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Mr. Bacon: My hon. Friend is on the subject of student accommodation and UNITE. Has he read the student living report published by UNITE, which described a level of student accommodation of which many students, including me when I was one, could only dream? Does he agree that policy should be directed towards encouraging such companies, which provide high quality accommodation at affordable prices, rather than reducing supply?

Mr. Baron: Yes, I have seen that report. It reinforces the point that we have to allow operators as much freedom as possible, especially in terms of the provision of student accommodation. We must not tie them up in red tape and costs, as we must ensure a decent supply of student accommodation. That has not been the case in the Scottish experience and tenants, especially students, have been made to suffer.

It may be anathema to some Labour Members, but I believe that if we care about driving up standards, the best way to do so is to encourage healthy competition. The more choice tenants have, the more they will gravitate to better accommodation and the more landlords will be prepared to invest. Landlords will not invest if there is too much interference from local authorities as a result of widespread registration; they will simply invest in other forms of property—commercial property, for example—or leave the market altogether. Meanwhile, those landlords who do remain will simply pass on registration costs to tenants, who will have little choice but to pay as a diminishing amount of accommodation will be available to them. In the end, it is the tenants who will suffer. The landlords have a choice as they can leave the market, but tenants need accommodation.

12.45 pm

I shall make three or four more points about widening the definition of HMOs, the first of which relates to planning. The extension of the definition of HMOs to include properties with more than two families could sweep into the definition nearly all shared houses. Such a definition would result in recategorisation for planning purposes. If a property is categorised for planning purposes as an HMO, there

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is no assurance that the planning authority in question will give the landlord the ability to recategorise for single occupancy when the property is sold.

In several incidents recently, local authorities have tried to restrict the power and use it to the detriment of the local housing market. For example, in Hammersmith and Fulham and in Camden, reports state that local authorities, worried about the availability of—

The Chairman: Order. The hon. Gentleman's remarks are leading towards amendments Nos. 45 and 46, which will be discussed later. I ask him to return to the amendment.

Mr. Baron: Thank you, Mr. Benton. I shall do so.

Hon. Members have all spoken in favour of the purpose of the Bill, which is ostensibly to encourage energy conservation, and includes targets to ensure that that is achieved. However, I question whether part 3, and the licensing of HMOs, will make a significant contribution to achieving that goal. HMOs represent about 40 per cent. of the total private rented sector and within HMOs, 25 per cent. represent shared housing. It must be assumed that local authorities are aware of the location of those HMOs. Therefore, only a proportion of them will not meet the energy-saving targets in full. Although the proposal may be of some help, it is superfluous to achieving the aim of parts 1 and 2: the eradication of fuel poverty. It is not quite an afterthought but it is not essential to the success of the Bill, and I ask the Committee to think about it.

I am worried about the definition of an HMO in clause 5, although I am conscious that new clause 7 brings in a modified definition. What is a family, nowadays? What will be prescribed relationships? A family is not an easy concept to define and the courts will be kept busy determining the definition. For example, could a family include non-marital relationships? Could it include homosexual relationships, or monogamous relationships for both heterosexual and homosexual groups? Are prescribed relationships to be based on friendship or on sexual relationships? Those questions must be asked or there will be confusion in the implementation of the Bill, which we are keen to support. Part 3 threatens the clarification of what is applicable.

We should examine local authorities' records. We are enabling them to have a much greater say in the running of HMOs, particularly from an energy and fuel point of view, but greater involvement in the sector is not necessarily a good thing. Indeed, local authorities' record of managing residential properties varies from area to area, and some can be very bad. Without wishing to name examples—although I have them here, if any hon. Member is interested to find out after Committee—more than half of council homes fail to meet government standards in some local authority areas. In some instances, as many as 5,000 homes are described as unfit for human habitation. If those homes were in the private sector they would be closed down, and yet we are asking those authorities to start ruling on the condition of HMOs, which will leave room for all sorts of discrepancies. The latest results from the Government's survey of English housing

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show that the highest levels of customer satisfaction are among, believe it or not, private tenants. The report by the Department for Transport, Local Government and the Regions indicates that nearly twice the proportion of council tenants say that they are dissatisfied with their landlords than those in the private sector—about 20 per cent. compared with roughly 10 per cent.

In moving the amendment, I am suggesting that we revert to the old definition, which has broadly worked, and allow the courts to decide whether there is a discrepancy in determining what is an HMO. We should allow the sector to expand as it has done in recent years, as it helps the economy and government policies on education and, above all, gives tenants greater choice. We have seen what can happen when a market shrinks because of over-regulation, as happened recently in Scotland, or planning issues, as we have seen in Hammersmith and Fulham, where the number of HMOs has declined markedly. There are difficulties with the proposed new definition of an HMO in both new clause 7 and the Bill. How does one define a family or a prescribed relationship? Although local authority involvement in the private rented sector may be good in some cases, it is not necessarily so and could cause a great deal of irritation to many landlords for no good reason.

Finally, as I have said on many occasions, I wholeheartedly support parts 1 and 2 in trying to eradicate fuel poverty. However, part 3 is largely superfluous to that aim. If we want to drive up standards in the private rented sector, healthy competition should have a major part to play. Part 3 would negate healthy competition, and on that basis I commend the amendment to the Committee.

Mr. David Drew (Stroud): I shall raise mainly technical questions for the Minister, but I must respond to the comments of the hon. Member for Billericay (Mr. Baron), which I generally support. He has probably had some of the same briefings as me. My starting point is the misconception that, with HMOs, we are always talking about older properties that are in need of repair, which is why energy conservation and the need to address fuel poverty are so important.

New and corporate landlords—UNITE is an obvious example—are entering the area of accommodation for students and people who work in the national health service. I am sure that we can all think of new blocks being built in our own areas that will take care of people on a multiple-occupancy basis, but which take anything but the usual form of such units of accommodation.

There is a difficulty inasmuch as clauses 5 and 6 run together, and we cannot sort out a definition of houses in multiple occupation without talking about registration and the fees that will be charged. However, I will restrict my remarks to clause 5. My right hon. Friend the Minister will move new clause 7, which I hope will clarify some of the issues. There are

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good ideas in clauses 5 and 6, and I hope that if I ask some technical questions, the Minister can help me through this. They are mainly about what is currently in the Bill. I am a little confused about whether we will deal with self-contained flats through the new clause, and if so where they stand with the definition of HMOs.

Much of the accommodation to which I am referring and the hon. Member for Billericay had recourse to consider is university halls of residence and accommodation for health service employees. Where do they stand with regard to the new clause? That matters because the definition of HMOs will have a significant impact on the registration of such buildings and units within buildings and, more particularly, the fee structure that will apply.

I agree that there are problems, and there are precedents on which we can call. Scotland provides the obvious one. There seems to be a differential between what different local authorities in Scotland have done on charging fees. I am aware that that relates to clause 6, but the definition is so important that if we can get it right, we can perhaps help to ensure that the registration process and the fee that follows are also correct.

The final issue is how we treat the different elements of these newer units of accommodation. It would be helpful if my right hon. Friend would clarify whether private sector operators who work in partnership with public sector institutions will be treated in the same way. If a private operator provides accommodation on behalf of a university, there should be parity in the treatment of the registration and the fee structure that applies. It would be unfair if the university charged one fee for its own accommodation, but the private deliverer of similar accommodation had a different fee structure.

The main point is that we must get this legislation right. It is about encouraging new people into the sector as well as dealing with what already exists. Although in certain respects I disagree with the hon. Member for Billericay, the measure is important. HMOs are an important part of the way in which we consider fuel poverty and its eradication.

Mr. Bacon: I support the amendment tabled by my hon. Friend the Member for Billericay, although not because amendments Nos. 45 and 46, which we shall reach later, stand in my name. In light of the earlier exchange between the Minister and the hon. Member for Brighton, Kemptown, however, I am tempted to say, ''I'll support yours if you support mine.'' I offer support because I agree with much of what my hon. Friend said about the existing position and defining a single household. That has probably been made over-complex. Indeed, if we consider the new clause—

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o'clock.

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The following Members attended the Committee:
Benton, Mr. Joe (Chairman)
Bacon, Mr.
Baron, Mr.
Best, Mr.
Cable, Dr.
Chapman, Sir Sydney
Drew, Mr.
Edwards, Mr.

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Griffiths, Jane
Lepper, Mr.
Meacher, Mr.
Rooney, Mr.
Sayeed, Mr.
Simpson, Mr. Alan
Turner, Dr. Desmond

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