Annette Brooke
Main Page: Annette Brooke (Liberal Democrat - Mid Dorset and North Poole)(9 years, 6 months ago)
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Annette Brooke (Mid Dorset and North Poole) (LD)
I beg to move,
That this House calls on the Government to set up a review of the current fee of up to 10 per cent of the sale price of a park home payable to the park home site owner.
I start by thanking the Backbench Business Committee for selecting this debate. I am reminded of a previous Back-Bench debate on park homes that I led in 2010. That debate was attended by a very large number of Members, and it was an important step in achieving the passage of the Mobile Homes Act 2013, ably piloted through the House by my hon. Friend the Member for Waveney (Peter Aldous). Although our numbers are smaller today, I have received messages of support from several MPs who are unable to attend and speak for various very good reasons.
On many occasions over the years, the House has heard about how mobile park home owners have been exploited and badly treated by some site owners. It is a matter for some celebration that appalling practices can now be prevented through the implementation of the 2013 Act, and there is also the ability to make use of the residential property tribunals. However, there is still work to do to protect and ensure fairness for a fairly vulnerable population.
Today we are focusing on the 10% commission charge that is payable to the site owner on the sale of a park home site. Well over 30,000 park home residents from 975 parks have signed a petition against the up-to-10% commission on the sale price of their homes that is payable to the site owner.
Dr Sarah Wollaston (Totnes) (Con)
Does the right hon. Lady know of any other circumstances in which residents would have to pay this iniquitous charge of 10%, particularly when it often applies to an older and vulnerable group of people?
Annette Brooke
My hon. Friend makes a valid point. It is difficult to think of anybody in a leasehold property who would have to pay such an additional charge. We need to look at what the money is used for, and I shall expand on that later.
Alok Sharma (Reading West) (Con)
I have had representations from residents of Garston Park caravan park about their concern that 10% is indeed a very high figure. The Mobile Homes Act says that the charge on the sale of a home can be up to 10%. Does the right hon. Lady have any statistics—or perhaps the Minister can give them when he responds—on how many park home owners are charging 10% as opposed to a lower figure?
Annette Brooke
I think we will have to rely on the Minister being informed of that number. It has not been drawn to my attention that anybody charges less than the maximum, as is usually the case when a maximum is set.
In July, over 200 park home owners travelled to London to lobby their MPs. That is an amazing number given the distance and the age of many park home owners. It is important to note that their campaign has no funding whatsoever.
There are at least three elements to a site owner’s income, including the initial siting of the mobile home, the pitch fees, and the commission payment. On the siting of a new home, a site owner may purchase a new unit at a wholesale price and will incur further costs such as transportation and connection to services. However, it is reasonable to assume that the final selling price will exceed all costs incurred, and perhaps produce a significant return. As soon as the home is re-sold, the commission clicks in. In another scenario, a park home owner could replace their home, meaning that they will be charged for connections to services and landscaping, leading to more potential profit through re-charging—and again, when the unit is sold, the commission will click in.
On pitch fees, research by the National Association of Park Home Residents in November 2013 revealed that monthly pitch fees in 1,075 parks varied from £40 to £382, with an average of about £150 per month—quite a lot for people on fixed incomes. The 2013 Act will introduce some accountability, with an annual review of pitch fees, an opportunity for park home owners to challenge pitch fees on the basis of lack of maintenance or deterioration of the site, and a requirement for site owners to justify increases above the retail prices index. I hope that there will also be fully published audited accounts for these transactions.
On the commission itself, it is sometimes argued that this payment provides an important income stream to the site owner, and it is equally argued that the payment is essential for site improvements. A case is also put forward that it is not in the interests of park home owners, who are often on low incomes, to pay higher pitch fees out of current income, as would be required without this sales commission. In that sense, it might be seen as a deferred payment. I do not want to create unintended consequences, and hence I am not following the wording of the petition in asking that the commission be scrapped or reduced, but calling for a review. I think we need some facts.
Steve Brine (Winchester) (Con)
I was at the rally in the summer and saw the strength of feeling about this issue, which we are right to bring to the Floor of the House. I completely concur with the right hon. Lady’s view that we must not legislate in haste and repent at leisure. She will be aware of the report from the Deputy Prime Minister’s Office back in 2002, which sounded a note of caution about abolishing the 10% charge, saying that pitch fees could rise to between 20% and 32% if we did that. Having a review is absolutely the right way to go, and I back her on that as a fellow officer of the all-party group on mobile homes. I also congratulate her on securing this debate.
Mr Mike Hancock (Portsmouth South) (Ind)
Another issue is whether site owners that are local authorities use the same policies. Any review should encompass local authorities that own parks and also have the 10% rule, because they certainly do not justify the fee they take for the pitch in terms of work carried out on sites.
Annette Brooke
I was not aware of that. We could demand transparency in that regard and find out how much of the commission fee was ploughed back into improvements on the site.
Alok Sharma
The right hon. Lady makes an interesting point about transparency. A lot of these park homes are owned by individuals and private companies, so there is not the level of transparency in the accounts that one would expect. Does she agree that as part of a review, we should ask park owners to be a little more open to demonstrate whether a reduction in the 10% charge would really hit their bottom line as much as they say?
Annette Brooke
I absolutely agree. Transparency is the key to finding the right answer for everybody in this scenario.
Obviously, a site owner must get a reasonable return on capital, and we want to encourage good site owners to remain in the industry. Park homes are an important part of the housing supply and should be encouraged. The Government acknowledge that the park homes sector plays an important role in the provision of low-cost housing for the elderly, and that it frees up under-occupied homes that are much needed as we face a housing crisis. However, with pitch fees, other overheads and the 10% commission, many residents worry that the costs of owning a park home are becoming unviable. The 10% commission charge is undoubtedly a matter of concern. Although it is now paid by the purchaser, it does reduce the sum of money paid to the seller.
Park operators have argued that they cannot remain in business without the 10% commission charge, yet our petitioners have pointed out that it would be foolish for a business to rely on an income that is unpredictable. It is difficult to predict how many new homes will be purchased, or used homes re-sold, in a year. Many residents reported feeling trapped in their homes and unable to sell. Owing to park rules, many sites are only for people of retirement age, and so the need to move into a nursing home or some other form of residential care is a real possibility. Having to give the park operator such a high percentage from the sale of their home reduces the amount the seller has to put towards their care.
Park home owners feel discriminated against and ask, “In what other leasehold property arrangement would a payment be made to the leaseholder on the sale of the property?” They cite examples of poorly maintained sites and no real improvements over time, and a perception of a luxury lifestyle for some site owners. Clearly, there are counter-examples of exemplary site owners, which I welcome, and I would like them to showcase their best practice. Transparency and published accounts would be helpful, to encourage all site owners to follow best practice.
Park home owners also point out that the value of the property is influenced by their contribution to the home’s value via its upkeep and maintenance, and argue, “Why should the site owner benefit from this contribution?” That is a good point.
Steve Brine
The Department put together an excellent document, “Park homes: know your rights”, following the legislation promoted by my hon. Friend the Member for Waveney (Peter Aldous). In the past, site owners were part of the sale, because they had to approve it, but the 2013 Act has taken them out of that equation. Did the right hon. Lady take that into consideration when preparing her speech?
Annette Brooke
The park home owners say that that gives even less justification for the 10% commission, because the site owners are not involved any more.
I received an interesting representation from a park home owner, who wrote:
“I am not personally in favour of abolition of the sales commission. This would remove an opportunity to improve the sector. Linking a reduced sales commission to site owner performance will improve site maintenance, sustain home values and assist mobility.”
That is an interesting idea and perhaps we could work it through.
Gavin Shuker (Luton South) (Lab/Co-op)
The residents of Brickhill Farm and Downlands park homes in my constituency would welcome the right hon. Lady’s general approach to the debate. Clearly, the 10% commission is having a behavioural effect on whether people are able to move and how they do so. Surely that should be the major point to consider when it comes to reviewing the effectiveness of any legislation or legislative change.
Annette Brooke
The 10% commission has wide-ranging impacts and they need to be considered. It is only now we are hearing about some of those impacts, as the voices of park home owners grow louder. If we had a review, their input would be vital.
Given that the commission is an unpredictable income stream depending on how many units are resold over a period of time, the question remains of whether it is a windfall gain or an essential source of money for site improvements. It is very difficult to answer that question without a review.
The Mobile Homes Act 1975 limited the commission to 15% and the Mobile Homes Act 1983 limited it to 10%. Is it not time to have a proper independent review to establish whether the current situation is justified or whether there is a case for a change? I am absolutely sure there is a case for more transparency.
Conor Burns (Bournemouth West) (Con)
I was delighted to support my right hon. Friend’s application for this debate. She knows that there are a number of park homes in the north of my constituency. I thoroughly endorse all the points she is making. Put simply, she is sensibly and correctly asking for a review—a very modest request—and I have noticed the shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), nodding in agreement with some of her remarks. She is approaching the issue in a sensible way and I hope the Minister, when he responds, will grant that review, which would be welcomed by all.
Annette Brooke
I thank my hon. Friend and constituency neighbour for that intervention. Obviously, we are mutually aware of the issues that occur on the park home sites in Poole, Bournemouth and Dorset.
In 2012, the Communities and Local Government Committee concluded in favour of retaining the 10%, but did we have the review I am asking for? I do not think we did, because the sequence of events shows that the Committee relied heavily on the conclusions of a 2006 Government consultation published in 2007, which in turn relied on a report published in 2002. National associations for park home owners feel that the 2007 conclusions were heavily biased towards site owners and their trade bodies. I believe that, in total, there were only 1,250 responses to the consultation. I would be interested if the Minister could confirm that. If we had a consultation today, I think the response would be very different. I believe the responses came from only 230 parks, which is a limited number.
The park home associations did not accept the conclusion that the majority of park home owners wanted the commission to remain. Questions have also been raised with me about the independence of the 2002 report. It is only in recent years that individual park home owners have made their voices heard in very large numbers and accessed democratic processes via petitions and lobbying, led by my amazing constituent Sonia McColl and others, complementing the work of their excellent national associations, including the National Association of Park Home Residents and the Independent Park Home Advisory Service. The situation is different from 2006. Our park home constituents are aware of their rights and know how to make their voices heard, but we as MPs need to respond.
We need a review that looks at the viability of the industry and that listens both to site owners and to park home owners. I do not prejudge the outcome of any review. It might conclude that the situation is best left as it is, but with openness, fairness and transparency to ensure no bias either way, all parties will understand the conclusions.
Interestingly, I have looked at what has happened in the Welsh Assembly. Following a short debate in July 2014, it agreed to review the data and evidence contained in the 2002 publication “Economics of the Park Homes Industry” and the 2006-07 consultation. A review has been undertaken and the Assembly awaits the report. This month, the Minister for Communities and Tackling Poverty wrote in a letter:
“I feel a further review of the economics of the mobile homes business is necessary before a decision on amending the 10% commission rate can be considered. I do though feel the Mobile Homes (Wales) Act 2013 needs time to be embedded before a further review is conducted. It is, therefore, my intention to commission further research into the economics of the park home industry and the implication of amending the commission rate, in late spring 2015.”
I do not think we should be embarrassed about following the lead of one of the devolved nations.
I would like to see the review process started shortly in England, with the setting of the terms of reference, the processes for looking at the economics of the industry and the commissioning of a study. Detailed consideration of the retention or alteration of the 10% could be dovetailed a few months later into a review of relevant aspects of the Mobile Homes Act 2013.
I emphasise that I do not want unintended consequences that would increase burdens on vulnerable people on low incomes with increased pitch fees. I want a viable park home industry, but I also want to be sure the system is fair to park home owners. The review process should start sooner rather than later.
Peter Aldous (Waveney) (Con)
I am grateful to my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for securing this debate. I am very much aware of the significant amount of work that she does for park home owners, for whom she is very much a champion. It is right for the House regularly to consider issues that the park home sector faces, and this debate provides us with such an opportunity.
The background to this debate is that my right hon. Friend’s constituent Sonia McColl—she runs the Park Home Owners Justice Campaign and is likewise a stalwart champion for park home owners—has delivered a petition of more than 31,000 signatures that calls for a debate on reviewing the 10% commission. I have considered the motion carefully. Although I welcome this debate and understand the reasons and sentiments behind the motion, I am not able to support it. I shall explain why briefly.
As has been said, I had the good fortune to pilot the Mobile Homes Act 2013 through the House. It was a privilege to do so and I pay tribute to the other Members who had campaigned for many years beforehand, including my right hon. Friend the Member for Mid Dorset and North Poole, my hon. Friend the Member for Christchurch (Mr Chope), the hon. Member for North East Derbyshire (Natascha Engel), my hon. Friend the Member for Winchester (Steve Brine), my hon. and learned Friend the Member for South Swindon (Mr Buckland) and the hon. Member for Epping Forest (Mrs Laing), as well as Lord Graham of Edmonton and Lord Best.
The 2013 Act addresses the appalling practices that have emerged in the sector in recent years, such as park home owners being bullied, intimidated and driven out of their homes by a minority of owners who are, in effect, gangsters. It also puts in place a framework under which park home sites can be better managed in a more transparent way.
In presenting the Bill, I was fortunate that a great deal of research had been done on the way the sector worked, identifying the problems that needed to be addressed and coming up with solutions. In many respects, the cornerstone on which the 2013 Act was built was the report on park homes by the Communities and Local Government Committee that was published in June 2012. The Committee considered the 10% commission on sales and heard evidence on the matter. It concluded that the right of site owners to receive up to 10% commission from the sale of park homes should remain. The same conclusion had been reached by the previous Government as a result of their 2006 consultation on park home commission rates.
I am mindful of the findings of the research carried out by Consumer Focus, which was published in its report, “Living the dream? An investigation into life on park home sites in England”, in October 2012. It concluded that the issues that needed to be addressed as a priority were improving local authority licensing, addressing the poor maintenance arrangements that prevail on some parks, introducing greater transparency in the process of paying utility bills and, above all else, tackling the problems of sale blocking and intimidation. Its research did not identify the 10% commission rate as a major problem that needed to be addressed as a matter of priority.
Annette Brooke
I congratulate my hon. Friend again on the Mobile Homes Act 2013, which addresses the very worst problems, but there is still a lot to be done. Does he not agree that we should look at the issues that concern park home owners in a balanced and unbiased way?
Peter Aldous
I agree with my right hon. Friend that there is an awful lot of work to be done in the sector. As I complete my remarks, she will see that I do not think that now is the right time to look at this one issue in isolation. The 2013 Act was one of the biggest changes in the sector in 30 years. I think that it needs to bed down and that we should then carry out a full review.
I have learned a great deal about the sector in the past two and a half years. One message that I have very much taken on board is the importance of achieving an equilibrium—a balance whereby park home owners can enjoy a high standard of living, a peaceful environment and quiet enjoyment, while responsible site owners can manage their parks efficiently and properly, and make a reasonable living and a return on their investment. In the feedback that I have received from responsible and good park home owners in my constituency, the concern has been expressed that if the 10% commission were removed, that equilibrium would be lost.
Given that there are fewer opportunities for new developments on sites and that the lifespan of homes is increasing, site owners are very reliant on pitch fees and sale commissions for their income. The majority of their income is derived from pitch fees—the figure of 70% has been mentioned to me—with sales commission providing much of the remainder. In many cases, the income from sales is the difference between profit and loss. I have seen figures to confirm that. Changing the 10% commission rate might therefore lead to some businesses becoming financially non-viable. That could result in cuts being made in the management of parks, with less money being spent on investment in infrastructure such as roadways, footpaths and communal areas. The result could be that parks take on a more run-down, down-at-heel appearance, which would have a negative knock-on effect on the value of the homes.
Natascha Engel
Absolutely; in fact Rick and Bill, from one of the park home sites in North East Derbyshire, made a T-shirt with “Daylight Robbery” on it, which is selling like hot cakes. It is a funny point, but about something serious. This is daylight robbery from people who cannot afford it. That is the really awful aspect. It is exactly as the hon. Gentleman describes: it feels such a terrible injustice that people pay out and get absolutely nothing in return.
I have mentioned this before in a debate, but it is also interesting to remember that when park home sites first started, the type of people who owned them had a social conscience. Part of the reason why utilities are bought in bulk now is that the site owners used to do that and then pass on the savings to the residents. Now the absolute reverse is true, certainly in many of the sites in my constituency, where although utilities are bought in bulk, everything is completely un-transparent. No one can see what they have used or how much money is being charged, and the site owners tend to add a little administration fee, on top of the pitch fees, on which a lot of them are making a disgusting amount of profit. That really should not be allowed, and it is also something that should be taken into the calculations.
As we have said before, what we are asking for is very reasonable: a review of just one thing that was not included in the private Member’s Bill of the hon. Member for Waveney. That would also be an opportunity for those who disagree with us to make their case. The most interesting thing in the speech by the right hon. Member for Mid Dorset and North Poole was the fact that the evidence relied on, certainly in the consultation for the private Member’s Bill and under the Labour Government, is from previous research that has never really been updated. As the sector is now much more organised, the people taking part in consultations are ever increasing in number and, thanks to Sonia McColl, have a proper focal point. I therefore urge the Minister and the shadow Minister—the Minister in what I hope will be an incoming Labour Government—to commit to having a review, simply in recognition of the fact that there is a problem. It is not a problem for the site owners, but it is for those who live on the sites.
Transparency and clarity are enormously important. Under the last Labour Government, a regulation was proposed to make any changes clearer and to require site owners to make it clear to those buying park homes that they would face not only pitch fees and utilities bills but the 10% charge at the end their time. That should have been a requirement, but unfortunately it was never implemented. It is all there in the Department; perhaps that regulation needs to be brushed down, so that we can have a look at it before the general election.
As I have said, we do not want to deny site owners a living; it is just that, certainly from anecdotal evidence and the kinds of cars they drive, we can make quite a safe assumption that the profits they are making, on the backs of vulnerable people, are extremely high. Therefore, it is reasonable for us to have another look at this extortionate commission of 10%. The right hon. Member for Mid Dorset and North Poole mentioned this, but it would also be a good idea for the review to look at minimum maintenance standards on site, so that if people are paying 10%, the site owner has to commit in return to maintenance up to a certain standard and within a certain timeframe. That would go some way to addressing the injustice that people feel. We could look at that in the review, and there would then at least be a proper justification for the site owners to take that 10%. At the moment, it is daylight robbery; people are getting nothing in return for it.
It was interesting to hear about park home sites that were council-owned. Bramley Park site in my constituency used to be council-owned and is now in private ownership. It does not charge the minimum 10%. The same owner charges the 10% at another park site in the constituency, but he seems to manage perfectly well without charging it on the former council-owned site. Perhaps we could look further into that in the review and assess the profit consequences to a park home site owner if the 10% commission were to be abolished.
Some people think of these mobile homes as caravans, but they are not mobile; they are entirely static. As mentioned earlier, there is one set of rules for people who live in bricks-and-mortar homes, and a different set of rules for these static caravans. Yet these are people’s homes; it is where they live. It is where many of them will live for the rest of their lives. Some have quite a high value. Some of these homes go for between £150,000 and £200,000—often reflecting how beautiful they are. We are not talking about peanuts.
Annette Brooke
When the commission first began to be charged, we were talking about home prices of between £10,000 and £20,000, yet now we are up into the realms of £250,000 for a new park home, and even trading prices can be at least £150,000. These are very large sums of money, yet we do not know exactly what the commission is used for.
Natascha Engel
That is an important intervention. One of my constituents has written:
“Under the new rules a Site owner has no dealings with the sale of properties, not even to notify the provider of essential services…Water, electricity etc. We do that. All he has to do is get his secretary to delete one name and enter another. A huge commission for a two minute job.”
I think that rather makes the hon. Lady’s point.
The review should look at another problem about which residents have written to me. On one park, an elderly resident had gone into a care home before she sold her home. We need to note that none of my constituents were happy for me to use their names. They wanted to remain anonymous because they are absolutely terrified of the consequences that might follow from their site owners. I would like the Minister to listen to this letter, as it reveals a really serious problem. It states:
“In respect of the new Mobile Homes Act 2013 particularly on the sale of homes, it appears that problems are occurring on properties that are for sale and empty due to either the home owners moving to another property or into a nursing home. Although the ground rent is continuing to be paid, our site owner is claiming that if the property is empty then the home owner is breaking the law within the implied term which states that the home must be kept in a sound state of repair and must be the sole residence of the occupier. It appears that our site owner then sends a solicitors letter to that effect to the seller and also sends out surveyors to check the exterior of the property who obviously find many major defaults and state the property is not worth anything! This then means that any prospective purchaser cannot purchase the property because it is in the hands of the site owners solicitors pending court action!”
That was not the first time I had heard about that problem, which relates to the wider context of the 10% commission issue. We really must have a proper and careful look at this. One positive consequence of setting up an independent review is that many such examples, which I have become aware of only recently, would be brought to our attention. Many of these real injustices, which simply would not be tolerated for homes of bricks and mortar, could be highlighted. That would be most useful.
I hope that when the Minister and the shadow Minister wind up the debate, they will commit to setting up a review and will ensure that the review is independent. We would very much like to help out with the review, but what is most important is for it to be independent of not just site owners, but any other pressure groups. We must ensure that its findings are regarded by everyone as fair and justified. It is high time that we updated what is, by now, quite ancient research.
Notwithstanding what was said by the hon. Member for Waveney, I think that time is of the essence. One of the tragic aspects of this issue is that many people have died since I started the campaign: they have died waiting. Many of those who are alive are elderly, and time is clearly of the essence for them. This is an injustice that needs to be dealt with sooner rather than later.
It is unfortunate that many of the changes for which we have been lobbying have got lost between general elections. I should dearly love to see a review set up now, with a definite timeline and involving cross-Bench consensus, so that we can ensure that something happens, and happens very quickly. I should be very grateful if the Front Benchers would be specific about whether there will be a review, how independent such a review will be, and, above all, what the timeline will be.
Annette Brooke
It has indeed been suggested to me that site owners and those involved in the business had quite an input into the report, albeit not in the writing-up stage. I do not know how true that is, but it contributes all the more to the case for having a review sooner rather than later. A lot of things have changed since 2002.
Brandon Lewis
My right hon. Friend makes a very good point. It is nice when we all agree from time to time.
The right hon. Member for Leeds Central also said that things have moved on in 12 years. The report is 12 years old and I agree that it had a small sample base, but it was based on a range of park home sites—from the very small to the very large. Although it was published in 2002, there is no great evidence at present to suggest that the economic structures of the industry have changed significantly in the intervening years. There was some involvement from homeowners—there had to be, given the nature of the study in preparing the report. However, the report was on the economics of the sector; it was not, to be fair to the previous Government, a consultation.
Brandon Lewis
Actually, what I said was that the majority of site operators need the commission to maintain their sites. On the question of whether they are poorly managed and maintained, I said that some operators are not investing in them. That is exactly what the 2013 Act—the rules and laws that came into force on 1 April 2014—deals with.
The independent report carefully evaluated the economic structure of the industry and concluded that commission was an important income strand that could not be abolished or reduced without relief. Nevertheless, the previous Government consulted on what the appropriate maximum rate should be. Although home owners favoured a reduction in or abolition of the commission rate, very few thought it should be linked, as the right hon. Member for Leeds Central has outlined, to a reduction or an increase in their pitch fees. Understandably, and as the right hon. Gentleman also said, those who generally saw their park home as their home for life wanted to retain the existing system, while other site owners wanted no change at all. The then Government’s preferred option at that time was to have a 7.5% commission on existing agreements and to abolish it on new ones, but to have unregulated pitch fee increases, for which consultees showed little support. The consultation was therefore inconclusive. It looked at options in relation to the payment but, as we all now know, it was not about reducing or abolishing commission. The then Government therefore decided that no case had been made to change the status quo.
In the spring of 2012, the issue of commission was looked at again by the Communities and Local Government Committee. It held an inquiry into the sector, and published its finding in June 2012. Its report, which identified widespread malpractice in the sector, led the Government to support the Bill introduced by my hon. Friend the Member for Waveney. We agreed with the Select Committee’s finding that there should be no change to commission. That was our view in 2012, and it remains our view today, but I will return to the issue of the review in a moment.
Annette Brooke
I am afraid that I may be anticipating the Minister, but does he think that the Select Committee conducted a thorough review? I praise it for its whole report on park homes, but I was not aware that a large part of its work related to the 10% commission.
Brandon Lewis
It is not for me to question the decisions of the Select Committee or its Chair about how they go forward, but I will turn in a few moments to how what they looked at can be taken forward. I now want to make a bit of progress with my speech.
As other Members have rightly said, the justice campaign and its founder, Sonia McColl, are to be congratulated on their fantastic, sterling work in raising issues about problems with the park home sector and on the need for reform. As I have explained, we believe that commission is a legitimate income strand. It does not result in profiteering—at the moment, the evidence does not back up such a claim—and site owners who run a legitimate business within the law are entitled, like any such business, to make a reasonable profit. If the commission were changed, compensatory relief would be needed. There are good site owners who run professional businesses within the law. I am sure that all Members want them, for the benefit of their residents and of the economy, to thrive and grow. We therefore do not want to put in place measures that could affect their continuing viability.
I appreciate that that may be unwelcome to some home owners who have campaigned for a reduction in the commission or its abolition. We should not, however, lose sight of the substantial reforms that were introduced by the 2013 Act. It targets unscrupulous and criminal operators who think that the law does not apply to them: it does, it should and it must. Apart from introducing new provisions to prevent the blocking of sales and a new scheme for selling homes, the Act requires site operators to use a statutory form, and to set out what is included in any proposed new pitch fee and how that fee has been calculated. We are therefore starting to see the transparency that we want to exist more widely. The Act has banned certain types of rules that can be used to block sales on sites. It also introduced important provisions to reform local authority site licensing, which came into force on 1 April this year. These hugely important changes for the first time give local authorities powers to take enforcement action against rogues who refuse to maintain their sites.
I want to reassure the House that the Government recognise that more work needs to be done to change the culture of the sector and to crack down on the rogues operating within it who give everybody in the sector a bad name and affect the lives of residents unfortunate to live in such areas. To achieve that, we will continue to work with partners to raise standards generally, and to remove criminality from this sector.
In particular, I am determined to stamp out the continuing bad practices in the industry, such as unlawful sale blocking, or local authorities and other agencies not using their powers effectively to protect home owners. That is why I have asked a ministerial colleague to bring together representatives from across the sector to identify evidence of poor practice where it exists, and investigate how best to raise standards further and tackle abuse. That group will significantly help to shape the review of the Mobile Homes Act.
I agree with hon. Members, not least my right hon. Friend, that the review should have an independent chair. The review will be undertaken in 2017, which will give us a couple of years to see the impact of the new laws before we review how they are working. However, I would be very happy for that group, under its own auspices, to consider a wider review of the issues that have been raised today. I hope that my right hon. Friend will take up the opportunity to be part of the group. I know that the Under-Secretary will welcome Members who want to contribute to and be part of it.
Annette Brooke
It is a pleasure to have you presiding over our debate, Madam Deputy Speaker, knowing that you have an interest in this subject.
I thank all Members for their excellent contributions. I thank the park home owners who have contacted us in various ways. I also take on board the representations that I have received from good site owners, who have contacted me either directly or indirectly, about how well their sites are managed. I would like them to come to the new group to showcase their good practice.
I thank the Minister for his response. I am sure that park home owners will feel very reassured that their interests are being looked at. We have to continue looking for the right balance, but I think that everybody here has acknowledged that site owners need a return on their capital and that, equally, park home owners need justice.
I liked the words from my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) when he said that bundling everything together was preventing the free market from working. I am not always a great free marketeer, but he made a strong argument. We have vulnerable constituents who are not being given perfect information on which they can make rational choices. It is therefore important to think about the model.
In conclusion, I hope that we have taken another little step forward, but we need to deal with this issue sooner rather than later. We must bear it in mind that there is a general election coming up. I am afraid that each time we have had a general election, we have taken a couple of steps backwards in our attempts to achieve more for park home owners. I hope that we really have made progress today and I look forward to participating in future work.
Question put and agreed to.
Resolved,
That this House calls on the Government to set up a review of the current fee of up to 10 per cent of the sale price of a park home payable to the park home site owner.