Leasehold Reform

Maria Eagle Excerpts

Thursday 11th July 2019 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) and his Committee on the excellent work that they have done on this issue.

Homeowners who have bought newly built houses in my constituency—and there are many hundreds of them—thought that they were buying their own homes. Technically and legally, they were buying a lease, a type of tenancy, often a long one of up to 999 years, which has left them with a landlord, the freeholder. Many property development companies and finance companies are treating the freehold reversionary interest on houses on these estates as a financial asset to be exploited to the full, with no regard whatever for the leaseholders and the families they are exploiting mercilessly. They see families in my constituency as nothing more or less than a long-term financial asset to be squeezed to the maximum for cash.

There is no reason at all to sell a leasehold house. There is only any point in selling a house as leasehold to make it into a financial asset to squeeze into the far future. Yet in the north-west, 69% of newly built houses in 2016 were sold as leasehold properties. There are already more than 1 million leasehold houses in England and Wales, so what is happening now to my constituents and other home buyers in the north-west is happening elsewhere—perhaps at a lower level, but it is happening.

There are four main areas of concern. People were mis-sold these properties—were not given the full information about what they were getting into. I have heard of many examples of conveyancers having potential conflicts of interest. I have constituents who paid deposits to secure plots in developments before they were even informed that they were in fact purchasing a lease. I have numerous examples of constituents using the conveyancers suggested by developers to guarantee the speed required to access Help to Buy, who were not even advised of how onerous some of the terms of their lease would be.

Escalating ground rents are a real problem for affordability, security of the lease and resale value. There is no reason for ground rent to go up in the way that it does—after all, the freeholder does not provide anything for these payments; it goes up because it can. It is feudalism of the worst kind. Purchasing the freehold is made very expensive and the price often seems arbitrarily high. I have had constituents whose freehold has been sold on without being offered to them. I have people on the same estate being quoted anything between £5,000 and £17,000 to purchase the freehold on identical properties. Leaseholders are being quoted 26 times the ground rent, plus freeholders’ extortionate legal costs, when the formula in enfranchising legislation uses 10 years’ ground rent as the norm.

Some of the restrictive covenants may be unfair contract terms in a legal sense, but no one has thousands of pounds to take the matter to the courts to check. I have heard examples of extortionate fees—£1,600 being demanded for granting permission to have a driveway installed. No wonder people call these properties “fleeceholds”. It is a sorry tale.

There is an additional common problem for lease- holders; they cannot sell their properties. I have been asking myself why escalating ground rent leads to mortgage companies not wanting to lend. I have constituents whose sales have fallen through, but why? Perhaps the answer lies in the landlord-tenant relationship that is the essence of the freeholder-leaseholder relationship. I saw a piece on the website of a legal firm, Mishcon de Reya, that addressed that issue. It said that long leases can sometimes count as assured shorthold tenancies. According to the piece, that cannot be the case where the ground rent is a peppercorn, but where the ground rent is over £250, or £1,000 in London, the lease is covered by the Housing Act 1988 and counts as an assured shorthold tenancy.

I find this shocking: where ground rents escalate, the leases are likely in time to come to fall into that category of assured shorthold tenancy, and such tenancies are designed to be the least well protected. Assured shorthold tenancies can be relatively easily terminated, and therefore the lease forfeit by the landlord or freeholder. In most leases there are provisions, which are quite draconian, for that to happen. Because assured shorthold tenancies allow relatively easy termination, the 1988 Act gave courts the right to grant relief, cancelling the forfeiture if the rent was paid. However, the power to grant relief does not apply to assured shorthold tenancies if at least three months’ rent is more than three months overdue. In such circumstances, forfeiture must be ordered by the court. That raises a terrible prospect of homeowners losing their homes simply because they did not realise this had happened.

The Government must do something about this, and they must do it now.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

First, I wish to thank all the hon. Members for their detailed contributions on an issue that affects so much of England; nobody can fail to be moved by the stories we have heard today. Obviously, I wish to thank the hon. Member for Sheffield South East (Mr Betts) for raising this issue and for his work as Chair of the Select Committee on the recent inquiry and the 18 contributors today.

There are more than 4 million leasehold properties in the UK, and leasehold tenure allows people to complete the journey towards ownership. As many Members will know, the Committee’s report contained a number of recommendations concerning both existing and future leaseholders. The Government have welcomed, considered and responded to the recommendations, and we will now press ahead with our programme of reform.

When we first announced our plans to reform the leasehold sector in December 2017, we said that we wanted to get the detail right. That is why we consulted last year on the implementation of our proposals, including the leasehold house ban and ground rent reduction. We received nearly 1,300 responses, many of which were from leaseholders hungry for change. The responses have also allowed us to fine-tune our proposals, which will remove many of the current injustices from the future leasehold market.

We will go ahead with our original plan to reduce ground rents on future leases to a peppercorn, as opposed to £10. Through the Committee’s inquiry and our own consultation process, it has become clear that a peppercorn is clearly understood and is best for the consumer—this is a peppercorn of zero. In practice, this will mean that leaseholders will no longer be charged a financial sum for which they receive no material benefit. It will also remove the current financial incentive for developers to build leasehold properties, as ground rent income will no longer present a lucrative profit stream.

[Maria Eagle]

rose—

[Mrs Wheeler]

I will not give way, as I have a lot to get through and I believe I have some answers for people.

On the leasehold house ban, I am pleased with the profound impact our original announcement and the work of campaigners have had on the market. When we made the announcement in 2017, 11% of new build houses in England were sold as leasehold, whereas today the figure stands at 2%—I repeat that it has reduced to that level. Despite that progress, we will still legislate to ensure that in the future—save for in the most exceptional circumstances—all new houses will be sold on a freehold basis. Developers will no longer be able to use leases on houses for their own financial gain, a practice that had become the norm in some regions of the country and, as we appreciate, particularly in the north-west. These reforms will remove the incentives for developers and freeholders to use leasehold to make unjustified profits at the expense of leaseholders, and we will be pressing ahead as soon as parliamentary time allows.

On the matter of where ground rents are so high that it—

Draft Construction Products (Amendment etc.) (EU Exit) Regulations 2019

Maria Eagle Excerpts

Monday 4th February 2019 General Committees

[Maria Eagle (Garston and Halewood) (Lab)]

On a point of order, Mr Bailey. Could I have your guidance on whether it is in order for the documentation to which the regulations before the Committee refer not to be present in the room for Members to consult?

[The Chair]

What is being considered is the documentation that you have in front of you. The Government could have provided other documentation, but it is in order to go ahead with the documentation that we have at this moment.

[The Minister for Housing (Kit Malthouse)]

I beg to move,

That the Committee has considered the draft Construction Products (Amendment etc.) (EU Exit) Regulations 2019.

These regulations were laid before both Houses on 18 December 2018. They are part of the Government’s programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime. Leaving the EU with a deal remains the Government’s top priority—that has not changed—but the responsible thing to do is to accelerate no-deal preparations to ensure that the country is prepared for every eventuality. The regulations are being made using powers in the European Union (Withdrawal) Act 2018 to fix legal deficiencies in retained EU law, in order to reflect the fact that the UK will no longer be an EU member state after exit day.

[Maria Eagle]

Will the Minister give way?

[Kit Malthouse]

Let me make a bit of progress.

I will start by providing some context, or background, to the regulations. The construction products regulation, or CPR, is an EU regulation that is directly applicable in all EU member states. It seeks to remove technical barriers to the trade of construction products, and applies UK-wide.

[Maria Eagle]

Will the Minister give way?

[Kit Malthouse]

I will not, sorry.

The CPR harmonises the methods of assessment and testing, the means of declaration of product performance, and the system of conformity assessment of construction products. It does not harmonise national building regulations, and individual member states remain responsible for safety, environmental, energy and other requirements applicable to construction works. When a harmonised standard exists for a product, the CPR places obligations on manufacturers, distributers and importers of that product when it is placed on the market, including that the product must be accompanied by a declaration of performance and affixed with the CE mark. At the point at which the UK leaves the EU, the CPR will become retained EU law and will therefore form part of our legal system.

[Maria Eagle]

Will the Minister give way?

[Kit Malthouse]

In a moment, please.

Without the amendments made by this instrument, the CPR’s provisions would not have practical application in the UK, because the UK will not be an EU member state. The CPR also confers several functions on the European Commission that will no longer have effect in relation to the UK.

[Maria Eagle]

I am grateful to the Minister for finally giving way, and it is good to hear his explanation of the regulation that this instrument amends. Can he tell the Committee why there are no copies of that regulation in the room for Members who are meant to be scrutinising the instrument to consult?

[Kit Malthouse]

As I said in my opening remarks, the instrument has been before the House since 18 December. It has been perfectly possible for Members to investigate it and to seek those documents for the past month and a half. If the hon. Lady has failed to do so, that is not our lookout.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

The Minister may not recall, but during the long period of the Labour Government, when I was in opposition, there were numerous occasions on which not only amendments or documents were not present—

[Maria Eagle]

When?

[Mr Prisk]

Numerous occasions.

--- Later in debate ---

[Kit Malthouse]

My hon. Friend has put his finger on the button. From the start of this sitting, it has been obvious that all this is not really about the EU construction products regulation; it is about a rejection of the whole process of properly preparing the country for all eventualities. I know that the hon. Member for Garston and Halewood regards herself as an assiduous Member of Parliament, but I am afraid that I cannot compensate for her dilatory approach to these regulations by producing a paper that she has had well over a month to look at and research.

[Maria Eagle]

I was simply raising the reasonable suggestion that if we are being asked to look at detailed amendments to a regulation, to which the Minister is referring, it is normal practice—it certainly was when I was a Minister—to have enough of every document that an instrument is amending in the Committee Room for Members to consult and look at during our proceedings. That is not unusual; it was quite normal when I was a Minister and it is not unreasonable. I am not angry, but I do not think it is reasonable for us to have proceedings such as these without being able to see those documents as we consider the SI. It was quite normal when I was a Minister to ensure that all those documents were present in the room, so it is a matter of some concern that on this occasion they were not.

[Kit Malthouse]

I note the hon. Lady’s concern. I would have assumed that, in her no doubt extensive preparation for this sitting, she would avail herself of the facilities in the Library and elsewhere to find those documents and study them, if she was giving a speech or preparing interventions on this subject, but I note her concern for the future.

Local Government Funding Settlement

Maria Eagle Excerpts

Thursday 13th December 2018 Commons Chamber

[James Brokenshire]

I acknowledge the pressures that councils have been experiencing and the hard choices that so many have had to make to deal with the issues with the public finances to which we have had to respond. I hope that my right hon. Friend will recognise the additional funding announced today. Equally, as we head towards the spending review next year, we will look carefully at further efficiencies and opportunities to ensure that councils are sustainable for the long term.

[Maria Eagle (Garston and Halewood) (Lab)]

Liverpool City Council and Knowsley Borough Council cover my constituency of Garston and Halewood. Both have been severely hard hit, with more than 60% of their Government grant removed. Will the Secretary of State explain how his announcement will help Liverpool City Council to meet the enormous gaps that have been created as a result of his Government’s policies?

[James Brokenshire]

The funding and allocations announced today certainly recognise some of the pressures that councils in Liverpool and elsewhere have been facing—for example, with regard to social care issues. It is important that we recognise those pressures and the growth that has been experienced. The additional funding will assist, but long-term reform is needed through the Green Paper and, in relation to the long-term funding situation, through the spending review. That needs to be addressed next year.

Local Government Funding: Merseyside

Maria Eagle Excerpts

Tuesday 30th October 2018 Westminster Hall

[Maria Eagle (Garston and Halewood) (Lab)]

I beg to move,

That this House has considered local government funding in Merseyside.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am happy to welcome several of my Merseyside colleagues to the debate.

The Prime Minister says austerity is over. The Chancellor says austerity is coming to an end. Aside from the clear difference between those two statements, neither is the experience of local government leaders and councillors on Merseyside, nor is it set to be their experience over the next few years. My constituency covers two local authority areas, Liverpool City Council and Knowsley Metropolitan Borough Council. I see that my right hon. Friend the Member for Knowsley (Mr Howarth) intends to speak in the debate, so I will focus my remarks on the situation facing Liverpool City Council and he will deal with that facing Knowsley Metropolitan Borough Council. I confine my remarks in that regard to simply saying that the challenge facing Knowsley is equally difficult to Liverpool’s, although it is a smaller authority.

Liverpool City Council has already had to cut £340 million from its budget—some 58% of its total resource—since 2010. This year, it must find a further £41 million of cuts to make up the balance of the £90 million reduction it has been seeking over the city’s three-year budgeting period, which comes to an end next March. By 2020, it will have cut £420 million in total, which was 64% of its budget before austerity was unnecessarily and zealously imposed to such a high degree by the Lib Dem-Tory coalition Government in 2010. Those figures show that there is a lot more cutting to come over the next two years, regardless of what the Chancellor said to us yesterday. Austerity is set to continue for Liverpool City Council, no matter the measures in yesterday’s Budget.

According to the National Audit Office, local authorities in England have seen a 49% reduction in Government funding since 2010, so the cuts imposed on Liverpool have been far higher than average, despite its people having higher levels of deprivation and poverty than the average. Indeed, Liverpool City Council is ranked as the fourth most deprived local authority in the latest indices of multiple deprivation statistics. In fact, 10 of the city’s 30 wards contain a local area within the 1% most deprived nationally, with one—Speke-Garston—in my constituency. Liverpool is ranked as the third most deprived for health and disability and the fifth most for income and employment.

In any fair system, central Government would mandate below-average cuts on Liverpool; that would happen in any system that took any note of the needs of the people of different areas. However, the way the coalition and Tory Governments since 2010 have imposed austerity most emphatically does not take account of the relative needs of the people of different areas who have to deliver the cuts demanded of them. Liverpool has been doubly disadvantaged by facing a larger cut in addition to having more and greater needs to meet.

Take social care as an example. In 2010, Liverpool City Council spent £222 million supporting adults who need help in the community, either because of age, infirmity or disability. That has been reduced to £152 million, despite our ageing population and our population having higher levels of ill health than in many other areas—as set out in the indices of multiple deprivation—meaning more people need the help provided by adult social care services.

[Conor McGinn (St Helens North) (Lab)]

I thank my hon. Friend for securing the debate and for the leadership she gives to Merseyside MPs on these issues. To put this in context, central Government cuts to St Helens Council’s budget are the equivalent of two years of its social care budgets. Similar to Liverpool, we have an ageing population and an expected increase in people suffering from conditions such as dementia. Does she agree that that is completely unsustainable, and that austerity certainly has not ended, for my constituents or hers?

[Maria Eagle]

I agree with my hon. Friend. It is impossible to see how anybody looking at these facts could assert that austerity is either over or is even coming to an end. We obviously do not know what the Government think between those two poles, but it is one or the other, depending on where they are. From where we are, it does not seem that either assertion comes near to explaining the truth.

In Liverpool, £70 million less is being spent on adult social care alone due to the cuts caused by austerity—this political choice that Governments since 2010 have made. Thresholds for eligibility for that help have therefore clearly had to increase, so fewer people get it despite more people needing it. The lack of that support, which should be there and would have been in the past, creates extra burdens on individuals and their families. That is the direct consequence of these cuts in Government funding.

[Mr Jim Cunningham (Coventry South) (Lab)]

This is a timely debate. Coventry has experienced exactly the same sort of local government cuts as Liverpool, and through the loss of grants—that is what caused all this—well over 50% of its budget is really not there anymore. One big problem in Coventry—I am sure my hon. Friend will touch on it—is the funding of children taken into care. She just touched on social care. Lots of families now have to find money for social care that they can ill afford, driving them into the hands of money lenders.

[Maria Eagle]

My hon. Friend will know the figures for Coventry very well. He set some out, and they sound similar to some of the figures we have seen on Merseyside. Any application for Coventry to join Merseyside will of course be considered by the appropriate authorities, if my hon. Friend wants to take that back to Coventry.

Nationally, £7 billion has been cut from social care budgets, so the £650 million announced by the Chancellor yesterday—to much fanfare—will make little impact on the size of the problem created by the Governments he has been a member of since 2010. I saw today that that figure will cover not only adult social care but children’s, and it also apparently includes money for NHS winter pressures next year, so perhaps that figure is not quite all it was cracked up to be in the Budget statement. However, even if it were, it would not be enough to deal with many of the problems created by the cuts to Liverpool’s social care that have had to be made in the last eight years and are still ongoing.

What about reserves? Tory Ministers frequently answer questions about the scale of the cuts faced by suggesting that authorities should spend their reserves; we often hear that cry. Liverpool has spent £146 million of its reserves to support social care spending, even at the reduced levels it now provides. Its reserves are down to £17 million, so I hope that the Minister was not planning to tell me that Liverpool City Council should spend its reserves. It is clear that that is not a long-term solution. In fact, it is not a solution that will work for much longer at all. Indeed, the NAO says that one in 10 authorities nationally will have nothing left in three years’ time if they continue to use their reserves to pay for social care, as Liverpool has done. Even if those remaining reserves were spent only on social care and nothing else, local authority reserves would be completely used up by 2022.

What about new money? The Mayor of the city of Liverpool, Joe Anderson, has adopted—quite entrepreneurially, I think—an invest to earn strategy, for which he has been criticised but which has yielded so far an extra £13 million a year in new revenue. His original idea was to use that money to support growth in the local economy. However, because of the extent of the cuts in Government funding and the damage they have done—the dire impact that they have had on some of the poorest and most vulnerable members of society in Liverpool—he has had to use the money to support services that would otherwise have been cut even further. For example, all our Sure Start centres have been kept open, even though some of the services they provide have gone. However, the tide of extra need being caused by ongoing cuts in Government support and social security benefits is likely to overwhelm the extra funding that the Mayor has brought in via invest to earn, and to do so soon. In that regard, the roll-out of universal credit will mean 55,000 people in the city being transferred on to it.

[Ms Angela Eagle (Wallasey) (Lab)]

Does my hon. Friend recognise the experience in Wirral with the roll-out of universal credit? That has led to a need for 30 extra tonnes of food and created a 32% increase in the use of food banks because of the hardship that it has caused.

[Maria Eagle]

My hon. Friend, perhaps unsurprisingly, has anticipated my next point—we tend to be on the same wavelength. The Trussell Trust says that in areas where universal credit has been rolled out, it sees a disproportionate increase—my hon. Friend reports a big increase in Wirral—in food bank referrals, as opposed to a lower increase in other areas. The Chancellor is putting some money back in for universal credit, to ameliorate the cuts made by George Osborne in Department for Work and Pensions budgets, but that will not prevent millions of poor and vulnerable people from losing money. They will just lose a little less—and that is without the administrative chaos and design features of this benefit that cause poverty and destitution in Liverpool. Only the Liverpool citizens support scheme, the mayoral hardship fund and the discretionary housing payments, on which the Mayor spends more than central Government provide in moneys, stand between many families and destitution.

The Mayor of Liverpool, Joe Anderson, has repeatedly invited Ministers to Liverpool to inspect the books and tell him just what else he is supposed to try in order to deal with the funding crisis that austerity has created, but not one has taken up the challenge. Indeed, he even sent train tickets to Eric Pickles, when he was Secretary of State, to facilitate a visit, but he did not use them. Perhaps this Minister can take up the offer to inspect the books and see what else he can suggest that Liverpool City Council do; we would be most happy to welcome him. If not, perhaps he could indicate that the Mayor of Liverpool’s suggestion of a royal commission on the funding formula will be seriously considered. After all, with things going as they are, soon there will be no consideration of levels of deprivation or need in any of the ways that funding is allocated to local authorities, nor will any account be taken of the ability of the people of a local area to pay for all that is needed themselves; there will be no elements of redistribution. That is a recipe for entrenching disadvantage and ending social solidarity.

According to the Local Government Association, 168 councils will soon receive no revenue support grant at all and will rely only on business rates and council tax for their income. That disadvantages Liverpool again, because the council tax mix and base is so low. For example, Liverpool has more people than Bristol, but raises £38 million less in council tax, because almost 60% of Liverpool properties are in band A, compared with an average of 24% across the country, and 90% are in bands A to C, compared with 66% nationally. In addition, almost 36% of council tax payers are eligible for a discount because of their circumstances, whereas the national average is 16%. However, Government funding takes no account of these issues. That makes a big difference. If Liverpool was at the national average for these things, that would have meant an additional £97.7 million in council tax available to be collected every year. As it is, Liverpool can raise only £167 million in council tax. Similarly, less is raised in business rates in Liverpool than in many other places, because of the density and mix of local businesses.

Forcing the people of the city to rely, for meeting higher levels of local need, on weaker business rate and council tax yields is not a fair way to fund local services. I therefore finish by asking the Minister to have the courage that his predecessors lacked and visit Liverpool to inspect our books and make some suggestions as to what else, if anything, can be done. I also ask him to address the question of establishing a royal commission on local Government funding to ensure that the Government of which he is a member do not entrench existing deprivation and remove elements of redistribution that have in the past ensured social solidarity and improved life chances, and equality between different areas of the country. We need that now more than ever.

[Several hon. Members rose—]

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I start by congratulating the hon. Member for Garston and Halewood (Maria Eagle) on securing this debate and it is good to see a strong turnout from Merseyside colleagues as well.

It did not sound like the hon. Lady was aware that in fact my very first visit as Minister for Local Government was indeed to Liverpool, both to see the City Council and to work with the troubled families programme, and I was delighted to accept an invitation from the hon. Member for Liverpool, Wavertree (Luciana Berger) shortly after being appointed to this particular role.

Being relatively new to this role, I am the first to say that local authorities have done a commendable job over the past few years, maintaining a strong level of services in the face of rising demand. In responding to the specific points that the hon. Member for Garston and Halewood made, I will first outline my broad vision for the role of local government, which consists of three particular areas: first, to drive economic growth; secondly, to help the most vulnerable in our society; and, lastly, to build strong communities. I will take each of these areas in turn, specifically in relation to the points that have been made by hon. Members about Merseyside.

I will start with the economics. In this financial year, councils on Merseyside— including Sefton, Knowsley, Liverpool, Wirral, Halton and St Helens—had an aggregated core spending power of around £1.3 billion. Core spending power is the standard measure of a local authority’s key financial resources. It includes money from the central Government grant, which is typically known as the revenue support grant, but also the money raised locally from council tax, the money raised through the business rates system, and further specific grants from central Government for things such as adult social care, the better care programme and, indeed, the new homes bonus.

Across Merseyside, core spending power is up every single year in this four-year spending period and up 2% this year as well.

[Maria Eagle]

I received a parliamentary answer from a colleague of the Minister about police spending, which said that over the last year £5.1 million of extra money had been given to enable the police to tackle the very serious crime that my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Wallasey (Ms Eagle) referred to. In fact, that money came from the Government simply allowing a precept increase; it all came from hard-pressed council tax payers in Liverpool and not one penny piece came from the Government. How can the Minister justify the ridiculous figures that he is using, which hide the Government’s contribution by referring to everything else that can be raised in any other way? That is a way of abdicating responsibility.

[Rishi Sunak]

I totally reject the suggestion of hiding. It would be ridiculous to look at any local authority’s financial resources without considering the various ways in which such an authority funds itself. I am delighted that the hon. Lady is focused on keeping council tax low. Indeed, the Government have ensured that council tax today is lower in real terms, across the country, than it was in 2010. We have heard various suggestions from Labour Members about doubling council tax, which is something I assume the hon. Lady, being on the side of hard-working taxpayers like us, would reject.

The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous. For example, when the adult social care precept was introduced, it was understood that different areas would raise different amounts from it, which is why in the incremental billions of pounds that the Government have injected into the social care system directly through the better care fund there is an equalising measure to take that into account. That is exactly why, today, the most deprived authorities have a core spending power per household—taking into account all those things, council tax included—that is 23% higher than that of richer authorities. Indeed, that is why areas with larger council tax bases provide more of their area’s resources from council tax; Merseyside provides less than half of the amount those areas do, because the council tax base in Liverpool is that much lower. It is totally wrong to suggest that that is not taken into account.

I think it was alleged that I, or the Government, had removed deprivation from funding formulas. I can categorically say that I have not removed it from any funding formula. We are in a root and branch review of how local government is funded. We are in the midst of various consultations and I would be delighted to have hon. Members’ suggestions.

--- Later in debate ---

[Maria Eagle]

I am disappointed that the Minister chose to take away half of my time to respond. I am afraid he did not deal with the points that were made in the debate, and that is a shame. It is ridiculous for him to suggest in the way he did that the Government take account of deprivation. I would like to see how he came up with the figures in his speech. Liverpool’s local authority has lost 64% of its money, and Knowsley 58%. Our police have had the worst cut in the country, losing 31% of their money, with the fire authority losing 50% of theirs. Liverpool Community College has lost £5 million over the past four years. If that is strongly supporting Merseyside, I hope that the Minister and his Government will stop supporting us, because it is terrible.

Question put and agreed to.

Resolved,

That this House has considered local government funding in Merseyside.

Draft Liverpool City Region Combined Authority (Business Rate Supplements Functions) Order 2018

Maria Eagle Excerpts

Monday 16th July 2018 General Committees

[Maria Eagle (Garston and Halewood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Wilson.

I do not object to the order in any way. It is a welcome, although very modest, measure enabling the combined authority to raise some of its own finance in certain circumstances. I hope that the Minister will go on to think about other ways we might give more genuine power to the combined authority.

I hope that we will see the Minister again in due course with more real devolved power for the combined authority.

Housing and Homes

Maria Eagle Excerpts

Tuesday 15th May 2018 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

The Secretary of State talks about fairness. What will he do to ensure fairness for those who buy new houses? Sixty-nine per cent. of new houses in the north-west were sold as leaseholds, purely and simply so that home buyers can be financially exploited into the future. What will the right hon. Gentleman do to ensure fairness for them?

[James Brokenshire]

I will come to the point about leasehold that the hon. Lady highlights, but first I want to finish considering some of the issues in relation to tenancies.

Last month, the Department set up a database of rogue landlords and agents and introduced banning orders. That will make it easier for local authorities to act against rogue landlords and agents to protect tenants. We will shortly consult on options to support landlords to offer longer tenancies to those who want them.

Buyers, too, are getting a fairer deal under this Government. We are determined to make the process of buying a home easier, cheaper and less stressful. As part of that, we put out a call for evidence. That has helped us to identify some practical steps we can take to achieve this goal.

We are also cracking down on abusive practices in the leasehold market. We will legislate to ban the development of new build leasehold houses, except in exceptional circumstances. We will restrict ground rents in newly established leases of houses and flats to a peppercorn.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

I would like to spend the few minutes available to me in this debate to talk about the financial abuse that arises from the growing practice of selling newly built houses as leaseholds. Over 1 million houses in England and Wales are leasehold properties, and 15% of new build houses in England are built and sold as leaseholds. In the north-east of England, the latest figures—from 2016—show that 69% of newly built houses are sold as leasehold, many of them in my constituency. That is a much higher figure than in any other area or region in England, so the issues that arise are particularly prevalent in the north-west. Many constituents have come to talk to me about problems that have arisen from buying their dream home as a leasehold and suddenly finding out that it is not what they thought it was going to be.

I want to talk about two estates in my constituency—Gateacre Park and Cressington Heath. In Gateacre Park, 40 properties sold as leaseholds were newly built houses on 250-year leases. The roads in the development are to be adopted by the local authority at the end of the work, so there are no maintenance charges. In Cressington Heath, homes have been sold on 999-year leases. It is a private estate, and the roads are not to be adopted when it is finished, so people will be expected to pay ongoing maintenance charges into the far future.

A number of constituents have come to me to complain that not only were they not aware of the full extent of the issues involved in the meaning of leasehold property or of the ongoing financial obligations, but that many of them, having been promised that they would have the option to buy their leaseholds, have discovered that, even on a long lease such as one of 250 years, they will be charged up to 20 times the ground rent. A figure of £5,600 has been quoted to people on the Gateacre Park estate, when it should not in reality be any more than about £2,000. On the Cressington Heath estate, people have been given different figures covering anything up to £17,500—£12,500, plus of course the freeholder’s legal fees—all to escape the escalating ground rents that are being charged.

I therefore welcome the fact that the Government have decided they will do something about this issue. They will prevent the sale of new houses as leaseholds—that is good and welcome, although it has not of course happened yet, and we await the legislation—and make the ground rent a peppercorn rent. However, my concern is that many existing leaseholders are already being exploited, and how far will the Government’s proposals help them? They are stuck in limbo: they are unable to sell their property except at a discount, because there is increasing awareness of the problems of buying leasehold houses, which is affecting the price of properties. I know of constituents who have lost sales as a consequence of their revealing that their houses are in fact leasehold properties.

There is another issue on which I would like a response from the Government. I do not believe that their proposals deal with the ongoing issue of freeholders increasingly selling the freehold—at inflated prices, but none the less agreeing to sell the freehold—but importing many of the restrictive covenants into the transfer document. I am not at all sure that it is lawful under the leasehold reform legislation. Some technical legal points have not been litigated, so I am not sure that that is lawful.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Does my hon. Friend recognise that some companies see the leasehold issue as so toxic that they are moving away from it altogether, as a local company has done in my constituency?

[Maria Eagle]

I welcome that fact, but what tends to happen is that companies add an extra £5,600 or so on to the initial purchase price and then put restrictive covenants into the transfer document.

I have constituents who have been told that into the far future, even when they are freeholders, they will have to pay to get permission to change their mortgage provider, paint their door a different colour or make any alteration to their garden or property. That is not a proper freehold; it is finding a way to make sure that restrictive covenants can carry on, be sold on and then used financially to exploit people who have such restrictions in their deeds—whether in a lease or in a transfer document when the freehold is transferred.

I want the Government to go further than they have so far said they will go and consider banning some of these ridiculous restrictive covenants from being put into transfer documents as well as into leases. If they were to do that, I might be able to welcome their package of measures rather more than I have been able to so far.

--- Later in debate ---

[The Minister for Housing (Dominic Raab)]

I welcome all the contributions to the debate, those from across the aisle as well as from the Government Benches.

The Government are more determined than ever to make sure that this country is one where the dream of home ownership can become a reality for aspirational working Britain and where, at the same time, we address the challenge for generation rent, whether people are in the private or social sector. We delivered over 217,000 new homes to rent or buy in the last year alone, the highest in all but one of the past 30 years.

This must be the point of departure, not the point of arrival. We are ambitious to go much further, first through planning reform, including the revised draft national planning policy framework and reforms to developer contributions. That is fundamental to delivering the homes the country needs, and fundamental to ensuring they are the right homes built in the right places to the right quality. As my hon. Friend the Member for Southport (Damien Moore) argued clearly and cogently, density is a key part of that, which is why the NPPF says that local plans should significantly raise minimum densities in towns and cities, and on other land well-served by public transport. My hon. Friend the Member for Weston-super-Mare (John Penrose) spoke powerfully about the importance of this particular policy measure and I recognise that he wants the Government to go further. The hon. Member for Oxford East (Anneliese Dodds) spoke about the need to preserve garden space when we utilise density.

Planning reform also means giving greater weight to the need to put suitable brownfield land to good use. Arguments on that were made on both sides, including by the hon. Member for Reading East (Matt Rodda) and my hon. Friend the Member for Cheadle (Mary Robinson). As the shadow spokesperson said, the hon. Member for Mitcham and Morden (Siobhain McDonagh) gave us an iconoclastic blast at the prevailing consensus around green belt, which I will certainly reflect on. Under the revised NPPF, we will also hold local authorities to account through the new housing delivery test to make sure we have a stronger focus on getting homes built, because people cannot live in a planning permission. There can be no ducking or diving; councils must build the homes that their communities need.

We must also deliver the infrastructure to support house building, a point made by my hon. Friend the Member for Northampton South (Andrew Lewer) and the hon. Member for York Central (Rachael Maskell). People rightly ask, when they see a new development near them, will the roads be congested, will local schools have enough places and will it mean a longer wait to see their GP? We are investing £5 billion, so local authorities can secure vital infrastructure in areas where housing need is greatest. Through our marginal viability funding, and through the £4 billion from the latest tranche of Forward Funding, which goes to larger-scale projects, there is the potential to deliver 200,000 homes in relation to marginal viability and over 400,000 new homes from the Forward Funding pot. That is the way the Government will deliver more homes, while at the same time building the stronger communities we all want.

At the same time, we will not shrink from holding developers to their responsibilities. The most recent figures show that 684,000 homes with planning permissions granted have not yet been completed. That is far too high. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is leading a review of the gap between the number of planning permissions granted and homes being built. He will make recommendations in the autumn for closing the gap. It will be important in addressing the concerns expressed so eloquently by my hon. Friends the Members for Poole (Sir Robert Syms) and for Stoke-on-Trent South (Jack Brereton). Where planning permission is granted, we believe it should be viewed more like a contract for delivery, not the start of an endless haggle that exhausts councils and frustrates local communities.

At the same time, we recognise that central Government have a lead role to play. We must lead by example. Releasing surplus public sector land has the potential to increase the supply of new homes and meet our ambitions. We are pressing all Whitehall Departments to release more sites, with the capacity to deliver 160,000 additional homes. Of course, that offers a special opportunity for us to provide more affordable housing for the teachers, nurses, veterans and all those key public sector workers who should be able to afford to live in the communities that they serve with such dedication.

Our mission is not just to build more homes, but to deliver housing that is available and affordable to everyone in our society, especially the most vulnerable. Strong speeches were made by hon. Members on both sides of the Chamber, including the hon. Member for Crewe and Nantwich (Laura Smith) and my hon. Friend the Member for Chichester (Gillian Keegan). The Government are committed to halving rough sleeping by 2022 and to eliminating it by 2027. We are backing that ambition with £1 billion of funding and with the Homelessness Reduction Act 2017, which has just come into force. I pay tribute to my hon. Friend the Member for Gravesham (Adam Holloway) for all his work in this area, and for having the guts and gumption to see what it is like at first hand and to look at the issue through the eyes of someone who is sleeping rough.

The Housing First pilots launched last week have put £28 million into helping those who are either sleeping rough now or who are at risk of rough sleeping. This aims not only to keep a roof over their heads but to help them to address the underlying challenges that lead to rough sleeping, from mental health problems to alcohol abuse. I welcome the support from the hon. Member for Paisley and Renfrewshire South (Mhairi Black) right the way across to my neighbour, my hon. Friend the Member for Spelthorne (Kwasi Kwarteng). It is also important to recognise the restlessness of my hon. Friend the Member for Harrow East (Bob Blackman) to go even further than those existing pilots, and that point was very powerfully made.

More broadly, 357,000 affordable homes have been delivered since 2010. More council houses have been built in the last eight years than in the whole period in office of the last Labour Government. Those are the facts. We believe that anybody who works hard and aspires to own their own home—

[Maria Eagle]

Will the Minister give way?

[Dominic Raab]

I will not, because I have such a short time, and I want to address all the points that hon. Members made on both sides of the House.

We believe that anybody who works hard and aspires to own their own home should have the opportunity to realise that dream. Right to buy has helped nearly 2 million to realise their aspiration to own their own home. I recognise that the shadow Housing Secretary, the right hon. Member for Wentworth and Dearne (John Healey), referred to the Labour party’s Green Paper, which recently vowed to scrap right to buy—there was not a lot made of that in his speech. The public will note that while Labour’s Front Benchers may enjoy owning their own cushy homes, they now oppose extending the same opportunity to those in our country for whom that is currently beyond reach. Government Members understand why people dream of owning their own home. That is why we will launch our £200 million pilot of the voluntary right to buy for housing associations in the west midlands. Only the Conservatives are serious about—

[Maria Eagle]

Will the Minister give way?

[Dominic Raab]

I will not. Only the Conservatives are serious about reviving the dream of home ownership and only the Conservatives have a credible plan to achieve it. Our Green Paper on social housing in England is a historic opportunity to address this crucial sector, from landlord-tenant relationships to, frankly, some of the ignorant and offensive stigma that too many social tenants suffer today. This Government—a Conservative Government—are dedicated to eradicating that prejudice, recognising the hard work that so many social tenants put in, valuing the pride that they take in their neighbourhoods, and restoring the respect and dignity that they deserve. We will publish that groundbreaking report before the summer recess. That is our mission: to reverse the decline in home ownership for the teachers, nurses, shift workers, couples working overtime up and down the country, and all those who dream of owning their own home.

Too many feel that the housing ladder has been pulled up beyond their reach. We must grasp the opportunity to right that wrong, to build the homes that Britain needs, whether to buy or to rent, to make them more affordable and to make the Conservative dream of a property-owning democracy a 21st-century reality for the next generation.

Question put and agreed to.

Resolved,

That this House has considered housing and homes.

Oral Answers to Questions

Maria Eagle Excerpts

Monday 30th April 2018 Commons Chamber

[Rishi Sunak]

My hon. Friend puts it very well, as she has done on previous occasions. It is not right to come to this place and scaremonger with regard to ordinary residents’ services. Worcestershire is delivering, and she is right to defend it.

[Maria Eagle (Garston and Halewood) (Lab)]

May I welcome the new Secretary of State to his post and wish him well? Does he agree that no new house should be sold leasehold? There is no excuse for it. What steps will he take to help the many hundreds of thousands of people, including my constituents, who are now being financially exploited by their freeholds being sold on to dodgy characters?

[Mrs Wheeler]

I thank the hon. Lady for her very important question. The scandal over feudal leaseholds on new build is absolutely disgraceful. We are working very hard with the Law Commission to change the rules as to how this should go forward. I am delighted to say that some developers have got the point. In South Derbyshire, we now have big signs up on new build saying, “Freehold houses for sale here”.

Local Government Funding

Maria Eagle Excerpts

Wednesday 28th March 2018 Commons Chamber

[The Secretary of State for Housing, Communities and Local Government (Sajid Javid)]

I welcome the opportunity to respond to this debate and to set the record straight on the Government’s support for local government and the communities that it serves. First, however, let me take this opportunity to express my condolences to the family and friends of Councillor Clarissa Slade—one of the youngest councillors in the country, who died, sadly, earlier this week.

Every day, dedicated councillors and officers in local government deliver vital services on which we all depend: on that much, the shadow Secretary of State and I agree. I have the highest regard for them. They are, quite simply, at the frontline of our democracy and the foundation on which strong, thriving communities are built. That said, these have been challenging times for local government, although it has been notable how impressively many councils have stepped up to make hard-earned taxpayers’ money go much further—not just protecting services, but often improving them. The fact that satisfaction levels among residents have remained broadly steady is testament to that. However, I recognise, of course, that these hard-won gains have been achieved in a very difficult financial climate.

[Maria Eagle (Garston and Halewood) (Lab)]

What does the right hon. Gentleman have to say to Liverpool City Council, which has lost 64% of its Government funding so far? We have not even reached 2020 yet.

[Sajid Javid]

I hope that the hon. Lady will appreciate what I am about to come on to: an understanding of how we got into this situation and how we can avoid getting back into it. Liverpool City Council is part of the Liverpool city region, which has been getting a lot more money recently—especially for investments, to encourage growth and jobs. If other members of the Liverpool city region, such as Wirral, for example, stopped wasting a quarter of a million pounds every year on some council Pravda, perhaps they would spend money more efficiently.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

I rise to support the motion in the name of my right hon. Friend the Leader of the Opposition and other right hon. and hon. Friends, in particular the part that suggests that

“councils are reaching a financial breaking point”

and calls on the Government to

“initiate a review into the funding of local government to ensure that the sector has sustainable funding for the long term”.

I am sorry that the Secretary of State is leaving at this point, because I hoped he might listen to what Back Benchers have to say—but apparently not. I think the level of cuts is too great and threatens the very future of local government as we know it.

Two councils cover my constituency of Garston and Halewood. Liverpool has lost 64% of its central Government funding, or £420.5 million in real terms since 2010. At the beginning of the Lib Dem coalition Government—I am sorry the Lib Dems have absented themselves, because they cannot absolve themselves of responsibility for the cuts that have happened and that continue to happen as a consequence of the Government they supported and were in—we lost £350 million from Building Schools for the Future, £127 million from the housing market renewal initiative, and all the money that recognised the levels of deprivation in Liverpool.

Consequently, the council now has 3,000 fewer staff. It has taken out most of its middle management and saved £5 million a year by cutting the performance-related bonuses of its remaining staff. Councillors’ allowances have been frozen since 2010 and special responsibility allowances have been cut by 10%. There remains a £90 million gap to be filled over the current three-year period.

The other authority, Knowsley, is smaller but has been bashed equally hard by the Government. It has lost 45% of its Government funding so far, which is over £100 million. That is £485 for every person in the borough, which is double the England average of a loss of £188. Consequently, the authorities are struggling to meet the requirements they have to support their residents.

The future the authorities face will be even more difficult, because by 2020 Government grant will be cut further and they will have to rely on council tax and business rates. Liverpool has the further disadvantage that 60% of its properties are in band A—the lowest yielding council tax band—and 90% in bands A to C. The money raised by council tax in Liverpool is £72 million below the average UK figure. It can raise only £1.4 million for every 1% increase in council tax.

The council tax base is such that it will never be as easy for a city like Liverpool to do as well as more affluent areas on the basis of council tax and business rates alone. Last year, 72% of Liverpool City Council’s funding came from Government grant and only 11% from council tax. It has to spend more on adult social care than it can raise in council tax. That is the situation it faces. It is doing what it can. It has built almost 11,500 new band D properties since 2010, yielding an extra £13.5 million a year in council tax. It is doing its best to grow the council tax base, but it is difficult.

Knowsley has made particular efforts to grow its local economy to deal with similar issues, and has managed to do so pretty well. However, it has to spend 80% of its resource on statutory services that it cannot avoid and adult social care, so there is not much space for it to make further savings. It can raise only £477,000 for each 1% increase in council tax. It is therefore fantasy for the Secretary of State and Government Members to argue that this is about efficiencies and just doing things a little bit better. It is far more fundamental than that.

When the Minister responds, I wonder if he might deal with the admitted errors that have been made in section 31 grant calculations in respect of authorities such as Knowsley. Apparently the council was told, after the legal deadline for setting its budget, that there was going to be clawback, because the Department had miscalculated the money due under section 31. To repay that money, Knowsley Council might have to raise council tax by an extra 2%. It cannot do so, however, as it has already set its budget. I hope the Minister will deal with the mistakes made by his Department. The effect on poorer councils such as Knowsley and Liverpool could be devastating. It is bad enough to lose 64% of resource and bad enough to lose 45% of the money used to carry out statutory duties, but to then have further monies clawed back because of a mistake by the Government is completely unconscionable. I hope the Minister in his reply will at least be able to give me some assurances about that clawback and what the Department is going to do about it.

[Several hon. Members rose—]

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

May I start by echoing the sentiments of the Secretary of State and hon. Members on both sides of the House? Within the short space of time that I have served as Local Government Minister, I have seen countless examples of the lengths to which councils go to serve their communities. It is a privilege to represent them in the Government, and I commend the hard-working staff and councillors delivering the services on which our communities depend.

I am proud that this Government are listening to those councils, recognising the pressures they face and responding to their concerns. That is why local government is seeing a real-terms increase in financial resources over the next two years. That is why local government is benefiting from an extra £2 billion in social care funding, and that is why local government is keeping billions more of its own money through business rates retention.

[Maria Eagle]

The Minister has just asserted that local government will have a real-terms increase. Does he accept that, as the National Audit Office has said, a 49.1% real-terms reduction in that funding has occurred in the past seven or eight years since the Conservative party has been in power?

[Rishi Sunak]

As the National Audit Office pointed out, this Government were alert to the requirements of adult social care building as a pressure. This Government responded by delivering extra money for adult social care.

In general, what this Government are doing is working. In adult social care, we have seen delayed transfers of care fall by 34% in the past year. In housing, we are seeing record levels of new home building and infrastructure investment, and from Teesside to the west country, we are seeing areas seize the opportunity to shape their own future. My hon. Friend the Member for Sutton and Cheam (Paul Scully) was absolutely right when he said that other people may paint a gloomy, downbeat picture, but there are examples of councils delivering for their constituents across the country, and as he pointed out, Kingston is doing a fantastic job.

Indeed, according to the LGA, over 80% of people are satisfied with their local area as a place to live, and satisfaction with local council services has remained entirely stable. To ensure that that continues, it is right that we update and modernise our current funding formulas. In the short term, I want to reassure the hon. Member for Garston and Halewood (Maria Eagle) that the Government are not clawing back section 31 grants, as she suggested might be the case. My right hon. Friend the Secretary of State confirmed that last week.

My hon. Friends the Members for Christchurch (Sir Christopher Chope) and for North East Hampshire (Mr Jayawardena) rightly asked about negative RSG. The Government are aware of the strength of feeling on that issue. We are planning to look at fair and affordable options for addressing that problem and will consult on it shortly after the local elections.

My hon. Friends the Members for St Austell and Newquay (Steve Double) and for Lewes (Maria Caulfield) spoke passionately about the rural areas they represent. They highlighted the historical unfairness in funding that their councils have suffered and why they think that should be addressed. I can confirm to them that understanding the particular costs of delivering services in rural areas and analysing the relative resources they have will absolutely be considered as part of our fair funding review.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) spoke about the importance of getting population growth right. Areas such as his have seen increases in the number of those of a particular age, which puts costs on to certain service areas. He is right to highlight that the new funding formula should use up-to-date population information and that it should be dynamic and respond to what is happening on the ground.

We have heard about children’s services, and it is absolutely right that we focus attention on vulnerable young people who are denied the stability that many of us sitting in the Chamber have enjoyed. It is a privilege for me to be the Minister responsible for the troubled families programme. Delivered in partnership with local authorities, the programme will invest £1 billion to help the most vulnerable in our society. I spent a morning last week in Liverpool hearing at first hand from the families themselves about the difference that this programme is making to their lives. Conservatives like to measure success by the outcomes we achieve, not just the amount of other people’s money that we spend, and the results are hugely encouraging.