of the offence, mitigation, culpability and serial offending. I commend the clause to the Committee.

Clause 25 - Procedure for inclusion under section 24

Marcus Jones (Conservative, Nuneaton)

The clause sets out the procedure that a local housing authority must follow before it can make an entry on the database in respect of a person under its powers to do so in clause 24. The authority must give a person whose details are proposed to be entered on the database notice of that decision, which must state the period for which it is intended that the details will be held on it. In accordance with subsection (2)(b), that cannot be less than two years.

The notice period must not be less than 21 days from when the decision notice is given. Only after that period has expired can a local authority make an entry on the database, provided that no appeal is brought against the decision. The notice itself must explain that the person has the right to appeal. If an appeal is made before the end of the notice period, the local housing authority cannot make the entry until the appeal has been decided or withdrawn.

Subsection (6) provides that no notice to make an entry on the database in respect of a person can be given later than six months after the person’s conviction for the banning order offence to which the notice relates. I commend the clause to the Committee.

Clause 26 - Appeals

Marcus Jones (Conservative, Nuneaton)

The clause is concerned with a person’s right to appeal against the local housing authority’s decision to make an entry in the database in respect of the person or in relation to the length of time for which the entry is to be maintained. Any such appeal must be brought before the end of the notice period in the decision notice in clause 25(2). However, under clause 26(3), the first-tier tribunal may allow longer to appeal if it is satisfied that there is a good reason for the delay.

Subsection (4) provides that a tribunal may confirm, vary or cancel the decision notice regarding entering the person on the database. If it decides to vary the decision notice, that variation will be to the length of time of the inclusion of the person on the database. I commend the clause to the Committee.

Alan Meale (Labour, Mansfield)

Order. A Division is taking place in the House. Members will want to go and vote, so I will suspend the Committee. I would like the break to be for 20 minutes rather than the usual 15, because I want the Opposition and Government Whips to come back in 15 minutes, and for the Front Benchers to stand by in case they are needed to liaise. I hope that is agreeable.

Clause 29 - Power to require information

Marcus Jones (Conservative, Nuneaton)

The clause provides that a local housing authority can ask a person to provide certain information in order to decide whether to make an entry in the database in respect of that person. That information may include details of previous convictions for banning order offences committed by that person, or any banning orders that have previously been made against the person.

The clause also provides that the authority can ask for information to make and keep the entry up to date. That may include details of the properties owned, managed and let by the person, subject to the entry, and requiring information to be provided about matters such as changes of address of the person entered on to the database, their trading name or their portfolio of properties.

Gareth Thomas (Labour/Co-operative, Harrow West)

I welcome the clause but wonder whether it goes far enough. For example, will the power to require information to be provided for the purpose of entering somebody on the database be extended to HMRC—is it already having to provide information to make a judgment? Where a housing authority is not sure whether someone else is part of an organisation that is acting as a rogue landlord, will it be able to be subject to the same power to require information as someone who is clearly the main focus for this particular power? Will it just have to be directed at one person, or can other people be covered by it; and are a series of other public bodies going to be covered by the power to require information as well?

Marcus Jones (Conservative, Nuneaton)

I thank the hon. Gentleman for his questions. Before I conclude my remarks on clause 29, I will respond to them.

Subsections (3) to (5) provide that it is an offence not to comply with a request for information or to provide false or misleading information in respect of such a request. If convicted of an offence, the person is liable to be fined. The hon. Gentleman has tried to broaden this out a number of times—earlier he asked for other organisations to have involvement in this process. As I said earlier, however, this is a power for local authorities only. It is not a matter for the tax authorities and therefore HMRC would not have the information.

Gareth Thomas (Labour/Co-operative, Harrow West)

I understand the Minister’s point. If the housing authority has suspicions that an individual may be a rogue landlord, they might be able to make a better judgment about where a person’s income is coming from, how extensive their assets are, and so on if they could access information from HMRC. Under this clause, could the planning authority make a request of HMRC and expect HMRC to have to respond to provide that information?

Marcus Jones (Conservative, Nuneaton)

As I said before, the power that the hon. Gentleman refers to is only vested in local authorities; but I am aware that housing authorities can speak to organisations such as HMRC and request information, if that information enables them to further a case that they may have against a person, persons or company.

Grahame Morris (Labour, Easington)

Will the Minister clarify whether it is the Government’s intention to make this information on the database available only to local authorities, or will it be available to members of the public, too?

Marcus Jones (Conservative, Nuneaton)

Let me put it this way: the actual banning orders made by the lower tier tribunal will be public information, but because of data protection laws, the register of rogue landlords will only be available to local authorities on the nationwide database that I mentioned earlier. The information will also be available to the Secretary of State, but that will only be available for statistical and research purposes. The Committee will be covering this matter in more detail when we discuss a later amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful to have the opportunity to speak on the stand part debate. I would not want to give the impression, Sir Alan, to you or to Conservative Members, that I oppose the clause. I think it is a worthwhile additional power. It prompts the question, though, whether housing authorities will be able to have enough access to potential sources of information about possible rogue landlords. I used the example of HMRC, but perhaps the example of the banks might be an appropriate one to offer up. The potential rogue landlord must have a bank account somewhere, so could Harrow council, wanting to exercise its powers here to crack down on any rogue landlords operating in Harrow, use this clause to go to HSBC or Lloyds Bank and say, “We have real concerns about individual X being a rogue landlord, but we need to check out what their level of income is and where that income appears to be coming from. Could you provide the following information to us?” I would have thought that that is a reasonable request from a housing authority wanting to get a grip on these 10,500 rogue landlords the Minister spoke about, some of whom, presumably, must be in each of our local authority areas. If we are really going to crack down on this and take it seriously, as I know the Minister wants to do, we have to make sure that housing authorities have all the powers they need.

If the clause does not cover the potential for a housing authority to make a reasonable request and expect that body to provide information back, the Minister might want to reflect before Report on whether the scope of the clause needs to be broadened. I think of constituents of mine who have got in touch with HMRC and have struggled to get a coherent answer back. Of course, the local housing authority can put in a request now, without any additional powers, but there is no guarantee that HMRC would reply in good time for that housing authority to make a judgment as to whether a rogue landlord is operating in their vicinity. I ask the Minister to reflect. We would expect a rogue landlord to have had some dealings with HMRC. We would certainly expect a rogue landlord to have bank accounts or to have had some history of dealing with the big banks. Why should the housing authority not be able to engage with those bodies and expect sensible, serious answers to their requests for help about named individuals?

Marcus Jones (Conservative, Nuneaton)

I thank the hon. Gentleman for his remarks. I do not think it is an unreasonable request that I consider his comments, particularly in relation to data sharing and HMRC. However, much of the data sharing and much of the evidence he talks about would, of course, have been obtained and presented to the first-tier tribunal when the original banning order was made. Obviously, this register is to convey that information, but I will certainly reflect on what the hon. Gentleman says before Report.

Clause 30 - Access to database

Stephen Hammond (Conservative, Wimbledon)

I beg to move amendment 79, in clause 30, page 14, line 8, after “England”, insert “and the Greater London Authority”

Alan Meale (Labour, Mansfield)

With this it will be convenient to discuss the following:

Amendment 80, in clause 31, page 14, line 22, at end insert—

‘(3) The Greater London Authority may use information in the database for statistical or research purposes.”

Stephen Hammond (Conservative, Wimbledon)

I shall not detain the Committee long, but these are significant and helpful amendments for the Mayor of London, in particular, and the Greater London Authority. I listened carefully to the Minister’s response to the hon. Member for Harrow West when he said that the proposals were very much for local authorities to have access to the database. These two amendments work together. I take his point that the powers are for local authorities, but I hope he will accept that in London the Greater London Authority has a strategic role, if not a direct role, in housing, in assessing the overall housing demand, and in planning. It obviously generates some of the housing supply in London, so I hope that he will consider that there is a strategic role, but more importantly, access to the database would allow the Mayor’s London rental standard to be better informed.

These two small amendments seek to do two things: to put on to the face of the Bill that the Greater London Authority should have access to the database, and to limit its powers regarding the use of that information to exactly those of the Secretary of State, which are to use it for statistical or research purposes.

Gareth Thomas (Labour/Co-operative, Harrow West)

Not that it will affect how I decided to vote on this issue, but it would be illuminating to discover whether the Mayor of London and his housing adviser support these two amendments.

Stephen Hammond (Conservative, Wimbledon)

I have had various discussions about a number of amendments with the Mayor and his housing adviser, and they have indicated that they would regard these amendments as perhaps not essential but helpful, purely on the basis of better informing the London rental standard.

Gareth Thomas (Labour/Co-operative, Harrow West)

I rise to speak in support of the hon. Gentleman. I hesitate to destroy his career by doing so, but if it offers him any help, I will now champion his future career, so that his Whips are hopefully unable to spread doom and gloom about it.

This point about the London rental standard is important, because, good thing though it is, it does not seem to be having a huge impact. The brutal truth is that the Mayor had hoped to have 100,000 landlords registered by the end of next year. At the end of last year, as I understand it, about 15,000 were registered, at best. That does not suggest that the Mayor is on course to succeed in his aim of having 100,000 landlords or letting agents signed up, which, given the scale of the housing crisis and the importance of the private rented sector in London, is a real concern.

It is worth pointing out some statistics from Shelter, which reports that 25% of Londoners rent privately and that figure is expected to rise by 2020, when the next Labour Government will be elected, to one in three, which is all the more reason urgently to seek to drive up standards in the private rented sector. Although clause 30 is merely about access to a database, I encourage the Minister, when reflecting on the debate we have just had on clause 29, to ask his officials and organisations such as Shelter whether there might be merit in requiring other statutory bodies to support the database and to provide information to it.

That could be particularly important in London, which has seen some of the worst cases of rogue landlords and prosecutions. There are the examples of Andreas Stavrou Antoniades, a landlord who operated in north London, and Andrew Panayi, who let out 180 properties mostly on Caledonian Road nears King’s Cross. Earlier this year, he pleaded guilty to renting out an unlicensed basement despite an earlier council ruling that it was unsatisfactory and a substandard unit of accommodation with inadequate light and outlook and a poor living environment. He is an example of the worst landlords in London. He is an example, too, of why faster progress on the London rental standard is needed and why the amendments proposed by the hon. Member for Wimbledon are useful, if modest, additions to the Bill. I would strongly encourage the Minister to support them. Unless he has a very powerful explanation on why they should not be incorporated in the Bill, I would be extremely tempted to show solidarity with my near neighbour down in Wimbledon and push this to a Division. Us London MPs need to stand together against the full bullying might of the Executive. The Minister has, throughout the course of today, generally been far more reasonable than his ministerial colleague. I do not know what is wrong with the Minister of State—whether he woke up grumpy or is just naturally of this disposition—but the current Minister has been much more considerate. I urge him again to be considerate and welcoming of the suggestions from the hon. Member for Wimbledon.

Richard Bacon (Conservative, South Norfolk)

I wondered whether the hon. Gentleman intends to table his own amendments to deal with these exploitative vermin, who really need much stronger measures against them.

Gareth Thomas (Labour/Co-operative, Harrow West)

I might do that on Report, now that the hon. Gentleman has encouraged me. However, hopefully in the interventions that I have made, I might have encouraged the more reasonable of the two Ministers to fight the fight within the Department and strengthen the teeth that are available to housing authorities to fight this problem. I do not know whether the hon. Member for South Norfolk, when he meets housing officials in South Norfolk Council, talks about these issues. I know that he talks to them a lot about self-build and custom build—that is excellent news—but does he go into detail about the powers that they will have under the Bill in other areas? I hope that he does, and if he has not up till now, I hope that he will in future.

I apologise to you, Sir Alan, as I think I have been led astray by the hon. Member. We are, after all, talking about London and whether the London rental standard might benefit from the amendments moved by the hon. Member for Wimbledon. I simply urge the Minister to embrace with enthusiasm the concerns expressed by colleagues on the Conservative Benches about the database.

Alan Meale (Labour, Mansfield)

I remind Members that the amendments are in the name of Mr Hammond.

Marcus Jones (Conservative, Nuneaton)

I thank my hon. Friend for Wimbledon for the amendment and for his comments. In my years in this House, I never thought it likely that my hon. Friend the Member for Wimbledon could be a comrade of the hon. Member for Harrow West, but the hon. Member seems to think that they may be compatible. I am sure my hon. Friend has his own views on that point.

Gareth Thomas (Labour/Co-operative, Harrow West)

Will the Minister give way on that point?

Marcus Jones (Conservative, Nuneaton)

Let me make some progress. Amendment 79 would allow the Greater London Authority access to the database on rogue landlords. We would be happy to grant the GLA access to the data for statistical and research purposes, however we would need to ensure that access was on an anonymised basis given that the database contains information about the relevant offences of which persons have been convicted, as well as details of properties owned. The data fall within the definition of “sensitive personal data” as set out in the Data Protection Act 1998 and may only be shared with organisations where strictly necessary and where at least one of the conditions set out in schedules 2 and 3 to the Act is met.

I would like to reassure my hon. Friend—and taking into account the comments made by the hon. Member for Harrow West—that we are taking on board the points that have been made today. We will give the matter further thought and I hope on that basis my hon. Friend will withdraw the amendment.

Gareth Thomas (Labour/Co-operative, Harrow West)

I am grateful for the opportunity to speak again. I do not understand why the Mayor of London should be such a controversial figure for the Minister not to want to share information. I appreciate there needs to be a bit of thought, and I appreciate that the Minister of State has been a bit grumpy today and that may be precluding the Parliamentary Under-Secretary’s room for manoeuvre. However, I hope the hon. Member for Wimbledon will be sufficiently robust in his attitude to the Minister’s answer to fight the cause for London and say that we need to make a decision now to strengthen the London rental stake.

The rest of the debate is in Hansard.