Group 10: Fixed-penalty notices (Amendments 43, 44)

Part of the debate – in the Senedd at 5:58 pm on 19 March 2019.

Alert me about debates like this

Photo of David Melding David Melding Conservative 5:58, 19 March 2019

Thank you, Deputy Presiding Officer. I'm happy to move both of my amendments in this group, namely 43 and 44. Amendment 44 stems from the same one that I brought forward at Stage 2 and builds on the amendments that the Government has already put in place, increasing the fixed-penalty notice from £500 to £1,000. My version increases the fixed-penalty notice from £1,000 to £2,000. I do welcome the fact that the Minister has moved somewhat with regard to a policy here, but I think that there was clear evidence from the sector that the proposed levels of fixed penalties were not high enough. It was really quite comprehensive in our evidence. It was surprising, indeed, that there was such unanimity from tenants and landlords and agents. I don't think £1,000 quite does it, however, and, in that regard, we need a more robust form of deterrent in this legislation so that rogue landlords and letting agents are truly deterred from any inappropriate action and it sends a very important signal.

The Minister did say that there would be provision to review the level of the fixed penalty and increase it in regulations. Indeed, I've just referred to that earlier. But I think that the initial fixed penalty has to be set at a level that is clearly a deterrent. Whilst, as I said, the Minister has shifted—let's remember £500 was set as the administrative cost to the local authority, and the model there was just to recover those costs. I do think that the extra £500 that is now proposed by the Government at least acknowledges there should be a clear element of deterrence beyond administrative costs, but I don't think that it's still enough to move to £1,000. So £2,000, I think, sends a stronger signal, and I hope that Members will agree. 

I do agree with what the Minister says that the ultimate deterrent is the potential loss of a licence from Rent Smart Wales. That, as far as the landlord is concerned, is a very powerful sanction. Because of that, I thought setting the fixed penalty at a higher rate still, say £5,000 as in England, wouldn't quite strike the right balance, because we should acknowledge the importance of Rent Smart Wales in Wales in the way we determine these matters. I'm pleased to put on record that I think it's a system that is now operating in practice with greater and greater efficiency, and it's an important part of our model to strengthen the rental sector in Wales and provide a fairer market. 

My second amendment, amendment 44, seeks to ensure that prohibited payments are recovered at the same point that a fixed-penalty notice is paid. This is, for me, central to this legislation. The context behind this Bill is that people were being ripped off with unjustifiable fees, making their housing costs more unaffordable than they already were. For most people, the least they would expect from this legislation would be for us to make those unscrupulous fees illegal and to put in place a repayment system that fixes the immediate issue and deters the landlord from undertaking such activity again in the future. As the Bill currently stands, immediate repayment does not exist. The court may order the fees to be repaid where there is a successful prosecution, but where there is no prosecution, if a prohibited fee is not repaid by the landlord or letting agent, a tenant will have to pursue the payment through the civil courts. There is consensus—I would say a very strong, overwhelming consensus—amongst all stakeholders that any prohibited fee should be repaid automatically, and there's a sense here that the Bill needs to do what it says on the tin. At the moment, it doesn't. Citizens Advice argued that—and I quote—we need, 

'An accessible method of redress', and that the courts are not—and again I quote them—

'necessarily the place for them.'

It is important that tenants should be able to recover fees that have been charged illegally in the easiest possible way. Otherwise, tenants will not see the full benefits of this legislation, which, again, I think, is highly perverse. We therefore want to see the Bill amended so that there is a requirement for any prohibited payment to be repaid when a fixed-penalty notice is paid. I'm not convinced by the evidence from the Minister and her officials on this issue. Expecting tenants to go through a legal process to recover fees that were charged illegally is unreasonable and unfair. It is a significant omission within this legislation, and I hope the Assembly will agree to rectify this lacuna. 

In the committee, we noted with interest section 10 of the Tenant Fees Bill in England provides the enforcement authority with the power to require repayment of the prohibited fee. Without a similar amendment being introduced here, tenants in Wales will be at a significant disadvantage compared to tenants in England, and I don't think that is acceptable. We should aim for best practice. Please support our amendments.