Public Health (Coronavirus) (Protection from Eviction and Taking Control of Goods) (England) Regulations 2020

Motion to Approve

Moved by

That the Regulations laid before the House on 16 November be approved.

My Lords, this instrument prevents enforcement agents—bailiffs—from entering residential premises in England to execute a writ or warrant of possession until 11 January, except in the most serious circumstances. The purpose of this measure is to protect public health by preventing people from being evicted from their homes by enforcement agents at a time when the risk of virus transmission is high and when local authorities and NHS services are typically under additional strain over the Christmas period.

The instrument builds on the Government’s previous guidance on enforcement activity during the national lockdown in England, introduced by the national health protection regulations, and the intention for the “winter pause” on evictions that was announced by the Government on 10 September. It also prevents enforcement agents from entering residential properties in order to take control of goods during the national lockdown, which ended on 2 December. This instrument applies to enforcement action in England.

The Government have taken unprecedented action to ensure that renters were protected from eviction at the height of the coronavirus pandemic, including providing significant financial support and agreeing with the courts to use powers in relation to court procedure to stay possession proceedings for a total of six months, until 20 September. However, that stay could only be temporary; the civil justice system and the rules that underpin it must be accessible, fair and efficient for tenants and landlords alike.

Ahead of the end of the stay on possession cases in the courts, the Government put in place a number of measures to carefully manage the resumption of cases so that the courts were not overwhelmed and could make decisions so that the most vulnerable could get the help and support that they need and, in particular, so that tenants could have access to legal advice and support.

My Lords, I refer to my entry in the register of interests. I thank my noble friend for her clear explanation and for all that the Government have done during Covid, particularly at the MHCLG, in inspiring and supporting magnificent voluntary effort during lockdown 1 and giving help to many small businesses. It was Small Business Saturday that reminded us that we can help by buying Christmas gifts from such businesses. However, there is a problem for landlords which this measure highlights. Few landlords are property tycoons. Most are small businesses or individuals letting out a property that they do not need for a while or have bought as part of saving for a pension.

I have spoken to the NRLA, which explained that the provisions mean that landlords cannot repossess properties even where tenants are up to almost 18 months behind with their rents. They actually reward those who were behindhand before the pandemic and have continued not to pay, knowing that landlords cannot remove them. Landlords are being required to subsidise such unsatisfactory tenants—an extraordinary move by a Conservative Government.

On timing, I note that we are debating this measure almost three weeks after it took effect. It runs out on 11 January and in my opinion should not be extended. Court and other processes should start to return to normal—with my thanks to the Government for the advances on vaccines, which have lifted everyone’s spirits this month.

On cost benefit, this is yet another Covid SI using the emergency excuse not to do an estimate of the impact on business. This exemption for measures lasting less than 12 months is frankly a scandal. We know from the impact assessment on the fire safety order that there are millions of tenanted dwellings. Therefore, even the process of informing landlords of these new rules and understanding them will cost millions. Add rent arrears, which cost landlords between £328 million and £437 million between March and September, according to work done for the NRLA. Then estimate the time needed to keep chasing tenants; you can see that we are talking about material sums, even if not all are caused by this measure.

I really liked that contribution from the noble Baroness, and I was grateful to hear the careful way in which the Government are approaching this issue. I must declare two things. First—it is in the register—I run RORA, the Ride Out Recession Alliance, which brings businesses, local authorities, tenant associations and landlords together to try to weather our way through what could be a massive increase in homelessness. Instead of me working with 7,000 to 9,000 people a year, I might end up working with 200,000; I assure you that I do not want that. I am trying to avoid it by building an alliance of interests that sometimes clash, but must have a meeting place. Secondly, I was one of the worst tenants you ever saw. As soon as I got my first tenancy, I did all sorts of terrible things like not paying the rent and having loads of people over for parties. I hope that the landlords who used to know me know that, now that I am grown up, I am not defending the kind of bad behaviour of my 20s and teens.

Let us try and separate those people who have fallen into Covid poverty. The Prime Minister said in the early stages that he would not allow people to fall into long-term homelessness through evictions because of Covid-19. We must ensure that this Government—whatever complexion they are, whatever they say—prevent people falling into Covid-related eviction.

We need to put our thinking cap on and realise that anyone evicted falls into a situation where the cost can double, treble and even quadruple for the taxpayer. Therefore, I am looking to get absolute value for money for the taxpayer. The best value for money is for us to keep the tenant or mortgagee in the home. We must recognise at the same time that people are landlords; if we did not have any landlords, we would have lots more homelessness. If we did not have social landlords, who were also hit by Covid-19, we would have much more homelessness. If we did not have banks offering mortgages, we would have more homelessness. This must be a convergence of energies; it has to be clear. We must stand by our commitment not to allow one person to fall into Covid-related eviction and homelessness.

My Lords, I draw the attention of the House to my interests as set out in the register. It is a great pleasure to follow the noble Lord, Lord Bird, who has great experience and knowledge in this area, as is clear. I thank my noble friend Lady Scott for setting out the regulations with such lucidity. As we celebrate the great news of the first vaccinations today—it really is great news—we still have some time to navigate difficulties. I understand the need for these regulations over the midwinter period. Eviction is a dreadful thing and in midwinter it is worse, with the added difficulties of accessing services when pressures are severe. NHS pressures are considerable at this time and I see the need to avoid placing additional pressures on our health service and local authorities.

Additionally, these regulations prevent the use of the “taking control of goods” procedure while the health protection regulations are in force. This validates an instruction given out by the Lord Chancellor in England. As my noble friend has set out, there are some limited, sensible exceptions to the prohibition of evictions: trespassers, where there is domestic abuse and so on. I certainly support that as well.

Therefore, I support these regulations, but I want to voice a general concern, in terms similar to my noble friend Lady Neville-Rolfe. The regulations do not do anything to reduce or abate long-term debts from accruing; in many ways, they just postpone the problem and potentially add to mental health pressures on poor tenants who see these debts continuing to mount up.

Many landlords have incurred substantial losses during the pandemic. Most landlords have a single property —they are not property tycoons—and are often not able to access support packages that the Government have put together, so they are severely disadvantaged, too. Some landlords have seen their income—for some, it is their pension—fall or be wiped out altogether. That is not sustainable in the long term.

My Lords, I declare my position as vice-chair of the Local Government Association. I begin by agreeing with the noble Baroness, Lady Neville-Rolfe, regarding Small Business Saturday and the importance of doing whatever we can to support small independent businesses. In her speech, she referred to unsatisfactory tenants who are not paying the rent, but some of those people will be one and the same. Many small business owners and self-employed people have, in Covid-related circumstances, found themselves in situations where they are unable to pay the rent through no fault of their own. As the Minister set out in her introduction, what we are talking about here is a “winter pause”.

Of course, it is welcome that people will not be thrown out on to the streets until, effectively, 25 January, but, eventually, many of these people who face eviction now are still going to be facing eviction in January. Based on the campaigning group Shelter’s figures, there were already 442,000 adults in rent arrears in July—double the figure from last year. Many of those people will eventually have to go to their local council seeking emergency accommodation. In 2019-20, local authorities spent £1.2 billion on temporary housing for homeless people.

Looking beyond 25 January, my question to the Minister is: what will the Government do to ensure both that people are not evicted and, for those who are inevitably evicted, that local authorities can afford to pay for their accommodation? We should think about where that money is going because, last year, 87% of it went to private landlords. This is taking public money and pumping it into private hands.

The Huffington Post today notes that a company is advertising that home owners can get

“‘exceptional returns’ by turning their properties into HMOs (houses of multiple occupation) and hostels.”

My Lords, I refer the House to my relevant registered interests as a vice-president of the Local Government Association, chair of the Heart of Medway housing association and a non-executive director at MHS Homes. Furthermore, my wife, the noble Baroness, Lady Kennedy of Cradley, is director of Generation Rent, which is the voice of private tenants.

I support the regulations as far as they go, but they are not the solution to the problem. They merely delay, rather than prevent, evictions of tenants. Landlords can serve an eviction notice and the courts remain open, but no possession orders can be enforced until 25 January, as the noble Baroness, Lady Scott of Bybrook, said. However, that still leaves people in the terrifying situation of being made homeless in the new year, possibly with no job or with the risk of losing their job.

The Government have it in their power to support both landlords and tenants while at the same time avoiding the disaster of homelessness for people in what we all know will be the worse economic conditions in the new year. They can also avoid the huge cost to the country of people being made homeless. I have carefully read the briefing note from the National Residential Landlords Association and I agree with it on the need to increase local housing allowance to cover the average rent in any given area, not just the bottom 30% of average rents. There are literally hundreds of constituencies where the local housing allowance does not cover the average rent paid in that constituency. That is a huge problem and there are no winners, neither landlords nor tenants—everyone a loser. For me, this seems an obvious thing that the Government need to do.

I also agree with the call to boost the discretionary housing payment available to local authorities, along with suspending the shared accommodation rate for 12 months, enabling those under 35 to claim benefits for living alone. However, I am not convinced that interest-free loans to cover rent are the solution. I can see the advantage for landlords, but whatever solution we come up with must benefit both landlords and tenants to get us through this crisis. Tenants being saddled with more debt does not seem to me to be the way forward. The solution must be a combination of the measures that I have outlined, which have large support across the housing sector. Could the noble Baroness, Lady Scott of Bybrook, tell the House what protections will be made available to tenants living under tier 2 and tier 3 restrictions from 11 January, when the regulations expire?

My Lords, I support these regulations as far as they go. Clearly, they are necessary. However, that does not mean that there will not be many children who are spending this Christmas in the knowledge that next year they will face homelessness. Too many people in this country have seen their income drop during the Covid outbreak and this has impacted their ability to pay their rent. Therefore, it is quite right that some protection from eviction for rent arrears has been provided.

I am grateful to the noble Baroness, Lady Neville-Rolfe, for pointing out that, as others have since echoed, most landlords are to some extent dependent on the income that they get from these properties, so they, too, have been suffering. Therefore, it must make sense for the Government not just to delay eviction but to make sure that both sides of this equation are helped and to subsidise adequate rental payment for landlords as far as they can.

Like so much to do with Covid, this issue merely highlights deficiencies which had already been prevalent in our society. Many people previously were employed but living on the brink, with no funds to fall back on in the event of any emergency. We saw that drive people to food banks immediately Covid hit. By the end of June there were 98,300 households in temporary accommodation because they had been unable to pay their rent before Covid struck. That is an appalling indictment of a modern society. We know the sort of conditions many of these people are being forced to live in, with children sharing rooms and trying to live, do exercise and do homework in appalling accommodation.

The noble Baroness, Lady Bennett, pointed out that public money is going into private hands to help provide roofs for these people, and that cannot be sensible. What this demonstrates is the need for more social housing. There is too little of it. In the London borough of Lewisham alone, there are 10,000 households on the council house waiting list, with little hope for many of them of ever reaching the top and finding themselves in a property.

The noble Baroness just raised a very interesting question.

Talk of eviction makes me feel uneasy. In the 1970s, 50 years ago, I ran, on a voluntary basis, an anti-eviction group in the Rossendale and Darwen and Blackburn areas of Lancashire. Our national campaign was a major contributor to the repeal of the Small Tenements Recovery Act 1838, a law that gave local councils almost unlimited powers to evict tenants. I learned an important lesson in that battle: backlogged arrears are problematic in themselves, and when you roll up arrears in packaged payments by retained tenants, in particular where tenants have a previously unblemished rental record, you more often than not aggravate the tenant-landlord relationship.

The best policy for landlords, if they are confident that the tenant’s difficulties are in the past and they are unsupported by benefits is, where possible, to write off the arrears and maintain a healthy tenancy. Some landlords, when the tenant has not been in receipt of sufficient benefit to cover the full rent, take a mature view and adopt this approach, despite the cost. They know that there is nothing worse than a resentful tenant. However, some landlords, insensitive to the suffering, do not give a damn, and that is why I am worried about rolled-up arrears post 11 January.

We are told that last year one-quarter of all tenancies nationally were in arrears. So there will be a lot more. For many tenants, the pandemic will have been a nightmare, with cases of acute depression, debt, domestic abuse, alcoholism and perhaps even loss of life—we do not know at this stage. So how can we respond? Yes, we can extend the ban in tier 2 and 3 areas. We can pass the promised rent reform Bill, which we have been briefed on by a number of people from outside. But we could also use the tax system to incentivise a landlord’s ability to write off pandemic-induced, rolled-up rent arrears. A system could be introduced similar to that for the self-employed. HMRC could look at the last three-year accounting period and then give partial grant aid, built on a percentage of the previous three years’ taxable profits base. We can be sure that it would lead to some very interesting conversations between tenants and landlords and, in particular, those landlords who are not too honest with the taxman.