General Practice: Large Housing Developments

Matthew Pennycook Excerpts

Tuesday 29th March 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Dowd.

I genuinely think that this has been a valuable debate about an important issue. I congratulate the hon. Member for South West Bedfordshire (Andrew Selous) on securing it and on the typically clear and powerful remarks he made in opening it. He has been raising concerns about this issue for a considerable period, and the fact that he felt compelled to secure this debate today only serves, I am afraid to say, to highlight the startling lack of progress on the part of the Government in addressing those concerns.

The concerns are not the hon. Gentleman’s alone; indeed, this issue is not confined to his corner of Bedfordshire. His concerns are widely shared across the House. As the attendance for today’s debate makes clear, they are keenly felt among Government Members in particular. I thank all the Members who have contributed this morning.

Having heard today’s contributions, we can only hope that the Minister will at least be convinced of the need to go away and revisit the fundamental aspects of a planning system that routinely fails to produce the necessary social infrastructure for new communities to thrive. We have heard lots of complaints and points of contention today, but it is within the Government’s gift to take action on many of the issues that have been raised. I hope that the Minister will go away with renewed vigour to address them.

The focus of this morning’s debate has been on the provision of primary care services for large-scale housing developments. I add my praise to the general expressions of support that have been conveyed today to GPs and GP practice staff. That we face significant challenges as a country when it comes to primary care capacity is not in dispute. The reasons for that shortage are complex, and when it comes to problems such as the recruitment and retention of enough GPs to accommodate rising patient demand or how local health services plan for population growth in service provision, those are obviously the responsibility of the Department of Health and Social Care. However, there is no question in my mind but that the planning system is exacerbating the crisis in primary care, particularly in areas experiencing significant development, by failing to deliver new facilities in places where the needs of large-scale new communities cannot be met simply by the expansion of existing sites.

The particular concern of the hon. Member for South West Bedfordshire and others who have spoken this morning is general practice capacity, but the national failure to ensure that all new large-scale housing developments have adequate primary care provision is mirrored in other forms of infrastructure, whether that be school places or transport, as the hon. Members for Wantage (David Johnston), for North East Bedfordshire (Richard Fuller), for Aylesbury (Rob Butler) and others have remarked upon. Having that infrastructure is absolutely key to gaining local consent, which is an essential part of the planning process.

I do not think that this issue is primarily one of housing supply. There is a housing crisis and we need to address it, but the crux of this issue is the need for up-front infrastructure investment before or at the point that a large-scale residential development completes and new residents move in. However, the planning system as it currently operates—and I think Conservative Members will accept this—is simply not geared up to facilitate that infrastructure-first approach on all major sites; all too often, no one has overall responsibility for place-making.

The importance of master developers was clearly identified in the Letwin review: they strategically assemble land, secure the necessary permissions, co-ordinate the delivery of the infrastructure and de-risk the development process as a matter of course. Without those developers, the system incentivises volume house builders to build often poor-quality housing in inappropriate and often entirely car-dependent locations, in a way that frequently leads to intractable disputes about how core infrastructure and services will be delivered and who will pay for them. Ultimately, the fact that the planning system lacks many of the features necessary to support effective large-scale housing growth stems from the failure of central Government to take a clear strategic role in the delivery of new large-scale communities.

The hon. Member for South West Bedfordshire and others drew attention to the inadequacies of the housing infrastructure fund, and they were right to do so. The fund can and does support the delivery of infrastructure on sites where viability is an issue and address the need for up-front infrastructure and the problem of risk on a limited number of sites. However, because it distributes funding on a competitive, ad hoc basis, it is not a general solution for the infrastructure needs of all large-scale housing developments.

Homes England could play a far larger role in providing local authorities with support and assisting local partners directly with delivery, land acquisition and the master developer role. It has extensive legal powers that allow it to take on that role and obtain land by means of compulsory purchase. It could be the instrument the Government use to support large-scale growth with the necessary social and transport infrastructure. However, that would depend on the Government having a strategy; at present, I am afraid, they do not. Although there are exceptions, in general terms it is simply a fact that central Government in England do not play a clear strategic role in site identification or the delivery of new large-scale communities.

The national infrastructure strategy sets out a range of investment priorities, but it does not provide a framework that makes clear which areas are preferred for long-term priority housing growth and their relationship to infrastructure investment. National planning policy on delivering sustainable, large-scale housing developments is incredibly vague and provides little in the way of encouragement or guidance to local authorities contemplating meeting local housing need in key strategic locations.

The Conservative Administration of the right hon. Member for Maidenhead (Mrs May) changed the law in 2018 to encourage locally led development corporations to act as master developers. However, to the best of my knowledge—the Minister may correct me—none has yet been designated.

In many ways, the root cause of the infrastructure challenges on sites such as those that have been mentioned today is the issue of land value capture. Aside from direct Government grant, development of those sites is reliant on developer contributions in the form of section 106 or the community infrastructure levy to meet essential infrastructure needs. However, those contributions are often not sufficient to provide all the infrastructure needed on those sites. I am surprised that this has not been mentioned today, but that is at least partly a direct consequence of the impact of viability rules set out in the 2012 national planning policy framework, which allow developers to game the system and drive down section 106 contributions. Although in some cases local authorities could be more robust with developers, the national planning policy framework ties their hands behind their backs in terms of what they can extract as public gains under section 106.

The Minister will no doubt point to the Government’s proposals, mentioned most recently in the levelling-up White Paper, to introduce a new infrastructure levy. However, at present, we have no idea how it would apply to large-scale development or deal with areas of low demand, how much it would yield or the date by which we can expect it to be implemented. There is an immediate deficit, as the hon. Member for South West Bedfordshire said in his opening remarks.

Given how heavily the Government appear to be leaning on the new levy as a means to secure affordable housing and the infrastructure communities need, perhaps the Minister might give us a sense of what the new levy will look like, what form it will take and when it will be brought before the House for consideration. Indeed, he might even go so far as to give Members a straight answer to the more fundamental question of whether the Government still intend to legislate for a reform of the planning system in this Parliament.

To conclude, this debate has highlighted a problem that is not confined to a handful of sites or to particular parts of England, but is the inevitable outcome of the current planning system, which does not provide the necessary social and transport infrastructure on major sites as a matter of course. Addressing that problem requires a fundamental change of approach on the part of the Government, not just tinkering around the edges with individual infrastructure funding streams.

Real benefits can be gained if the Department is willing to grapple seriously with the problem, not only in delivering a marked increase in housing supply but in terms of the quality and sustainability of the new communities that could be created. The alternative is that we continue to see more poor-quality housing in inappropriate locations without the necessary infrastructure that residents need to flourish. Members across the House do not want to see that outcome, and I suspect the Minister does not want to see it either, but do the Government have the political will to re-examine the flawed system that they are currently presiding over?

--- Later in debate ---

[Stuart Andrew]

I thank my right hon. Friend for asking such a specific question. I do not have those figures to hand, but I will ensure that I get them to him. He makes a very valid point, and I will come on to some of the things that we are looking at to address exactly his points.

I was talking about local plans, which provide certainty for communities, businesses and developers. An effective and up-to-date plan is essential not only to meet an area’s housing requirements, but to create well-designed and attractive places to live, with the services that people need on their doorstep. We are already helping councils to put in place such robust and up-to-date plans. That includes encouraging visits from the Planning Inspectorate and specialist advice from the Planning Advisory Service to provide a range of specialist planning advice to councils throughout England.

Plans should be shaped by early, proportionate and effective engagement between plan makers and communities, local organisations, businesses, infrastructure providers and operators, and statutory consultees. They should seek to meet the development needs of their area, and that includes facilities that will be needed across health, schools and other areas. We recognise, however, that more work is needed. We want all infrastructure providers, including healthcare providers, to be much more engaged in the plan making right from the outset, because that is clearly not happening enough, as we have heard in the evidence of colleagues today. We will come forward on how we will do that as part of our reforms in due course.

Local plans are not the only means of improving services and building that vital infrastructure. There are clear regulatory frameworks for local authorities and developers to follow. The national planning policy framework, for example, states that local plans should aim for sustainable development, which means that new schools, hospitals and local services such as GP practices should be factored in from the outset. Proposed development should be shaped by effective engagement with the local community, so that planners and developers know what is really needed. In some areas, it might be new roads, bridges or bus depots, but in others it will be new nurseries or GP surgeries. That engagement should extend to relevant health bodies too, such as NHS trusts and the clinical commissioning groups, to ensure that any development helps rather than hinders local strategies to improve health and wellbeing.

Local healthwatch organisations have a role to play. They have a firm grasp on the concerns of people who use health and social care services. My Department strongly encourages planning authorities to consult them when new homes are being built, so that they can raise those all-important questions on the number of GPs needed. Equally, to some extent local plans should head some of that off before houses are actually built. I have, however, listened to what colleagues have said—I hear it loud and clear. Put simply, if a GP surgery is right in the centre of town and a new development is on the outskirts, it is obviously better to ensure that a new surgery is built closer to the homes it will serve.

We have touched on some of the funding. Hon. Members are aware that councils obtain contributions through a community infrastructure levy on new development and by negotiating section 106 planning obligations with a developer. That helps to create funding not just for housing, but to address local infrastructure needs. In the constituency of my hon. Friend the Member for South West Bedfordshire, about £5.5m has been allocated to healthcare provision through such funding, and that should be spent on helping to provide GP practices.

I recognise, however, that there is an issue here about which we need to do more. We hope that part of the effective planning reforms that we are to introduce will answer some of that. Our ambition has always been to simplify the system and to ensure that development becomes synonymous with improved services, and healthier and happier neighbourhoods. That is why we are exploring the introduction of a new infrastructure levy to replace the existing system of developer contributions.

At the moment, we plan for that new levy to be payable on completion of development. That will replace the negotiation and renegotiation that we keep seeing happen. The new levy will not be negotiable and will maximise land value, so we get more for local communities. It will also bring much greater certainty on costs, on factoring expenditure into the price paid for land and, in turn, on delivering more vital infrastructure. Under our proposals, local authorities would be allowed to borrow against infrastructure levy revenues so that they could bring forward vital improvements to services, including expanding GP capacity, before the first spade of a new development even hits the ground.

That said, I recognise that we need to test the policy. Many issues have been raised. I cannot at this moment commit my right hon. Friend the Prime Minister to a meeting, but I will raise with him the suggestions and comments made today, and I will meet my colleagues in the Department of Health and Social Care to raise the points made, to ensure that we are prioritising, gearing up and keeping focus, so that we can see what more can be done, and so that we do not miss the opportunity provided by the new fund to get the necessary infrastructure.

[Matthew Pennycook]

The Minister may not be able to answer, but may I tempt him to name the legislative vehicle by which the new infrastructure levy will be introduced?

[Stuart Andrew]

The hon. Member will not have to wait too long before hearing which vehicle will be used; I hope it will be in a couple of weeks.

I want to touch on the issue of transparency. We have introduced infrastructure funding statements, which give people the opportunity to see what councils have done, but we can and must do more to give confidence to residents. That brings me on to community engagement.

As hon. Members will know, changes to the levy system are by no means the only improvement we want to bring to our planning system. One of the reasons why new development has not always been matched with tangible improvements to schools, nurseries or GP practices is that it has not always been easy for local residents to scrutinise applications or to make their voices heard. We need a faster, more responsive planning system, fit for the modern age. That means embracing digital technology and encouraging more residents to voice their views on what is being built in their community, and where.

I know that some of our previous proposals generated significant debate, to say the least, and it is therefore right that we paused for thought and took stock of different voices from across the planning sector and beyond, but on this ambition we are determined to make headway because we believe that it will result in more real-world improvements to services, which hon. Members all want to see.

My ministerial colleagues and I hope to announce a way forward soon so that the planning system supports our wider mission to level up communities in Bedfordshire and right across the country. The key point is that, at its heart, communities must be involved. Communities and neighbourhoods should be shaping the places in which they live, so that we have beautiful places with the necessary infrastructure and a democratic system that also considers environmental improvements. Neighbourhoods should have a big say in all of it.

Colleagues raised a number of other points. My right hon. Friend the Member for Chipping Barnet (Theresa Villiers) never misses an opportunity to raise housing targets with me. She knows from our conversations and meetings that I understand the issue. If she will allow me, I will come back to her in due course. My hon. Friend the Member for Wantage (David Johnston) has also been quick off the mark to come to see me to discuss the issues in his constituency. Again, I understand them.

My hon. Friend the Member for Loughborough talked, quite rightly, about wanting to support new housing but that we should be building places where people want to live, not just huge dormitory estates. There has to be a sense of community. My hon. Friend the Member for North East Bedfordshire (Richard Fuller) asked me to double up with the Secretary of State after his report—I will make sure that I do that for him.

I will see my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) later today to discuss the issue of second homes and its impact on those working in the public sector. I hope we will have a constructive meeting. My hon. Friend the Member for Keighley (Robbie Moore) talked about towns I know well. My mother-in-law lives in Addingham, so I will get an earful from her if I do not get this right.

My hon. Friend the Member for Aylesbury (Rob Butler) talked rightly about the stark increase—from 16,000 to 26,000—in the number of patients at his surgery. That is absolutely an area we need to look at carefully. He also talked about all of the different funds that are available. I think that that is one of the most confusing issues, and it is something that I would like to address as we go forward.

The Opposition spokesman, the hon. Member for Greenwich and Woolwich talked about the new levy. We are currently working with local authorities, providers and industry to ensure that the levy works for everybody.

In closing, I reiterate that I have heard loud and clear the concerns of hon. Members. The frustration of our constituents when large-scale new developments are green lit and local services become increasingly congested is palpable for us all. I hope I have clearly set out what we have already done to address that, through local plans, NPPF and section 106 agreements. I have also reiterated that we intend to go much further, by creating a more streamlined, smoother planning system, which levels up infrastructure and local services in every part of the country. I say to my hon. Friends that I am committed to working with all of them to ensure that we can make that vision a reality.

Private Rented Sector Housing

Matthew Pennycook Excerpts

Tuesday 15th March 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

As always, it is a pleasure to serve with you in the Chair, Sir Gary. The debate is incredibly important. The issue does not get enough attention in this place but, as all Members will know, it is of huge and growing importance to many of our constituents, not least given the size of the private rented sector and its ongoing—and, indeed, accelerating—expansion.

I congratulate my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) on securing the debate and on the way he opened it. As always, he spoke with great force and sincerity on behalf of his constituents, and brought alive the reality of the appalling conditions faced by far too many of those renting privately.

Following his impassioned remarks, we heard a series of incredibly powerful contributions from my hon. Friends the Members for Westminster North (Ms Buck), for Ellesmere Port and Neston (Justin Madders), for Vauxhall (Florence Eshalomi), for Lewisham West and Penge (Ellie Reeves), for Easington (Grahame Morris) and for Liverpool, Walton (Dan Carden), as well as the hon. Member for Strangford (Jim Shannon). Their contributions were all directly informed by their respective constituency experiences and the obviously huge housing caseloads each of them deals with on a weekly basis.

It is not in dispute that some of the worst standards in housing are in the private rented sector. It goes without saying that that statement should not be taken to imply that every privately rented property is in bad condition, or that all private landlords fail their tenants. I also fully accept—no doubt it will be referenced in the remarks the Minister’s officials have prepared for him—that, measured by either the decent homes standard or the housing health and safety rating system category 1 hazards, the absolute number and proportion of poor quality private rented homes continues to fall, albeit steadily rather than drastically, as part of a half century if not longer of improvement in housing standards.

There is still clearly an acute problem for those private sector tenants who are the most vulnerable, have little or no purchasing power, are increasingly concentrated at the lower end of the private rental market and—as anecdotal evidence would suggest—are also increasingly concentrated geographically. However, we still need the Department to provide accurate data on precisely how private rented homes are distributed across the country.

As we have heard from all speakers today, for tenants forced to live in homes that do not meet the decent homes standard and that often have a category 1 hazard what should be a place of refuge and comfort is instead a source of daily anxiety and, in many cases, torment and misery. Whether they wake up every day to mould, vermin or dangerous hazards, today’s debate has provided yet more evidence that substandard private rented housing takes a huge toll on the physical and mental health of those in it and prevents families and children—it is this I find the most saddening—from flourishing as they should be able to.

I know the Under-Secretary cares deeply about improving housing standards and life chances, but it should be a real source of shame to him and his colleagues that after 12 years of Conservative-led Government, one in five homes in the private rented sector still does not meet the decent homes standard and one in 10 has a category 1 hazard posing a risk of serious harm. The Minister and his colleagues should be agitating week in, week out for the changes necessary to bear down decisively on this problem, and for those changes to be enacted as a matter of urgency. What makes the situation all the more frustrating is that it is patently obvious what the required changes are and, indeed, there is broad consensus across the House on most of them.

I leave aside the more fundamental issue of a striking lack of decent, secure and genuinely affordable social homes to rent, which is in many ways at the heart of the problem, and will instead use the time left to explore in a little more detail the three most important areas where change in the private rented sector is required: standards, enforcement and rights. Each has already featured in the debate.

First, on standards, a technical but crucial issue is that the Government need to review and strengthen national standards for rented homes, and to do so at pace. The decent homes standard, which provides for general benchmarking, has not been updated since 2006. It is welcome that it is being reviewed, but the process needs to be expedited. Will the Minister tell us when the Government expect the decent homes standard review to complete? The HHSRS is also under review and we need the conclusions of that exercise to be published as soon as possible. Will the Minister give us an update on when he expects that review to complete?

My final point on standards is that, in the levelling-up White Paper, the Government committed to exploring

“proposals for new minimum standards for rented homes”.

Obviously, we have no issue with that in principle, but will the Minister give us some sense of how such minimum standards would interact with the updated decent homes standard and the HHSRS? The last thing we need is to make the current regime even more complex and challenging to administer.

Secondly, the Government must start taking enforcement more seriously. A number of contributors have talked about the importance of enforcement. The Minister could emerge from Marsham Street in a month’s time with proposals for the most robust set of national standards possible, but it would count for little if those standards could not then be enforced in practice. As my hon. Friend the Member for Westminster North mentioned, two changes need to be made if the Government are to facilitate the proper enforcement of standards across the country.

The first is to give local authorities the means to enforce standards properly themselves. At present, enforcement of standards across the country is incredibly patchy and tenants face a postcode lottery as a result. Those councils that could do more with the resources they have but are not need to be encouraged to do so, but the problem in large part is the product of central Government funding cuts over many years. Does the Minister accept as much? If so, what plans do the Government have to provide local authorities with the funding and support they need to enforce regulations, as well as enabling, rather than frustrating, those authorities that wish to adopt landlord licensing schemes?

The second change is to enable tenants themselves to enforce standards. I appreciate that the issue lies outside of the Minister’s departmental responsibilities, but does he accept that unless legal aid is reintroduced for disrepair claims so that lower income tenants can seek to enforce existing standards—let alone future standards—progress on his objectives is likely to be held back?

Thirdly, the Government must act now to give renters more rights and better protection, so that they can seek redress for poor quality conditions and disrepair without fear of retribution. There is clear consensus across the House that we need to overhaul the outdated legislation that applies to the private rented sector. However, it is now three years since the Conservative Administration of the right hon. Member for Maidenhead (Mrs May) promised to abolish section 21 no-fault evictions. There has been a lot of talk about the White Paper today but, perhaps most disappointingly, we were promised a renter’s reform Bill in the Queen’s Speech last year yet as we approach the end of the Session, not only is there no sign of that Bill but we are now told to expect a White Paper in its place in the spring.

Of course, we need to ensure that any proposals for reform are considered and properly scrutinised, but tenants need protection now. They cannot afford to wait 12, 16, 18, 24 months or longer for the White Paper to be published and consulted on and for legislation to be brought forward. Given the implications for tenants suffering now, I would like to hear from the Minister why, having committed to a Bill in this Session, the Government have now determined that a White Paper will do instead.

To conclude, the House must act to improve conditions for the millions of private renters trapped in substandard housing, and must act quickly. Tenants living in squalid conditions cannot wait years while the Government slowly analyse yet more reviews and engage in more consultations and delay. We know what needs to happen; it is now a question of delivering it. I look forward to hearing from the Minister that the Government are not only seized by the urgency of the problem but, as a result, will look again at how the changes that need to be made can be enacted quickly.

[Sir Gary Streeter (in the Chair)]

I remind the Minister to leave three minutes at least for Ian Byrne to wind up.

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[Eddie Hughes]

It is great to hear about good work that is going on across the country, and I fully accept that we can learn from the work that other areas are doing.

I quickly want to cover a few more points. The hon. Member for Vauxhall (Florence Eshalomi) mentioned Louise’s case. I would be grateful if she would write to me, so I can pick up that case, because we need to be concerned about standards in all forms of accommodation, and student accommodation is one of them. The hon. Member for Strangford (Jim Shannon) raised working with devolved assemblies. One of the things I have been working on is the new homes ombudsman, who will ensure the new properties we build are of an appropriate quality. We have been working very closely with the devolved Assemblies on that issue, and we will continue to do so in other areas.

I am grateful for the invitation from the hon. Member for Easington (Grahame Morris) to visit. I hope there is no reshuffle before I get the opportunity to get out and about more, to say the least. With regard to the hon. Member for Ellesmere Port and Neston (Justin Madders), when we are talking about insecurity and poor quality housing, I hope that work to abolish section 21 will address both those points because tenants will have more security and more leverage to complain about the standards of accommodation they are being provided with.

[Matthew Pennycook]

The one question I would like the Minister to answer before he wraps up is why the Government have decided to replace a commitment to a renters reform Bill in this Session with a White Paper. Can he guarantee that we will get that comprehensive renters reform Bill in this Parliament?

[Eddie Hughes]

It would be fair to say that I will do everything I can. I feel personally invested in ensuring that happens. On the delay, I am not sure this is the legitimate answer the Government expect me to give, but we have been through two years of covid, and I have seen—we are seeing it now with the situation in Ukraine—that a number of staff have to pivot to the most pressing item that the Government are dealing with. We have a finite number of staff, and clearly covid has caused incredible challenges for the Government. I personally feel that they have responded well, but I understand the frustration. I conclude by saying that the debate has been incredibly useful for me—

Draft Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022

Matthew Pennycook Excerpts

Tuesday 8th March 2022 General Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure, as always, to serve with you in the Chair, Mr Gray. I thank the Minister for so ably summarising the regulations, which, for reasons that will be obvious to Committee members, are entirely straightforward, as the Minister said, and uncontroversial. None the less, as I said to the hon. Gentleman before the Committee sat, I am going to make him earn his salary by asking a series of quick questions, some general and some specific to the SI.

First, in relation to the general issue of—

[The Chair]

Order. Before the hon. Gentleman starts, it might be worth reminding him that he may only put questions relating to this particular SI and not to more general matters at all. That would not be in order.

[Matthew Pennycook]

Thank you for clarifying that, Mr Gray. My questions relate directly to the instrument in the sense that it concerns EPC ratings.

The Minister is responsible for the climate change portfolio and net zero policy in the Department for Levelling Up, Housing and Communities, and therefore he will have a keen grasp of the scale of the challenge we face to retrofit our country’s extremely inefficient building stock, and the importance to that national effort of accurate information about current ratings. Given that the regulations relate to the EPC register, I am keen to understand whether the Department knows the exact proportion of buildings in England and Wales that are on that register and, crucially, whether all buildings with EPC ratings are adding their names to that register. How confident is he that it is accurate?

Secondly, as for the effect of the regulations, the explanatory memorandum notes that as a result of the progressive shift to cloud-based systems, as the Minister noted, the Government have been overcharging the fees to register for some time. The precise period of overcharging is not specified. The fees are required to cover the cost of the register and although the fees reduction may seem small, when aggregated we are talking about serious amounts of money that have been overcharged and over-recorded during that period, whatever it might be. I simply wish to know how long that overcharging has run; how much has been collected as a result and what the Government have done with that money?

Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 7th March 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Matthew Pennycook.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

The Opposition have repeatedly criticised the Government’s First Homes scheme on the grounds that, by top-slicing section 106 funding, it drastically reduces the number of social and affordable rented homes that are being built, but we also have concerns that the scheme is failing in practice to help large numbers of first-time buyers across the country. Given that the new build premium is continuing to rise, and given that UK house price index data suggest that average house prices in England have increased by 18% since the scheme was first consulted on, can the Minister tell us in how many local authority areas the discount on those homes has not already been entirely eroded?

High-rise Buildings: Remediation

Matthew Pennycook Excerpts

Wednesday 2nd March 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mrs Miller. This has been an incredibly worthwhile debate on an issue that we all agree deserves more attention. That will only increase in significance in the months and years ahead as more and more buildings compromised by historical cladding and non-cladding defects undergo remediation.

I congratulate the hon. Member for Ipswich (Tom Hunt) on securing the debate. He spoke forcefully on behalf of his constituents in St Francis Tower. I add to the general and well-deserved praise bestowed on the hon. Member for Stevenage (Stephen McPartland), and thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) and the hon. Member for Strangford (Jim Shannon) for their contributions, and for bringing to the attention of the House the plight of constituents in Mandale House, Vista Tower, and other affected buildings.

Each Member has touched on this, but any hon. or right hon. Member whose constituency contains buildings with historical cladding or non-cladding defects will know of the abject misery that the building safety scandal has caused to residents. At the point that they learn that the home they believed to be safe is a fire risk, they are immediately trapped—physically, mentally and financially.

The point at which remediation works finally begin—particularly when the full cost has been met by either the freeholder or the building safety fund—should be the moment at which that misery begins to somewhat dissipate. However, as the hon. Member for Ipswich brought home in his introductory remarks, and as others have argued on the basis of cases in their constituencies, those vital remediation works, for too many residents, are a continuation of the distress that they have been experiencing.

Whether it is the psychological damage of having their home shrouded in plastic sheeting for months on end, if not years, the associated physical and mental health implications of being denied natural light or fresh air, the security risk, which we have touched on, or the financial impacts of buildings being exposed to the elements, there is no doubt that remediation works that are not undertaken with the appropriate sensitivity can and do have a detrimental impact on residents in high-rise buildings.

We have heard several suggestions this morning about how the issue can be tackled. I think that the hon. Member for Stevenage raised the idea of a digital register of new and remediated buildings. I think that is absolutely unarguable, and I hope that the Minister will give it serious consideration.

Several hon. Members raised the idea of relocating residents from buildings. That may be necessary in some cases, but the idea that all affected residents could be provided with alternative accommodation for the duration of remediation works is deeply problematic, not only because of the astronomical cost, but the practical difficulties that would be involved in such an undertaking, given the thousands of buildings that must be made safe over the coming years.

I actually agree with the hon. Member for Stevenage: surely the simplest way to minimise the impact of remediation works on residents in these buildings is for the Government to look to introduce some kind of code of practice that would seek to ensure that remediation works are carried out as sensitively as possible. There may be a standard alternative to that opaque plastic sheeting, which we can encourage developers to take on board. Even if that is not possible, and plastic sheeting is required, there are ways, and examples around the country, of how freeholders, managing agents and those they contract, can undertake those works in a more sensitive manner, often as a result of extensive consultations with residents about their particular needs.

He is sadly not in this morning’s debate, but my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) was telling me about a block in his constituency just the other evening. The landlord, Plymouth Community Homes, has ensured that a young boy with autism who loves looking out of his window at the ships coming and going from the dockyard—an important part of his daily routine, I was told—can still do so, despite the cladding remediation works, because the builder installed see-through plastic sheeting around his family’s flat.

That is just one example, taken at random, of what considerate remediation could look like. We know that there are many others across the country. It would surely be an incredibly low-cost initiative for the Government to bring forward that code of practice to ensure that all building owners and managing agents properly engage with residents in drawing up remediation management plans. I very much welcome the Minister’s views on the matter, as I once again welcome him to his place.

Remediation works are not being carried out as sensitively as they could be, and there is an additional problem related to that. As has been raised, residents are having to endure for longer than necessary the inevitable daily noise, dust and general inconvenience that come with building works, often because of a shortage of skills, personnel and materials. We know that there are many obstacles to the building safety crisis being resolved any time soon. However, shortages of suitable replacement materials and appropriately skilled remediation experts have been known about for some time.

All the evidence suggests that the sector is working at full capacity, with many of the firms able to undertake remediation works being booked up years in advance. There is anecdotal evidence that the constraints on people and materials are impacting on the duration of works on individual sites. That is why there is a need to ensure that the remediation works are carried out not only as sensitively as possible, but as quickly as possible. The need for both those things, I would argue, reinforces the case for the Government to look to establish a new building works agency, as Labour has proposed: a single body, accountable to Ministers, that could go block by block to determine which works are necessary under the new PAS 9980 guidance, commission those works, look at the ways in which the impact might be mitigated and certify buildings as safe at the end of the process.

At present, the debate around the building safety crisis is, for completely understandable reasons, focused almost entirely on the issue of who pays. However, if—and I do say if—and when that issue is finally resolved, as we hope it will be if the Building Safety Bill is overhauled as required in the other place, Ministers will have to confront the very real problem of tackling the remediation challenge across the country at pace, and in a way that best limits the harm to the blameless residents caught up in this scandal.

To ensure that, Labour argues that the Government will need to be more interventionist; otherwise, the work will simply never get done. The hon. Member for Stevenage argued that none of us have prepared for the scale of the forthcoming remediation challenge. However, it has been on a lot of our minds for some time. As the Minister will know, various professional bodies have for some time been urging the Government to grip this issue, whether by the Department chairing a taskforce or by creating a body of the kind for which Labour has advocated.

Labour remains of the view that the Government could learn many lessons from the model adopted in Victoria, Australia. As the Minister may know, Cladding Safety Victoria provides a dedicated officer for each affected building, who then appoints a project manager directly. It is obvious how that arrangement could help ensure remediation works are carried out swiftly and considerately. I urge the Minister to look again, if he has not already, at the Australian experience and at what might be learnt from it.

This has been a valuable debate and I welcome the opportunity to hear the concerns of hon. Members from across the House on the effect of remediation works on residents in high-rise buildings. Labour has long pressed the Government to bring forward a comprehensive solution to the building safety crisis that will restore common sense and proportionality to the system, resolve the fundamental issue of leaseholder liability, clear the backlog of building safety fund applications and accelerate the agonisingly slow pace of remediation. However, mitigating the impact of remediation works on residents should not be an afterthought in all this, and I look forward to hearing what the Government will do to ensure that it is not.

[The Minister for Housing (Stuart Andrew)]

It is a pleasure to serve under your chairmanship this morning, Mrs Miller. It is also a pleasure to take part in this important debate, and I commend my hon. Friend the Member for Ipswich (Tom Hunt) for securing it. As he mentioned, he has raised this issue with me before, even before I was in this new role as Minister. I know that he is passionate about trying to resolve many of the issues that his constituents face.

Other hon. Members have also raised important experiences that their constituencies have faced. One of the many things that struck me when I took on this role was the challenge that many of those constituencies have faced. Residents of high-rise buildings across the country probably went into those buildings with the dream of home ownership and the prospect of living in a nice new apartment, which rapidly turned into a nightmare the day they discovered that their flats were clad in dangerous and unsafe materials. That is why the contributions of hon. Members this morning have been so very important. I am deeply aware of the harrowing cases that many have discussed.

Although I am very new in post, I know and have known about the importance of remediation. I am obviously keen to get a grip of it during my time in this role, but I am also very keen to work with colleagues and to continue the cross-party relationship that has clearly delivered some important results for constituents. My door is always open to any colleagues who want to speak to me.

I will in a moment address some of the specific points that were raised. I want to reiterate that I hope that the announcement made by the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), will indicate to the House how seriously the Government take this issue. The whole package of measures that has been announced and the amendments being introduced in the other place as we speak show that there is a shift in addressing the issue. Those who live in high-rise properties can be assured that this matter is being taken seriously, and that we will address their safety concerns. We will also bring a good deal of proportionality into the issue; there are some people living in perfectly safe accommodation who are also feeling very frightened, so we need a sense of proportion.

To come to some of the points that were made, my hon. Friend the Member for Ipswich talked specifically about St Francis Tower and other buildings in the town. The lack of consultation with residents is, frankly, unacceptable. It does not cost any money to consult with the people who live in those buildings and to explain the processes that have to be undertaken. There are some elements that are necessary: some of the shrink wrapping ensures that residents do not face astronomical heating bills as a result of the cladding coming off. That said, we perhaps need to look at the types of wrapping. He says that he does not believe that there are any other ways. Lord Greenhalgh is dealing with the detail of those things, and I will speak to him when I get back to the Department about the really important points that my hon. Friend the Member for Ipswich raised.

The hon. Member for Sheffield Central (Paul Blomfield) talked about Mandale House and the lack of natural light. I do not think any of us could understand how that would feel—lacking the only source of natural light in one’s building. Those are the sorts of experiences that we have to listen to and learn from, because this will become a bigger problem as remedial works happen all over the country.

I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland). I know that when he gets his teeth into a subject, he does not let go—he is like a terrier—and he gave me a bit of a Christmas list of asks. He talked about developing a code of practice, and I will speak to Lord Greenhalgh about the merits of that. My hon. Friend raised the issue of compulsory purchases. That is a big ask, but these things are always worth exploring. I obviously cannot commit to that here, but it is an interesting point.

On the issue of a building safety register, for the high-risk buildings and buildings over 18 metres that are about to be occupied, there will be a register under the new Building Safety Regulator. However, if my hon. Friend has other concerns about that issue, perhaps we can talk about them later. Of course I will happily speak to my counterpart in Northern Ireland. Sharing best practice is right, as it is for the benefit of all the people of the United Kingdom and Northern Ireland: it is important that we share the vital lessons that have been learned.

I hope that we have come a long way in recognising that this is an important issue that needs addressing and that that gives people confidence that the places they live in will have the remedial works that they need, so that they can get back to enjoying the houses and the accommodation that they are living in and enjoying the things in them. I get the point about my hon. Friend’s constituents’ plants; such things are important to people. Someone’s home is the most important place in their life and they want to ensure that they are able to enjoy it safely.

I will touch on the pace of remediation, because that is an important point. We are forcing industry to step up to the plate and take responsibility, of course, but we are also pressing ahead with getting dangerous cladding removed from buildings without delay. As I have said, we have provided the £5.1 billion to address fire safety risk caused by unsafe cladding on these buildings in order to protect residents and we have made great progress in making safe high-rise buildings with the most dangerous form of cladding—ACM cladding, the type that was on Grenfell Tower. Some 93% of all high-rise residential buildings identified with unsafe ACM cladding have now been remediated or have workers on site as we speak, finishing the job, and that rises to 100% in the social sector. For high-rise buildings with unsafe, non-ACM cladding, £1.073 billion has already been allocated from the building safety fund, with £945 million relating to the private sector and £128 million relating to the social sector. So, in total, 892 private sector buildings and 123 social sector buildings are proceeding with a full application to the building safety fund.

[Matthew Pennycook]

I will not put the Minister on the spot with a question, but I will just request that he go away and consider how we can speed up that application process, because far too many buildings without ACM cladding that have applied to the building safety fund face, even with the portal and the information on it, inconsistencies about the information that is said to be required and submitted, as well as very severe delays in receiving that funding. We are talking about remediation works that can take a year or two, but these buildings are not even at that point because they are still being held up in terms of getting a final award or final decision on remediation. Can he consider what more he can do to speed up that application process for all the buildings across the country that are affected?

[Stuart Andrew]

I will happily commit to go away and look into that issue for the hon. Gentleman, and I will get in touch with him afterwards to update him on that. It is important to say that we have also improved the information available to leaseholders and residents about the building safety fund, with the new online services that provide real-time updates, but I take the point that he has just made.

Clearly, the mental health aspect is a very important issue. I have outlined the steps that the Government are taking to meet a lot of the financial costs of removing the cladding and how we are doing everything within our power physically to speed up remediation. However, in response to the points that hon. Members have made today, I will also say that we also recognise that the building safety crisis has taken a very heavy toll on people’s mental health. Of course, my Department regularly engages with leaseholder groups who have shared with us terrible examples of people being sick to the stomach with stress over the last few years because they are trapped in homes that they are unable to sell or that they cannot afford to fix. We believe that bringing these matters to a swift conclusion through the measures that I have spoken about today is the best way to alleviate the stress and concerns of so many leaseholders.

We know that many residents living in these buildings, including many who have had to endure 24/7 waking watches or who have faced acute financial difficulties, understandably need access to proper mental health support. That is one reason we are working across Government to ensure that all people, regardless of their residential situation, get that help and support they need. Where residents in buildings fitted with flammable cladding need specific mental health support, we are encouraging them to contact their GP to discuss these issues and ensure they are referred to appropriate mental health services. I recognise that we have to look at that in greater detail.

My hon. Friend the Member for Stevenage asked about the contribution of costs to waking watch being offset under the £10,000 cap, and I confirm that is the case. I am sure his constituent will be happy with that.

Non-commissioned Exempt Accommodation

Matthew Pennycook Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is an absolute pleasure to follow that powerful speech from my hon. Friend the Member for Birmingham, Yardley (Jess Phillips).

This has been an excellent debate, featuring a great many thoughtful and impassioned contributions, and I thank all the Members who have taken part in it. As would be expected, there have been points of contention throughout, but there is clearly agreement across the House that far too many people find themselves living in unsafe, poor-quality shared housing without the support that they need to get back on their feet and improve their lives, and that the beneficiaries of this arrangement are the unscrupulous providers who, by exploiting gaps in the existing regulatory regime, have extracted—and continue to extract—significant amounts of public money through the “exempt” provisions relating to housing benefit.

As we have heard today from Members in all parts of the House, those who are suffering so that rogue landlords of this kind can get rich are some of the most vulnerable people in our society: those fleeing domestic abuse, those who have served their time in prison and are trying to make a fresh start, those with severe mental health needs, those battling addiction and substance dependence, those leaving care, and those who have sought and secured asylum in our country and are starting the process of building a new life for themselves. The impact of poor-quality, non-commissioned exempt accommodation on vulnerable individuals like those can be devastating, whether it is the physical and mental consequences of living in squalid conditions, the risks that arise from the absence of effective supervision and safeguarding arrangements, the money gouged from hard-up residents through service charge costs that are ineligible for housing benefit purposes, or simply the inability to sustain an exempt accommodation tenancy, or to move on from one, because of a lack of care or support.

Sharp practice in this sector is causing real harm, and, as we have heard today, it is not only causing harm to the vulnerable individuals placed in this type of housing. Communities with large numbers of badly run exempt-accommodation properties are struggling to cope with the impact of concentrated numbers of people whose lives are, by definition, challenging and often chaotic, and who are not being given the supervision, care and support that they need in order to manage. Most gallingly, it is taxpayers who are subsiding this exploitative arrangement, and are thereby indirectly facilitating its social consequences. This is a situation that cries out for urgent reform, and the motion therefore seeks to ensure that the Government end the exploitation of vulnerable individuals at the hands of unscrupulous agencies, and at the taxpayer’s expense, as a matter of urgency.

I want to respond to a number of the points that have been raised in the debate, and to explain why we believe that a package of emergency measures is required to end this profiteering. Today we have heard numerous accounts of the detrimental impact of poorly managed, poor-quality non-commissioned exempt accommodation across the country. That attests to the scale of the problem, and to the fact that it is not an issue that affects only some cities and towns or only a select number of local authority areas. It is obvious that some parts of the country are more badly affected than others, and we have heard how and why cities such as Birmingham have become hotspots for poor practice in this sector, but it is a problem affecting every corner of the UK. Given the steady increase in the number of exempt tenancies over recent years, it is likely to become more widespread and more acute in the years to come if the Government fail to act quickly to stop rogue providers gaming the system.

Today’s debate has also made it clear that this is a complex problem to which there is no simple single solution, and the necessary first step to addressing it is that the Government accept that it cannot be tackled simply by incremental improvements at local level. Local discretion is of course vital, and there is no doubt that individual local authorities have been able, by their own efforts, through measures such as enhanced scrutiny of benefit claims or the use of voluntary codes of conduct, to reduce their reliance on the exempt accommodation sector and to drive up standards within it.

However, leaving this problem purely to councils, even with additional support, is not a solution, because it fails to address the fundamental causes of the problem. It is akin to asking the passengers of a ship holed beneath the waterline to do their best to bale the rising water out with their hands rather than seeking to repair the damage at source. Because it does not address the fundamental causes, any progress made in one local area will inevitably mean rogue providers simply pick up sticks and move to prey on another. If the Government are truly committed to bearing down on this problem wherever it arises, it must be a question of how, not if, they should intervene at national level to support the efforts already being undertaken by individual local authorities across the country.

We know what underlying factors have combined to drive the marked growth of this sector under successive Conservative-led Governments: a chronic shortage of genuinely affordable housing; reductions in funding for housing-related support; and new barriers to access for single adults requiring social rented or mainstream privately rented housing. If we are to stand any chance of reducing reliance on non-commissioned exempt accommodation over the long term, the Government must take meaningful action in those areas.

However, those individuals and communities that are already suffering at the hands of unscrupulous exempt accommodation providers do not have the luxury of time. They cannot wait for patient reform over many years to reduce overall dependence on the sector and limit the opportunities for rogue operators to take advantage of it. They cannot wait for the Government to get around to analysing the results of local pilots that finished long ago. They require Ministers to act now—in a considered way, yes, but at pace. I have to say that the lackadaisical tone adopted by the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Walsall North (Eddie Hughes), in his response suggested that the Government had not yet properly taken this on board.

We must act at pace, and that is why the motion specifically calls for a package of emergency measures to bring an immediate end to sharp practice in the sector. There are two obvious ways in which the Government could act swiftly and decisively to achieve that outcome. The first is to introduce some form of licensing regime, including fit and proper person requirements for providers of exempt accommodation. Ultimately, it is the exempt provisions of housing benefit that enable and encourage rogue providers to enter the sector and exploit vulnerable individuals at the taxpayer’s expense. There is therefore an overwhelming case for better regulating the eligibility for, and therefore access to, exempt benefit claims, to ensure that high-quality supported housing providers are the norm. Just as care home providers need to register with the Care Quality Commission and be subject to regular inspection, an effective licensing regime would see exempt accommodation landlords screened and monitored so that new unscrupulous providers were denied access to the system and the existing ones were progressively weeded out.

The second change would be to introduce a robust framework of national standards for the sector while ensuring that councils had access to the resources necessary to tailor that framework to local circumstances and enforce standards on the ground. At present, what qualifies as the more-than-minimal care, support or supervision to be provided by an exempt accommodation landlord is incredibly vague. As a result, local authorities are unable to judge effectively whether claims are valid and eligible. The reforms proposed in the social housing White Paper should make a difference to exempt homes that fall within that category, and we urge the Government to bring forward the legislation to enact them as soon as possible. Even if those proposals lead to an improvement, however, they do not cover all kinds of exempt housing, as the Minister well knows. Anyone who examines how rogue exempted accommodation providers are taking advantage of existing regulatory loopholes cannot but conclude that we need a new regulatory regime to drive up standards for supported housing across the board and to give all local authorities the tools they would need to make the regime work in their area.

These are only the two most obvious changes that are needed if we are to begin effectively bearing down on the problem that the House has debated today. Many other smaller changes are required to bring this scandal to an end. The motion deliberately avoids setting out an extensive shopping list of specific proposals, leaving it open to this House to debate at greater length, on another occasion, precisely what would be included in the kind of emergency package that the motion calls for in principle.

What is important today is that Ministers accept that the current state of affairs must be brought to an end, that what is required is for this House to enact urgent and fundamental reform at a national level, and that they must commit to bringing forward an emergency package of measures to that end. Anything less is tantamount to accepting that some of the most vulnerable people in our society are not worthy of immediate protection, that unscrupulous operators can continue to exploit them for financial gain and that taxpayers will continue to pick up the bill.

Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 24th January 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Eddie Hughes)]

The building regulations set out the minimum energy performance standards. They do not prescribe the technology that is required—they just set the goal—which allows builders and homeowners the flexibility to innovate and select the most practical and cost-effective solutions appropriate to any development. Obviously, our intention is to go further. We have had the part L uplift, and building regs will move towards the future homes standard for 2025.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Would the Secretary of State give the House a clear and categorical assurance that if he cannot ultimately extract enough money from industry finally to fix the building safety crisis he will not allow the Chancellor to raid his Department’s budgets, including funding already allocated for new affordable homes, to make up the shortfall?

[Michael Gove]

I am grateful to the hon. Gentleman for giving me an opportunity to update the House on the conversations we had with developers last Thursday. Those conversations were cordial and constructive, but we were also clear about the obligation developers have. I am confident that they will meet it.

Building Safety Bill

Matthew Pennycook Excerpts

Report stage
Wednesday 19th January 2022 Commons Chamber

[Christopher Pincher]

No, I will not.

We want to ensure that these matters are properly debated and properly agreed. We also want to ensure, through a suite of mechanisms such as the extension of the Defective Premises Act and working with the sector to ensure that it pays for the defects it has caused, that this issue for leaseholders, which has gone on for far too long, is finally put to bed. This group of Government new clauses and amendments make key improvements to the Bill and extend its benefits to include the whole of Great Britain. I hope therefore that Members across the House will feel able to support the new clauses and the new schedule and allow them to stand part of the Bill.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It will not have escaped your notice, Madam Deputy Speaker, that I have taken on this Bill in its final stages, so I must begin by thanking my hon. Friends the Members for Manchester Central (Lucy Powell) and for Weaver Vale (Mike Amesbury) for their prodigious efforts during its earlier stages. I also want to thank my hon. Friends the Members for Liverpool, West Derby (Ian Byrne), for Brentford and Isleworth (Ruth Cadbury), for Luton South (Rachel Hopkins), for Jarrow (Kate Osborne) and for St Helens South and Whiston (Ms Rimmer) for so ably scrutinising it in Committee.

The issues covered by the Bill have been extensively set out in debates on Second Reading and in Committee. I have no intention of seeking to reprise them this afternoon, but before I turn to part 5 of the Bill and the consideration of the amendments related to it, I feel it is incumbent on me briefly to restate why we believe this legislation is so important. As the House knows, on 14 June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system installed on the outside of their 24-storey tower block in north Kensington. That tower block was also compromised by a range of other fire safety defects. I put on record once again our admiration for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their home.

[Catherine West]

Does my hon. Friend agree that it is extremely important that we give the debate the time needed to remember the loss of life and the community that survived that terrible moment in our shared history?

[Matthew Pennycook]

My hon. Friend is absolutely right. I hope that, as Members consider the Bill and amendments, they have the chance to reflect and to remember why it is going through.

One does not pre-empt the Grenfell Tower inquiry’s conclusions in stating that the horror of that dreadful June night was the product not only of pernicious industry practice, but of state failure—the failure of successive Governments in presiding over a deficient regulatory regime, and the failure to act on repeated warnings about the potential lethal consequences of that fact. The Hackitt review detailed a deeply flawed system of regulation and argued for a radical overhaul of it. To the extent that the Bill delivers on the recommendations of Dame Judith’s report, we remain supportive of it and want to see a version of it on the statute book as soon as possible, given that four and a half years have elapsed since the Grenfell tragedy; however, the House knows we have serious concerns about what is missing from the Bill, and particularly its failure as drafted to provide robust legal protection for leaseholders facing ruinous costs—a point already made by several hon. Members on both sides of the House—for remediating historic cladding and non-cladding defects. In the absence of such protection, the Opposition are clear that the Bill will fail to meet what Dame Judith described as

“The ultimate test of this new framework”,

namely,

“the rebuilding of public confidence in the system.”

As we have heard, part 5 deals with remediation and redress, as well as assorted provisions relating to safety and standards. In Committee, my hon. Friends raised concerns about the limitations of clause 126, which seeks to ensure that landlords take “reasonable steps” to pursue other potential means of recovering the costs before passing them on to leaseholders. We of course believe it is right that landlords be forced to exhaust all means of funding remediation works other than passing on costs to leaseholders, whether that be seeking redress from the original developer in cases where the two are not the same, exploring a claim against a warranty, or applying for grant funding; however, we remain of the view that this provision gives leaseholders extremely limited protection in practice and we want that to be supplemented with additional provisions for maximum legal protection against the costs of remediating all historical defects—an objective that I know is widely shared across the House, as evidenced by the numerous amendments on the amendment paper today relating in one way or another to leaseholder protection. I will speak on that issue in more detail later in my remarks.

Clause 128 relates to limitation periods and makes changes to the operation of the Defective Premises Act. We supported the proposed expansion of the Act but remain of the view that there are considerable practical obstacles to leaseholders’ successfully securing redress via that mechanism—a point made by the right hon. Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Blackley and Broughton (Graham Stringer)—not least given the prevalent use of special purpose vehicles precisely to avoid liabilities of this kind. We believe that the Government are in general overplaying the significance of litigation as a solution of the building safety crisis.

[Hilary Benn]

While of course we all welcome the extension, in practical terms, our constituents who have, staring at them from the table, bills for sums of money that they cannot afford, will not be in a position to start a legal action that may take several years, at enormous cost and risk and with no guarantee that it will reach a satisfactory conclusion, as my hon. Friend is so ably pointing out. It is not an answer to the problems that so many of our constituents are facing now.

[Matthew Pennycook]

My right hon. Friend, as so often, is absolutely right that it is an uphill struggle for leaseholders to get together to begin legal action of this kind. He also raises the highly pertinent point that there is nothing in the Bill that prevents freeholders today from passing on costs to those blameless victims of the crisis.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that there is a real opportunity here for the Department to link up with the companies registrar and companies law, and to use the options that exist there to take action early against directors who repeatedly set up these special purpose vehicles, repeatedly carry out substandard developments, and repeatedly liquidate those companies, leaving no assets for leaseholders to act against, and who it appears are in no way acted against, either proactively or reactively, under companies law or by Companies House?

[Matthew Pennycook]

My hon. Friend makes a very good point, which she has made in other debates in this place with regard to unscrupulous developers operating in her constituency. Changes to company law certainly warrant further consideration in that respect.

[Sir Peter Bottomley (Worthing West) (Con)]

May I add the problem that leaseholders do not have an interest in a brick of their building and that a claim would need to be made on their behalf by the freeholders to the landlord, who would require indemnity costs from the leaseholders who cannot pay?

May I, through the hon. Gentleman, suggest to the Government that between now and the House of Lords they consider taking a right to take the potential claims by the landlords on behalf of leaseholders into a public agency which can make a public claim against the developers, builders, architects, surveyors, building specification and building controllers, so that money can be brought back from those who were responsible, not the innocent leaseholders who are not?

[Matthew Pennycook]

I thank the Father of the House for that intervention. That is a very good suggestion, which I hope the Minister will take on board and give some considered thought to.

Notwithstanding our concerns with regard to the limitations of the Defective Premises Act, we argued forcefully in Committee for the Bill to be revised so that the period for claims under the 1972 Act be extended from six to 30 years, rather than from six to the 15 years the Government proposed. In response, the Minister urged my hon. Friends to withdraw our amendment on the grounds that a 15-year limitation period was appropriate and indeed that any further retrospective extension beyond 15 years would increase the chances of the legislation being tested against the Human Rights Act and found wanting. Because that argument was never convincing, we are extremely pleased that the Government have reconsidered their position on this matter in the light of the case made by my hon. Friends in Committee, and have brought forward amendments 41 and 42, which provide for that 30-year limitation period, as well as changes to the initial period. We fully support both amendments.

We also believe that new clauses 11 and 12, proposed by the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith), warrant support. If the Government genuinely believe that litigation has a significant part to play in helping to fix the building safety crisis, they need to give serious consideration to permitting a limited class of claims relating to pure economic loss, rather than just actual physical damage.

Clauses 129 to 134 concern the new homes ombudsman scheme, the creation of which we support, albeit, as the Minister will know, with some concerns about its operational independence and the composition of the new homes quality board. While we remain unconvinced that the new ombudsman and the new code will lead to a step change in developer behaviour and thus a marked increase in the quality of new homes, we see no issue with the scheme being expanded to cover Wales and Scotland, so we support the various Government amendments to that effect under consideration today.

Finally, I want to turn to amendments relating to the fundamental and contentious issue of leaseholder liability. I know I need not detain the House for any great length of time on why it is essential that greater legal protection for leaseholders be put on the face of the Bill.

[Janet Daby]

My hon. Friend is making excellent progress. My constituents living in unsafe homes due to unsafe cladding feel trapped and isolated in their homes. Does he agree that the Government need to work with lenders to see if properties caught up in the cladding scandal can be sold and re-mortgaged?

--- Later in debate ---

[Matthew Pennycook]

My constituency neighbour, who shares many of the same case load issues relating to the building safety crisis as I do, is absolutely right. A lot that flows from the Secretary of State’s statement last week depends on lenders, insurers and other stakeholders agreeing with the Government’s approach. We wait to see whether that bears any fruit. We know there have been occasions when the Government have made announcements and the industries in question have not responded as the Government expected.

For many leaseholders across the country, lots of whom are first-time buyers who diligently saved to purchase their homes, all but the most superficial remediation and secondary costs will simply be unaffordable. The reason the building safety crisis has caused and continues to cause such abject misery is because so many blameless leaseholders not only feel trapped in their homes physically, mentally and financially, but because they feel let down by the Government. Despite allocating significant public funds to cover the costs of remediation for some buildings and repeatedly promising that all leaseholders should be fully protected, the Government nevertheless, until very recently, had only committed to shielding a proportion of leaseholders from unaffordable costs, which were defined by one Minister a few years ago, if memory serves, as “anything short of bankruptcy.” I must make it clear to this Minister that it has come as a bitter blow to the countless blameless leaseholders across the country who have already been hit with huge bills, both for remediation works and for interim fire safety measures, that the Secretary of State made clear in his statement last Monday that the Government have no plans to secure retrospective financial redress for them. We think that Ministers need to think again about that issue. However, he did commit in that statement, repeatedly and clearly, to bringing forward amendments to the Bill to provide leaseholders with the “most robust legal protection”, extending to

“all the work required to make buildings safe.”—[Official Report, 10 January 2022; Vol. 706, c. 291.]

Given that he rarely misspeaks, that clearly suggests historic non-cladding and historic external wall-related defects. I hope that the Minister can confirm as much today when he responds on this group of amendments.

That robust legal protection for leaseholders is what this legislation must contain, and it is disappointing that no Government amendments providing for it have been tabled for consideration today.

[Jonathan Edwards]

rose—

[Matthew Pennycook]

I am going to make some progress, if the hon. Member will forgive me. That legal protection must be delivered as a matter of urgency and in a way that brings immediate protection for leaseholders, because, as I have said, there is currently nothing, aside from the limited clauses in the Bill requiring them to take reasonable steps before they do, to prevent even more freeholders from passing on costs, as we know many are in the process of doing, even now, including several in my constituency, such as the Comer Group in the case of Mast Quay in Woolwich. As well as providing for the establishment of a building works agency, which we believe remains necessary if the Government are to ensure that the pace of remediation across the country is accelerated and that works are properly carried out and certified, our new clause 3 seeks to provide the maximum legal protection possible for leaseholders facing potential costs to fix historic cladding and non-cladding defects, irrespective of circumstance.

[Jonathan Edwards]

I fully support Labour’s new clause 3 and if there is a vote on it, I will be supporting it, particularly as subsection (6) would protect the small buy-to-let landlords the right hon. Member for Leeds Central (Hilary Benn) has referred to and I referred to in an intervention. As the hon. Gentleman knows, the scheme in Wales will be administered by the Welsh Government, so may I take it and inform my constituents that new clause 3 will be the basis of the scheme that we see apply to Wales, where Labour is in government?

[Matthew Pennycook]

It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.

As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.

[Mr Betts]

Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?

[Matthew Pennycook]

The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.

I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend the Member for Leeds Central (Hilary Benn) in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?

--- Later in debate ---

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call Matthew Pennycook, I ask colleagues who are trying to catch my eye that they please make sure that they address the new clauses and amendments in the group before us, not those in the previous group.

[Matthew Pennycook]

Scintillating they may not be, but it is still a pleasure to respond for the Opposition to the remaining proceedings on consideration. I will first deal briefly with several of the non-Government amendments selected, before taking the opportunity to ask the Minister several specific questions relating to Government new clause 19, new schedule 1 and various other amendments relating to special measures and protections against forfeiture. I hope he is able to answer at least some of them.

New clause 1, which stands in the name of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who sadly cannot be in her place today because she has contracted covid, is a straightforward amendment that would place on the Secretary of State an obligation to review the effects of behaviour in the construction industry that have a negative impact on building safety, such as contract terms and payment practices that prioritise speed and low-cost solutions, and to report findings to this House. We support the new clause fully and urge the Government to give it due consideration.

New clause 18, which stands in the name of my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), would establish minimum standards for property flood resilience measures in new-build homes. In response to my hon. Friend last week, the Secretary of State made it clear that “more could be done” on this issue. I hope my hon. Friend gets a chance to make her case in more detail in due course, and that the Minister will give serious consideration to her new clause and to what might be done through future planning legislation to drive up standards when it comes to flood mitigation and resilience.

New clause 15, which stands in the name of my hon. Friend the Member for Hammersmith (Andy Slaughter), would extent the electrical safety inspection duties that currently apply in the private sector to social landlords. It is straightforward and we believe it warrants support.

New clause 16 would extend the same duties to leaseholders. Although we do not want extra burdens to be placed on leaseholder-occupiers—those who sub-let are of course required to have the relevant certification anyway—and we do want further assurances that the provision would not duplicate powers and duties that the Bill confers on the building safety manager, we support in principle steps to ensure the safety of electrical installations in high-rise buildings and to reduce the risk of fire spreading between flats.

[Andy Slaughter]

My hon. Friend is a logical and fair man, and he will appreciate that there is an anomaly here. If a leaseholder rents out their property, as we have heard some are forced to do, they will be a private landlord and will be obliged to carry out these checks, but they will not be if they are living in the property themselves. In the name of safety, there has to be consistency. Not only landlords of high-rise blocks but social landlords and resident leaseholders need to do this, and the cost is estimated to be about £30 a year per flat.

[Matthew Pennycook]

I agree there is an anomaly, and I agree that we need consistency. I very much hope the Government give further thought to what might be done to achieve that objective.

The Opposition support new clause 23 and amendments 73 and 74, which derive from the Select Committee’s recommendations, and I hope the Minister will constructively respond to them in due course.

On Government new clause 19 and new schedule 1, which will replace clauses 104 to 113, and various related amendments, we fully accept the need for special measures in cases where a given accountable person fails to discharge their duties under the new regime, including the appointment via an order secured by the regulator at the first-tier tribunal of a special measures manager who will take on the management of risk in a given building in such instances.

We also support the changes made to the special measures arrangements by new schedule 1, such as the change to enable the regulator to provide financial assistance to the special measures manager by way of loans or grants. However, we would be grateful if the Minister provided some clarification on those parts of the new schedule that allow for payments to be made by the accountable person to the special measures manager if expenses exceed what can be raised by way of the building safety charge. Will he give a commitment this afternoon that those additional payments will not be able to be charged to leaseholders?

Building height was debated extensively in Committee and warrants a brief mention in relation to this group of Government amendments, because the Bill’s arrangements for special measures still apply only to higher-risk buildings, defined as those of at least 18 metres in height or of at least seven storeys—I note that new clauses 24 and 25, in the name of the hon. Member for St Albans (Daisy Cooper), directly address this.

Eighteen metres has always been a crude and arbitrary threshold that fails adequately to reflect the complexity of fire risk. It is absolutely right and long overdue that the Government made it clear last week that 18 metres will no longer be the difference between whether an affected leaseholder is protected by the state from the costs of remediation or made to take on a forced loan and long-term debt, although leaseholders will still face ruinous costs for the remediation of buildings under 11 metres. That requirement will not be entirely resolved by the withdrawal of the January 2020 consolidated advice note, and we urge the Minister to ensure those people are also protected financially.

Leaving aside whether a more proportionate approach to fire safety risk results in a reduction in the number of medium-rise buildings that ultimately require remedial works, many of them will clearly remain designated as high risk and will therefore require remediation. Can the Minister confirm that it is the Government’s intention eventually to bring high-risk buildings under 18 metres into the purview of the regulator and the gateway system once the regime has been given a chance to bed in and deal with the most complex high-rise cases?

Lastly, amendment 29 will extend existing protections against forfeiture of a lease on the ground of non-payment of a service charge to non-payment of a building safety charge. We do not oppose this amendment as it rebalances, even if only marginally, the disparity in power between a landlord and leaseholder when it comes to the building safety charge. This directly relates to our previous debate on part 5. No provisions prohibiting forfeiture would be necessary if the House had accepted any amendment, whether it be new clause 3, new clause 13 or potential forthcoming Government amendments, that provides sufficiently robust legal protection for leaseholders in all circumstances.

The difficulty of considering amendments on Report when other amendments that are likely to have a direct bearing on their operation, were they to be accepted, have not yet been tabled is that, if no amendments are made to provide legal protection for leaseholders against the costs of remediating historical defects, we would be concerned that amendment 29 could inadvertently incentivise freeholders to sue for unpaid building safety charges. I therefore ask the Minister and his officials to consider revising the amendment to make it clear that failure to pay a building safety charge can never be used as a basis for forfeiture, rather than merely regulating the process by which forfeiture takes place, as the amendment does in its present form.

[Peter Aldous (Waveney) (Con)]

New clause 2 and amendment 1, which stand in my name and are kindly supported by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), add “the protection of property” to the list of purposes for which building regulations may be made under the Building Act 1984, and require the Building Safety Regulator to carry out its work

“with a view to furthering the protection of property”.

In many respects, in terms of drafting, these are tweaks to the Bill, but they could have far-reaching and positive consequences. Modern methods of construction and the increasing compartmental sizes of industrial and commercial buildings are leading to more challenging and larger fires, which put lives at risk and also cause enormous social, economic and environmental consequential damage. That is exactly what happened at Wessex Foods in Lowestoft 11 years ago, in July 2011. If adequate property protection measures—in the form of sprinklers, in that instance—had been in place, a huge amount of disruption would have been avoided, and the firefighters would have been back at their station in four minutes.

If the consideration of “property protection” were added to the Building Act and the building regulations, we would secure a significant double dividend: greater safety for people, including firefighters, and more sustainable buildings. It is far better to be preventing fires than to be putting them out. I should therefore be grateful if the Minister gave serious consideration to accepting new clause 2 and amendment 1, so that the Building Act can be amended to provide for the protection of property. These proposals have the support of professionals across the fire sector: the National Fire Chiefs Council, the Fire Sector Federation, the Fire Brigades Union, the Fire Protection Association and the Institution of Fire Engineers.

The new clause and amendment would provide an appropriate framework for the future fire safety of building design, and we would therefore know that homes, schools, care homes, student accommodation and all industrial and commercial buildings had adequate property protection and fire prevention measures built in at the start, so that we were not putting people—including firefighters—and property at risk. As I have said, I should be grateful if the Minister considered these proposals.

--- Later in debate ---

[Matthew Pennycook]

I would like to start by thanking the Bill team, the Clerks, the House staff and the Library specialists for facilitating the debates in the House on this important piece of legislation, as well as all those hon. and right hon. Members who have contributed to the proceedings, particularly those on both sides who took it through Committee over a great many weeks last year.

The impetus for this Bill, and what I am sure has been at the forefront of our minds throughout its passage to date, is the horrific fire at Grenfell Tower four and a half years ago. As I suggested on Report, it is not pre-empting the Grenfell Tower inquiry’s conclusions to state that the horror of that dreadful June night in 2017 was the product not only of pernicious industry practice but of state failure: a failure that involved successive Governments presiding over a deficient regulatory regime, and a failure to act on repeated and clear warnings about the potentially lethal consequences of that fact. That is why the Government and industry have a shared responsibility to make all buildings safe and to resolve the building safety crisis fully and finally, in a way that protects all those living in dangerous buildings who bear no responsibility for it whatsoever.

To the extent that the Bill implements the recommendations of the Hackitt review, provides for a stronger regulatory framework for building safety and ensures clearer accountability on the management of risk in buildings over their lifecycle, we support it. We welcome the improvements made on Report, and we want to see a version of the Bill given Royal Assent as soon as possible,

However, this Bill leaves a range of fire safety issues unresolved, from the lack of a national strategy on how to evacuate high-rise buildings to the absence of a requirement to plan for the escape of disabled residents. The Bill is not in itself a panacea for the building safety crisis. Even on its own terms, we have argued that it could and should have gone further in several important respects, whether in relation to the arbitrary definition of height or the issue of product testing.

We have concerns about the Bill’s implementation, specifically whether the new building safety regime will be able to function as intended and whether the new building safety regulator within the Health and Safety Executive, which the Bill makes responsible for all aspects of the new framework, has the resource and capacity to perform all the complex tasks assigned to it.

Hoping that the hard deadline will conjure the necessary outcomes, whether in relation to building control, skills shortages or ongoing concerns about indemnity insurance, is not good enough and we intend to monitor closely whether the new regime operates effectively in practice. We are disappointed that, despite the clear strength of feeling across the House and following our extensive debates, we are being asked to send this Bill to the other place without changes having been made to provide robust legal protection for leaseholders who are facing ruinous costs for remediating historical cladding and non-cladding defects. The Opposition have been clear throughout the Bill’s passage that, without changes to provide for such robust protection from all costs, it will fail what Dame Judith described as the “ultimate test” of any new framework, namely the rebuilding of public confidence in the system.

The House will have noted the extremely legalistic language that the Minister used on Report in response to several questions on whether the Government will table amendments in the other place on leaseholder protection, on when they plan to do so, on what those amendments will look like and on whether this place will have sufficient time to debate them. Do not underestimate the degree to which expectations have been raised by the repeated and unambiguous commitments the Secretary of State made last week to amend this Bill in pursuit of protection for leaseholders in relation to all the work required to make buildings safe.

For all the gaps raised by the Secretary of State’s statement and all the obvious gaps that remain in his new plan, leaseholders across the country who are caught up in this scandal drew comfort from his words, believing them to be a signal that the Government are finally prepared to honour the promises given by successive Secretaries of State and Ministers from the Dispatch Box that leaseholders will be fully protected.

That the blameless leaseholders at the centre of this crisis should be protected is, we believe, incontrovertible. The mental and financial toll this crisis has taken on them is incalculable. Lives have been put on hold, relationships have broken down, retirements have been ruined and countless hours have been forever lost as a result of spending evenings and weekends researching, lobbying and campaigning. In far too many cases, savings have vanished entirely and homes have been lost to bankruptcy.

The Secretary of State spoke last week of the injustice of asking leaseholders to pay money they do not have to fix a problem they did not cause. He was absolutely right, but if it is unjust that leaseholders pay in the future, it surely follows that it is unjust that so many have already paid or are being asked to pay now. The Government must look at financial redress and how it might be secured.

When it comes to protecting leaseholders in the future, we forcefully made the case throughout the Bill’s passage for the maximum legal protection for all those facing potential costs to fix historical defects, irrespective of circumstance. On Report we asked the Minister to give serious consideration to several issues of concern arising directly from the Secretary of State’s commitment to amend the Bill to achieve that.

We support the passage of the Bill tonight because we want the recommendations of the Hackitt review to be implemented and a stronger safety regime to be put in place as soon as possible, but we await the tabling in the other place of the promised amendments on leaseholder protection. We sincerely hope that when the Secretary of State says he intends to protect leaseholders from paying any costs, he truly means it, and that consequently the Bill will not be yet another forestalling, but will deliver justice finally for all the blameless victims of the building scandal.

[Several hon. Members rose—]

Second Homes and Holiday Lets: Rural Communities

Matthew Pennycook Excerpts

Thursday 6th January 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

As always, it is a pleasure to serve with you in the Chair, Mr Sharma. I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this debate. He has a huge amount of knowledge about the subject. As he has done on numerous occasions in the past, he spoke with authority about the negative impact of second homes and holiday lets on his constituents, as well as outlining a number of suggestions that certainly warrant further consideration.

All speakers in today’s debate have acknowledged that, in order to thrive, rural communities need investment, employment opportunities and, in many cases, thriving tourism industries, but they also need affordable homes for local people. While second homes and short-term lets can undoubtedly bring benefits to local economies, those benefits must be continually weighed against their impact on local people.

It is clear from the strength of feeling expressed in this debate, and from other recent debates that have touched on these issues for coastal, urban and rural constituencies, that there is a clear view among a sizeable number of hon. Members on both sides of the House that, as things stand, the Government have not got the balance right. It is that balance, as so many have mentioned, that is important.

Informed by their respective constituency experiences, the hon. Member for Westmorland and Lonsdale and other hon. Members who have contributed this afternoon have detailed the negative impact that excessive numbers of second homes and holiday lets are having on the communities they represent. As we have heard, excessive rates of second home ownership in rural areas have a direct impact on the affordability and therefore the availability of local homes, particularly for local first-time buyers. As the hon. Gentleman mentioned, high rates of second home ownership entail the loss of a significant proportion of the permanent population, and have a detrimental impact on local services and amenities, whether that be local schools, transport links or local small businesses, and therefore the sustainability and cohesion of those communities.

The staggering growth in short-term and holiday lets in many rural constituencies—as well as, as hon. Members have said, in urban areas, including in my own city—is having a direct impact on the affordability and availability of homes for local people to buy. In many parts of the country the growth in this market is also having an impact on those who cannot buy or to secure social housing, in terms of access to private rentals. That point was highlighted powerfully by the hon. Member for North Devon (Selaine Saxby). That growth is also having an impact in terms of security for those renters, including key workers, who find that their landlord wishes to begin using their property exclusively as a short-term or holiday let, a situation unlikely to be ameliorated any time soon, given the fact we are still waiting for the Government’s promised renters’ reform Bill.

The emerging evidence suggests that the pandemic and the resulting attraction of staycations for domestic holidaymakers has accelerated markedly the growth in both second home ownership and holiday lets. Fuelled in part by the stamp duty holiday, the number of transactions liable for the second home stamp duty surcharge stood at just under 85,000 in the second quarter of this year—the single largest quarterly figure since the higher rate for the additional dwellings surcharge was introduced back in 2016.

As the Financial Times reported back in July, figures produced by estate agent Hamptons International using Companies House data show that the rate at which holiday let companies are being set up has more than doubled over the coronavirus crisis, with the vast majority of those incorporating being individuals owning only one mortgaged property, rather than large corporations holding multiple holiday homes.

It is worth reflecting briefly at this point on the issue of data—the point was well made by the hon. Member for North East Fife (Wendy Chamberlain) in her contribution—because the fact is that we do not know the numbers of second homes and holiday lets in any detail, other than that they continue to rise. We do not have an accurate grasp of the figures across the country. Council tax records are likely to significantly undercount second homes, both because there is no financial incentive to register a property in areas where a council tax discount is no longer offered and because second home owners can still avoid council tax altogether by claiming that their properties have moved from domestic to non-domestic use. When it comes to second home ownership, the estimates produced by the English housing survey are more reliable, but even they are based on a relatively small survey sample and rely on respondents understanding what is meant by a “second home” and accurately reporting their situation. Similar limitations apply to short-term lettings. There is no single definite source of data on rates for what is after all an incredibly diverse sector, with providers offering accommodation across multiple platforms.

It therefore seems logical that as well as considering what more might be done to mitigate the negative impact of excessive rates of second home ownership and short-term and holiday lets, the Government should give some thought to how we might obtain better data on overall rates, not least to provide a more accurate baseline as we emerge from the pandemic and also a better sense of precisely which parts of the country face the most acute challenges. I would be interested to hear from the Minister whether the Department has given data collection in this regard any thought and, if not, whether he will commit to taking the point away for further consideration.

In relation to how we might meet the housing needs of local people in rural areas and other parts of the country where there is high demand, the wider context is obviously crucial. The point was touched on in the debate, but if we had had more time, we could have had a much wider debate about affordability criteria and what needs to be done, not least in the light of the evident failings—here I have to disagree with the hon. Member for Thirsk and Malton (Kevin Hollinrake)—of the First Homes scheme, to give local first-time buyers better access to new homes.

On the specific issue of what more might be done to mitigate the negative impact of excessive numbers of second homes and holiday lets, it is useful to break things down, as the hon. Member for Westmorland and Lonsdale did, into potential planning and non-planning—primarily taxation—measures. On the non-planning side, the Government have taken action over recent years by reforming stamp duty, allowing local authorities to increase council tax to 100% for second homes and proposing that properties be required to have been let for 70 days in a given financial year in order to be liable for business rates rather than council tax, although I believe that we are still waiting for a formal decision to confirm that change in policy.

However, there is a strong case for exploring whether the Government should provide local authorities with powers to, for example, introduce licensing regimes for second homes and short-term lets, and for considering giving them even greater discretion over their council tax regimes—perhaps allowing local authorities, as Labour has done in Wales, to levy a premium or surcharge on second homes and long-term empty properties if they believe that that is required in their locality. There is also a strong case—this point was well made by my hon. Friend the Member for York Central (Rachael Maskell)—for reviewing whether the current 3% rate of stamp duty surcharge on second homes as well as the 5% rate levied on non-UK buyers remain at the appropriate level in the light of the boom that we have witnessed over the course of the pandemic. Is the Department even exploring those or any similar options?

When it comes to planning, the system now enables local residents to put in place neighbourhood plans that can go some way to managing second home ownership rates, but it is clear that further measures are required. May I therefore press the Minister to clarify whether the Government accept in principle that in order to bear down on excessive numbers of second homes and holiday lets in particular parts of the country, there may be a need for further changes in relation specifically to planning restrictions and enforcement—designed, obviously, so as not to exacerbate the problems of affordability and availability that have been touched on in the debate today?

This has undoubtedly been a worthwhile debate on an issue that is only going to grow in significance. I look forward to hearing from the Minister about what further steps the Government propose in order to ensure that when it comes to the benefits and liabilities of second home ownership and short-term and holiday lets, we begin to redress the current imbalance affecting rural and other communities across the country.

New Homes: Developers, Housebuilders and Management Companies

Matthew Pennycook Excerpts

Wednesday 5th January 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Betts. I wish all hon. Members and staff present a happy new year, and add my congratulations to the hon. Member for Wantage (David Johnston) on securing this important debate, and on his comprehensive and extremely well-judged introductory remarks.

As expected, given the subject, this has been a wide-ranging debate, with a series of thoughtful contributions informed by the experiences of hon. Members on both sides with new build developments in their respective constituencies. I highlight, in particular, the contributions made by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Warwick and Leamington (Matt Western), who spoke of the importance of local authorities in housing and planning and the imbalance of power between councils and developers, and the constraints that the former therefore face when it comes to meeting the needs of their populations.

My hon. Friends the Members for Stretford and Urmston (Kate Green) and for Halifax (Holly Lynch) spoke powerfully about cases of unscrupulous developers in their own constituencies, as did the hon. Member for Keighley (Robbie Moore) in relation to Harron Homes, and the lack of accountability, at least in the current system, for redress for the serious defects that people face.

In the time available, I would like to expand on three issues that have featured in the debate this morning and that the hon. Member for Wantage touched on in his introductory remarks. First, what is the quality of new homes being built? Secondly, as well as building new homes, do we have a system that supports the creation of sustainable communities where individuals and families can not just live but thrive? Thirdly, are buyers of new build homes getting a fair deal?

I turn first to quality. It manifestly remains the case, despite the problem being both of long standing and widely understood, that a significant proportion of those buying recent new builds in England find, having moved into their new home, that their property has serious defects. As has been made clear today by cases from across the country, to which I could add a great many from my own constituency, we are talking here not about minor snagging issues but about major defects, whether that be in relation to the fabric of the building, unfinished fittings, or faults with utilities.

The fundamental reason why standards remain too low is simple: the housing market is broken and the planning system is in crisis. As the right hon. Member for Rayleigh and Wickford (Mr Francois) argued, the housing market does not have sufficient diversity of supply, and it is not one in which—aside from a minority of homes at the very top end of the market—quality of product is rewarded by price. A decade of planning deregulation has exacerbated that situation, and the relaxation of permitted development is the most egregious example of decisions taken by this Conservative Government that will increase the amount of substandard housing being delivered across the country, with all the negative impacts on health and life chances that flow from that. For all the rhetoric about beauty and the various initiatives announced in the wake of the Building Better, Building Beautiful commission, the present system still overwhelmingly produces, as extensive analysis by the Place Alliance has shown, “mediocre” or “poor” outcomes when it comes to build quality and design.

We of course must robustly challenge developers and house builders to improve their performance, and call out those choosing not to build better-quality housing or using the planning appeals process to force through schemes with the lowest design quality, but there is much more that the Government could do to drive up standards. The establishment of the new homes ombudsman is of course welcome, although the Minister will know the concerns that Opposition Members have about the scheme’s membership. Likewise, we welcome the publication of the new homes quality code. However, given its nature and the fact that it relies on compliance with national standards that currently, I argue, fall far short, we have little confidence that it will lead to the needed step change in developer behaviour. The fact is that until the Government act to ensure that we have a planning system fit for purpose and make greater progress on diversifying the housing industry and delivering a marked increase in output, including in terms of genuinely affordable homes, the numbers seeking redress for serious defects are unlikely to fall significantly.

I turn next to the question of how we ensure that the construction of new homes creates sustainable and thriving communities. As things stand, far too many new build developments are not being delivered with the necessary key amenities and social and physical infrastructure to provide for such communities, and we have heard a great many examples this morning. That is because the present housing and planning framework is simply not conducive to effective place making. Of course, that is not a new phenomenon—indeed, it was remarked upon as far back as the 2007 Callcutt review. But the problem has become more acute in recent years, as a direct result of this Government’s commitment to deregulating the planning system, with the relaxation of permitted development rights in particular preventing councils—the skills, morale and capacity of whose planning departments are at an all-time low after a decade of budget cuts—from co-ordinating development or planning vital infrastructure and services.

The situation is having a direct impact on the provision of environmentally sustainable development—for example, in terms of the relationship between relatively inaccessible development sites and rates of sustainable transport use, or buildings that are constructed on sites without due regard to climate resilience. Again, the fundamental problem is a development model that is geared primarily towards the wants of developers, as opposed to one whose primary purpose is securing what is in the public interest.

When it comes to enabling effective place making, the Government must, as a minimum, rescind the damaging relaxation of permitted development rights and return those powers to local government. Ministers should then turn their attention to what more the Government must do to encourage the creation of thriving communities that support the health and wellbeing of their residents, not least by implementing comprehensive national housing standards so that developers—particularly the volume housebuilders—have no choice but to deliver in core place making.

Lastly, turning to whether those people buying new homes are getting a fair deal, the answer in far too many cases is clearly no, particularly for leaseholders. That is most obvious in the topical issue of ground rents for new leasehold homes. The House will know that the Opposition welcome the Leasehold Reform (Ground Rent) Bill but remain of the view that onerous ground rents must be tackled for existing long residential leases, not just new homes, and we urge the Government once again to reconsider their position on the matter.

With regard to existing long residential leases, we welcome the commitment given by Taylor Wimpey to the Competition and Markets Authority to remove onerous ground rent terms from its existing contracts. The imposition of those terms was wholly unjustified, and it is obviously right that the relevant clauses will be removed. Other developers and freehold investors must also do the right thing and abandon escalation clauses in their leasehold contracts. When he responds, I would welcome the Minister making it clear, for the record, that that is what the Government now expect them to do.

However, the issue of ground rents is not the only way in which those buying new leasehold homes are getting a bad deal. There are a range of issues, from soaring service charges to the unregulated nature of managing agents, that all point to the need not only for measures to address specific problems, but for wider leasehold reform and reform of the current framework for resident control of estate management—issues that I have no doubt Ministers and I will return to on many future occasions.

On protecting the owners of new homes from abuse and poor service at the hands of disreputable management companies, I ask the Minister to tell the House whether the Government intend to implement the recommendations of the regulation of property agents working group, chaired by the noble Lord Best. What progress has been made on that, given that the final report was published back in July 2019?

To conclude, this has been a valuable debate and a welcome opportunity to hear the concerns of hon. Members from across the House regarding new homes. However, it is taking place after almost 12 years of Conservative-led Government, with numerous changes to housing and planning legislation in that time. Yet when it comes to new homes, the outcomes for people and communities, on the whole, have not only not improved but noticeably deteriorated in a number of key areas.

It is self-evident that more must be done to drive up quality and design standards across the industry, to enable and support more effective place making, and to ensure that those buying new homes get a fair deal. I look forward to hearing from the Minister, not least in relation to the planning legislation that we are told the Government remain committed to introducing and on what the Government will do differently to ensure that real progress is made on these objectives.

[Mr Clive Betts (in the Chair)]

I call the Minister. If he could allow a brief period at the end for the mover of the motion to wind up, that would be appreciated.