Mobile Homes Act 2013
Lord Graham of Edmonton
To ask Her Majesty’s Government what assessment they have made of progress following the enactment of the Mobile Homes Act 2013.
Lord Graham of Edmonton (Lab)
My Lords, this is a good opportunity to review the situation, and that is the spirit in which I raise the issue. There are lots of things that I could say from experience, and especially from correspondence with the people involved. I do this because in 1983 I was a member on the Mobile Homes Act 1983. As a consequence, for the last 30 years I have been heavily involved. When I look back over 30 years the progress made from the situation then to now is quite remarkable and satisfactory. I do not intend to go over old ground of what has been fought over, achieved, and all the rest of it. However, I want to put down one or two markers.
The Minister, in replying to me on issues that I raised, alluded—not to put words in his mouth—to the fact that for the next three or four years the Government were looking forward to the issue bedding down. If he thought I was asking for action tomorrow he was wrong, but I know that he was saying, “Look, give us time to work out the detail”. All I want to say to the department—members of which I see not 100 miles away from me—and Ministers who have taken an interest is that there is a big job still to be done and I just want to point out one or two aspects of it.
I have here a booklet, Park Homes in Cornwall. I am sure it is familiar to the department and those who work there. What puzzles me is the assumption that because we are very creditworthy and using all the facilities, everybody else is the same. From a source that I have, which I accept completely, in Cornwall only 8% of the people who live on parks have access not just to telephones but computers. I do not have the answer, but the department should look at how it is possible to ensure that not just every authority and park but every resident on a park is given the information that they are entitled to. It is a tall order and I am not too sure how it should be done, but I congratulate Cornwall County Council, which has gone out of its way to ensure that residents on the parks are given all the information they need in order to make progress.
I remind the Committee that there are some villains who own sites. The situation has changed. At one time a park was owned by a man or a woman or a married couple, and that was their life. Their job in life was to make sure that the people who lived there, who they knew were vulnerable and sometimes distressed, were looked after. But now there are people who own 30 or 40 parks. Because they have that muscle and it is a big business, they combine with others, and a handful of people have the park home industry in their hands.
There are one or two instances that I want to bring up. The first is the following local newspaper article:
“The company that owns an Isle of Wight mobile home site has been ordered to pay more than £300,000 after offences committed against residents”—
of course, comment can be made that if that is the situation, that is what I want. I do not want people to have to pay. I want people to recognise that although they do not have a gold mine, they have something that pays well and they should look after it and do what needs to be done.
We all know the situation in Wolverhampton. I have a document here from a good friend, who lives in Wolverhampton. He is the secretary of the PHRAA. He woke up one night to find that the owner had set fire to some oil drums. In effect, he was trying to force him out. He was very quick. He was on to me like a shot. I spoke to the local police and they set up a system whereby they could co-ordinate. One of the problems we have is the number of different people involved. There is the department, which I deeply respect and the people who work in it, but we not only have the people who work there, but we also have politicians. There are residents’ associations, and all sorts of other things. We even have the police.
A few years ago, Detective Inspector Colquhoun, in Bromsgrove, solved the problem. We usually find that if we make a request, most police will argue that disputes on parks are civil matters, not criminal. Yet, Detective Inspector Colquhoun was called out to the park when a gang of eight tried to burn out this person and some others. The gang was caught and taken to court. Eight of them were given a total of 64 years in prison. That must have been a very big case, but the beauty was that under the Proceeds of Crime Act they were also fined hundreds of thousands of pounds because they could not show where their money had come from. Of course, that is very important.
I have one or two cuttings from various places. A caravan site was fined for safety breaches. Many site owners, as part of a quid pro quo, ask for a pitch fee or 10% of the sale, but they do not carry out the basic requirements or ensure that various aspects of their responsibilities are carried out. Many of the residents meekly accept that the law is the law and think that they can do nothing about it. When they raise the matter with the local police or the council, because of pressure from other places, including this place, those organisations say, “Well, it’s easier for us to tolerate a bad situation than to get involved”, and it costs a lot of money to the council or the police.
An article in the Cornish Guardian has the headline: “£11,500 bill for parks’ failings”. One park was found guilty of having,
“street lamps left with broken glass fittings, exposed electrical wiring in a clubhouse and a former swimming pool building being demolished by unqualified staff”.
The article continues:
“An inspection found sections of the roof fallen in, guttering blocked and electrical wiring exposed”.
People are getting away with these things. Frankly, we ought to be man enough to realise that they should not. The Herald ran an article with the headline: “Big fine for unsafe lights, wiring and pool building at caravan park”. I do not want to see headlines like that, because I know that behind them is human misery.
About a month ago, on 2 July, the marvellous organisation fronted by Sonia McColl presented a petition to No. 10 Downing Street, and then came to a meeting in Room No. 10 here, attended by Members of Parliament and others. They were quite clear in their minds that although they had won one or two victories, the biggest victory was the ability of a site owner to stop a sale, and, further, still to demand 10% of any sale. That battle is going on now, and so far, so good. But we need to watch the situation very carefully because many people who live in parks are single, elderly and unwell. I am frightened to raise the issues that they have in order to keep their homes. They have their homes, which they look after. When you look at a magazine or some of the journals, you will see that the products that these people are selling are absolutely fine, except that there are some blemishes.
There are no instant solutions; if there were, if it were possible to do things by the wave of a wand, I know that this Minister, looking after this Committee and others, would do it. But the strategic value of combining forces with other people needs to be recognised. The police, councils, councillors and authorities are all organisations that can make a contribution.
Baroness Williams of Trafford (Con)
My Lords, I ask the noble Lord to conclude his remarks because he has gone significantly over time.
Lord Best (CB)
My Lords, I am very grateful to the noble Lord, Lord Graham of Edmonton, for providing us with this chance to consider the position of mobile home owners following the enactment of the Private Member’s Bill which I had the honour of taking through your Lordships’ House. I pay tribute to the noble Lord’s many years of tenacious campaigning on behalf of mobile home—or park home—residents. I took on the Mobile Homes Bill entirely because of my admiration for the noble Lord’s tireless work.
I also want to record my appreciation for Peter Aldous MP, who piloted the legislation with great skill through its stages in the other place. In noting the all-party nature of parliamentary backing on this issue, I also thank Annette Brooke MP, joint chair of the relevant APPG, for her persistent support. In addition, we all owe a debt of gratitude to the hard-working civil servants who have handled all these difficult issues over many years with great skill.
There is no doubt that the Mobile Homes Act 2013 has righted some terrible wrongs and is a landmark for the thousands of residents of mobile homes who faced grave injustices from the evil practice of so-called “sale blocking”. When I got involved with these matters and talked to residents in their homes, I was deeply shocked to discover the appalling behaviour of certain site owners. These had acquired the freehold ownership of sites—some of which were previously quite idyllic little rural communities—and set about exploiting, harassing and intimidating residents, making huge fortunes from acquiring their homes at knockdown prices and selling on at huge profits. Not only that, but services on sites were neglected; the service charges—pitch fees—were exorbitant; and peaceful communities of older citizens suddenly became places of fear, insecurity, danger or even violence.
I believe that the Act has been a power for good both in outlawing sale blocking and in introducing licensing arrangements that, with proper opportunity for appeals to the First-tier Tribunal, mean that pitch fees must be reasonable and site owners must manage their sites effectively. It is gratifying to note that, in most cases, site owners are now using the standard forms recommended by the Department for Communities and Local Government for their agreements with residents on pitch fees.
So far so good, but we always knew that the Act could not do everything, and park home residents still face serious challenges. I shall set out four areas for further action by the Government. I hope that they may be addressed not by another Private Member’s Bill, as it is difficult to get time allocated to such Bills, but by primary government legislation—particularly when the next housing Bill is prepared.
First, when the Mobile Homes Act was a Bill, we recognised that it could not cover the separate but related issue of excessive charges by site owners controlling the supply of liquid petroleum gas—LPG, often calor gas—distributed to residents’ homes. We heard of cases where the site owner, holding residents to ransom, charged double the sum he paid to the liquid gas suppliers. Similar problems with piped gas, electricity and water were the subject of an Upper-tier Tribunal case last year. The tribunal has outlawed such profiteering from the supply of those utilities—although the worst site owners still ignore those rulings—but many sites depend on LPG, and exploitation through controlling that source of heating can mean fuel poverty for elderly residents. Action is needed.
Secondly, the Act makes provision for a review of whether a fit and proper person requirement should be introduced to debar the real gangsters and profiteers who have moved in on this lucrative opportunity to exploit older people. Ministers have said that this exercise will not be undertaken until 2017. In the mean time, some sites remain in the ownership of some pretty unsavoury characters. It is surely unwise to allow those who are serving prison sentences, those with criminal records, bankrupts, those who have been found seriously wanting by a First-tier Tribunal and other undesirable speculators to be awarded licences to manage park home sites. Although the Act may have chased out some of those operators, some offenders have remained in control of sites. It is open to the Government of the day at any time to bring forward the necessary statutory instrument that would require site owners to be fit and proper persons. I urge that process to be pursued as soon as possible.
Thirdly, there is the question of holiday homes being used as permanent residences and occupied on virtually the same terms as other mobile homes, but falling outside the important protections of the Mobile Homes Act. Clearly, genuine holiday homes serve an important function and help local economies, but if some so-called holiday homes are in reality permanent retirement homes, with the protections afforded to other park home occupiers being avoided simply by requiring residents to take an annual holiday elsewhere, surely they should be brought within the scope of the 2013 Act. This is unfinished business, which a forthcoming housing Bill needs to address.
Finally, there is the issue of the 10% sales commissions—payments to the site owner when a resident sells. That was the subject of the rally which the noble Lord, Lord Graham, mentioned, when hundreds of park home owners came to Parliament earlier this month. I am familiar with the concept of exit fees—typically of 1% of sales proceeds—paid by outgoing leaseholders in many retirement housing schemes. The Office of Fair Trading, just before its demise, condemned this practice whereby the money raised was not used to improve the housing or top up “sinking” funds, which provide for future major repairs. The OFT opposed exit fees that were not used to keep down monthly service charges but instead simply represented a windfall gain for the freeholder. I suggest that the same approach should be applied to 10% sales commissions required by owners of mobile home sites. If the sales commission is used to enhance conditions on the site—improve roads, plant trees, upgrade electricity supply lines et cetera—then everyone benefits. The value of a park home may be 10% higher where the quality of a site is kept up to good standards. This suggests that the charge could pay for itself. All occupiers then enjoy better facilities and the site owner benefits, too, because his commission is 10% of a higher sum.
Conversely, if the site owner pockets the commission and neglects his duties, and the site deteriorates, he does not justify extracting a substantial commission. Indeed, I am told that there are cases in which the site owner deliberately runs down the conditions on the site in order to put pressure on the mobile home owners to leave so that more sales, more commissions, will flow in. That is a travesty.
Now that local authorities are being resourced—I hope adequately—to ensure that licence-holders are doing what they should, the proposition from campaigners like Tony Turner in Cornwall deserves to be progressed. They want to align the requirement to pay a large commission to the quality and quantity of time and money invested in the site by its owner. Paying for something rather than paying for nothing changes the picture considerably. A change to make 10% commissions conditional on performance requires primary legislation. However, means of implementing a change seem to be in place already. Local councils would have to be satisfied with the condition of the site and its management before allowing commissions to be demanded. That certainly looks like a priority for legislation when the chance arises.
I conclude by underlining the appreciation of all those concerned with the fate of mobile home occupiers for the sterling efforts of legislators, civil servants, campaigners and residents’ associations but, above all, for the life’s work of the noble Lord, Lord Graham of Edmonton.
Lord McKenzie of Luton (Lab)
My Lords, we should be grateful to my noble friend Lord Graham of Edmonton for causing us to keep a focus on mobile or park homes following the passing of the Mobile Homes Act 2013. As we know, and for which we admire him, my noble friend has been a long-standing campaigner for the rights of park home residents. He could be forgiven for signing off and putting his feet up with a job well done now that the legislation is passed, but it is not in his nature to stop campaigning and to give up on the cause. I acknowledge also that the Act was expertly steered through your Lordships’ House by the noble Lord, Lord Best, who is a housing expert to boot, and who had the support of the Government and from all Benches in this House.
However, my noble friend’s Question is a reminder of the nature of our role in such matters. The job is not done just by passing the Act or, indeed, by Ministers securing any necessary funding. It is about seeking to ensure that the legislation is delivering as expected. Of course what spurred this legislation in the first place were the serious abuses in the sector, the victims of which are mostly elderly—“frightened” was the word used by my noble friend and the noble Lord, Lord Best—people. There was also the powerful testament to these abuses not only from the organisations representing the victims but from Members of the Commons and several noble Lords, including the noble Lords, Lord Cormack and Lord Best, the noble Baroness, Lady Scott of Needham market, and my noble friends Lord Whitty and Lord Graham.
The purpose of the legislation was to stop those abuses, giving reassurance and justice to those 85,000 households for whom these sites were intended to be their homes. The legislation was also to create and sustain a level playing field for good site owners and operators, preventing them facing unfair competition from unscrupulous ones. What has happened so far?
Sections 1 to 7 of the Act were brought into force only on 1 April this year, a year after the Act was passed. This date marked the end of the Government’s moratorium on new burdens for micro-businesses. What benefit does the Minister think was gained by the deferred implementation of those provisions? Inevitably this means that there has been very limited opportunity to see how some of the provisions are working in practice. But so far as the licensing role in Section 1 is concerned, is there any indication of the level of fees local authorities are charging and whether they have sought to increase their capacity to undertake their role effectively? Will the Minister say how many authorities in England have “relevant protected sites” within their boundaries?
One of the major bones of contention of the past has been circumstances where site owners have tried to block home owners selling or gifting their property. Section 10 prevents this happening in different ways depending on whether the home is subject to a new or existing agreement. This section has been in force for more than a year and has presumably been tested in practice, certainly with regard to existing agreements. Will the Minister tell us whether any problems have yet arisen from its application and whether site owners are seeking to circumvent or have circumvented its intent?
As the noble Lord, Lord Best, said, we have had no movement on the introduction of a fit and proper person test for site owners and operators. That was a major concern when we debated the Bill and when it was introduced in another place. Such a test was recommended by the CLG Select Committee and strongly backed by the Park Home Owners Justice Campaign. If we had that fit and proper person test, it would address some of the real issues that are still going on in the sector, as we have heard from my noble friend.
Section 8 includes a power to introduce a fit and proper person test but this power has not yet been used. In replying to the Second Reading debate, the then Minister, the noble Baroness, Lady Hanham, explained that it was not,
“the Government’s intention to impose an industry-wide fit and proper requirement at present. New burdens on business are always a last resort”.
However, she went on to say that,
“we will be reviewing the situation after a suitable period—I hope that would be shorter rather than longer—to see how behaviour in the industry has changed”.—[Official Report, 1/2/13; col. 1814.]
Will the Minister confirm that “shorter rather than longer” accords with his view and say what plans there are to review the situation? Must we wait until 2017, as the noble Lord, Lord Best, suggested? What sort of new burden would be unreasonable to impose on someone who was not a fit and proper person in those circumstances?
In that debate, the noble Baroness, Lady Hanham, also responded to points raised by the noble Lord, Lord Best, concerning energy efficiency and fuel poverty. The noble Lord has raised the issue of LPG profiteering again today. Concerns were similarly expressed at the time by Consumer Focus. In particular, there was the suggestion that the standard assessment of energy performance used for the Green Deal was inapplicable to park homes. There were added complications about single metering arrangements on some sites. The noble Baroness, Lady Hanham, indicated that the matter had the attention of the Prime Minister, no less, and that work was under way with DECC officials to see what might be done to improve the position. Will the Minister give us an update on progress?
Noble Lords will doubtless also be aware of the recent Westminster Hall debate initiated by Annette Brooke MP, which focused on the perceived inequity of the commission—up to 10% of the sale price of the pitch—payable to site owners. I raise this point not because we consider that there should necessarily be changes to those arrangements at this stage, although the issue of basis on which they are levied, raised by the noble Lord, Lord Best, seems worthy of review; we acknowledge that the mechanics of the payment are changing—but because it was an obvious opportunity for any perceived failings of the 2013 Act to be aired, and none was.
Two residual questions flow from this. How confident is the Minister that the fundamental changes that the Act brings about are being effectively communicated within the sector, and what more is planned? The legislation was intended to prevent unscrupulous behaviour of site owners and managers, who hitherto have harassed, ill treated and made life intolerable for too many vulnerable people. What arrangements are in hand for the routine monitoring of the legislation’s effect and what early warning systems are in place to identify avoidance of its rigours? As we have heard from my noble friend Lord Graham, these abuses are still going on despite the Act, and we have a concentration of ownership that is deeply worrying.
The efforts of my noble friend over so many years have been the major factor in bringing significant improvement to the lives of thousands of people. We owe it to him to make sure that this legislation stands the test of time, just as my noble friend’s persistence and commitment have endured.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, I am pleased to be answering this Question. Perhaps I may begin, as have other noble Lords, by acknowledging the tireless advocacy of the noble Lord, Lord Graham, on behalf of park home residents. I am therefore pleased that the noble Lord lent his support to the Mobile Homes Act 2013, which, as he rightly acknowledged, puts in place many of the reforms that he has campaigned and argued for over many years. I welcome the noble Lord’s acceptance that the Government have shown determination to provide protection to home owners. However, I totally agree that it does not end with the Act. The noble Lord mentioned Park Homes in Cornwall as an example of good practice. It is entirely appropriate that where we see good practice it should be shared across the country.
I should also at this juncture acknowledge the great efforts and skill of the noble Lord, Lord Best, in his navigation of the Private Member’s Bill last year. The Bill received Royal Assent on 26 March 2013 and, as the noble Lord, Lord McKenzie, said, received support from all sides of the House.
Before I answer some of the specific questions that were asked, I remind the Committee that the Act puts in place measures that will enable the park home industry to develop on a sustainable footing, where site operators who run a decent and honest business can prosper while those who abuse their home owners and have no regard for health and safety will no longer be able to profiteer.
The Act is the biggest shake-up in the law relating to park homes in 30 years. It marks the Government’s commitment to providing greater protection to the rights of park home owners and ensuring that sites in which they live are safe and healthy places. However, we are not complacent and recognise that more work needs to be done to change the culture of the sector and crack down on the rogues operating in it, about whom we have heard today. To achieve this, we will continue to work with partners, the police and cross-government enforcement agencies to raise standards generally and remove criminality from the sector.
On enforcement, we are clear that there needs to be engagement with and education of site operators so that they have the opportunity to put matters right voluntarily before authorities go down the route of formal enforcement action. To that end, the department has set up a licensing working group comprising local authority practitioners, the industry trade bodies and representatives from national resident groups to look into best practice in setting licence fees and enforcement, and to provide guidance on the new licensing provisions for local authorities and site operators.
As acknowledged by the noble Lord, Lord Graham, very little professional advice was available to home owners prior to the Mobile Homes Act 2013. Since last May, we have funded the Leasehold Advisory Service—known as LEASE—to give home owners and site operators free and impartial initial advice on their rights and obligations. Our funding of LEASE, to help people understand and know their rights, is an important step in empowering home owners to stand up for their rights, which was a concern expressed by the noble Lord.
LEASE has already advised about 1,000 customers and is working to increase its outreach. Last summer, the Government also launched a leaflet campaign aimed at every park home resident in England to raise their awareness of the new law and where they could gain further information about it. In that regard, more than 180,000 leaflets were distributed and feedback has been very well received and informative. We recognise that there is also a need for better education of their obligations and responsibilities among site operators and a greater understanding and empathy from them on the rights of home owners. We will continue to work with the industry trade bodies to achieve this.
Turning to some specific questions, the noble Lords, Lord Graham and Lord Best, referred to the 10% commission paid to the site owner when a home is sold as being unfair. Indeed, it has been suggested previously that it should be abolished. It is our belief that commission is an important income strand for park home businesses, enabling them to ensure that sites are properly managed and maintained. If their commission were reduced or abolished there would be a need for a compensatory increase in pitch fees to cover the shortfall in income. As noble Lords will know, in 2006 under the previous Administration, the department consulted on the appropriate maximum rate. In 2012 the Communities and Local Government Select Committee also held an inquiry into the park home sector and considered the issue of commission. The committee recommended that the right of site owners to receive up to 10% commission from the sale of a home should remain in place. Given the balance of views and the committee’s recommendation, the Government do not see a strong case for changing the current system.
The noble Lord, Lord Best, also referred to Ministers recently saying that 10% was an important income strand. The 2013 Act introduced important provisions on site licensing, which came into force on 1 April this year. These are hugely important changes, giving local authorities for the first time powers to take enforcement action against the rogues who refuse to maintain their sites. The issue about a fit and proper person was raised by both noble Lords, Lord Best and Lord McKenzie. The Act enables the Secretary of State to introduce a fit and proper test through secondary legislation should that prove necessary. However, the position cited by the noble Lord, Lord McKenzie, as set out by my noble friend Lady Hanham, has not changed thus far, and the Government are not currently committed to introducing these measures. It is important to see how important the other measures in the Act will be in delivering changes in behaviour in the sector before we introduce such a system. In some cases, that could be bureaucratic to run and could impose additional costs on all owners, good or bad. Therefore, the Government do not intend to bring forward secondary legislation until they have conducted a full review of the effectiveness of the legislation, three years after the licensing provisions in the Act have been introduced—and only then following a public consultation on the proposals.
The noble Lord, Lord Best, raised the issue of energy, and the important issue of park owners being subject to overcharging for liquid petroleum gas and unfair administration charges in connection with the supply of gas and electricity. I understand that the Upper Tribunal Lands Chamber has ruled that charges for things such as reading electricity meters and sending out bills are not eligible unless the park owners are expressly allowed to be charged under the pitch agreement. In any such case, such charges would need to be reasonable.
The Government are committed to providing a fair deal for park home owners in relation to energy charges. Noble Lords may be aware that the Department of Energy and Climate Change will shortly—I qualify shortly by saying imminently—be publishing a call for evidence around energy issues on park home sites. All I can say is: watch this space. The noble Lord, Lord McKenzie, raised several questions on deferment benefits. We have allowed local authorities time to prepare for the new regime. He also talked about the level of fees charged by local authorities. We have not monitored this, but on average fees are about £12 per pitch per annum. In terms of the specific question on how many authorities have protected sites, I shall take the liberty to write to him and other noble Lords in that regard.
Turning to the review of the Act, which was raised by the noble Lords, Lord Best and Lord McKenzie, as I have already alluded to, we will carry out a review of the effectiveness of the legislation in 2017. Although it is too early to say what the terms of the review will be in measuring effectiveness, it is likely to look at: whether poor and unacceptable practices, such as sale blocking, which has been highlighted today, have ceased; whether professionalism in the sector has improved; and whether conditions on poorly managed sites have improved. Ministers will then decide whether there is a need to introduce through the reserve powers in the Mobile Homes Act 2013 the “fit and proper” registration requirements.
The noble Lord, Lord Graham, talked about combining forces and best practice up and down the country. These are all things that the Government totally share. That resonates across the Committee, but we acknowledge that there is more work to do. We want to work with partners so that this small but very important part of the housing market can be put on a sustainable footing for the future. Let me reiterate that the Government are totally committed to improving this sector, so that those who run a professional, honest business can prosper without unfair competition from rogues, and where home owners, some of whom are vulnerable, can be assured that their rights are respected, their health and safety properly protected and that they will not suffer bullying and harassment.