LICENSING OF HMO TO WHICH THIS PART APPLIES

HC Deb 11 May 2004 vol 421 cc183-204

Mr. Hayes

I beg to move amendment No. 127, in page 36, line 9, leave out 'the following' and insert 'all'.

Mr. Deputy Speaker (Sir Alan Haselhurst)

With this it will be convenient to discuss the following: Amendment No. 128, in page 36, line 9, leave out from `HMOs' to end of line 19.

Amendment No. 3, in page 36, line 10, at end insert—

'()any HMO in the authority's district of 3 storeys or above or in which at least 5 people live, and'.

Amendment No. 87, in page 36, line 10, at end insert—

`()any HMO in the authority's district of 3 storeys or above or in which at least 4 people live, and'.

Amendment No. 105, in page 36, line 37, leave out '5 years' and insert '12 months'.

Amendment No. 129, in page 36, line 37, leave out '5' and insert '3'.

Amendment No. 106, in page 36, line 38, at end insert—

'(c) a local authority may apply to the appropriate national authority for authority to extend the 12 month period in 54(6)(b) to a maximum of 5 years. The authority in making its application must satisfy the appropriate national authority that there are good reasons why it cannot reasonably comply with the requirements of 54(6)(b).'.

Government amendments Nos. 31 and 32.

Amendment No. 1, in clause 66, page 44, line 5, at end insert—

'(c) the energy efficiency of the house concerned.'. Amendment No. 107. in clause 66, page 44, line 10, leave out paragraph (b) and insert—

'(b) conditions requiring the written statement of terms in paragraph 1(5) of Schedule 4 to contain details of—

1. (i) the responsibilities of the occupier in respect of his own conduct;
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2. (ii) the responsibilities of the occupier in respect of the conduct of other occupiers and visitors;
3. (iii) the ways in which the licence holder may address any nuisance or annoyance caused to others by persons occupying or visiting the house.'.

Government amendment No. 33.

Amendment No. 2, in clause 66, page 44, line 16, at end insert—

'(da) conditions as requiring the installation of energy saving measures or efficient heating systems'.

Amendment No. 108, in clause 72, page 49, line 16, at the end insert

'and (c) section 21 of the Housing Act 1988 (c. 50) shall not apply.'. Government amendments Nos. 34 and 14.

Government new clause 6—HMO declarations.

Government new clause 7—Revocation of HMO declarations.

Government amendments Nos. 125 and 50 to 53.

Amendment No 122, in clause 214, page 157, line 44, at end insert

'and (c) a short-term stay hostel'. Amendment No 123, in clause 214, page 158, line 8, at end insert—

'(5A) In subsection (4), "short-term stay hostel" means a building or part of a building which offers temporary accommodation and is occupied wholly or mainly by visitors from outside the United Kingdom (whether or not employed in the United Kingdom).'.

Government amendments Nos. 126, 56 to 59, 65 and 66.

Amendment No. 124, in schedule 11, page 218, line 1, leave out paragraph 5.

Government amendments Nos. 67 to 69 and 35 to 37.

Amendment No. 95, in clause 99, page 68, line 37, at end insert—

'(2A) A local housing authority must have regard to any breach of the duty owed to persons occupying the house under section [HMOs and duty of care].'.

Government amendment No. 17.

New clause 17—Housing ombudsman for students—

1. `(1) For the purpose of the investigation of complaints made about landlords by students, there shall be an office of Housing Ombudsman for Students.
2. (2) The Housing Ombudsman for Students will be appointed by the Secretary of State.
3. (2) An appropriate code of conduct for the Housing Ombudsman for Students will be established by regulations by the Secretary of State.
4. (4) The Secretary of State will, by regulation, make provision about the investigation by the Housing Ombudsman for Students of complaints made about landlords by students.
5. (5) Regulations under subsection (4) will make provision about—
1. (a) the matters about which complaints may be made;
2. (b) the grounds on which a matter will be excluded from investigation, including that the matter is the subject of court proceedings or was the subject of court proceedings where judgment on the merits was given;
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3. (c) the description of individual who may make a complaint;
4. (d) a power of the Housing Ombudsman for Students to investigate any complaint made (whether the complaint is subsequently withdrawn or not), and, where he investigates, the making of a determination;
5. (e) a power of the Housing Ombudsman for Students to propose alternative methods of resolving a dispute;
6. (f) the powers of the Housing Ombudsman for Students for the purposes of his investigations (including powers to consult and co-operate with other persons), and the procedures to be followed in the conduct of investigations;
7. (g) the powers of the Housing Ombudsman for Students on making a determination. which may include power—
1. (i) to make recommendations as to action to be taken to remedy any injustice to the person aggrieved and to prevent any similar injustice being caused in the future,
2. (ii) to make orders with regard to the payment of compensation or to order that a person is not to exercise, or require the performance of, certain rights or obligations, and
3. (iii) to publish statements, or to make orders requiring the publication of statements, that a person has failed to comply with an order mentioned in sub-paragraph (ii);
8. (h) the manner in which determinations are to be—
1. (i) communicated to the complainant and the person against whom tin complaint was made; and
2. (ii) published (with or without excisions).
6. (6) Regulations under this section may contain such supplementary, incidental, consequential or transitional provisions and savings as the Secretary of State considers appropriate.
7. (7) Regulations under this section may make different provision for different cases or descriptions of case.'.

New clause 21—Warm homes—

1. '(1)The appropriate national authority shall issue guidance for the improvement of existing HMOs and the implementation in future housing stock (where possible) of —
1. (a) installation of products manufactured for cavity walls, loft or underfloor insulation, external and internal wall cladding and draft proofing
2. (b) Greater control of domestic heating systems, low emissivity glazing and efficient fitting of pipes and plumbing.
2. '(2) The local housing authority should seek to act in accordance with subsection 1 and with the Sustainable Energy Act 2003.'.

New clause 25—Landlord associations and codes of practice—

1. '(1) The Secretary of State may ask one or more bodies representing landlords to draw up a code of practice for his consideration under section 193;
2. (2) Before exercising his power under subsection (1), the Secretary of State must determine that any such body is itself fit and proper, and is capable and competent to represent the landlords who are its members;
3. (3) In reaching his determination in subsection (2), the Secretary of State should give particular regard to any training, professional development or accreditation schemes operated by that body for its members.'.

New clause 28—HMOs and duty of care—

1. '(1) A person having control of or managing a HMO owes to all persons occupying the house a duty to take such care as is reasonable in all the circumstances to see that they are reasonably safe from personal injury or from damage to their property.
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2. (2) A person having control of or managing a HMO who is in breach of the duty of care in subsection (I) commits an offence.
3. (3) A person who commits an offence under subsection (2) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
4. (4) A local housing authority must have regard to any breach of the duty in subsection (1) when considering the health and safety condition under section 99.
5. (5) In this section—

HMO" means a house in multiple occupation as defined by sections 213 to 217, save that the provisions of Schedule 11 do not apply to this section, and references to an HMO include (where the context permits) any yard, garden, outhouses and appurtenances belonging to, or usually enjoyed with, it (or any part of it).'.

Amendment No. 120, in clause 194, page 146, line 38, at end insert—

'(3A) The regulations may empower local authorities to require, by notice, owners of houses in multiple occupation to carry out such works or actions as may be necessary to put in place, or observe, satisfactory standards of management.'.

Amendment No. 121, in clause 209, page 155, line 22, leave out from 'section' to end of line and insert—

'sections 213(3), 142, 143, 144, 150 or Schedule 4'.

Government amendment No. 21.

Amendment No. 96., in schedule 11, page 217, line 8, after 'Part 1', insert—

'or section [HMOs and duty of care]'.

Amendment No. 97., in schedule 11, page 217, line 9, after 'Part 1', insert—

'or section [HMOs and duty of care].

Amendment No. 98, in schedule 11, page 217, line 11, after 'Part 1', insert—

`or section [HMOs and duty of care]'.

Mr. Hayes

I hope that I can follow your laudable example, Mr. Deputy Speaker, and be pertinent and pithy, thus allowing the maximum time for exploration of the detailed matters involved in this and later parts of the Bill.

I want to discuss not just amendments Nos. 127 to 129, tabled by me and my hon. Friends, but to spend a good deal of time—with your permission, Mr. Deputy Speaker—on other amendments and new clauses in this group. They concern such important matters as warm homes and the appointment of a housing ombudsman for students, which Conservative Members have championed in Committee and on other occasions.

The first few amendments are designed to clarify whether the Government will seek to bring more HMOs within the licensing framework. A number of people are concerned about the balance of the Bill. We must be ever mindful of the balance between regulation and the proper protection of vulnerable citizens in particular. We have argued throughout the proceedings so far that that balance must be struck in a way that does not act as a disincentive to those who provide much-needed accommodation for rent. Issues such as cost, burden and the difficulty of staying within the law are considerable disincentives to marginal landlords—people who might stop letting their properties just as easily as they might start letting them.

Matthew Green (Ludlow) (LD)

The hon. Gentleman is on to a good point in relation to concerns about regulation. I am therefore bemused by his first two amendments, which would appear to include all HMOs in the regulations, rather than restricting them, which I thought was the thrust of his argument. I am therefore confused, right from the start.

Mr. Hayes

The hon. Gentleman is often confused, but not always. I concede that I should perhaps have said at the beginning that the first two amendments were probing amendments, but I did say that they were designed to clarify whether the Government would seek to bring more HMOs within the licensing framework, as he will see from the record. Conservative Members are highly sensitive to that question. We are mindful of the balance that I was beginning to describe, and which was acknowledged by the hon. Gentleman, between regulation and protection; and we are anxious, on behalf of landlords and others, about the risk of seriously deterring landlords from investing in this sub-sector of the rented sector.

Sir Sydney Chapman

We should be particularly sensitive at a time when public housing, or housing in the social sector, has declined, and when the number of new homes has declined. We must be careful not to discourage private landlords from supplying much-needed housing, particularly in places such as Greater London, unless there are very good reasons for closing properties because they constitute a hazard.

Mr. Hayes

My hon. Friend, who is an expert on these matters, properly draws attention to a particular failing on the Minister's part. I do not want to embarrass the Minister more than is necessary, but we are among friends here, are we not? I think that the Minister would want me to remind him of his failure in respect of social house building. He has let down the country, himself and the Government. He has many qualities and strengths, which will doubtless be on show today, but the 50 per cent. reduction in social house construction under this Labour Administration further emphasises the need to fill the gap with other suitable properties. If that is not done, many vulnerable people will not be able to obtain the houses that they need so desperately for themselves and their children. As my hon. Friend says, it is all the more important for us not to deter private landlords at a time when there is not enough social housing, and the amendments that the hon. Member for Ludlow (Matthew Green) quickly identified as probing amendments are designed to test the Government in that regard.

The Council of Mortgage Lenders feels that the licensing of all HMOs would be excessive, but believes that there may be a back-door policy of extending licensing not just to them but to a substantial proportion of the private rented sector. Like the Opposition, it seeks assurances from the Government.

I pay tribute to the Minister for taking on board the concern expressed in Committee about fit and proper persons. Government amendment No. 32 seeks to extend the definition of evidence relating to whether someone is a fit and proper person to evidence that a person has been convicted of sexual offences. The Government have tabled a number of other useful technical amendments, which shows that the Minister listened carefully in Committee. That does not surprise me, and I do not think that it will have surprised anyone else because much of the debate in Committee was constructive and intended to improve the Bill.

2.15 pm

I want to say a little about the Liberal Democrat amendments. I do not like to say more than is necessary about the Liberal Democrats, although we recently combined usefully on the Planning and Compulsory Purchase Bill, and I do not want to spoil the emerging affair between us and the minor party.[Laughter] I mean, of course, the emerging political affair. I have to say, however, that amendment No. 105, which requires local housing authorities to fulfil their general duties within 12 months rather than five years, is a regulatory step too far. Authorities would, I think, find it extremely difficult to fulfil their obligations. That is an optimistic aspiration at best and in all probability an unrealistic one. Under amendment No. 106, if

there are good reasons why it cannot reasonably comply", a local authority may apply for an extension of the 12-month period to five years. The answer to that is that all authorities would apply, as few would be able to comply with what I consider an over-zealous time scale.

Let me now say something about our new clauses 17 and 21. Conservative Members, along with many Labour Members, are champions of those who campaign against fuel poverty. I see that the hon. Member for Nottingham, South (Alan Simpson) is present. I want to make it clear, on my own behalf and that of my party, that he has a noble record in that respect. We can join forces in raising genuine questions about the Government's ability to meet their own targets for the delivery of warm homes. Fuel poverty blights lives and it not acceptable for any Member or party to allow the problem to continue when it could be rectified with reasonable practical ease. Many Members have tabled amendments, at this stage and earlier, drawing attention to the concerns of those who, like me, are determined to highlight that problem.

It is estimated that between 30,000 and 60,000 people die unnecessarily in winter because they have not enough money to heat their homes. I need say little more than that, except that we know that fuel poverty is caused by a combination of inadequate income and inadequate home insulation. New clause 21, which is modest and practical, is designed to push the Minister further towards a policy that would unite Members throughout the House in pursuit of the campaign against fuel poverty, in the interests of some of our most vulnerable citizens.

New clause 17 would establish a housing ombudsman for students, who are specifically excluded from the regulations in the Bill. I note that amendment No. 124, tabled by the Liberal Democrats, requests their inclusion, but I do not think that that counteracts or contradicts our demand for an ombudsman, which has been welcomed by the National Union of Students. It has written to me saving that it welcomes our new clause in principle. A letter from the vice-president for welfare, who is running the NUS housing campaign, raises a number of specific issues about the role of the ombudsman. I also have good news from the housing ombudsman himself, who has written to me and also to my hon. Friend the Member for Poole (Mr. Syms) saying that he might well be able to add this responsibility to his existing brief, so that he or one of his deputies could perhaps become the students' ombudsman.

We see a real need to protect vulnerable students. Most universities do a good job in providing accommodation and many halls of residence are of the highest possible standard, but it is important for us to build in some protection to deal with those that are not.

I have tried to cover what is an enormous subject, given the grouping of the amendments and new clauses. I make no criticism of the Chair, of course. I hope that it is fair to say that all our amendments and new clauses are designed to be practical and positive, and I am sure that the Minister has read and will respond to them in that spirit.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab)

I should like to speak to amendment No. 3, which is also supported by two of my hon. Friends and three Liberal Democrat Members. I had therefore wondered whether I got the amendment right, but on balance I think that I probably have.

This is a relatively simple amendment, which I am sure the Minister could simply accept. It deals with the issue, which was raised in Committee, of which houses in multiple occupation will be incorporated in the mandatory national licensing arrangements. The Minister said then that he was likely to use as the definition properties that had three or more storeys and five or more people living in them. The amendment seeks to change "and" to "or", so the definition would cover properties with three or more storeys or five or more people. That is an important point. Although the change involves the small words "and" and "or", it would make quite a big difference to some properties that will otherwise be excluded from the scheme.

I should like to try to tease out a number of issues from the Minister, if he is in a teaseable mood today. I hope that we can get one or two responses from him. I am sure that he will say in response that the amendment would put the definition on the face of the Bill, whereas he prefers the position in which that is done by regulation through secondary legislation, because it is then easier to adapt to changing circumstances as we go along. I have listened to that argument with interest but if he is going to mount it, as I am sure that he will, perhaps he will also inform the House of whether he sees the definition that he gave in Committee, if that is what he is going to stick with—three or more storeys and five or more people—as just a starting point for a national licensing scheme. Does he foresee a situation in which, once local authorities have a certain number of properties in the national licensing framework, he might look to extend the definition as authorities become able to cope with more properties? It would be interesting to learn that from him, because it might give us a different appreciation of what he and the Government intend.

Will the Minister reflect on why we are looking to introduce a national licensing system for HMOs at all? I suggest that there are two essential problems with HMOs, which come up over and over again. The issue that particularly interested him in Committee, which was why he wanted to stick with a definition that excluded any properties lower than three storeys, was risk. We went into the assessment that has been made of fire risk, and the conclusive evidence that the greatest risk of fire, and deaths from fire, in HMOs occurs in properties of three or more storeys. That is clear. However, I put it to the Minister that there are two main problems. Risk, particularly risk from fire, is one fundamental reason for licensing HMOs, but there is another difficulty, which perhaps occurs more often, although its impact is arguably less serious: nuisance. Nuisance from HMOs, where there is concern from neighbours about dereliction, rubbish scattered around the property and the noise and nuisance that can come from the occupants—often in part because a property is being badly managed—has little to do with a property's height and whether it has two or three storeys. It has much more to do with the number of people who live in a close environment. That is why my definition is better than that which the Minister proposes.

Chris Ruane (Vale of Clwyd) (Lab)

In my hon. Friend's definition of HMOs, would the three storeys include the cellar and the attic?

Mr. Betts

We went through that in Committee and the Minister will probably be able to reinforce the argument. We were told then that an attic or cellar might well count towards the number of storeys. However, there is a further problem because if a landlord then chose to block off the cellar, basement or attic, the property might not count. There could therefore be a three-storey property with a blocked-up attic that was not included under the definition. That issue should be taken up, and perhaps the Minister will say more on it.

Lynne Jones (Birmingham, Selly Oak) (Lab)

My hon. Friend mentioned the problems other than fire hazards that occur in HMOs of fewer than three storeys. Does he accept that, in many areas, particularly where there are large numbers of students occupying smaller properties, there can be similar problems even when only four people occupy a property? What are his views on the amendment tabled by my hon. Friend the Member for Nottingham, South (Alan Simpson)?

Mr. Betts

That is an interesting point, which takes us back to the arguments about the Housing Act 1996. The position of the Labour Opposition at that time was that the definition should be three or more storeys or four or more people, which is exactly what is in amendment No. 87, tabled by my hon. Friend the Member for Nottingham, South (Alan Simpson). I accept that point, but by sticking to the figures used by the Government and inserting "or" instead of "and", I am trying to raise the principle that the problems of HMOs do not just concern risks such as that from fire. They also concern the management of the property in terms of nuisance, especially in student areas. The number of people in a property is more important in that regard than the number of storeys. If the Minister insists on a definition that means that any property lower than three storeys, irrespective of the number of people in it, will not be subject to the national licensing arrangements, that leads to a position in which many properties where there is the potential to create nuisance will be excluded from the scheme. That is a real concern that I hope he will address. It is the additional issue of nuisance that I hope that he will take into account in the final definition.

The Minister might point out that there can be additional licensing and that it is open to any local authority to designate an additional area in which the definition of HMOs for licensing can be different from that prescribed by the Minister for the national scheme. I have had discussions with him on that point and I hope that he will respond on it.

Funding arrangements are important for local authorities because in their present budgets, education and social services funding tends to be passported, so that what is left is often constrained and under pressure. My understanding is that the first start-up costs of the national scheme will be borne by an up-front Government grant, but that the ongoing costs will be covered by the charge made for licences. However, when a local authority considers an additional licensing scheme, although any licences under that scheme will cover the day-to-day running costs, the start-up costs, because of the consultation that must be undertaken, are likely to be greater than the start-up costs of implementing the national licensing scheme. Yet as I understand it, there are to be no additional funds whatever from central Government for that.

The start-up costs—for all the consultation and arrangements laid down in the Bill—of additional licensing arrangements will come out of the small amount of money that local authorities have for street cleaning, environmental improvements, parks and gardens, and other important services on which local people rely. Perhaps the Minister will consider giving us some comfort in that regard. It would not take much for central Government to agree that, where an additional licensing scheme is ultimately accepted and approved—the Minister said in Committee that he would not seek to second-guess local authorities on that—the start-up costs, at least, should be borne by central Government.

Mr. Hayes

The hon. Gentleman is making a compelling case, as ever on such issues. What broad assessment has he made—or does he know what assessment the Minister has made—of those costs? I am particularly concerned about extra resources and staffing, and the retraining of existing staff. We have not had clear answers on that and I wonder whether the hon. Gentleman could elucidate.

Mr. Betts

A response with that sort of detail is probably up to the Minister to give. I understand that he has accepted that, where there is a statutory requirement for a mandatory licensing scheme because that is an extra responsibility on local authorities, the Government are committed to providing for that under their principle of funding for such costs. However, they are not committed to funding any discretionary work that local authorities do on additional schemes.

I know that other hon. Members want to speak, but I have a few more points to raise with the Minister. I understand that he is discussing with local authorities in housing market renewal areas the possibility that they could bring in additional licensing arrangements without having to come to the Secretary of State for approval for them. Perhaps the Minister could give us some information on that.

Local authorities have mentioned the lack of interaction between the legislation and HMOs in terms of class 1 hazards. Has that problem been resolved? As I understand it, where there is a class 1 hazard, a prohibition order can be put on the property. As a result, the property could be excluded from being an HMO, but because such an order does not come into force for 28 days, and because there is a right to appeal during that period, it might be necessary for the local authority to take a decision on licensing the property as an HMO at the same time as it has identified a class 1 hazard. The problem associated with the class 1 hazard would not be resolved for some months, so what would the authority do in the meantime? That issue needs to be addressed.

2.30 pm

Finally, I turn to an important issue raised by Chris Galley, a Sheffield city council officer who is responsible for dealing with these matters. We need to be rigorous in introducing a national licensing scheme and local authorities need to be rigorous in enforcing it. But in addition to ensuring that we catch landlords who act wrongly, we should also be interested in educating them to act in the right way. As well as trying to raise standards through an inspection regime that is designed to catch landlords out, will there be funding for local authorities for the start-up costs of the scheme, so that they can engage with landlords through a proper education programme in an effort to raise standards? I doubt whether the cost of the licence will cover that, although the Minister will correct me if I am wrong. That is another important issue that needs to be addressed.

Matthew Green

This is a huge group of amendments, including 12 Liberal Democrat amendments and two new clauses that deal with seven major issues. In addition, we have added our names to amendment No. 3. I hope that the House will bear with me as I try to go through some of the amendments. I shall try to allow plenty of time for others to get in.

I was mightily relieved to hear that the first two Conservative amendments' are probing ones. I was worried that the Conservatives were harking back to their days as the party of over-regulation. I want to add to the comments of the hon. Member for Sheffield, Attercliffe (Mr. Betts) on amendment No. 3. There is a real case for the Government's having to justify why they are not going for three storeys or five or more occupants, given that they supported that principle fairly extensively in the past. Indeed, the Entec report, which is one of their own commissioned reports, makes it clear that all three-storey houses in multiple occupation are high risk, regardless of occupancy levels. That is the very report on which the Government relied in making the case, and rightly so, for the licensing of HMOs. The same report also identified two-storey bedsits and homes for vulnerable persons as being high risk. A two-storey bedsit could easily contain five or more people, but currently, it would be outside the mandatory system, even though it should be in it.

Amendment No. 3 would in fact cover only 120,000 properties, extending the provision to just 19 per cent. of HMOs. That is not over-regulation but regulation of the most vulnerable and dangerous properties. There is a real case for the Government to answer here. Their argument that they propose to rely on regulation might be satisfactory if we could believe that they would introduce it. However, they have made it clear throughout the process that they will regulate only in respect of three or more storeys and five or more occupants.

Another argument that the Minister has used against the amendment is that local authorities could use the discretionary powers to extend the scheme to areas in which there were particular problems. A Shelter survey of local authority environmental health teams discovered that 13 of the 32 authorities taking part were considering additional licensing to cover a larger number of HMOs in their local area, but worryingly, 10 of the authorities that were not likely to extend licensing provided examples of dangerous and substandard HMOs that fell outside the limits of the mandatory scheme. The discretionary powers still have to be agreed by the Office of the Deputy Prime Minister, but the Minister has not said that the ODPM would agree to local authority applications for such powers—and it is clear that, even if it does agree, many local authorities are not likely to follow the procedure.

I should point out that most of the local authorities that responded to the Shelter survey were Labour run. I wish the Minister would listen to those Labour authorities and councillors. I shall quote the excellent Labour authority of Telford and Wrekin, which is a near neighbour of mine. It has just been capped, but we shall leave that issue to one side for the moment; it is still rated as "excellent". It states:

Size and storeys are not the most important factors but increase the risk. However, that is the principle on which the Government are relying, in respect of a provision that will include very few properties.

Amendment No. 105, which is one of our amendments, seeks to ensure that licensed houses in multiple occupation do not contain hazards that present a threat to the health or safely of occupants. As currently drafted, the Bill allows licensed properties to contain hazards for up to five years after the application for a licence. The amendment would require local authorities to bring such properties up to standard within 12 months. The Conservatives suggested a period of three years, but under our proposal, a local authority could apply for an additional discretionary period if it had particular problems.

The Conservatives said that all local authorities would apply under the terms of such a provision, but not all would. For example, because my own South Shropshire district council is in a rural district—the Minister chided me in Committee because it has not undertaken a voluntary scheme—it has only three properties that fall within the HMO category. It should consider starting such a scheme quickly. Indeed, under our amendment, many local authorities could put such a scheme in place quickly, and those with a particular problem or burden could apply for extra time. So we have shown some flexibility. The amendment does not insist on a period of 12 months; a case can be made if a longer period is needed.

Mr. Hayes

The hon. Gentleman will appreciate our concern about the capacity of local authorities to deal with these matters. He seems to be saying that those local authorities that do not in any case have many HMOs will find it very easy to adopt such a scheme, but the point of such legislation is that it should apply to places where the risk is greatest and the problem is at its height. What worries me is that there are insufficient resources and training for such duties, and we have had no assurance from the Minister that they will be provided.

Matthew Green

I share some of those concerns, but whereas ours is a practical amendment, the Government's provision simply gives everybody too much time. Five years is too long a period in which to allow such properties to be inspected and brought into the regime; indeed, the Conservative amendment reflects that by calling for a period of three years. We have tried to introduce a double-lock system, whereby inspection should take place within 12 months unless a strong case can be made for doing otherwise. These are different ways of approaching the same problem, but it is clear that the Government's proposed regulation is too lax for us to agree to—a fact that must cause Labour Back Benchers concern.

I welcome Government amendment No. 32, which adds sex offences to the list of offences that local authorities will consider in deciding whether a licence applicant is a fit and proper person. This issue was raised in Committee, the Government undertook to look at it and they have rightly tabled an amendment on it. It is clearly unacceptable for a sex offender to be the manager of a property containing numerous potentially vulnerable people.

Amendment No. 107 was designed to force the Government to discuss once again what they meant by the landlord controlling the actions of the tenant, but the Government have tabled their own amendment No. 33, which clarifies the licence holder's obligation, restricting it to "anti-social behaviour" by a tenant or visitor—and only to the extent that the landlord is "reasonably" able to do so. We welcome that, as we highlighted the matter in Committee. I shall spend no more time on amendment No. 107 because it has been largely dealt with by Government amendment No. 33. The Minister will not need to respond, which should save him a little time.

Amendment No. 108 deals with an issue that I attempted to raise in Committee, but we all got a bit lost—perhaps that is the politest way of putting it—so I shall have another go. It is a probing amendment, designed to deal with the problem that the "no rent payable" sanction against unlicensed landlords in clause 72 could result in the eviction of tenants. The stipulation that section 21 of the Housing Act 1998 shall not apply prevents landlords from using the accelerated possession procedure to evict tenants as a result of those sanctions.

The current provisions do not reflect the reality faced by tenants on low incomes with no security of tenure, who are unable to enforce their housing rights without risking eviction. HMOs represent a scarce housing resource and clause 72 could result in existing tenants being made homeless. Tenants with a shorthold tenancy will simply face possession action by their landlord if they attempt to enforce the "no rent payable" provision on unlicensed properties. In practice, many tenants will choose not to risk losing their homes and will simply continue to pay the rent. Those tenants on housing benefit will face withdrawal of their benefit, leaving them unable to pay their rent other than by dipping into what limited savings they might have. They risk homelessness if their landlord brings their shorthold tenancy to an end.

The Select Committee heard from Brent private tenants' rights group, which raised that very point, as the Chairman, the hon. Member for Denton and Reddish (Andrew Bennett), will probably recall. It said:

Shorthold tenants will have no more power to refuse to pay the rent than they have power to exercise any other housing right. For housing benefit claimants, the situation is tragic, because their benefit will cease, and they will lose their homes at the earliest opportunity. Many of these tenants will be in priority need and will have no option but present as homeless to the local authority. The Local Government Association raised similar concerns.

Sarah Teather (Brent, East) (LD)

I endorse my hon. Friend's point. My constituency has the highest number of houses in multiple occupancy anywhere in the country and the work done by the group that my hon. Friend mentioned is second to none in raising awareness of the issue.

Matthew Green

I thank my hon. Friend. She and the group are quite right to bring that matter to the House's attention.

When the Select Committee reported, it concluded:

We are concerned that the 'no rent payable' provisions could have adverse consequences for tenants, potentially leading to their eviction. If the Government plans to retain these provisions, the final version of the Bill must include adequate safeguards so that tenants cannot be evicted because their landlord is unlicensed.

That was clearly recognised by the Select Committee, and the Minister has not dealt satisfactorily with it. It is a relatively technical point and not of great political significance, so I hope that the Minister will have a closer look at the effects of the provision and agree to amendments in the other place.

Our amendments Nos. 122 and 123 deal with issues that were not raised in Committee. They would amend the definition of hostel to include "short-term hostel". We define such a hostel as

a building… which offers temporary accommodation and is occupied wholly or mainly by visitors from outside the UK". It is primarily designed to deal with back-packers' hostels, in which there have been some hideous examples of fires in other parts of the world. We are concerned that the Bill does not cover those hostels. I hope that the Minister will either accept these amendments or present some alternatives. Such a provision could help to deal with the circumstances when people brought into the country by gangmasters have to live in very cramped conditions. I hope that the Government will accept some such amendment on the grounds that it would strengthen their powers in that respect.

2.45 pm

I welcome Government amendment No. 58, which repeats an amendment that I moved in Committee. It would delete the word "woman's" from the term "woman's refuge". I was never certain why the Government were restricting the provision to women's refuges, when there are also battered men. After amendment, the definition of a refuge is a place where people may stay if they have left their homes owing to physical or mental violence or threats of such from their spouse or cohabitee. I am glad to see such a unisex solution. As I said, I was surprised that the Government had been so sexist in their original drafting, which I am sure was just an aberration.

I hope that we will vote on amendment No. 124, which would remove from the Bill the exemption of student halls of residence. It is supported by the National Union of Students, and the Government have not, frankly, argued a strong case why halls of residence should not be licensed. Indeed, in their 1999 consultation, the Government did not propose to exclude halls of residence, on the grounds that there was

some evidence of unacceptable standards in these sectors. That is stated in the Government's own consultation document. Subsequently, however, it has been suggested that public sector bodies, including universities, might be exempted from licensing, because they were under "some degree of control" or could be "expected to behave responsibly". In my opinion, that is not sufficient.

I would like to raise one particular issue that was not debated in Committee. It came to my attention when I visited Manchester students' union. There, the university uses PFI schemes to deliver student halls of residence. They are run by private companies, but appear to be exempt because they are "university halls of residence". Yet they are being run for profit by outside companies. At the very least, I hope that the Minister will ensure that the definition does not exclude those properties from the licensing of HMOs, as would appear to be the case. The universities certainly believe that they are exempt from the legislation.

Andrew Bennett

Let someone else get in to the debate!

Matthew Green

I shall move swiftly on. The Chairman of the Select Committee will note that many amendments have been tabled in my name.

Government amendment No. 67, which deals with student buildings, would have the opposite effect to our amendment No. 124 and would make the position worse.

Our amendment No. 95 is a drafting amendment that accompanies new clause 28, which introduces a general duty of care on all landlords of houses in multiple occupation as defined by clause 213. It is supported by Shelter and the Select Committee. The matter was not raised in the Committee and I hope that the Minister will explain why the Government do not accept it.

Our new clause 25 would introduce the possibility of a code of practice for landlords and I know that some landlord associations support the idea. Having such a code of practice is a means of delivering many of our objectives, including the licensing of HMOs, without overburdening regulation.

Hon. Members will be pleased to hear that our remaining amendments—Nos. 120, 121, 96, 97 and 98—are drafting amendments that accompany new clause 28 and can be dealt with accordingly. I would have liked to explain some of the amendments further, but I have already incurred the wrath of the Select Committee Chairman, who is the victim of the Government's own programme motion as much as anything else. I will leave it there, but I repeat that I want to press amendment No. 124 to a vote.

Alan Simpson (Nottingham, South) (Lab)

I rise to support amendment No. 87, which I intend to press to a vote.

I begin by thanking the Opposition spokesman, the hon. Member for South Holland and The Deepings (Mr. Hayes), for his kind and generous remarks about my work on fuel poverty. That is an issue to which we will return later in the debate. I also want to thank the members of the Standing Committee that considered the Bill—and especially my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts)—for what they said in Committee about the problems encountered in university cities, and the proliferation of properties that are being acquired and turned into HMOs.

I also want to congratulate the Government on grasping the nettle that is a national licensing scheme. However, I want to press the amendment, as the holes in what we have done mean that people will criticise us rather than thank us.

Last night, I attended a public meeting in my constituency. The banner headline on yesterday's edition of theNottingham Evening Post was "Students Drove Me to the Brink of Suicide". A two-page spread inside told how attractive areas of the city were doomed to become the slums of the future. Such was the scale of feeling in the city that the meeting was covered on BBC Radio Nottingham as an outside broadcast.

I did not come across anyone at the meeting who was close to suicide, but many appeared to be close to murder. People expressed a great deal of anger at the way in which their lives, in settled areas and communities, had been turned over because properties that were traditionally family houses had been sucked up and converted into HMOs.

Nottingham is the fastest growing university city in the country. In a couple of years, its student population will total about 55,000. In some of the areas that I represent, half the properties are occupied by students in HMOs. The police complain that those areas are becoming unpoliceable. Schools say that families no longer live there, and that as a result there are no children to make up school roll requirements. Many residents say that they do not have a clue where the landlords of these properties can be found.

Representatives of landlords' associations were on the panel at last night's meeting, but even they said that they had nothing to fear from an inclusive regulatory process that meant that everyone running an HMO should be subject to a licence. However, there are gaps in the way that the Bill defines HMOs, and the landlords at last night's meeting said that those gaps will be an invitation to cowboys.

Good landlords do not present a problem—many of the best have been involved in setting up voluntary agreements, and they stand by those agreements—but cowboys are a problem for everyone. The landlords told the meeting that the proposed definition of HMO will allow the most exploitative of landlords to move from three-storey properties into two-storey properties, and that that is exactly what they will do. They said that those landlords will seek to exploit the definition and make the greatest amount of money for the smallest outlay. Do they care about standards and conditions? Not one jot, we were told, and that is why I urge the House to support a definition that is as inclusive as it needs to be if we are to preclude the Bill becoming a cowboys' charter.

Many residents at the meeting asked exactly the same questions as the local authority was trying to ask. How do we deal with misbehaviour by tenants when there is no constraint on the people who own the property? The Government—rightly, properly and proudly—have introduced a series of measures to tackle the standards of tenants' behaviour, including antisocial behaviour orders. In addition, local authorities have been invited to take a much tougher and intrusive line when it comes to telling council tenants, "Look, if you can't control your kid's behaviour, your tenancy is in jeopardy and you can expect to be evicted."

Do any similar powers exist in respect of the private sector, and HMOs? No. Last night, everyone—including representatives of the police, the local authority, landlords and the universities, and even student bodies—was asking for a level playing field. They want standards of decency and community stability to be part of the framework for housing provision, in which safe neighbourhoods and sustainable communities are delivered, and are not just slogans used by the Government.

We can achieve that if we have the courage to use a definition that covers the majority of properties currently being acquired and converted into HMOs. My definition would accept the three-storey limit but would apply to properties in which four or more people live. Effectively, therefore, it would also cover properties in the two-storey category.

I hope that the House has the courage to vote for the amendment. If it does, landlords, local authorities, students and communities across the country will sing our praises. If we do not have that courage, we will get only brickbats from communities that are divided against each other.

Mr. Harold Best (Leeds, North-West) (Lab)

The account just given by my good and hon. Friend the Member for Nottingham, South (Alan Simpson) mirrors what is going on in my constituency. One difference is that the equivalent of what happened at his public meeting last night happened seven years ago in my area.

The Bill is to be welcomed. I want to place on the record my appreciation of the efforts of my right hon. Friend the Minister for Housing and Planning. Real work has been done that will help to ease the real problems that exist. I want to deal with how the peculiarities of tenancy agreements and property management have been exaggerated by the explosive growth in student numbers. That has happened in densely populated areas that once were homes for traditional families.

Mr. Andy Reed (Loughborough) (Lab/Co-op)

Does my hon. Friend accept that in a place such as Loughborough, a market town with a population of between 55,000 to 60,000, the impact of student numbers—there are between 12,500 and 14,500, depending on how one counts them—is even greater than in large cities? I support amendment No. 87 because the vast majority of properties in towns such as Loughborough are much smaller, being terraced houses with two or three bedrooms. The problem highlighted by my hon. Friend the Member for Nottingham, South (Alan Simpson) is enormous in my area, and has also caused house prices in the town centre to rise way beyond the traditional entry level for first-time buyers.

Mr. Best

I have no difficulty in endorsing that point. The problem is not confined to large cities. Leeds has a population of 750,000 and it has two universities. In addition, people attending Huddersfield university live in what has become the student area. The effect on house prices is equivalent to what my hon. Friend described in his constituency.

I want the Bill to contain a clear definition of the term "storey". How many storeys does a particular house have? For example, a traditional family house with a ground floor, a first floor and an attic used to be considered to have two storeys. Such houses used to cover acres of land in my constituency. However, for practical purposes—and those are what we must be concerned about—those houses have four storeys. That is important: thousands of houses that used to be family homes have been opened up to exploitation, with a catastrophic effect on what we might normally call community structures. For example, it is difficult to get people to vote. We have polls in which the turnout is only 12 per cent., which is unbelievable given that 10 years ago, in the same area, turnout was between 40 and 50 per cent. in local government elections.

The other issue is crime. That area had the highest burglary rate in the UK last year and the year before. It will probably have the highest rate this year and next. The peculiarities that we are legislating for must be understood. I appreciate the Minister's efforts, but this legislative programme must be further advanced as rapidly as possible.

3 pm

Keith Hill

This has been a lively debate, in the course of which many separate issues have been raised. I shall respond first to the issues raised by the hon. Member for Ludlow (Matthew Green) on behalf of the Liberal Democrats, because what I have to say may be of interest to all those who have contributed to the debate.

The hon. Gentleman spoke in support of amendments Nos. 127 and 128, and I have to tell him that the Government have no plans to extend mandatory licensing. However, as I have said before, we intend to review the operation of the licensing system within three years and we will come back to the House if any proposal to amend it finds favour. I hope that that gives the hon. Gentleman some comfort. I also hope that other colleagues will have heard that reassurance.

The hon. Gentleman also discussed other amendments, including new clause 21, with which I shall deal if I have time. However, we will have the opportunity to debate the issues of warm homes and energy efficiency under a later group. I turn, therefore, to those issues on which an intention to divide the House was expressed. Amendment No. 124 was spoken to by the hon. Gentleman. It would remove the exemption from the definition of houses in multiple occupation for those properties managed by universities and occupied by their students, such as halls of residence, in schedule 11.

I genuinely believe that there has been a misunderstanding in some quarters about whether property owned by universities but leased to other bodies for them to manage is also exempt from the definition. That is not the case, and Government amendment No. 60 clarifies that position. We tabled that amendment to make the situation clearer. Properties owned by universities and managed by another company, but of which the university retains control—and continues to receive the rents from the tenants—will be exempt from the HMO definition and, therefore, licensing. Properties that are owned by universities but managed by another organisation, and of which the university does not retain control—for example, because it has granted a long lease—will not be exempt from the HMO definition and may therefore be subject to licensing. That clarifies the position and goes some way towards what the National Union of Students and others would like. However, it does not go far enough for them, as they would like all properties owned by universities but managed by another organisation to come within the HMO definition.

The Government are aware of the concerns expressed by the National Union of Students about the conditions in some halls of residence. We are not, however, convinced that licensing or management regulations would be a solution to those problems. For a start, we are not aware that the problems are on the scale alleged. I have seen examples and they appeared mainly to concern the physical condition of the property. As I said in Committee, those issues can be addressed through part 1 of the Bill, which covers the health and safety rating system—and could not in any case be dealt with through licensing. Of course, I appreciate that there will be cases of management failure, but the Government expect universities and other higher education establishments to regard the health, safety and welfare of their students as of paramount importance, equally in the lecture halls and in the residential accommodation they provide.

Mr. Hayes

If the Minister had accepted our suggestion of an ombudsman, perhaps some of the arguments for bringing all student accommodation into the net would have evaporated. The Minister said that there were some problems, although they were not general. Why not have an ombudsman to whom people could appeal in those exceptional cases?

Keith Hill

I hope to respond to the remarks made by the hon. Gentleman on the issue of a student ombudsman and, if he will permit me, I shall complete my line of thinking in an attempt to persuade the Liberal Democrats not to divide the House.

If, in individual cases, there are grounds for complaint about poor management, any complaints should be made to the university authorities, and the Government anticipate that they will be dealt with promptly and effectively. However, as there is little hard evidence of widespread poor management of university halls of residence, the Government are not persuaded that there is a sufficiently strong case for bringing university-managed accommodation in England and Wales within the definition of HMOs, other than for the purpose of part 1 of the Bill.

I come now to amendments Nos. 3 and 87 and the debate on studentification, which was less defensive than concerned. A divergence of opinion was evident between hon. Members about when the requirement for mandatory licensing should apply. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) will know that we debated extensively in Committee the Government's proposed scope for mandatory licensing of HMOs—those of three storeys or more and occupied by five or more persons—and the reasons for that formulation. Amendment No. 3, tabled by my hon. Friend, would require a local authority to licence all HMOs of three storeys or more, or any HMO occupied by five persons or more. By contrast, my hon. Friend the Member for Nottingham, South (Alan Simpson) tabled amendment No. 87, which seeks mandatory licensing of HMOs of three storeys or more and occupied by four or more persons.

My hon. Friend the Member for Sheffield, Attercliffe raised many highly detailed questions, and I know that he will forgive me if I say that this is not the time or place to respond in similar detail. However, I undertake to write to him in response to the issues that he raised. His starting question was whether the current mandatory regime was a starting point for a mandatory licensing regime. As I have said before, that is not the Government's intention. We have accepted the principle of mandatory licensing, but we have done so on the basis of a clear and pragmatic justification—the issue of vulnerability to fire risk.

Dr. Desmond Turner (Brighton, Kemptown) (Lab)

Will my right hon. Friend give way?

Keith Hill

I shall give way to my hon. Friend in a second when I have completed this thought. The Government have borne in mind two considerations on the issue of mandatory licensing— the burden on local authorities, which any licensing regime would impose, and our wish to protect and encourage the private rented sector, which I also mentioned in Committee. Of course, we shall bear down on abusive landlords, but we recognise that on the whole the sector plays an extremely important role in the housing industry, both by giving people a first step on the housing ladder and in relation to labour mobility. The sector is also rather vulnerable—the average landlord owns only three properties. It has been characterised as a cottage industry, so we are reluctant to impose excessive burdens on it. We want to encourage it rather than burden it.

I apologise for taking so long to make my point. I shall now give way to my hon. Friend the Member for Brighton, Kemptown (Dr. Turner).

Dr. Turner

I want to refer to amendments Nos. 1 and 2, which are grouped with amendment No. 127. They would restore a principle that the Government had previously agreed in respect of my private Member's Bill, and would deal with licensing, energy efficiency and energy conservation requirements for HMOs, given that such properties are subject to some of the worst energy conservation conditions and the greatest fuel poverty, and house some of the poorest and most vulnerable tenants. That principle was agreed by the Government two years ago, so can my right hon. Friend explain why it is no longer part of the HMO licensing requirements? Will he consider reinstating it?

Keith Hill

We have already discussed the new housing health and safety rating system, which, as my hon. Friend knows, would allow cold and damp to be taken into consideration in the orders and requirements that environmental health officers might make. We shall by no means exclude issues such as warmth and thermal energy from our approach to the condition of housing stock and the need for action. My hon. Friend has considerable expertise in such matters, so he, better than most, knows that we are committed, through the warm front programme, to extensive improvement in providing warm housing stock in the private sector. However, we are certainly not in a position at this stage to make as a requirement the sort of measures that he recommended in his earlier proposals.

I want to return to some of the issues raised by my hon. Friend the Member for Sheffield, Attercliffe and I shall then respond to the remarks made by my hon. Friend the Member for Nottingham, South. I listened very carefully to my hon. Friend the Member for Sheffield, Attercliffe to ascertain the justification for his proposal to extend the mandatory licensing regime, and it was on the basis of nuisance. As he knows, the Government are clear about their criterion for mandatory licensing: it is based on a clear assessment of fire risk. However, I remain to be convinced that the properties that would be included in my hon. Friend's extended definition of mandatory licensing for HMOs would intrinsically be sources of nuisance or would have the potential to create nuisance.

In response both to my hon. Friend and to my hon. Friend the Member for Nottingham, South, who raised a different concern—the studentification phenomenon—I point out that the Government are providing for an additional licensing regime, as all colleagues are aware, and where there is evidence of proven wrongdoing and proven risk there is the possibility of extending the licensing regime beyond what is caught by the current mandatory proposals. I hope to speak about that shortly.

Mr. Reed

Does my right hon. Friend understand the frustration in places such as Loughborough, where 98 per cent. of properties would not fall within the Government's current definition? As he knows from his many visits to the wonderful town of Loughborough, the town centre, especially the Storer road area, has changed dramatically, so a much narrower definition is required. There is nuisance, and if he would like me to join him in a walk around the Storer road area to see the consequences of not having a licensing scheme I should be more than willing to do so.

3.15 pm

Keith Hill

I have not had the opportunity to discuss these matters with my hon. Friend, but I have certainly had ample opportunities, both in formal and informal contexts, to discuss them with my hon. Friends the Members for Leeds, North-West (Mr. Best) and for Nottingham, South. I have told them repeatedly that the Government cannot, in the Bill, legislate for where people live. We are legislating on the physical condition and management of housing stock. It is not invariably the case that students live in housing of poor physical condition. Indeed, it is frequently asserted that the studentification of abandoned city centre areas can actually lift the quality of the stock. Similarly, it is not the case that properties in student areas are, without exception, badly managed.

I do not for one moment deny the consequences of the concentration of student populations in terms of local services. There are certainly pressures on local schools and there may even be pressures on services such as post office facilities, but those issues do not relate directly either to the quality of the housing stock or the prevailing management conditions of that stock. I repeat that where a case can be made that there is systemic poor management of properties in localities, the additional licensing regime for which the Bill provides will respond to those situations.

Lynne Jones

I thank my right hon. Friend for giving way, but he somewhat misleads the House by giving the impression that studentification, as he calls it, can lead to an increase in the amenities or the quality of the housing stock in an area. Certainly, most of my hon. Friends who have experience of the problem in their constituencies would say that the houses converted to student accommodation are, by and large, former owner-occupied properties in good condition and that studentification leads to a great deterioration in the area and in the quality of life there.

Keith Hill

I do not for a moment challenge my hon. Friend's observation about the quality of life, but I simply say that the argument goes both ways on whether the acquisition of properties for the purpose of accommodating students leads automatically to a decline in the quality of the physical condition of those properties. The argument goes both ways, and there are persuasive arguments on both sides.

I need rapidly to move on to explain and offer some reassurance, I very much hope, to the House about the possibilities for interventions in the licensing domain under this legislation. As I explained in Committee, the Government have adopted three-storey HMOs as the starting point for mandatory licensing because those properties pose the greatest risk of causing injury or death from fire. People living in a two-storey HMO are about four times less likely to die as a result of a fire than those living in a three-storey building.

As I also said, the number of occupants is a factor to be considered. Clearly, the greater the numbers of storeys in an HMO, the more people are likely to live in the property, so the risk of fire increases. Of course, many HMOs are less than three storeys and house five people or more, but those people are far less vulnerable to injury from fire than those in three-storey houses. I also appreciate that some three-storey HMOs are occupied by four people, but it is far more likely that three-storey buildings will house more people than that number, and I reiterate that the greater the number of persons, the higher the risk of fire.

We have estimated that mandatory licensing will apply to about 120,000 properties in England, housing five or more people. A line must be drawn somewhere on where HMO mandatory licensing applies. The Government believe that we have got this right at properties with three storeys and above that are occupied by five or more people, forming at least two households. However, local authorities must have, and we are giving them, powers to license problematic categories of HMOs in their areas. If a local authority establishes that there are management problems with all HMOs of, for example, three storeys or more occupied by four people or all HMOs occupied by five people that justify licensing, we are giving the local authority the tools to do so with the additional licensing regime.

I very much hope that that serves to reassure colleagues who come to the House with quite desperate concerns about the pressures arising from a concentration of student numbers.

It being two and a half hours after the commencement of proceedings on the programme motion,MADAM DEPUTY SPEAKERput the Question already proposed from the Chair, pursuant to Order [this day].

Amendment negatived.

MADAM DEPUTY SPEAKERthen proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.