Housing and Planning Bill

Catherine West Excerpts

Tuesday 12th January 2016 Commons Chamber

[Robert Neill]

I am grateful to my hon. Friend, who I know has professional experience and expertise in this matter. Of all the amendments and new clauses in my name, I urge the Minister most strongly to pay urgent attention to this provision. As my hon. Friend said, this issue is the one thing that puts people out of business, and that cannot be in anybody’s interest, and I urge the Minister to look swiftly and urgently at the matter. Perhaps it does not require primary legislation, but it needs to be addressed. My hon. Friend is right—established firms have folded from time to time when the bank required a redemption, and people may need to increase their exposure and put up the family home, for example, to provide that security, which cannot be just under such circumstances. My hon. Friend effectively encapsulates the point of the amendment.

Finally, failing to pay advance compensation runs contrary to virtually all other commercial transactions, and it is an outlier that often puts people who have been compulsorily required to sell in a disadvantageous position compared with public bodies. It makes it really difficult for any landowner or businessperson to run their business efficiently against that backdrop, as they do not have the financial security they would otherwise have. That is the purpose of the amendment and I hope it will be looked on favourably by the Government. I am not fussed about the route. Achieving outcome and fairness is the most important thing. Amendment 77 is consequential to that amendment; they hang together.

On amendment 76, it is important not only to have prompt payment but a realistic level of compensation. That can be assessed through the current system, but there is the question of interest on late payment. The coalition Government and the current Government have rightly emphasised the importance of prompt payment to businesses, and the Department for Business, Innovation and Skills set up codes to encourage prompt payment. The importance of prompt payment weighs particularly heavily on small and medium-sized enterprises, because they are more exposed than most to the need for external bank financing. They are not likely to be able to draw down on capital.

I recognise and welcome the Government’s increase—to 4% as I recall—in the rate paid. That is an important and valuable step forward, but, for exactly the same reasons that have already been referred to, I urge them to go further. When a compulsory purchase goes through, very often landholders find it difficult to secure the funding to move forward. In particular, it is important to have a realistic rate of interest. Even with the current proposed changes, the rate will lag behind what is effectively the market rate.

The nature of compulsory purchase means that the majority of compensation due is meant to be paid before entry. When it is, all well and good. When it is not, there ought to be some compensation for those held up by late payment. By and large, the Government have now proposed introducing an interest rate of 2% above the base rate on late payments. That is a step forward, but still well below the commercial rate.

On compensation due before entry but not paid on time, the amendments seek an interest rate of 8% above the base rate. That is in line with the rate of interest charged on the late payment of commercial transactions. The truth is that that would be no burden on acquiring authorities. All they have to do is pay on time. If they pay on time, they will not attract the punitive rate of interest. It is a spur to good behaviour by acquiring authorities. An 8% rate would be closer to the market rate than the 4% rate currently available.

We suggest that any compensation on a quantifiable amount should be at 8%, which would put it in line with interest on a judgment debt after a finding by a court or tribunal. Other payments, which are not always quantifiable immediately but become apparent, should attract an interest rate of 4% above the base rate. That would be in line with commercial lending rates. We are therefore simply saying to acquiring authorities, “Behave like any other commercial body would.” I say to those on the Opposition Front Bench that that would not undermine the compulsory purchase regime, but ensure fairness and efficiency from an acquiring authority. Those that are efficient would have nothing to fear: if they just pay up promptly they will not have to pay the rate. If they do not, why should a landowner who has been compulsorily acquired against be in a worse position than if the land had been acquired as a result of a commercial negotiation or a judgment of a court not under the compulsory purchase regime?

That is the point of the amendments. They may sound technical, but they are actually quite important to a lot of rural businesses. I can say that there is little constituency interest for me—I think we have one farm in Bromley and Chislehurst—but this is an important issue for many businesses in rural areas.

[Catherine West (Hornsey and Wood Green) (Lab)]

It is a delight to follow my colleague from the all-party group on London, the hon. Member for Bromley and Chislehurst (Robert Neill), given his expertise on housing and planning. I want to talk about conditions in the private rented sector and to express my agreement with my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) on leasehold reform.

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[Catherine West]

I thank the hon. Gentleman for that excellent point, which is something I have campaigned on for a long time. Now that the private rented sector is the new normal, we need to move towards tenancies of three or four years. People do not have to accept three or four years, but six months as the norm is simply unacceptable, particularly when we know that in places such as Finsbury Park people need an income of £75,000 to rent a three-bedroomed place for the family. Finsbury Park is not Chelsea, but now that such a high income is required, we need to do much more to deal with the problem of short-term leases and lack of security. The length of tenancy is a crucial issue. I am sure we will get another bite at the cherry when it comes to tabling an amendment to deal with that. Unfortunately, such an amendment was not accepted in Committee, but we will continue to campaign for it. The hon. Member for Rossendale and Darwen (Jake Berry) was quite right to mention it.

In the olden days, we used to talk about the decent homes standard, which included things such as kitchens and bathrooms, heating, security, windows and so on. We should have exactly the same thing in mind when we talk about conditions in the private rented sector. We all know about the long-term health impact of living in a cold home. Now and, funnily enough, in many places, our social homes have better conditions—on account of the decent homes standards I mentioned, which were introduced under the Labour Government up to 2010—and many tenants live in quite acceptable accommodation.

Private tenants, however, who are now paying more, are living in colder homes, which we know leads to a greater chance of getting respiratory illnesses. In London, we should not be seeing the increased number of tuberculosis cases that we are seeing. Tuberculosis is aggravated by overcrowded and cold accommodation. Problems such as these are a regular feature of our constituency surgeries, and we should be ambitious about seeing the end of something like tuberculosis.

Another issue is the number of days that children miss at school because of illness, and this applies whether we are talking about primary school, secondary school when pupils are doing their GCSEs or even university years. Asthma, chronic obstructive pulmonary disorders and other respiratory problems are holding our youngsters back; and we must not forget the healthcare of our older folk.

When we are reflecting on what we want our local authorities to look at, I hope that we can include high-quality heating systems. I would be surprised to find any social sector homes left in the borough of Haringey that did not have a proper heating system. However, I have been into homes in the private rented sector where tenants are still switching on low-quality heating systems.

That brings me to the point made by my hon. Friend the Member for Poplar and Limehouse about the importance of having electricity checks. Every local authority knows about CORGI—Council for Registered Gas Installers—and it seems to me basic common sense that we need something similar to that for electricity. It will need a new name, but we need something for electricity standards—names on a postcard to the Deputy Speaker if anyone can think of one today. The CORGI standard is the reason we do not have as many accidents caused by problems with gas. People have campaigned on gas standards for the last 20 years and we now have that protection put into rules and regulations through statute. When checks are carried out for gas, we could do the same thing for electrics. It is such a basic point; we must make this part of what we do.

My hon. Friend the Member for Poplar and Limehouse and others mentioned leaseholder issues. With 4.5 million people living in leasehold properties, it has become, like the private rented sector, the new normal. A third of all residents living in social homes in some of our London boroughs are leaseholders, so we need to look further at providing some form of regulation to deal with service charges and ground charges, and to control the interaction between the freeholders and the leaseholders. A number of leaseholders have come to me with specific questions in circumstances where it is plain that the freeholder is not being a good landlord. We need to deal with that, and we need some kind of cap on what can be charged where the freeholder is a private entity and leaseholders are at their mercy when it comes to repairs, unreasonably high bills and general lack of rights. Being a Member of Parliament with just one caseworker in a constituency where there are thousands of unhappy leaseholders is not good. [Laughter.] Everyone is laughing because they know what the situation is like for leaseholders.

There are a number of other steps that need to be taken, and I think that we may need more time to consider them. Some of them are very specific. In the case of both the private rented sector and leaseholders, we are no longer talking about small groups; we are talking about more and more people who cannot afford to buy into the property market and get on to the housing ladder. Notwithstanding all the announcements by politicians wearing hard hats and wonderful fluorescent jackets, we know that supply is a desperate problem which will not be fixed overnight. What we can do is improve the conditions of leaseholders, and, first and foremost, ensure that the private rented sector is at the forefront of our minds.

[John Stevenson (Carlisle) (Con)]

I want to say a few words about new clause 42. I thank my hon. Friend the Member for St Albans (Mrs Main) for her support, and I entirely agree with what she said earlier.

The Minister will be pleased to know that I do not intend to press the new clause to a vote. However, I seek a reassurance from him that the issue will be properly reviewed in 2017—as has been proposed by Ministers previously—and that, if necessary, the Government will seek to amend the law if that is required.

Given that the Bill concerns housing, there have of course been discussions about home ownership, whether freehold or leasehold, and about tenancies, whether in the private or the social housing sector. There are also different types of housing: detached houses, terraced houses and flats. However, we should not forget the mobile park home. A surprising number of people own such accommodation in constituencies all over the country, and certainly in mine. Under the current law, a site owner can charge a commission of up to 10% on the sale price, which I think many people—including politicians and, especially, mobile park home owners—consider to be grossly unfair and, indeed, outdated. I acknowledge that the commission was reduced from 15% to 10%, so there was an acceptance that it was an issue, but that was back in 1983. I think that we live in a very different world now, and that the 10% commission should be reviewed.

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[Greg Clark]

The hon. Gentleman might not be aware that restrictions are in place that prevent, for a considerable period, homeowners who have exercised the right to buy selling on. In fact, foreign ownership of UK property is still at a very low level. I do not recall the previous Labour Government introducing any particular restrictions on that. Let me point to two flagship manifesto commitments that the Bill implements, namely the extension of the right to buy to housing association tenants and the provision of 200,000 starter homes by 2020. The Bill is making good the pledges that were made directly to the British people and that were backed by the British people in the general election.

[Catherine West]

That particular element of the Secretary of State’s scheme does not work in high-value areas where people, because of the sort of work that they do, will never ever be able to get a mortgage. Therefore, there are certain people who will never be helped by his Bill.

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[John Healey]

As we pass this Bill on to the other place, I thank the officers and staff of the House, particularly those in thePublic Bill Office, for their guidance and support throughout our work. I also pay tribute to my Front-Bench colleagues, my hon. Friends the Members for City of Durham (Dr Blackman-Woods), for Erith and Thamesmead (Teresa Pearce), for Greenwich and Woolwich (Matthew Pennycook) and for Easington (Grahame M. Morris). They relentlessly exposed the deep political, fiscal and policy flaws in the Bill as we opposed the worst of what the Government are trying to do. I am grateful, too, for the unified and strong support from my colleagues on the Labour Benches, particularly those who served on the Public Bill Committee—my hon. Friends the Members for Bootle (Peter Dowd), for Harrow West (Mr Thomas) and for Dulwich and West Norwood (Helen Hayes). I pay tribute also to the other members of that Committee who worked through those 40 hours of scrutiny.

The voices of serious concern from the Conservative Benches are welcome, as well as striking—those of the hon. Members for Hertford and Stortford (Mr Prisk) and for Wimbledon (Stephen Hammond), the right hon. Members for Cities of London and Westminster (Mark Field) and for Arundel and South Downs (Nick Herbert), and the hon. Members for St Albans (Mrs Main), for South Cambridgeshire (Heidi Allen) and for Oxford West and Abingdon (Nicola Blackwood), to name just a few. It is a warning to Ministers, and a signal to the other place, that Conservative Members and Conservative local government leaders rightly have growing criticisms about the loss of genuinely affordable homes in their area, rural and urban alike, about the sweeping new powers for Ministers to impose planning decisions on local communities, and about the so-called starter homes being unaffordable for many young families on modest incomes in their areas.

Usually, we hope to improve a Bill as it goes through the House. This was a bad Bill; it is now a very bad Bill. It was a bad Bill, now made much worse by amendments forced through at the last minute after the Committee’s line-by-line scrutiny—new clauses to define homes on sale for up to £450,000 as officially affordable. The Government are not building enough affordable homes, so they are simply branding more homes as affordable. Other late amendments included new clauses to stop councils offering anything longer than two to five-year tenancies, meaning the end of long-term rented housing, the end of a stable home for many children as they go through school, and the end of security for pensioners who move into bungalows or sheltered flats later in life.

How has it come to this—that we on the Labour Benches are having to defend the reforms and rights introduced by Margaret Thatcher? This is an extraordinary and extreme Bill.

[Catherine West]

Does my right hon. Friend agree that this Bill makes the lives of Londoners and people in other regions as well much less secure? Added to the insecurity that many people are experiencing in the workplace, that makes everyone’s life much worse.

[John Healey]

My hon. Friend is right. The Bill fails to get to grips with the problems of modern life and the crisis of homeownership, especially for young people and families on ordinary incomes. The so-called starter homes are simply out of reach in those areas where people most need help to buy a home of their own. Last week, Tory MPs voted against Labour proposals to make those homes more affordable. The Bill sounds the death knell for social housing, which has had support from all parties for over a century, and for the first time since the second world war, the Chancellor confirmed in the autumn statement that there is no national investment programme to build such housing.

Starter homes will be built in place of affordable council and housing association homes, both to buy and to rent. Councils will be forced to sell their best properties and housing associations will not replace many of their right-to-buy sales with like-for-like homes. That is why Shelter, like the independent Chartered Institute of Housing, predicts that this Bill will lead to the loss of at least 180,000 genuinely affordable homes to rent and buy over the next five years—an extraordinary and an extreme Bill.

We have tried to stop the worst of the plans, but Tory Ministers and Back Benchers have opposed our proposals to give local areas the flexibility to promote not just starter homes but homes of all types, depending on local housing need; to make starter homes more affordable and protect and recycle taxpayers’ investment; to stop Ministers mandating that pay-to-stay limits hit working households on modest incomes; to allow local areas to protect council and housing association homes with a proper replacement of each; to limit any automatic planning permission from Ministers for brownfield land; and to protect stable family homes for council tenants.

In truth, many of the problems are caused by Ministers who announce first and ask questions later—no consultation and little time for proper scrutiny. More than 60 pages of new legislation were tabled at the last minute after the Committee had completed its scrutiny. There is a great deal for the other place to do.

In five years of government, we have seen five years of failure on housing under Conservative Ministers. Homelessness is rising, private rents are soaring and levels of homeownership have fallen each and every year since 2010; they are now at the lowest level for a generation. Over the past five years, the Government have seen fewer new homes built than under any Government in peacetime history since the 1920s. After five years of failure, the Bill does nothing to deal with the root causes of those failures; in many areas, it will make the problems a great deal worse.