Official Report: Monday 07 March 2022


The Assembly met at 12:00 pm (Mr Speaker in the Chair).
Members observed two minutes' silence.

Executive Committee Business

Mr Speaker: The Criminal Justice (Committal Reform) Bill received Royal Assent on 7 March 2022. It will be known as the Criminal Justice (Committal Reform) Act and is chapter 4.

Assembly Business

2 March 2022

Mr Speaker: The first item of business in the Order Paper is the consideration of Executive business not concluded on Wednesday 2 March. However, all business was disposed of last week, so we will move on.

Mr O'Dowd: I beg to move

That Standing Orders 10(2) to 10(4) be suspended for 7 March 2022.

Mr Speaker: Before we proceed to the Question, I remind Members that the motion requires cross-community support.

Question put and agreed to.

Resolved (with cross-community support):

That Standing Orders 10(2) to 10(4) be suspended for 7 March 2022.

Executive Committee Business

Mr Speaker: I call the Minister of Finance, Conor Murphy, to move the Further Consideration Stage of the Bill.

Moved. — [Mr C Murphy (The Minister of Finance).]

Mr Speaker: As no amendments have been tabled, there is no opportunity to discuss the Budget Bill today. Members will, of course, be able to have a full debate at Final Stage, which is scheduled for tomorrow, Tuesday 8 March. The Further Consideration Stage of the Budget Bill is, therefore, concluded. The Bill stands referred to the Speaker.

Members, take your ease for a moment, please.

That the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations (Northern Ireland) 2021 be approved.

Mr Speaker: The Business Committee has agreed that there should be no time limit on this debate.

Ms Hargey: The statutory rule that the House is considering will introduce requirements for trustees of certain occupational pension schemes to ensure that there is effective governance of those schemes with respect to the effects of climate change. It also introduces related reporting and publication requirements for trustees of such schemes and confers compliance powers on the Pensions Regulator. The requirements apply to trustees of schemes on a phased basis from 1 October 2021 according to the value of relevant scheme assets or whether the scheme has been authorised for certain purposes.

The regulations aim to ensure that trustees embed effective climate change risk governance activities and report publicly on how they did that. That includes requirements on governance, strategy and risk management, requirements to select and calculate climate-related metrics and requirements for trustees to set and measure performance against targets, referred to as the "governance etc. requirements". The regulations specify who is subject to the governance requirements, which will be introduced on a phased basis according to the value of the relevant assets of a scheme at the end of a particular scheme year. Trustees of authorised master trust schemes are subject to the governance requirements from 1 October 2021. The governance requirements will also apply to trustees of schemes that will provide collective defined contribution (CDC) benefits from the date of the scheme, as authorised by the Pensions Regulator. The legislative framework for CDC schemes was introduced by Part 2 of the Pensions Scheme Act 2021.

To recognise that the availability and quality of certain climate-related data may be limited but is expected to improve over time, trustees are required to comply with a number of governance requirements:

"as far as they are able".

That is defined in the regulations to mean that they must:

"take all such steps as ... reasonable and proportionate in the ... circumstances taking into account—

(a) the costs, or likely costs, which will be incurred by the scheme, and

(b) the time required".

The regulations also specify the reporting and publication requirements. Subject to limited exceptions, trustees will be required to produce a report for each scheme year or part of a scheme year during which they are subject to governance requirements. The regulations specify the information that the trustees must include in their reports, which must be produced and published on a publicly available website that is accessible and free of charge within seven months of the end of the scheme year. Therefore, once they are subject to governance requirements, it is expected that trustees will normally produce and publish a report each scheme year.

In complying with the requirements of the regulations, trustees are required to have regard to guidance issued by my Department. The regulations include powers for the Pensions Regulator to issue compliance notices, third-party compliance notices and penalty notices. For example, where the Pensions Regulator is of the opinion that a person has failed to comply with the requirement to publish a report on a publicly available website that is accessible and free of charge, the regulator must issue a mandatory penalty of at least £2,500. A mandatory penalty is considered appropriate in such circumstances since there would have been a complete failure to comply with the publication requirements. It will be at the discretion of the Pensions Regulator whether to issue penalties in all other cases where it considers that there was a contravention of relevant provisions in the regulations.

Finally, the rule forms part of a package of regulations, along with the Occupational Pension Schemes (Climate Change Governance and Reporting) (Miscellaneous Provisions and Amendments) Regulations (NI) 2021, that amend existing pensions legislation to introduce related disclosure and notification requirements and requirements about trustees' knowledge and understanding of matters relating to the effects of climate change on occupational pension schemes.

Ms P Bradley (The Chairperson of the Committee for Communities): The Committee considered the statutory rule on 23 September 2021 and understands that the rule will introduce requirements for trustees of certain occupational pension schemes. The regulations form part of a package of regulations that amend existing pension legislation to introduce related disclosure and notification requirements and requirements about trustees' knowledge and understanding of matters relating to the effects of climate change on occupational pension schemes. The requirements are not to ensure that there is effective governance of those schemes with respect to the effects of climate change. As well as that, the regulations will introduce related reporting and publication requirements for such trustees and confer new compliance powers on the Pensions Regulator.

The Committee welcomes the additional governance requirements in the regulations, which will ensure that they will apply to trustees of master trust schemes and to trustees of schemes providing collective money purchase benefits. There are huge sums of money involved in pension schemes, and it is only right that the schemes are subject to strong governance arrangements. The regulations recognise that the quality of certain climate-related data may currently be limited, so trustees are, as far as they are able, required to comply with a number of the governance requirements.

The Committee also welcomes the powers that the regulations give to the Pensions Regulator in issuing, for example, compliance notices and penalty notices, including a mandatory penalty of at least £2,500 if the regulator feels that an individual has not complied with a requirement to publish a report free of charge on a publicly available, accessible website.

In conclusion, the Committee agreed to recommend that the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations (Northern Ireland) 2021 be affirmed by the Assembly.

Ms Á Murphy: I will keep my remarks brief, as the detail has already been covered. I thank the Minister and the Committee Chair for the summary of the regulations. As we have heard, their intended purpose is to ensure effective governance by the trustees of particular pension schemes with respect to the effect of climate change. As well as that, there is the introduction of related reporting. The detail of what that means in practical terms has been clearly outlined, and, in the interest of ensuring that any risks to people's pensions are minimised, I am content to support the motion.

Mr Durkan: All that I might have said has been said. I just want to indicate our support for the regulations.

Ms Armstrong: Climate change is expected to have a significant impact on pension schemes' assets due to the physical risk associated with a warmer planet and the transition risk that movement towards a low-carbon economy brings in the form of lower valuations of many sectors across the economy. As long-term investors, pension scheme trustees should be especially alive to those risks. At present, evidence suggests that the market does not fully price in climate risk, meaning that many assets that pension schemes hold may be mispriced. As a result, there is a risk that, without intervention, members of pension schemes may be overexposed to the financially material risks of climate change, which ultimately impacts their expected outcomes in retirement.

While trustees of pension schemes are already required to consider all financially material risks as part of their fiduciary duty, the Government are seeking to strengthen and clarify the focus on climate change by proposing steps to require increased analysis and consideration of climate change to be embedded in the decision-making process of trustees, as well as requiring the disclosure of climate risk information. On that basis, the Alliance Party is absolutely behind the Minister in bringing forward this legislation.

Ms Hargey: I thank the Chair and all those members of the Committee for Communities who spoke in the debate. These regulations will ensure that the largest occupational pension schemes, as well as authorised master trusts and authorised collective defined contribution schemes, have measures in place to identify, assess and manage climate-related risks. Better management of climate risks will be in the interests of everyone, including pension savers as well as pension takers. I commend the motion to the House.


12.15 pm

Question put and agreed to.

Resolved:

That the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations (Northern Ireland) 2021 be approved.

Mr Speaker: I ask Members to take their ease for a moment while we move to the next item in the Order Paper.

Mr Speaker: I call the Minister for Communities, Deirdre Hargey, to move the Further Consideration Stage of the Bill.

Moved. — [Ms Hargey (The Minister for Communities).]

Mr Speaker: Members will have a copy of the Marshalled List of amendments detailing the order for consideration. The amendments have been grouped for debate in the provisional grouping of amendments selected list. There is a single group of 10 amendments that deal with rent decreases and notices to quit. I remind Members who intend to speak that, during the debate on the single group of amendments, they should address all the amendments in the group on which they wish to comment. Once the debate is completed, any further amendments in the group will be moved formally as we go through the Bill, and the Question on each will be put without further debate. If that is clear, we shall proceed.

Clause 7 (Restriction on rent increases)

Mr Speaker: We now come to the single group of amendments for debate. With amendment No 1, it will be convenient to debate amendment Nos 2 to 10. Within the group, amendment Nos 2, 3 and 9 are mutually exclusive to amendment No 1, amendment No 4 is consequential to amendment No 1 and amendment Nos 8 and 10 are consequential to amendment No 5. I call the Minister for Communities, Deirdre Hargey, to move amendment No 1 and to address the other amendments in the group.

Ms Hargey (The Minister for Communities): I beg to move amendment No 1:

In page 8, line 18, leave out from "to" to end of line 26 and insert—

"in relation to private tenancies.
(2) The Department may by regulations do either or both of the following regarding the rent payable under private tenancies in relation to which this Article applies—

(a) provide that, for a prescribed period, the rent is, or may not exceed, a prescribed proportion of the rent that would be payable apart from the regulations;

(b) provide that, for a prescribed period, the rent is, or may not exceed, the rent that was payable under it on a prescribed date, or during an earlier prescribed period.
(3) Regulations under paragraph (2) may not—

(a) specify, for the purposes of sub-paragraph (a) of that paragraph, a proportion that is less than 90%;

(b) provide for any limitation, or any series of limitations, to last for longer than 4 years in relation to any particular tenancy.
(4) Regulations under paragraph (2) may in particular—

(a) provide for how the rent that would be payable apart from the regulations is to be determined;

(b) provide that—

(i) the prescribed date for the purposes of sub-paragraph (b) of that paragraph, or

(ii) the earlier prescribed period for those purposes, is a date, or a period, that falls before the date on which the Private Tenancies Act (Northern Ireland) 2022 was passed;

(c) provide for different limitations to apply to the same tenancy, for different periods;

(d) provide for exceptions in relation to tenancies of prescribed descriptions, or make different provision in relation to tenancies of different descriptions;

(e) make further or consequential provision in relation to the limitations, including provision amending any statutory provision (within the meaning given by section 1(f) of the Interpretation Act (Northern Ireland) 1954);

(f) make such other consequential, supplementary, transitory or transitional provision, or such savings, as the Department considers appropriate.
(5) Tenancies may be described for the purposes of paragraph (4)(d) by reference to (among other things)—

(a) the amount of rent payable under the tenancy;

(b) the area within which the dwelling-house in question is situated;

(c) whether the tenant is in receipt of housing benefit or any other benefit payable under a statutory provision (within the meaning given by section 1(f) of the Interpretation Act (Northern Ireland) 1954).
(6) The Department must consult the following persons as to whether to exercise the powers conferred by paragraph (2)—

(a) district councils,

(b) such persons as appear to it to be representative of landlords,

(c) such persons as appear to it to be representative of tenants, and

(d) such other persons as it considers appropriate (which may include landlords or tenants).
(7) The Department must prepare a report on the consultation and—

(a) lay the report before the Assembly, and

(b) publish it in such manner as the Department considers appropriate.
(8) The Department must lay and publish the report under paragraph (7) before the end of the period of 6 months beginning with the day on which the Private Tenancies Act (Northern Ireland) 2022 receives Royal Assent.
(9) If the Department does not make regulations under paragraph (2) before the end of the period of 12 months beginning with the date on which it lays the report under paragraph (7), this Article ceases to have effect at the end of that period."

The following amendments stood on the Marshalled List:

No 2: In page 8, line 19, leave out "6" and insert "1". — [Mr Carroll.]

No 3: In page 8, line 26, at end insert—

"(5) A person who contravenes paragraph (2) is guilty of an offence under this Order.
(6) Where a person—

(a) is convicted of an offence under paragraph (5), and
(b) has received rent in excess of the amount of rent payable under the tenancy to which this Article applies, the court may order the excess to be repaid to the person who paid it." — [Mr Carroll.]

No 4: In page 9, line 25, after "insert" insert "5C,". — [Ms Hargey (The Minister for Communities).]

No 5: In clause 11, page 11, line 36, leave out from "paragraph" to end of line 23 on page 12 and insert—

"paragraphs (1A) and (2) substitute—

‘(1A) For the purposes of paragraph (1) the relevant period is—

(a) 8 weeks, if the tenancy has not been in existence for more than 12 months;

(b) 4 months, if the tenancy has been in existence for more than 12 months but not for more than 3 years;

(c) 6 months, if the tenancy has been in existence for more than 3 years but not for more than 8 years; and

(d) 7 months, if the tenancy has been in existence for more than 8 years;
but this is subject to regulations made under paragraph (5).

(2) Paragraph (1) applies whether the private tenancy was granted before or after the commencement of this Order.

(3) The Department may by regulations amend any sub-paragraph of paragraph (1A) so as to provide a different relevant period.

(4) Regulations under paragraph (3) may provide that the relevant period is different in different cases within a particular sub-paragraph of paragraph (1A) described by reference to the period for which the tenancy has been in existence. (But this is without prejudice to the application of section 17(5) of the Interpretation Act (Northern Ireland) 1954).

(5) The Department may by regulations provide that, in cases falling within the circumstances set out in paragraph (6), the relevant period for the purposes of paragraph (1) is as prescribed in the regulations.

(6) The circumstances are—

(a) the tenant is in substantial arrears of rent;

(b) the tenant, or a member of the tenant’s household, has engaged in serious anti-social behaviour in, or in the locality of, the dwelling-house;

(c) the tenant, or a member of the tenant’s household, is convicted of a relevant criminal offence. (But see paragraph (9) for provision regarding other circumstances.)

(7) Regulations under paragraph (5)—

(a) may make provision that applies to all cases that fall within a sub-paragraph of paragraph (6) and, for that purpose, may make provision about the meaning of any expression used in that sub-paragraph;

(b) may make provision that applies to cases of a prescribed description that fall within a sub-paragraph of paragraph (6);

(c) may provide that the relevant period is different in different cases that fall within a sub- paragraph of paragraph (6) described by reference to the period for which the tenancy has been in existence;

(d) may make provision about the evidence to be provided to show that a case falls within a sub-paragraph of paragraph (6) or within a prescribed description. (But sub-paragraphs (a) to (c) are without prejudice to the application of section 17(5) of the Interpretation Act (Northern Ireland) 1954).

(8) The Department—

(a) may not make regulations under paragraph (5) that come into operation before the end of the emergency period within the meaning of section 1(2) of the Private Tenancies (Coronavirus Modifications) Act (Northern Ireland) 2020, but

(b) must make regulations under paragraph (5) that come into operation before the end of the period of 2 years beginning with the date on which this Act receives Royal Assent.

(9) The Department may by regulations amend paragraph (6) so as to add to the list of circumstances set out in it.
(10) Amendments made by virtue of regulations under paragraph (3), and provision made by regulations under paragraph (5), do not apply in relation to a notice to quit given before the date on which the regulations come into operation.’" — [Ms Hargey (The Minister for Communities).]

No 6: In clause 11, page 13, line 14, leave out "subsection (3)" and insert "subsections (3) and (4)". — [Ms Hargey (The Minister for Communities).]

No 7: In clause 11, page 13, line 14, leave out "3(2)" and insert "3". — [Ms Hargey (The Minister for Communities).]

No 8: In clause 11, page 13, line 15, at end insert—

"(9A) At any time before the coming into operation of sub-paragraph (a) of Article 14(1) (as inserted by subsection (3)), paragraph (1) of that Article has effect as if, before sub-paragraph (b), there were inserted—

‘(aa) it is given in writing, and’.
(9B) At any time before the coming into operation of the paragraph (1A) of Article 14 that is inserted by subsection (4), that Article has effect as if, before paragraph (2), there were inserted—

‘(1A) For the purposes of paragraph (1) the relevant period is—

(a) 4 weeks, if the tenancy has not been in existence for more than 12 months;

(b) 8 weeks, if the tenancy has been in existence for more than 12 months but not for more than 10 years;
(c) 12 weeks, if the tenancy has been in existence for more than 10 years.’" — [Ms Hargey (The Minister for Communities).]

No 9: In clause 14, page 14, line 25, at end insert—

"(za) section 7 insofar as it relates to 5C." — [Mr Carroll.]

No 10: In clause 14, page 14, line 38, after "section 11" insert—

", except in so far as it confers a power to make regulations under Article 14(3) of the 2006 Order (as inserted by subsection (4) of that section).

(2A) Subsections (2B) and (2C) apply to the provisions of section 11, except—

(a) the provisions of that section commenced by subsection (2)(g),

(b) subsection (3) of that section in so far as it inserts sub-paragraph (a) into Article 14(1) of the 2006 Order, and

(c) subsection (4) of that section in so far as it substitutes paragraph (1A) of Article 14 of the 2006 Order and inserts paragraphs (3) and (4) into that Article.

(2B) The provisions to which this subsection applies come into operation on the day after the day on which this Act receives Royal Assent.

(2C) But if (apart from this subsection) those provisions would come into operation before the end of the emergency period within the meaning of section 1(2) of the Private Tenancies (Coronavirus Modifications) Act (Northern Ireland) 2020 they come into operation at the end of that period.
(2D) Section 11(4), in so far as it substitutes paragraph (1A) of Article 14 of the 2006 Order and inserts paragraphs (3) and (4) into that Article, comes into operation on the coming into operation of the first regulations made under Article 14(5) of the 2006 Order (as inserted by section 11(4))." — [Ms Hargey (The Minister for Communities).]

Ms Hargey: From the outset, I wish to state that all my proposed amendments are intended to bring the Bill back within competence. The Bill is urgently needed and long awaited by those in the private rented sector, and I do not want to lose the important piece of legislation that is in front of us. My amendments seek to improve the drafting of the Bill, as amended at Consideration Stage, in order to ensure that its clauses operate properly, that they maintain consistency with the Bill or relevant parent legislation and that they address potential practical difficulties in implementation. For that reason, I will keep my comments brief.

Turning to amendment No 1, the issue of affordability in the private rented sector is a priority for me. I had already asked my officials to begin work to look at fair and affordable rents in the private and social sectors. I have always been clear that that will be taken forward as part of the second phase of the private rented sector reform. I know that the previous amendment was well intended, but it cannot be done like this. I have made it clear that, with the legal advice that I have, the amendment that was made at Consideration Stage puts the whole Bill outside competence. Very simply, you will have to vote for amendment No 1 in order to keep everything else in the Bill, and particularly all the protections that are contained in it.

Amendment No 1 places a duty on my Department to conduct a consultation on a rent reduction and rent freeze. That is in keeping with the spirit of the amendment that was passed by the Assembly at Consideration Stage. The consultation will result in a report that is to be produced and laid before the Assembly within six months of the Bill's receiving Royal Assent. With the amendment and regulation-making powers included, this is a flexible approach to ensure that any rent reduction will, as far as possible, achieve its policy intent and avoid unintended consequences for those who are living in the private rented sector.

There are two clear choices for the House today: to deliver a Bill that will bring about the protections that are set out in it or to accept the amendment that was voted on at Consideration Stage, which is impossible to deliver at this time. I have clearly set out the legal advice, which is that if that was to move ahead, it would be unworkable, and therefore the Bill would be beyond competence and would fall. That would mean that all those long-fought-for protections included in the Bill would also fall. I am sure that many have been contacted by housing campaigners who are concerned at that prospect.

Amendment No 4 is consequential to amendment No 1. Amendment Nos 2, 3 and 9, tabled by Gerry Carroll, also relate to clause 7. I have made clear the advice that Gerry Carroll's amendments at Consideration Stage will put the Bill outside of competence and lead to it falling. That would not change if the Assembly agreed the amendments that he has tabled today. Those amendments do nothing to address the unintended consequences of the provisions and amendments. Indeed, the proposed amendments are not even enforceable. The Department has further advised that amendment Nos 2 and 3 are defective in their drafting. For example, the offence created by amendment No 3 has the potential to criminalise the tenant as well as the landlord.

Amendment Nos 5, 6, 7, 8 and 10 relate to clause 11 and the notices to quit. Together, they set out that the Department will carry out work to develop exemptions to the new longer notices to quit, which the Assembly voted for. The longer notices to quit will come into effect when those regulations are made. In the meantime, there will be a transitional arrangement replicating the notices to quit in the Bill, as laid. That will prevent the notice periods from reverting back to those that were in operation before the coronavirus Act. The transitional arrangements will come into place when the coronavirus emergency Act ends, or as soon as possible afterwards, depending on Royal Assent. The development of exemptions will keep the Bill within competence. The amendments also refine the tiers of notice periods, depending on the length of tenancy, and state the notice period in weeks and months rather than days. That is in response to comments that were made by many Members during the Consideration Stage and will be clearer for landlords and tenants. I thank Ciara Ferguson, whose original amendment was passed by the House, for working with my officials to refine the clause and ensure that that part of the Bill is brought back within competence.

In summary, my amendments will bring the Bill within competence and ensure that all the vital protections for tenants contained in it come into place as soon as possible. I commend the amendments in the group.

Ms P Bradley (The Chairperson of the Committee for Communities): On behalf of the Committee for Communities, I welcome the Further Consideration Stage of the Bill. As we debate the amendments, I will reiterate a couple of points that I made at Consideration Stage.

During its deliberations, the Committee bore in mind that the private rented sector accounts for a significant proportion — over 17% — of the housing stock in Northern Ireland and that the sector is home to a considerable number of vulnerable households. We focused on the purpose of the Bill — to amend the Private Tenancies (Northern Ireland) Order 2006 — as the first stage of a further long-term programme of reform, which, we were assured, will include dealing with issues of fair rents. The Committee also aimed to find a balance between protecting tenants and over-regulation that may drive landlords from the sector, thus compounding housing problems. The legal fate of the Bill may well hinge on what is decided today in the House regarding the proposed amendments.

At its meeting last Thursday, the Committee was briefed on the Minister's amendm