Leasehold and Freehold Reform Bill

George Eustice Excerpts

Report stage
Tuesday 27th February 2024 Commons Chamber

[Mr Betts]

Absolutely. I hope the Minister will have a look at the whole issue of freeholders who will not respond. That certainly applies to many who are overseas, with whom it is very difficult to get in touch.

I will not press new clause 40 to the vote, but the purpose of it is to say to the Minister that the default answer cannot be that the leaseholder can always go to a tribunal. Most leaseholders are simply ordinary residents trying to get on with their lives, who think it ought to be fairly easy to put in a request, get a calculation done and buy their freehold. They are not ready for these organisations, with all their lawyers and surveyors, that want to evade this and try to hide away, in some cases overseas, so that they cannot be contacted.

Can the Minister look at that issue? I know he is aware of it, because we share the same problem with Coppen Estates. There are others that are based overseas, but this one is based in a semi-boarded-up shopfront with a letterbox that never seems to be opened. That is the sort of company we are dealing with. They are small organisations that make a living out of charging ground rents from leaseholders, who cannot exercise their enfranchisement because of the attitude and evasion of the freeholders concerned. I hope that the Minister will have another look at that issue.

The other amendments I have tabled are about having professional qualifications and some form of regulation of property managers. The Government have legislated to say that the managers of social housing will need professional qualifications in future, but what is the difference between a manager of social housing and a property manager of leasehold blocks? In some ways, there may be greater complications in trying to manage a multitude of different leaseholders than people who have secure tenancies in a council or housing association block of flats. What is the difference?

Why will the Government not recognise that there are some good property managers who are well qualified, experienced and can be held to account, but others who are not like that? Indeed, some are put in place for that purpose: they are cheap, they do not have experience or qualifications, and they provide another way of avoiding the restrictions and rules that are rightly put on the management of property. They do not bother with proper service charge information or a proper list of charges for permission fees. I accept that the Government have tried to improve that, but in the end such improvements will only work if the individual or organisation managing the property does so in a proper way. Will the Minister look at those issues? What is the rationale? Why is there resistance to ensuring that people doing a serious and important job as property managers are qualified to do it and properly held to account through regulation?

[George Eustice (Camborne and Redruth) (Con)]

Let me begin by declaring my interest as an adviser to the HSPG group, which among other things is a registered provider of social housing.

I rise to speak to new clause 68, which is based on a specific challenge that I have encountered in my constituency and that affects residents in more than 70 homes spread across three locations in the town of Hayle and the village of Mount Hawke. The experience of those cases exposes a potential gap in the Bill and in policy on the issue of shared ownership. The Bill deals at some length with standard leasehold agreements and the problems of extortionate ground rents, as well as with some of the issues around service charges and management companies with which we are familiar. However, in the early 2000s some agreements were put together that were technically leasehold agreements but that masqueraded as shared ownership agreements, even though those shared ownership agreements do not comply with the standards of modern shared ownership agreements.

The agreements I have encountered contain a number of defects, and I would like the Minister’s view on them. The first is that the freehold on those homes is not held by a registered provider. It was initially owned by the developer who built the sites, but it has changed hands twice. In a way that is familiar to many Members, the freehold has ended up in the hands of an offshore investment vehicle based in the British Virgin Islands, and with a company called Rockwell, which has not been easy for residents to deal with over the years.

The second major defect in the agreements is that there is no provision for staircasing or enfranchisement of the leaseholder’s share of the property. Residents typically own between 58% and 72% of their property, but their stake is fixed and cannot be extended. There is no right to extend under the agreement. The agreements are under a 990-year lease and there is no ability to extend that, although I appreciate it is a long-term lease.

The third defect is that even if residents could enfranchise and extend or staircase their ownership within the agreement, a section 106 covenant means that the properties must be sold to a local connection with a significant discount on market value. The way that has been worded in the agreement means that it is simply not worth the while of residents to increase their share, since there would be no value to the increased share that they would have.

Finally, there was something described as ground rent, although in practice a big chunk of that was effectively a rent on the shared ownership portion. The ground rent was initially around £20 per week, but that was linked to the retail price index on an escalating model. It has now got close to £2,000 per year for those residents, and it is still increasing rapidly.

All of those defects in that leasehold tenure arrangement or shared ownership arrangement—indeed, it appears to be neither one nor the other—mean that all of the properties have been judged unmortgageable by lenders, and that means the residents are trapped. They cannot sell their properties because no one can get a mortgage to buy them. These are people in my constituency who had a local connection. Typically, they are on modest incomes. These agreements and these homes were sold to them as a way to get a foot on the housing ladder, and for those residents it has transpired to be a complete nightmare.

I will say a word about planning and pay tribute to Penwith District Council, as it was then, and Cornwall Council. Planning was granted between 2004 and 2006, and the local planning authorities did their due diligence. They could see that this shared ownership model was defective, and they refused planning permission on all three sites on that basis. The Minister might ask how these homes were then built and sold under the arrangement, but I suspect he can predict the answer, which is that they were approved at appeal by the Planning Inspectorate, an agency within his own Department. The situation that my constituents face has been caused principally by a chronic failure of due diligence by the Planning Inspectorate, as is often the case with such issues.

In conclusion, my new clause 68 seeks to address a gap in the Bill and to give the Government the opportunity to atone for the mistakes of the Planning Inspectorate. It deals explicitly with shared ownership agreements and would create a statutory right to staircase ownership and put a cap on the rent of the freeholders’ portion of the home. I do not intend to press new clause 28 to a Division this evening, but I hope that the Government will consider the matter closely. I would like to meet the Minister or the Secretary of State and share with them and their officials a copy of the shared ownership agreement that my constituents are suffering under so much, with a view to seeing whether the Government might consider further changes at later stages of the Bill’s consideration to address a gap in it. Given that the Planning Inspectorate has been somewhat culpable in creating this problem for my constituents, I hope that the Government will seek to do that.

I support the general thrust of the Bill in all its attempts to deal with management charges, service charges and ground rents, but I hope that the Minister will agree to meet me to discuss some of these remaining issues.

[Barry Gardiner]

It was 1 December 1998. I had been an MP for one year and seven months to the day, and I was chained to the railings of College Green by 200 cheering leaseholders. Thankfully, they were friendly. It was to illustrate that leaseholders felt that they are were prison. Those were the days before social media, and it was a photo op. The BBC ran the headline, “Leaseholders demand more control”. They still do.

Since then, we have had the Commonhold and Leasehold Reform Act 2022, which was an attempt to resolve some of the problems, such as forfeiture of a person’s home for a failure to pay a small service charge, the ground rent grazers charging money for no service and moneys not being held in trust in sinking funds. It is strange that after 25 years, these should be the very areas that yet another Bill on leasehold reform is pretending and failing to solve.

I say “failing”, because that is the reason I rise to support new clause 5, tabled by my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). It is ridiculous that a landlord can take away a person’s home worth hundreds of thousands of pounds for a simple failure to pay a minor service charge amounting to a couple of hundred pounds and where there is a dispute over whether the service was even provided. That is why I tabled new clause 16 about moneys being held in trust, which would implement a provision of the 2002 Act that has never been brought into force. We heard in Committee that the policy had strong support from stakeholders, including spokespeople for the Property Institute and the Leasehold Advisory Service. Even the British Property Federation has campaigned for this provision of the 2002 Act to come into force, yet it is not here in the Bill. Of course, 2002 was a time when nobody had even predicted the new rentier practices that freeholders and developers have since invented to extract money from homeowners for the privilege of living in their own homes: the scandals of leasehold houses; the repeated doublings of ground rents; and the inclusion of commercial areas and shared services in any development to stop any hope of residents exercising their right to manage.

Economic Activity of Public Bodies (Overseas Matters) Bill

George Eustice Excerpts

Report stage
Wednesday 25th October 2023 Commons Chamber

[Angela Rayner]

As I said at the start of the debate, people have to be responsible—and, in fairness, I acknowledged that the Prime Minister at the start of this week also outlined that people have to be responsible. I say that across the whole House and genuinely mean it: we all have to be responsible. I know people feel very strongly at the moment about these issues, and rightly so, and I hope the hon. Gentleman sees from my contribution to this debate that I am taking that very seriously as well.

We rightly expect that our local government must surely stay by the principles I mentioned, but we must also make sure that our national Government do too. That is real leadership—of our communities, and of our whole country. Instead, I fear we have a Government unwilling to recognise what is needed from them at this moment on this Bill: careful, precise deliberation and to bring communities and the country with us.

I am disappointed that the Secretary of State has taken the reckless path of forcing the Bill back to Parliament today—a Bill that fails on its own terms. His approach risks dividing our country, our communities and even his party. I urge him now not to divide the House and to accept the amendments proposed by Members on the Opposition side and his own.

For our part, Labour stands ready—as we have at every single stage of the Bill—to work constructively with the Government and other parties to build consensus behind a workable, sensible solution. There is no doubt that the people of our country want us to speak with one voice. Labour stands ready and willing to work in good faith to achieve that goal. The question is, are the Government?

[George Eustice (Camborne and Redruth) (Con)]

The Prime Minister was absolutely right earlier this week to say that the tone we adopt is incredibly important given the gravity of the events we are seeing in the middle east at the moment. Every single Member of this House is obviously absolutely horrified by the tragedy that is unfolding and the barbaric atrocities committed by Hamas. In my case, I absolutely support the right of Israel to self-defence, but it is possible to believe all these things—to be a friend of Israel, too—but nevertheless to be reluctant to pass bad legislation through this House unamended when we have the opportunity to make amendments on Report. It is possible, too, to believe strongly that freedom of contract and freedom of speech are important pillars in our liberal democracy, and that although we might sometimes fetter those key pillars of freedom and our liberal democracy, we should not do so lightly.

For that reason, I would support amendments 7 and 3 in the name of my right hon. Friend the Member for North West Hampshire (Kit Malthouse), because putting the occupied territories and Israel into the Bill is unusual for a Bill of this sort. We must ask this question: if the purpose is to make it difficult for a future Government to take a position that would change the approach to our close allies, why is the United States not also listed? Many of the groups that people object to, such as BDS, are often quite anti-American as well, so why do we not have a fuller list of countries to make it difficult for them to add?

More importantly, this sends an unfortunate signal around British foreign policy. It has been the long-standing position of all British Governments that we support a two-state solution and that the Israeli settlements in the occupied territories are illegal. That is a consistent British Government position over a long period of time, and we must be careful not to send signals that that has changed.

More importantly, I would also support amendment 3, because clause 4 is a strong violation of freedom of speech. It has come to something when we are saying that not only would people not be free to follow the procurement policy they want, but they would not even be allowed to say that the reason why they were not free to do so was this Bill. I will support amendments 7 or 3 if either go to a vote this evening.

However, I want to focus principally on the two amendments in my name—amendments 10 and 11. Although much of the debate around the Bill is understandably conducted through the context of BDS and of Israel and the Palestinian situation, the scope of clause 1 is very broad. What is before us this evening is a broad procurement Bill that places quite broad restrictions on procurements and applies to every country in the world. I presume the reason is that the Government’s legal advice was that to have something that focused just on one country, Israel, or on just one campaign group, BDS, would create some legal issues. So they then had to construct a Bill that affects every organisation, every issue and every country, and then through the schedule try to piece back some of the liberties affected by the imposition of clause 1.

I want to focus on that schedule, because it lists lots of different issues that are outside the scope of clause 1, and rightly so, including “environmental misconduct”, but there is no mention of animal welfare. There will be times when public bodies will take a procurement decision based on animal welfare. They need to be free to do that, and it is not at all clear from the schedule that that could be done. Paragraph 10 mentions “environmental misconduct” and at the end talks about

“the life and health of plants and animals”,

but it does so very much in the context of the environment and the wild environment rather than through the context of kept animals.



The Government buying standards were recently revised to encourage all public bodies and all Government Departments to take account of animal welfare in their procurement policies, but the Bill would appear to curtail the right of local authorities to do just that. Legitimate issues will come into play here. These are probing amendments on which I am looking for reassurance from the Minister and an undertaking to consider these matters further in the other place. For instance, were a local authority to judge that it would prefer to procure lamb from New Zealand over, say, Australia, because New Zealand has high animal welfare standards while the Australian sheep industry has poor levels of animal welfare and does not have in place the right regulatory powers to deal with certain practices, that would be a legitimate consideration. Indeed, it is not only legitimate but a consideration that the Government’s own buying standards and the Crown Commercial Service encourage all public bodies to pursue.

In closing, my question, which is very much linked to my two amendments, is this: is the Minister’s understanding that it would be entirely in order under the Bill for any local authority or public body to make decisions based on animal welfare, and that any such decision related to animal welfare would be totally outside the scope of clause 1?

Levelling-up and Regeneration Bill

George Eustice Excerpts

Report stage
Wednesday 23rd November 2022 Commons Chamber

This Bill is a missed opportunity. Today, as in Committee, we have sought to help the Government improve it. I fear once again for our prospects in this regard, but that is because this Government are interested in the politics of levelling up, not the delivery of it for all of our nations and regions. This Government will never level up, and they should get out of the way for one who will.

[George Eustice (Camborne and Redruth) (Con)]

I rise to set out the case for new clauses 70 and 71 in my name with the support of my hon. Friend the Member for St Ives (Derek Thomas) as well as numerous other Members from all parts of the House, including several Liberal Democrats, among them its leader, about which I will say a little more later.

I was very pleased that the Chancellor made direct reference to Cornwall in the context of the next round of devolution deals in his autumn statement last week, but linked to the agreement is a more controversial decision about whether Cornwall should have a directly elected leader, or mayor. I can see both sides of the argument and am genuinely agnostic. On the one hand, having a directly elected mayor could create, in one individual, a powerful voice for Cornwall; it could strengthen the accountability to local people in a more direct way, rather than have a model that relies heavily on a council chief executive. On the other side of the argument, however, the idea of a single individual representing the whole of Cornwall unsettles some of our Cornish sensibilities. We have a motto in Cornwall, “One and all”, but can this Cornish mindset based around the idea of shared endeavour be properly represented in a “One for all” system of democratic accountability? In addition, if we were to have lots of councillors from one party but a directly elected leader from another, or indeed from no party at all, would that create tensions and undermine good governance? This is therefore a significant decision for our councillors in Cornwall, and it is essential that all parties allow their councillors a free vote on the issue so that the advantages and disadvantages can be debated openly ahead of a final collective decision.

My contention today is that, whatever Cornwall eventually decides to do by way of structure of governance, it should nevertheless be granted an ambitious tier 3 devolution agreement. If having a mayoral system is such a powerful idea, it will carry the day irrespective of whether the Government dangle new money and new powers as an incentive. If it turns out not to be a good idea, however, the problems created might be more expensive than the perceived benefits of the deal.

I know that the Government seek to bring more clarity and consistency to local government structure, and I completely understand, for what we have now is something of a hotchpotch. But there are powerful reasons, rooted in centuries of history, for treating Cornwall as a special case, for Cornwall has a distinct and subtly different place within the British constitution. The nature and origins of this Cornish particularism are often misunderstood and sometimes even mocked by people “up country,” as we say, who do not know what they are talking about, but Cornwall is different. It has a highly Unionist tendency, sealed through the Crown down the centuries. Its geography as a peninsula gives it a self-reliance, and with that a resilience. Cornwall can occasionally be somewhat aloof, but it is only ever hostile to other parts of the country when deliberately provoked. It is eternally proud of its distinctiveness.

--- Later in debate ---

[Ben Bradley (Mansfield) (Con)]

It is nice to be called near the beginning of a debate, Mr Deputy Speaker; I am grateful that I have managed to catch your eye—perhaps it is because I have put a tie on today. I am also grateful for the chance to speak on Report, as I sat on the Bill Committee in its latter stages, but for only five of the many, many sessions that the hon. Member for Nottingham North (Alex Norris) mentioned, so I experienced only a fraction of the joy that he did.

I am grateful for the opportunity to speak given my interest both in this place and as the leader of a council that is directly involved in devolution negotiations. Indeed, they are probably some of the more advanced negotiations and, to proceed, they require the Bill to pass. I thank the Minister for her response on a number of technical points in recent days and weeks, and for her commitment to this agenda, which I know she is passionate about.

The amendments focus largely on devolution in combined authorities. As I have repeated, I am frustrated that the planning parts are even in the Bill. It started as a Levelling-Up Bill, but planning was added to it later and has complicated it and made it difficult and controversial. Those could have been two separate things. We could have flown through this very quickly. I know it is before the Minister’s time, so I do not expect her to account for that, but the Bill could have been far simpler than it now is. The timing of all this is vital for the delivery of some of these combined authorities. If the Bill is delayed, it will delay the timeline for the delivery of these outcomes that we all seek, so it is important that the Bill is allowed to progress quickly.

Since my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) said some 18 months ago that these deals would be a key driver for levelling up, progress has been positive. Mansfield is often at the wrong end of many tables that would put it front and centre of the levelling-up agenda, so we wanted to be at the front of the queue for new powers and new funds. We are currently consulting on a new devolution deal, worth £1.14 billion initially in additional gainshare funding into our region, plus powers over transport, skills and economic development.

Huge opportunities for us stem from this Bill and from other existing growth projects across the region, whether that is our freeport, our development company, which is also formalising and given its powers through this Levelling-up and Regeneration Bill, integrated rail plan projects or spherical tokamak for energy production—STEP fusion—which was recently announced for north Nottinghamshire. When painting out this opportunity for business clubs, residents and education providers recently, I have used the STEP fusion example. It is a £20 billion project with investment from the Government and the UK Atomic Energy Authority that could put us front and centre of clean energy for the world in 20 or 30 years’ time. It is a huge, long-term project, and what devolution gives us—I would like to think this is part of why our area was attractive for the bid—is the ability not only to have a prototype power plant in the future, but to create the skills environment and training opportunities around it, working with our colleges and universities so that local children can take up those courses and move into that space. That way, rather than just importing nuclear scientists from other parts of the world, young people in places such as Mansfield are given the opportunity to build and create.

The deal also means we will have the power to fill in the gaps in our transport system and ensure local people can easily access those opportunities and get to and from those jobs. That is game changing. There will be kids in my constituency who, in 20 years’ time, will work not just in nuclear science but in its supply chain who could never have dreamed of those opportunities on their doorstep even just a few months ago. The power of this deal and these opportunities is incredibly meaningful. Finally, the east midlands can be in the premier league alongside other regional partners; I hope we will do a bit better than Forest so far, although things are picking up. The project is a huge opportunity.

I welcome new clauses 61 and 62, which enhance the powers of Mayors over that key route network. Members will not be surprised by this if they have campaigned in elections, particularly local elections, but highways are always at the top of residents’ list. They are probably the one service, particularly at upper-tier, county level, that everybody uses and experiences, so they are always top of the list. More power and opportunity to engage in this space and work with National Highways on a wider range of networks and to do that more closely and in a more joined-up way is beneficial. I also look forward to the negotiations for our region around this transport pot and investment that is part of our deal and is yet to come.

I am afraid I cannot support new clause 71 tabled by my right hon. Friend the Member for Camborne and Redruth (George Eustice). I appreciate that he was making a particular case for his area, and he was right to do so; we all do the same thing. But one benefit of devolution—the Government have said that every area across the country will have the right to access this opportunity—is the chance to have some clarity and consistency within a structure that is currently incredibly complicated. I speak for an area that has, arguably, three tiers of local government. We see a combined authority as an opportunity to make coherent sense of that and to pull us into a structure that allows us to have shared strategies.

Other areas might take a different view, but it is not inconsistent or unrealistic to say that if someone wants the same powers as the west midlands, for example, they should have the same accountable structure as the west midlands. That will allow Government to have a consistent relationship with each region and each part of the country with those regional Mayors. That is my personal view from my experience of that engagement. If, having devolved powers, built structures and offered everyone that chance, we end up with a more complicated structure with different systems across the country, that would be a bad thing.

[George Eustice]

I agree it is good to have that consistency in England, but the amendment is specifically about Cornwall, which has a unique constitutional place within our family of nations.

[Ben Bradley]

My right hon. Friend knows Cornwall better than I do; I know it only as a holiday destination. I leave him to make the case for his particular place. I am sure that the Government will engage with him in that conversation. However, consistency is an important outcome from these proposals.

A number of amendments appear to duplicate things that are already happening around the country and in government. For example, new clause 46 speaks to a review of business rates, which I hope and trust the Government are already looking at. The Treasury review concluded last year and set out a five-year road map on that, but I hope the Government will take it further.

--- Later in debate ---

[Mrs Lewell-Buck]

My hon. Friend is correct. It is simply not in the interests of local people to have no mechanism at all to remove someone from office who is acting inappropriately. People in my area who have experienced the damage caused by our previous council leader and his supporters find offensive the suggestion that removing that level of accountability has somehow given them more of a voice or restored any power to them.

It is the greatest honour to serve our community, whether at council level or in Parliament. With that should come appropriate checks, balances and levels of accountability. The public need confidence in the system. They need to know that cases such as those that I have mentioned will never happen again. My new clause would ensure that.

Amendments 71 and 72 simply ask that the Government align the levelling-up missions with the United Nations sustainable development goal to end hunger and ensure access by all people—the poor and the vulnerable, including infants—to safe, nutritious and sufficient food all year round, and that it be measured by tracking the prevalence of undernourishment in the population and the prevalence of moderate or severe food insecurity, based on the food insecurity experience scale. It is astonishing that a Bill that attempts to level up all parts of the UK does not mention hunger or food insecurity once, despite the Government acknowledging that it is not possible to level up the country without reducing the number of children going hungry and living in poverty.

[George Eustice]

The hon. Lady is right that this is an incredibly important issue, but is it not the case that all these issues were addressed through the Agriculture Act 2020, and the requirement to publish every three years a food security report that includes very detailed chapters on household food insecurity, which is what she is concerned about?

[Mrs Lewell-Buck]

I thank the right hon. Member for that intervention. He will know that those measurements have not resulted in reduced levels of poverty. The amendments would strengthen the Government’s commitment to reducing it.

There are 14.5 million people living in poverty across our country. Poverty among children and pensioners rose in the six years prior to covid, alongside a resurgence of Victorian diseases associated with malnutrition, such as scurvy and rickets. Surely the Government must have grasped that for at least five of their own missions to succeed people need access to food. Living standards, education, skills, health and wellbeing are all deeply impacted in a household impacted by hunger. The Government’s own reporting in the family resources survey, which was made possible only after years of campaigning to implement my Food Insecurity Bill, shows that households in the north-east are more likely to struggle to afford food than those anywhere else in the country. It would be totally misguided to think that we can level up the country without addressing that issue.

We know that the figures will increase. Already this year food insecurity has risen by almost 10%. Thanks to the Government’s economic mismanagement, the biggest fall in household incomes on record will only exacerbate those levels of hunger. The Food Foundation has found that levels of food insecure households are rising, with figures for September this year showing a prevalence in nearly 10 million adults, with 4 million children also suffering from hunger. If it were not for the over 2,500 food banks in the country, those adults and children would be without food. That should be a source of great shame for Government Members.

Regional disparities, which the Bill supposedly aims to level out, are more stark when we look at the fact that life expectancy in my part of the world, the north-east, is two and a half years less than in the south-east. Increasing healthy life expectancy is a huge challenge. The pandemic revealed the serious underlying health inequalities in this country. Public health funding will play a crucial role in helping to achieve the mission; however, in the most recent allocation councils faced a real-terms cut. That is just another example of where the Government’s actions do not meet their levelling-up rhetoric.

The Government commissioned a national food strategy, which found that diet is the leading cause of avoidable harm to our health; however, the Government have ignored Henry Dimbleby’s recommendation to increase free school meals eligibility. If the Government are serious about levelling up, tackling food insecurity is vital to achieving the levelling-up White Paper’s missions. As Anna Taylor, chief exec of the Food Foundation, said:

“If the Government wants to really get to grips with the issue, a comprehensive approach to levelling-up must tackle food insecurity head on.”

The Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Bishop Auckland (Dehenna Davison), claimed that the amendments in Committee were not needed as the Bill is

“designed to establish the framework for the missions”––[Official Report, Levelling-up and Regeneration Public Bill Committee, 20 October 2022; c. 859.]

not the content of them. That sums up the vacuous nature behind all the missions in the Bill. By making them as opaque as possible, and lacking such content, the Government will not have to bother delivering on a single one of them.

The Government should accept this amendment today. By doing so, they would signal that at long last they accept that people are going hungry on their watch and they are eventually prepared to do something about it. I sincerely hope that they will do this, but I expect that they will not. In any event, I look forward to the Minister’s response later on.