Freehold Estate Management Fees

Helen Morgan Excerpts

Thursday 13th July 2023 Westminster Hall

[Helen Morgan (North Shropshire) (LD)]

I beg to move,

That this House has considered freehold estate management fees.

It is a great pleasure to serve with you in the Chair this afternoon, Dr Huq. I am grateful to the Backbench Business Committee for granting this debate and also to the 14 MPs from across the House who enthusiastically wrote to me to support it. I suspect that the fact that they are, unfortunately, not all here is a function of its taking place on a Thursday afternoon. Like me, they have been contacted by constituents whose lives have been blighted by the often scandalous reality of unfair, unregulated estate management fees, and feel obliged to call on the Government to legislate robustly to correct this.

I will begin by outlining the crux of the problem for many freeholders in the UK who are trapped by such arrangements. It is becoming increasingly common in new housing developments for the shared areas that are built to remain unadopted by the local council. Instead, a management company takes responsibility for the shared areas outside the bricks and mortar of the owners’ homes, and the freeholders are required by law to pay annual charges for the upkeep of those areas. That could include anything, from the maintenance of garden areas to roads and footpaths. As I will come on to later in my speech, it can even include the sewerage connections of the properties in the development. Sometimes, the freeholders will also be the joint owners of the shared areas.

The commercial substance of these arrangements is that the freeholders sign up to a leasehold agreement, even if the legal form gives it a different name. It is in the nature of these agreements that the problems begin. A common practice, I found, is for brochures and contracts, or sales staff to refer to estate management charges as

“a small annual charge for grass-cutting or for the upkeep of the play area.”

In some cases, that description of the charges could not be further from the truth.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I have been pursuing this matter for some time. Indeed, I have described it as the new payment protection insurance, or PPI, because there are so many people who have been signed up to things that they did not know about. The similarities between that and the leasehold scandal are all too familiar. Does the hon. Member feel that there needs to be far greater candour and transparency from developers when they sell their properties?

[Helen Morgan]

I thank the hon. Member for his intervention and I agree with him; that is one part of the solution to this problem.

From day one, homebuyers are being fleeced by the developer, given the reality of the charges they will face, and unfortunately, because they are often first-time buyers, they do not have the experience or knowledge to delve deeper into the charges during the conveyancing process.

These charges are usually uncapped and unregulated, with no means of redress for the buyer, which can be the beginning of a spiral of problems that freeholders in this position face. A common arrangement is that the management company is a zero-profit company that simply passes the cost of maintenance work to the freeholders. However, this work is subcontracted to a profit-making company; and I am sure it will come as no surprise to hear that, in these arrangements, the subcontractor is often connected to the original developer and makes exorbitant profits. The subcontractor does that by ensuring that the cost of the maintenance work is extortionate. To add insult to injury, although the freeholders are paying for the upkeep of the communal area, or the public area, or the roads, or the street lights, they do not receive a reduction in their council tax.

A stakeholder from the Cambridge Centre for Housing And Planning Research said in an interview that the reason why the number of freehold estates with estate rent charge requirements is increasing is that local authorities are not keen to adopt all communal areas and roads on estates. But in actual fact, local authorities are being incentivised to encourage these arrangements, because they raise council tax revenue without incurring any maintenance costs.

I will provide a few examples from my constituency to demonstrate the harm that these arrangements can cause when they have not been established in good faith. I have spoken on many occasions about the Brambles development in Whitchurch in my constituency, and I will mention it again today, because the circumstances are so appalling, and I believe they could and should have been avoided. The Brambles is a development of 14 houses built in 2016 by the developer Sherwood Homes Ltd, on land for which Shropshire Council had already granted planning permission for development. It was a condition of the planning permission that the road, footpath and drainage would all be complete before the houses were occupied. Unfortunately, despite that agreement, these elements were never fully completed, but building completion certificates were issued for the properties and they were subsequently sold and inhabited.

Once a number of the houses had been occupied, the drainage system failed, which led on some days to raw sewage backing up in residents’ gardens. Sherwood Homes Ltd had not taken out the section 104 agreement required in the planning permission, and not only was the arrangement dysfunctional, but the connection to the Welsh Water sewage network was illegal. In addition, neither the road lighting nor footpath was completed.

In December 2019, Sherwood Homes Ltd went bust, and Shropshire Council could not take planning enforcement action against the company. The residents of the Brambles, who were the successors in title to the private company that was established to manage the development, had been the subject of the enforcement process. The truly shocking reality is that they have been required to accept five-figure charges on their properties to rectify the £1 million issue of connecting the drainage to Welsh Water’s network. It is also worth noting that the saga has cost the rest of Shropshire’s taxpayers a considerable amount, because council officers have expended time and effort in attempting to rectify the situation.

Had the residents not been the owners of the shared areas, they would not have been liable. Perhaps if Shropshire Council had been expecting to bear the full costs of the clear-up, it would have taken out an injunction to prevent the final homes from being sold and occupied until the drainage was rectified, or indeed ensured that, in the first place, financial bonds had been in place under the section 104 agreements and the section 106 agreement for the drainage in the road.

That is the worst example, but it is not the only one that has come to my attention. Other cases from my constituency include a developer that is charging residents extortionate fees for the maintenance of a shared ground source heat pump, but has kept the Government’s renewable heat incentive by putting it in a private company. The developer runs the management company and has failed to hold an annual general meeting or provide detailed accounts for the residents.

In another example, there appears to be a total disregard of the Companies Act 2006. In this instance, once again the drainage and road are not at an acceptable standard, and the developer claims the management company is dormant, despite having contracted limited maintenance work to a third party. It has not held an AGM, and there is no opportunity for the homeowners to challenge the arrangement. The developer ignores all correspondence, and the homeowners do not have the resources to take him to court.

The problem is not unique to North Shropshire but impacts people across the UK. Indeed, since being granted this debate, I have been contacted by freeholders from across the country who have explained that they are being fleeced by management companies, having initially been told that they would simply have to pay for the upkeep of the grass. These people find themselves in an inescapable position. For many, there is no use turning to their original conveyancing solicitor for assistance, because that solicitor was recommended to them by the developer, which offered a discount if they used that solicitor. In addition, as I have mentioned, many homeowners are first-time buyers, and starting legal proceedings retrospectively is simply out of the question on a cost basis. As a result, freeholders are left with nowhere to turn, paying extortionate fees and with their dreams of a new home shattered.

It is important to note that the cost to the resident is not only financial. A support group called HorNet has explained to me that, on top of the burden of paying the fees, homeowners often come into dispute with other members of the public, who may abuse or damage the very infrastructure, such as the play equipment, that the homeowners are paying such huge annual fees to upkeep.

[Justin Madders]

The hon. Lady raises an interesting point. Constituents have told me that people who walk their dogs on the land for which they are paying an estate management charge should not be allowed to do so, because those people have come from another estate, where they are not paying the charge. This whole model is set up to be divisive and turn communities against each other, is it not?

[Helen Morgan]

The hon. Gentleman is exactly right, and that also raises questions of liability. HorNet describes one example in which it asked the local authority to comment on whether the local authority or the freeholders would be liable if a member of the public was injured on land maintained by the freeholders—for example, by falling off the play equipment used by the public. The council responded that it did not know. There is therefore an additional level of stress for these freeholders, as well as the potentially divisive elements that the hon. Gentleman raises.

As they stand, the agreements are a bit of a legislative desert, and they are a source of incredible stress and risk for residents. Frankly, they are a bit of a money-printing machine for unscrupulous developers that seek to exploit homebuyers. What is frustrating is that the Government have on numerous occasions considered that this area of legislation desperately needs reform, yet we have made no progress to protect freeholders from the situation.

In 2017, the Government launched a consultation to tackle unfair practices in the leasehold market and promised to legislate to ensure that freeholders would be able to access rights equivalent to leaseholders’ to challenge the reasonableness of such charges. In 2018 they launched another consultation, “Implementing reforms to the leasehold system in England”, which promised that the consultation requirements and obligations of the provider of services must be provided also to freeholders and that freeholders would have the ability to challenge the reasonableness of the payments at a first-tier tribunal.

In 2019 came the Government’s second report, “Implementing reforms to the leasehold system in England”, promising equal rights for leaseholders and freeholders when it came to challenging management fees. Those consultations and reports have been encouraging. Some 76% of those asked in 2019 agreed that freeholders should have the right to challenge such fees, but we have seen no progress at all in the legislation.

It is the responsibility of the Government to honour their promises made in 2017, 2018 and 2019. In March this year, when responding to a parliamentary question from the right hon. Member for Elmet and Rothwell (Alec Shelbrooke), the Secretary of State promised to legislate on this issue “when parliamentary time allows”.

I do not think I need to make it any clearer to the Minister that the delay in legislating is directly affecting people stuck in freehold arrangements. It is unnerving to think about how much money they have been forced to pay to scandalous management companies because of those delays. From where we are today there is no end in sight for them. They are chained to these agreements. They cannot dispute the payments legally, nor sell their homes. They are truly trapped.

We have been promised by the Secretary of State that the leasehold reform Bill will be introduced after the King’s Speech. There remains an opportunity to ease the situation, as the Levelling-up and Regeneration Bill passes through the other place. Could local authorities be encouraged to ensure that there is a plan for the adoption of roads, street lights and play areas, and that either section 106 or community infrastructure levy moneys are obtained from developers to ensure that they can be upkept in the future?

Could local authorities be given clear guidance to outline where a shared management company may not be a suitable solution; how planning conditions can be used to ensure that suitable financial bonds are in place for the adoption of drainage and roads and pavements; and how injunctions should be used where a significant failure emerges on a development, such as in the case of the Brambles, which I have outlined? Will the Government bring pressure to bear on the legal sector to ensure that there is no conflict of interest when a homeowner buys a house, and outlaw sweeteners promoting the use of a connected conveyancer?

When the leasehold reform Bill is introduced, will cost-effective legal remedies be made available to homeowners already trapped in these arrangements? For example, can they be released from their obligations if annual general meetings are not held, detailed accounts not laid or competitive quotes not obtained for maintenance work? Or could those arrangements be outlawed altogether?

I know the Government are keen to resolve the issue, so I look forward to hearing the Minister’s response. I very much hope she will commit to working with MPs from across the House to ensure that our concerns are fully addressed in the leasehold reform Bill.

--- Later in debate ---

[The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)]

It is a great pleasure to respond to this debate and to serve under your chairmanship, Dr Huq.

I start by thanking the hon. Member for North Shropshire (Helen Morgan) for securing this debate on an issue that she feels passionately about. Indeed, many of us feel passionately about it, and it is a testament to the persistence and determination of many colleagues in the House that we are again debating this vital issue.

As the hon. Member did during the recent Opposition day debate, she brought to the House’s attention powerful examples from her area; I think that it is particularly on the Brambles estate in Whitchurch where the current system is not working for homeowners. I am hugely frustrated at the situation that those homeowners find themselves in.

I thank my hon. Friends the Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for the discussions we have had about this issue and for the attention to detail they have brought to our process of scrutinising and preparing the legislation that we very much hope to introduce soon. I will come on to that shortly.

The Opposition Front-Bench spokesperson, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), correctly highlighted the cross-party support on this issue. He has been supportive and constructive in his tone, both today and other occasions. I welcome that, because it makes the case for all of us to pursue the legislation and to ensure that it is brought to the House swiftly.

There was a broad consensus on the need for change. Let me use this opportunity to assure Members that fairness remains at the heart of our ambition for the housing market. We all know that we need to drive up housing supply so that we have the homes that the country needs, but while doing that, we need to ensure that buyers are getting high-quality and safe housing on modern, beautiful estates—if that is what is being built—that they can enjoy for years to come. Unfortunately, too many homeowners who bought their properties in good faith have not had their expectations met.

In the past, as Members have highlighted, it was typical for councils to adopt local infrastructure and shared spaces, but the system has changed in recent years. I recognise that on more and more estates, it is common for the shared spaces to be owned and managed by another party. The ownership of the land varies between developments. On some estates, it is owned and managed by a resident-led management company, often with the support of a managing agent, which provides expertise and services to the residents in the running of the estate. On other estates, the land is owned and managed by private management companies. Some have connections to the original developers; others are third-party companies.

It is often not down to the homeowners themselves to decide which type of management arrangement is in place on the estate. Commonly, that is set by the developer before any of the houses are sold. Either way, as has been pointed out, homeowners on these estates must pay a charge to cover the upkeep of open green spaces, roads, sewerage, drainage and other shared infrastructure, such as balancing ponds and play areas, which have been highlighted. In such circumstances, we must ensure that homeowners get a fair deal and do not end up in a vulnerable position as a result of these arrangements.

My hon. Friend the Member for Buckingham and the hon. Member for North Shropshire called for local authorities to be compelled to adopt all communal facilities on a new estate. It is worth pausing to consider why that does not happen at the moment. Our current planning arrangements exist to support new developments. When a new development is granted planning permission, the local authority can obtain section 106 planning obligations to secure a commitment from the developer. That means that the local authority does not have to adopt and maintain the land at its own expense. Local authorities no doubt take such financial considerations into account when they make these decisions, but it is up to developers and the local planning authority to agree on specific issues such as timescales for development and appropriate funding arrangements, and it is clear to me that, in a lot of cases that have been brought to our attention, that process is breaking down.

The local authority has powers to ensure that the developer builds and maintains communal facilities to the standards and quality set out in the planning permission. It is worth noting that the maintenance of communal areas, and of roads in particular, can be a significant financial burden. This is why it is right that the decision about adoption should rest with the local authority. The Department for Transport has recently issued guidance on the circumstances in which local authorities should be adopting roads. Again, I note that this can be a fraught area in some situations; I have seen that from my correspondence.

We need transparency. We need a system that consistently delivers clarity to potential purchasers and arms them with information about the arrangements for the maintenance of shared spaces on private estates. That information should be set out as part of the conveyancing process. Many already use the freehold management enquiries form, the FME1, published by the Law Society. I know that the form is used widely across the sector, but I have heard that for some buyers the information was not provided, or perhaps not drawn to their attention, at the point of purchase. That may have been the experience of some of the constituents my hon. Friends and colleagues have spoken about.

If a homeowner is unhappy with the service that they received from their conveyancer or solicitor, and the internal complaints process cannot resolve the issue, the legal ombudsman may be able to help. That needs to happen within six months of the homeowner’s final response from their conveyancer or solicitor. My hon. Friend the Member for North East Bedfordshire highlighted the issues with buying and selling homes, the process for which in England and Wales can be expensive, time-consuming and stressful. For that reason, we committed to improving the process in the levelling-up White Paper.

We have committed to work with industry to ensure that potential buyers have access to the critical information that they need in an accurate and timely format. That will help them to make an informed decision about whether to purchase a property, reducing the likelihood of the sale falling through. Some of that work is already taking place, but the Government are committed to continuing to create a fair and just housing system for everybody.

Too often, once a homeowner has moved into their home, they are asked to pay charges without an effective breakdown of what they cover. This is a matter of basic fairness and justice. Homeowners deserve to know what they are paying for on their estate. As with leaseholders, a lack of transparency, both at the homebuying stage and when people are settled in their property, leaves homeowners in an unfair and often vulnerable position.

[Helen Morgan]

That is the crux of the matter. If rogue management companies acting in bad faith do not provide that information and do not have an AGM, there is no remedy for homeowners to challenge what they are up to, or to take control of the situation. If those basic Companies Act requirements are not being fulfilled, could there be some legislative remedy for homeowners that does not involve them incurring the enormous expense of going to court? For example, could they take on the management of the company if basic Companies Act requirements are not complied with?

[Rachel Maclean]

I thank the hon. Member again for reminding us of this issue. I hope that she will bear with me, as I am coming on to our intended legislative remedy, through which we intend to drive up transparency for homeowners. Better transparency will help people to be better informed about buying a home on a managed estate and empower them to question or challenge the charges when they are billed. Alongside that, they must have better rights to challenge, as the hon. Member just said.

Freeholders on managed estates are currently at a disadvantage compared even with leaseholders, for whom the system is not perfect by a long way, regarding their ability to challenge costs and poor service. Leaseholders already have certain protections and rights that enable them to hold landlords and management companies to account, yet freehold homeowners have no such equivalent, although they may be paying for very similar services. The situation is clearly unfair, and we are committed to introducing legislation to plug the gap.

Let me come on to what we intend to do, which I am sure Members are keen to hear. We intend to create a new statutory regime for freehold homeowners based on the rights that leaseholders have. We will give homeowners the right to challenge the reasonableness of the estate management charges at the first-tier tribunal, and the right to change the provider of management services by applying to the tribunal to appoint a new manager. That will be an important power when a homeowner is unhappy with the service that they are receiving and there is a significant failure by the estate management provider in meeting its obligations.

The hon. Member for North Shropshire mentioned existing homeowner rights, which will depend on the ownership of the land and the terms of the transfer. People should seek independent advice on the options available to them. For example, if a management company is not complying with its obligations, homeowners may be able to use contract law and make an application to the county court for an injunction for specific performance. That will require the management company to comply with its obligations.

Resident-led management companies are independent companies to which residents are appointed as directors. Sometimes the articles of association, which set out how the company will run, will specify that homeowners are automatically part of the company and so can vote at the AGM. Homeowners may also be able to call extraordinary general meetings, and they can apply for an injunction for specific performance if the company is not complying with the articles of association of any management agreement. But we know we must do more, which is why we will consider introducing a right to manage for freehold homeowners. That will follow from our consideration of the Law Commission’s report and recommendations on changes to the right to manage for leaseholders.

It is not only estate management charges that need to be reasonable. As I mentioned in last week’s Westminster Hall debate, the principle must also apply to the administration fees that individual homeowners may face in their dealings with estate management companies. Therefore, we will legislate to require that all administration charges must be reasonable, which will mean that they may be challenged at the first-tier tribunal.

I want briefly to mention the Competition and Markets Authority’s house building market study.

--- Later in debate ---

[Helen Morgan]

I thank the Minister and the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), for their comments, and I thank the hon. Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for coming along for the graveyard shift on a Thursday afternoon. I also thank you, Dr Huq, for chairing the debate.

The Minister’s comments are welcome. I am particularly pleased to hear that freeholders will be given equivalent rights to leaseholders to go to the first-tier tribunal. She has heard today, as I am sure she has in other debates on the subject, that for the people who are trapped in these situations, what should have been their dream purchase—a new build home that comes ready-made, without the need for renovation or extensive work—and something they hoped would be simple has turned into a nightmare. We really cannot have legislation soon enough.

The hon. Member for Buckingham made a really good point about what should be considered standard shared areas that should be adopted by the council, and what might be considered over and above and normally subject to the arrangements we have been discussing. I agree with him and urge the Minister to consider making it mandatory for councils to adopt the things we consider to be standard—the roads, pavements and streetlights, for example. The hon. Member for North East Bedfordshire made some good, practical comments on transparency, which I certainly support. I urge the Minister to take those on board too, and to bring legislation forward as soon as possible.

Question put and agreed to.

Resolved,

That this House has considered freehold estate management fees.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 10th July 2023 Commons Chamber

[Lee Rowley]

My hon. Friend highlights an important place where further progress is needed. We recognise that there are challenges in this area, and I know that the Minister of State, Department for Levelling Up, Housing and Communities, my hon. Friend the Member for Redditch (Rachel Maclean), who is the Housing Minister, and the Secretary of State are well aware of these challenges and seeking to address them. My portfolio includes nationally significant infrastructure programmes, and we have brought forward the NSIP action plan, demonstrating our commitment to speed up projects and decisions within them as much as we can.

[Helen Morgan (North Shropshire) (LD)]

Shropshire’s Conservative-run council is trying to save £1 million a week just to balance its budget this year and restore its reserves to a safe level. Part of its problem is that the funding allocated to rural councils does not reflect the additional cost of delivering services in rural places. Will the Minister consider reassessing that allocation, so that rural councils can get the revenue they need to support the cost of the services they need to provide?

[Lee Rowley]

We are absolutely aware of the challenges that rural councils face. That is one of the reasons why we increased the rural grant within the most recent financial settlement by £10 million. Where there are pressures in local government finance in the coming years, we will continue to work with colleagues across the House to address them.

New Housing: Swift Bricks

Helen Morgan Excerpts

Monday 10th July 2023 Westminster Hall

[Helen Morgan (North Shropshire) (LD)]

It is a pleasure to serve with you in the Chair, Sir Edward, and to follow such a passionate speech from the hon. Member for Witney (Robert Courts).

I, too, am a rural MP, and the benefits and protection of swifts is an issue that is incredibly important to my constituents. Indeed, one of my constituents, Sarah Gibson, is the author of a fantastic book about swifts called “Swifts and Us”. Although I have not read it yet, I have obtained a copy and I am very much looking forward to reading it. A total of 305 people from North Shropshire signed the petition, and I have received frequent casework about the topic of swift conservation and the importance of ensuring that swift bricks are included in planning regulations.

It is understandable that so many people feel passionately about this matter, because as we have heard this afternoon, swifts are incredible birds. They do everything on the wing, so they do everything while they are still in the air—sleeping, mating, bathing, all while in flight. They also eat in flight, efficiently chasing down insects while in the air. In case that is not impressive enough, they are our fastest bird in level flight and have been recorded flying at almost 70 mph. Of course, on top of that, they are beautiful. The sight and sound of them coming in and out of the eaves of buildings are, for many people, the first signs of summer. I am sure that colleagues here will agree with me that the best canvass sessions are the ones with swifts screaming over the top of our heads.

Unfortunately, the swift population is declining. The number of swifts in the UK has decreased by nearly 60% since 1995. This is yet another reminder of the rapid rate of decline of a beautiful and important species. Like many other birds, such as the house martin, swifts joined the red list for the first time in 2021. Something must be done.

I confess that before I was an MP I had not heard of a swift brick, but I have since become aware of the campaign, and they seem to me to be a fantastic solution. They offer artificial homes for swifts, which the British Trust for Ornithology has said works incredibly well for the reintroduction of swift nesting sites in areas where they have been lost. Swift bricks have been incorporated into new planning developments in both urban and rural areas over the last few years. Alongside being cheap to produce, one of the main benefits of the bricks is that they can be implemented easily into many kinds of developments.

For example, they have been installed into the rooftops above Oxford Circus and the walls of Lambeth Hospital, and in Brighton, as we have heard. In addition, one of my constituents has created a Facebook group dedicated to the protection of swifts and designed to spread information about the ease of installing artificial nesting spaces in properties, which I understand has ensured that over 100 new artificial swift nesting places have been installed to properties around North Shropshire over the last 12 months. Artificial nesting places such as swift bricks seem like a fantastic solution to a serious problem.

I am even ensured by Swift Conservation that parents eat the chicks’ droppings, meaning that there are no piles of droppings under the nests. That is surely another benefit for homeowners, who might be concerned about having artificial nesting places for swifts in their property. The benefits of swift bricks are not only that they protect these most impressive animals, but that they provide nests for other types of endangered species, including other red-listed birds such as the house sparrow, starlings and wrens, which we have already heard about. While assisting the longevity of the swift, swift bricks would also create a home for other endangered species and improve biodiversity.

There is another hurdle to swifts’ attempt for survival that lies outside habitat creation and is related to their diet. A swift’s diet consists mainly of insects, specifically flying insects, of which they can eat as many as 100,000 in one day. They include aphids, flying ants and mosquitoes. The Wildlife Trusts have raised concerns about ensuring that there are enough insects to feed an increase in swifts. The decline in insect species is a sure sign of nature being under threat in the UK. The pollution of prime feeding habitats for swifts, such as wetlands and grasslands, presents another potential barrier to swifts flourishing in the UK.

The issue is twofold. We must provide sufficient space for swifts to live, but we must also consider their need to feed by tackling the depletion of insect varieties head on. Overall, I support Members’ calls to back the mandatory use of swift bricks in all new homes and extensions. As we have heard, it could be done so easily and quickly. It could be a measure we add to the Levelling-up and Regeneration Bill, or there are opportunities in the national planning policy framework and the future homes standard, all of which we are waiting to see; they could all incorporate this important measure.

We should also stress that to support biodiversity for all bird populations, we must look at insect decline and a sufficient food supply for these impressive birds. I would therefore say to the Minister: look at planning regulations, look at the levelling-up Bill, look at the national planning policy framework and future homes standard and take this simple step to make the first move in support of these amazing birds and biodiversity the UK.

Economic Activity of Public Bodies (Overseas Matters) Bill

Helen Morgan Excerpts

2nd reading
Monday 3rd July 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I remind Members that I am a vice-president of the Local Government Association.

First, I want to be very clear that the Liberal Democrats condemn antisemitism. Anti-Jewish hatred has absolutely no place in our society, and we must all do more—as individuals, as political parties and as a Parliament—to tackle antisemitism in all its forms. Nor do we support the BDS movement or any other singling out of Israel driven by anti-Jewish hatred. However, we do not believe that this piece of legislation is going to help to tackle antisemitism. In fact, as many Members throughout the House, including the right hon. Member for Barking (Dame Margaret Hodge), have already set out, the measures in the Bill could even be counterproductive, which is frankly the last thing we want.

Liberal Democrats are also deeply concerned by a series of the provisions in the Bill. First, it will greatly restrict the ability of public bodies to take action against human rights abuses. Many public bodies as well as civil society organisations are alarmed by the persecution of the Uyghurs in Xinjiang, which has led to the detention of more than a million people by the Chinese state. Regrettably, the Government have failed to recognise the genocide that is taking place in Xinjiang, even though Parliament has called on them to do so. It is appalling that a local council will be prevented from calling what is taking place in Xinjiang what it is—a genocide—simply because the Government continue to take a cowardly approach. It seems extraordinary that a local council or museum would risk a significant fine by deciding that they did not want to buy products coming from Xinjiang.

Many of us in this place will remember the popular boycotts of South African goods in the 1980s, which were an effective way of demonstrating opposition to apartheid and which added to the international political pressure to end the regime. In this country, it was local councils that led the way then—and thank goodness they did—but under these new provisions, such action would be illegal.

Secondly, this piece of legislation represents an unjustified restriction on the power of local communities to take decisions for themselves. As a Liberal Democrat, I believe in liberalism, federalism and localism. We believe that it is up to local authorities and public bodies to be able to decide for themselves what they do. If local councillors are elected on a manifesto that includes a commitment to a boycott on ethical or environmental grounds, we believe that those councillors should be held to account by their local electorate, not banned by a distant central Government.

Thirdly, we are hugely concerned by the restriction on the freedom of speech on public bodies and elected representatives in clause 4—the gagging clause. The Bill does not just restrict a public body from engaging in boycott and divestment; it restricts it from saying that it would support such a boycott if it were legal. That represents a significant overreach, which will erode a fundamental democratic right—that of free speech.

Fourthly, I echo the concerns raised by other Members that the provisions in clause 3 represent an attempt by the Government to change their position on the status of the occupied territories. The UK Government have always made a distinction between the occupied territories and Israel, in line with international law. That is clear in everything from our trading arrangements to the advice given to businesses looking to operate in the occupied territories. However, the Bill conflates the two by listing the occupied territories as exempt from the Bill alongside Israel. The Bill goes against not just the widespread consensus held on both sides of the House and by our allies, but international law. What an irony it is that, at the heart of a Bill designed to restrict local councils from speaking out about international issues, we find the Secretary of State for Levelling Up, Housing and Communities trying to conduct his own foreign policy. It is almost as if he has forgotten the purported purpose of his own legislation.

On today of all days, when we have awoken yet again to more violence in the region, it is incredibly depressing that the Government are choosing not to stand up for international law, at a time when there is such hopelessness around the conflict.

In conclusion, I firmly agree that we need to do more on the pressing need to tackle antisemitism. I agree that the BDS movement targeting Israel will not help to achieve peace between Israel and Palestine. If there is a need to beef-up legislation on hate crime or prejudice against protected characteristics, such as race and religion, Liberal Democrats would wholeheartedly support such a move. Local councils should not be singling out one country and holding it to a higher standard than others because of their own prejudice, but closing down debate on international human rights issues will not achieve the stated aim of stamping out antisemitism. The resolution to the problem is not to clamp down on debate on international human rights issues. The Liberal Democrats will oppose the Bill for that reason, and will be voting in favour of the reasoned amendment tabled by those on the Opposition Front Bench.

I urge the Secretary of State to rethink this legislation and work across party lines to resolve issues of prejudice and discrimination by more practical and fair means.

Teesworks: Accountability and Scrutiny

Helen Morgan Excerpts

Wednesday 7th June 2023 Commons Chamber

[Lisa Nandy]

I will take absolutely no lessons from a representative of a political party that stood aside and watched as the Tees works collapsed in 2015.

Labour is therefore asking the Government to provide all papers, advice and correspondence, including Ministers, senior officials and special advisers, relating to the decision by the Secretary of State and the Prime Minister to commission a review into the Tees Valley Combined Authority’s oversight of the South Tees Development Corporation and the Teesworks joint venture, including papers relating to the decision that the review should not be led by the National Audit Office.

[Helen Morgan (North Shropshire) (LD)]

The hon. Member is probably aware that, in addition to the scandal that she is outlining in her excellent speech, Woking Council has today issued a section 114 notice, following its having run up £1.9 billion of debts under a Conservative-led administration, when it has core spending power of just £14 million. Does she agree that a National Audit Office investigation is important for the people of Woking as well, because there is clearly inadequate scrutiny of decision making on public money?

[Lisa Nandy]

There is a wider point here, which is that devolution matters but it matters for a reason. It matters because decisions taken closer to people, driven by the people of the place they call home and for the benefit of those people, have the ability to transform lives. We need and deserve proper robust scrutiny arrangements and accountability in every part of the country, not just some, in order to ensure that.

I am sick and tired of hearing Conservative Members making accusations at our doorstep about unfounded allegations and naysaying about regeneration in the north-east. They are wrong and I suspect that they know it. The Labour Front-Bench team has not made allegations against Teesworks and the development corporation, and we will not do so before any investigation reports back. What we have asked for is honesty, transparency and clarity about what appears on the face of it to be an incredibly murky situation. It is the clear breakdown of local accountability that is sufficiently alarming that an investigation by the National Audit Office is required. We want to see this resolved. Conservative Members should want to see this resolved for the benefit of people on Teesside. The South Tees Mayor believes that is the case, as do three Select Committee Chairs, the Prime Minister and the Secretary of State—if he did not, no investigation at all would be forthcoming. Let me be clear that the Humble Address today is about ensuring that a proper, full and independent investigation can take place in terms sufficient to provide the public with confidence in the process and the outcome of the investigation. In hand picking a panel and terms of reference, the Secretary of State has done a disservice to the principle of independent scrutiny and to his commitment to devolution, which until today I believed to be sincere. He has made it harder for confidence and transparency to return.

New Housing Supply

Helen Morgan Excerpts

Monday 5th June 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I welcome the debate and congratulate the right hon. Member for Haltemprice and Howden (Mr Davis) on securing it.

I think that we are all in agreement that we have a housing crisis, and that young people in particular deserve an opportunity to buy a decent home for themselves, or at least to rent one at an affordable price and of a decent habitable standard. The proportion of people renting in the UK has grown substantially since the mid-1990s, from 29% to 35%, and, in tandem, more people are paying a higher portion of their salary to rent their homes. Shelter UK estimates that private renters are spending more than 30% of their income on rent.

Finding a good-quality home at a fair price has become a never-ending task for some people. There is a general consensus that we need to deliver around 300,000 new homes every year if we are to overcome the crisis. However, despite the efforts of successive Governments, this has not been achieved since the 1950s, and we should ask ourselves why that is.

It seems like an obvious question, but much of the debate focuses on planning, and indeed on blaming the nimby. But if we look at the numbers, we can see that building, not planning, is the key driver behind this shortfall. In the past six years, we have granted planning permission for an average of just over 300,000 homes per year. Some 80%, or possibly more, of planning applications were granted last year. Although I agree that the process needs to be streamlined, that is not the reason why the homes are not being built.

So what is the reason? The first is to do with profitability. Developers build at a rate that the local market can absorb without depressing prices, because, obviously, they need to make a profit on their activities, which is quite reasonable. Another reason is capacity in the industry. We do not suffer high rates of unemployment in the construction industry—quite the opposite, in fact. In the absence of thousands of construction workers sitting about with nothing to do, the simple reality is that it is not possible for us to build 300,000 houses a year without an informed strategy to train and retain the workers required to deliver them.

It is also important to consider the types of housing that we want to see built. We urgently need affordable housing, but developers make most of their money from larger, more expensive homes, and that worsens the shortage of affordable housing. I am sure that we all have examples in our constituencies of local developments with affordable housing quotas being specified as conditions of planning permission, only for those quotas to be significantly watered down on the basis of commercial viability as that development progresses. The result is that the least well-off in society are bearing the brunt of the housing crisis, because it is at its most acute in the affordable and social rented sectors. Here again, demand is outstripping supply, often forcing people to live in cramped and unsuitable temporary accommodation while they await their chance to be allocated a property from the housing register.

Overall, the National Housing Federation has estimated that there are currently 8.5 million people in England with some form of unmet housing need. That is putting huge pressure on the private rental market, keeping rents unaffordably high and preventing many young people from saving for a deposit with which to buy their first home.

I wish to focus my attention specifically on the provision of social housing, especially in rural areas. I also broadly agreed with the comments of the hon. Member for Weaver Vale (Mike Amesbury) on social housing. The NHF estimates that 4.2 million people would benefit from a social housing solution, and that 145,000 additional affordable homes need to be built each year, including 90,000 for social rent, and that is just to meet the current need for social housing in England. Despite that, last year just 60,000 new affordable homes were built, and a mere 7,500 homes were built or acquired for social rent.

Put simply, those are astonishing statistics. However, based on my constituents’ experiences, they are not surprising. A lack of affordable and social housing is a particular issue for rural constituencies such as mine in North Shropshire. The all-party parliamentary group for rural business, of which I am a member, has estimated that 175,000 people are on rural housing lists at present, with homelessness increasing, especially among young people.

Rural homelessness may be invisible, but it is estimated to have increased by 24% in the past year, according to a study commissioned by English Rural. With average house prices 8.6 times higher in rural areas than in urban areas, this is hardly surprising. Only 11% of annual affordable housing delivery is built in rural areas, and that figure is falling. For every eight homes sold through the right-to-buy policy in a rural area, only one has been replaced. Overall, only 8% of rural housing stock is affordable compared with 19% in urban areas. This not only deprives people of the basic need of a home, but creates a barrier to the rural economy, causing businesses to struggle to recruit the quality of workforce they need to survive. In short, we need more affordable and socially rentable homes, and we especially need them in rural areas.

The impacts of this deficit of social housing are depressing. Many people waiting for social housing are forced into the private rented sector, where homes are often inappropriate, insecure and really expensive. They are also pushing up demand and average rents, working to inflate the demand for housing benefits. Alternatively, those waiting on the housing register are often housed in so-called temporary accommodation—often rooms in bed and breakfasts, hotels or shared houses. Even in my constituency, I have found that they can be unsuitable and even hazardous solutions to the lack of available social housing, and that housing register applicants live in them for far longer than a period that could be considered temporary.

Of course, that lack of housing comes at a substantial social cost. Shelter has suggested that, of the nearly 100,000 households living in temporary accommodation, more than 25% live outside the local authority area they previously lived in. Not only do those people suffer the threat of homelessness, but their only chance of being offered a roof over their head involves moving away from their places of work, critically their support networks, often including childcare, and their children’s schools. For a family already suffering the threat of homelessness, that intensifies an already incredibly tough situation.

In my constituency, I have families facing lengthy waits to be provided with a house, and a lot of my casework deals with the quality of social housing. I have a family of seven in a two-bedroom house, unable to find something more suitable despite having been given priority status. I have a woman whose mental health is at rock bottom, having been placed in a bed and breakfast for months on end, and a family with a disabled child unable to find a home with step-free access.

Like most hon. Members, I also have a constituent struggling with mould and damp in council and local authority housing, which, instead of being treated, has just been given a new extractor fan. One constituent has a disabled child and another suffers from asthma. We all agree that that property is not adequate to meet their needs, and those are just a few examples I have picked out from my casework. We must go further and build at least 150,000 new homes for social rent per year, delivered by empowering local authorities to commission the housing that they need, with an independent inspectorate to evaluate their assessment of that need.

As I noted at the beginning of my speech, none of that can be delivered without training the workforce to deliver it. I think we agree on the need to increase the housing supply, with the right homes in the right places, but social housing must be a key element of delivering that. We need to empower local authorities to put those homes where they are needed and we need a coherent workforce strategy to be able to build them.

--- Later in debate ---

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

It has been a genuine pleasure to be part of this evening’s debate, and I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) in his absence on securing it. I pay particular tribute to the hon. Member for Stretford and Urmston (Andrew Western) for what I thought was an exemplary speech, in which I really could not find anything to disagree with. I say that with deep admiration.

We must confront the stark reality that we are facing a severe shortfall in housing because of the policy choices of successive Governments, a dearth of political leadership at both local and national level, and a lack of honesty with the public about the consequences every time a Member of this House, a local councillor or a local campaign group celebrates blocking new homes. The Centre for Cities estimates that our shortfall is as great as 4.3 million homes. That crisis is stunting our economic growth, leaving young people without the space to start a family, and trapping renters in unsafe accommodation. At our aimed-for build rate of 300,000 homes a year, it would take us some 50 years to put that right, and we are not getting anywhere near that build rate.

Of course, historically we did much better. Home ownership was a moral mission for the Macmillan Government, and it may not have escaped the attention of Conservative Members that his achievements underpinned his huge election victory in 1959, in the way that Mrs Thatcher won huge support through her right-to-buy policy. The contrast with the 1960s could hardly be more stark: in that decade, we built 3.6 million homes, more than we have built in total since the turn of the century. We have created a supply and demand feedback loop of the worst possible kind.

I am afraid that I must take issue with the hon. Member for North Shropshire (Helen Morgan) when she says that the planning system is not the problem. I am afraid that it is: that system is fundamentally broken. It is what is driving the fact that someone buying their first home now faces paying nine times their income for it. In the 1980s, the figure was just three times the average salary.

[Helen Morgan]

I would just like to clarify: it is not the only problem. We give planning permission for all these houses, but we do not build them. We need to address the build-out problem as well as the planning issue.

Leasehold Reform

Helen Morgan Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

The last Liberal Prime Minister, David Lloyd George, launched a campaign against leasehold in 1909, describing the leasehold system as blackmail, not business. In 2023, it is unacceptable that, despite campaigning by the Liberal Democrats and right hon. and hon. Members on both sides of the House—and some truly excellent speeches today—we are in the same position.

The Leasehold Reform (Ground Rent) Act 2022 was a necessary small step in the right direction to protect leaseholders from exploitation, but it is extremely disappointing that the next steps of the Act have once again been delayed, despite the Secretary of State admitting that the system is feudal in nature. He is, of course, right. Being unable to control the amount of ground rent paid each year is a relic of the feudal system, and is why pretty much every other country apart from Australia has abolished it and replaced it with some form of commonhold tenure.

It is also not right that homeowners should have to pay tens of thousands of pounds to renew their lease and remain in their own home when it ends, often having seen very little—if any—of their landlord during the period of ownership. Hon. Members have already made excellent speeches about the unfairness of this outdated system. Like them, I have casework from residents frustrated by extortionate ground rents and management fees.

I would like to reflect a little more on the management fees, which are becoming a scourge not only in traditional leasehold arrangements but in many new developments, where shared management companies for the areas outside the bricks and mortar of the owner’s home are exhibiting many of the characteristics of the landlord in a leasehold arrangement. These are known colloquially as “fleecehold” arrangements, and are as much of a problem as the traditional leasehold charges that we have been discussing at length.

Across North Shropshire there are several new developments, built by both large well-known developers—Persimmon has been mentioned, which I have dealt with—and smaller rogue developments, where the council have rightly required shared space as part of the planning conditions. But the developer has made no provision for those shared areas and the roads, street lights, pavements and play facilities to be adopted by the local authority. Instead, the shared areas are maintained by a management company and all the homeowners of the new development, who are the freeholders of their own homes, must share the costs of maintenance. The commercial substance of that arrangement is a leasehold.

Homeowners have come to me, fleeced by their management company and unable to force the directors of those management companies to hold annual general meetings or provide proper accounts. They do not want me to name their developments because that will reduce their ability to sell a home that they desperately want to leave and are completely trapped in.

The companies share similar features. They are often non-profit-making, simply passing on the costs of maintenance to the owners of homes on the development. But there is a catch: they are controlled by the original developer and they outsource the maintenance work to a connected business—often run by the original developer—which charges an exorbitant fee to the maintenance company. That way, the developer can fleece the people who bought their homes in good faith, and who cannot exit the arrangement. More importantly, having just taken on a mortgage for the most important purchase of their life, they do not have the resources to take the company to court, or to force it to hold meetings or get competitive quotes for the work required.

As Members have pointed out, there is often no point turning to the conveyancing solicitor for help with faulty conveyancing, because the solicitor was recommended by the developer, which offered a discount to use them. Quite how those solicitors get around conflict of interest laws I am not sure, but the result is that the homeowner is left with nowhere to turn.

It is important to emphasise that these people do not get a reduction in their council tax, often while suffering unfinished roads, inadequate lighting and wasteland that should be some sort of park or recreation area. If the council enforces the conditions of the planning permission—to tidy up and landscape the shared areas for example—the costs are passed on to the residents, who have no choice but to pay. I have a case where a large national developer—Persimmon—requires the permission of the management company to allow someone to sell their freehold. That is leasehold in all but name, and it needs reforming along with the feudal arrangement that we all agree needs getting rid of.

There is one development that I can name because it has already been made public, and I described it in some detail in an Adjournment debate last year. The Brambles in Whitchurch was set up under one of these arrangements but, catastrophically, the developer went bust before the estate was finished. The homeowners are liable for the maintenance of the shared areas, which includes their sewerage connection. But it was not completed properly, and they have faced exorbitant costs of over £1 million between 14 homes to get their foul waste connected to the mains sewers and their roads surfaced. That is very similar to the situation in which some leaseholders found themselves after the disastrous Grenfell fire, when they discovered they were living in buildings covered with dangerous cladding, but there is no equivalent of the Building Safety Act 2022 to protect the homeowners in my constituency who have no sewerage connection.

In a second case, a developer charges astronomical fees for the maintenance of a shared ground source heat pump, but keeps the renewable heat incentive payment, paid by the Government, to himself, in his own, separate company.

In a third case, the management company is connected to the maintenance outsource provider and passes on astronomical costs to the residents. There is no mechanism to help these people; indeed, the practice is becoming the norm. Local authorities are not incentivised to adopt shared areas when they can charge full council tax and effectively dodge the maintenance costs that come with the new dwellings.

When the legislation to deal with our outdated leasehold system is finally brought before the House, I urge the Minister to consider measures to deal with the outrageous practice of fleeceholds, which is being exploited by sharp practice at best and possible criminality at worst, and to ensure that people who have already been subjected to those arrangements can take more control of their situation.

Many people have already entered into fleecehold or leasehold arrangements, before any legislation to protect them has been implemented. For example, nobody should feel pressured to renew their lease before the Leasehold Reform (Ground Rent) Act 2022 is implemented. To this end, I am happy that Liberal Democrat peer, Lord Stunell, introduced amendment 9 to that Act in the other place, to protect people who need to renew their leases by creating a duty to inform leaseholders of the contents of the Act before negotiating or renegotiating a lease extension. Unfortunately, the Government removed the amendment when the Bill returned to this place.

When people buy a home, it is often the biggest and most important purchase of their lives—it is a dream realised. They are often promised reasonable-sounding ground rents and maintenance fees, but when they find themselves tied into a cycle of rapidly increasing costs, beyond their control, that dream turns into a nightmare.

We have the means to prevent that happening and we should stop delaying. We should act now to protect them. The Liberal Democrats will support the motion today. I urge the Minister to do so, and to consider the additional problem of fleecehold arrangements when she brings leasehold reform to the House.

Non-Domestic Rating Bill

Helen Morgan Excerpts

Committee of the whole House
Monday 22nd May 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I rise to speak to amendments 1, 2, 3 and 20, as well as new clauses 1 and 2, tabled in my name. I note the excellent speech by the hon. Member for Waveney (Peter Aldous), who tabled amendments with very similar objectives to my own. This Bill is a disappointment to all businesses who are struggling through tough financial conditions. Not only are prices going up for every single purchase that they make, but many small businesses were forced to lock into gas and electricity contracts at astronomical rates last year and are no longer receiving any meaningful support with those energy costs. They may also be struggling with interest rate rises on their borrowings following the period of economic chaos caused by the Government last autumn.

This Government committed to reviewing the system of business rates fundamentally in their 2019 manifesto, but this Bill offers only peripheral changes to an outdated system that does not work for a modern economy. The Bill offers to change the timescale of revaluations from every five years to every three years. This is a welcome reduction, but Liberal Democrats believe that it does not go far enough. The reality for businesses is that a three-year gap between revaluations means that they will continue to pay rates that are far from reflective of the real economic conditions they are operating in. Amendments 1, 2 and 3 would require non-domestic rating lists to be compiled every year and make every year from now on a relevant period for transitional provision under the Local Government Finance Act 1988. Annual revaluations are possible. We only need to look to the Netherlands, where they have been taking place since 1995. There, rateable values are allowed to move with the local economy. This means the tax that businesses are required to pay better reflects the conditions that they face.

I also want to spend a little time on amendment 20, tabled in my name. It is estimated that as a result of the Bill as it stands, 700,000 small businesses who currently pay no business rates at all will need to submit annual reports to the Valuation Office Agency, even when there has been no change to the premises they occupy. These small businesses, like many in North Shropshire, are already plagued by seemingly endless monthly and quarterly Office for National Statistics returns, along with their ongoing tax and financial reporting requirements.

The Bill adds yet another administrative hoop for these businesses to jump through and threatens hefty penalties if forms are completed incorrectly. This piles unnecessary pressure on to small businesses and it will not raise any more tax for public services. These businesses already receive a notification to inform the VOA if there is a material change in their premises, so there is nothing to be gained from this element of the Bill. Amendment 20 attempts to deal with this problem by removing the requirement for annual reporting of no change for those businesses in receipt of small business rate relief. I urge the Minister to support amendment 20, which I intend to push to a vote, and to cut unnecessary red tape for the small businesses we desperately need to help, in order to drive economic growth and breathe new life into the high streets of our historic market towns.

I also wish to speak to new clause 1, tabled in my name. It seems very one-sided to impose punitive fines on businesses for failing to report updates to the VOA on time, without any reciprocal expectations of that agency. As I outlined on Second Reading, dealing with the VOA over changes to a premises can be a protracted affair, and all the time that that is going on, businesses face uncertainty about their rates liability and, critically, cannot plan their cash flow. New clause 1 would require the VOA to report to the Secretary of State on its performance in detail at least once a year. This report should correspond to targets to be set by the Secretary of State. The new clause also calls for the findings of these reports to be laid before Parliament. I have suggested targets, rather than legally binding levels of service, to reflect the fact that no two premises are the same and that updates can be complex and can be challenged, but those targets would at least set an expectation of performance and ensure some accountability for the VOA.

Lastly, I wish to draw attention to new clause 2. I think there is general agreement on both sides of the Committee that we want to see our high streets and market towns thrive. This is especially true in places such as the five historic towns in my North Shropshire constituency, where the local high street is not just a practical place to go to but a social lifeline for many residents. Those high street shops are in competition with online retailers whose warehouse premises have a much lower rateable value per metre squared, putting the high street at a disadvantage. This was confirmed in the Treasury Committee’s “Impact of business rates on business” report in 2019.

Disappointingly, however, the Bill does not take this discrepancy into consideration. Instead, the Government will continue to drain physical retailers through rates that do not reflect the challenges they are already facing, leaving many at a tipping point and struggling to compete on an unfair playing field. New clause 2 would require a review of the impact of non-domestic rateable values on competition in different parts of the retail sector, so that Members could understand the true scale of the issue and inform policy accordingly. This review should be commissioned within six weeks after the date this Act is passed. Overall, I urge Ministers to support these amendments and new clauses in order to improve the Bill, which is just not ambitious enough in fundamentally reforming an out-of-date tax system.

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

I am grateful to all colleagues across the Committee for their contributions today. I think all of us spoke on the Bill’s Second Reading, and we have rehearsed the arguments on a number of these points already. It is important to reiterate from the Government Front Bench that this Bill delivers significant reforms for the business rate system. It increases the frequency of revaluations, which I think has been generally welcomed across the Committee today. It also modernises the administration of the tax and it provides new reliefs to support things such as property improvements. Taken along with the nearly £14 billion-worth of taxpayer subsidy for businesses this year, it helps to manage the tax burden amid the ongoing pressures that the hon. Member for North Shropshire (Helen Morgan) mentioned.

I will now turn to the contributions that hon. Members and hon. Friends have made today. My hon. Friend the Member for Waveney (Peter Aldous) made an incredibly constructive set of comments, and I completely understand the sentiments behind many of the amendments he has tabled. He set a challenge at the outset of his speech, saying that he is looking to move towards annual valuations, the removal of complications and the adoption of digitalisation. We are making progress in two of those three areas, which I hope is not bad, and he has indicated that, overall, this is a step in the right direction. We are moving from five-yearly valuations—in reality, they have happened every seven or eight years in some instances in recent years, for good reason—to three-yearly valuations. We are moving towards the collection of further digital data, and we are continuing to support businesses, where we can, through the reliefs we have put in place.

--- Later in debate ---

The leader of the Liberal Democrats continues to speak to the media and in this place about tens of billions or hundreds of billions of pounds of additional spending. If we were to remove the income from business rates, the Liberal Democrats would have to ask themselves where they would get that money from and how they would pay for the black holes created in our tax system.

[Helen Morgan]

rose—

[Lee Rowley]

The hon. Lady is going to tell me exactly where she would find several hundred billion pounds to fill her black hole.

[Helen Morgan]

Amendment 20 is about cutting red tape for small businesses. Does the Minister agree that he is talking about policy objectives that are not relevant to the Bill?

[Lee Rowley]

That tells us everything we need to know about the Liberal Democrats. They want to talk about only this Bill, ignoring every other policy. They look one way when talking to one part of the country, and the other way when talking to the other part of the country. That shows the Liberal Democrats’ lack of seriousness in understanding how taxation actually works, in understanding how to run a modern, dynamic market economy and in understanding how we need to pay our way to make sure our economy is successful in the long term. It is for those reasons that we oppose amendment 20.

Voter ID

Helen Morgan Excerpts

Thursday 27th April 2023 Commons Chamber

[Rachel Maclean]

I thank my hon. Friend for his question. When Labour Ministers introduced voter ID in Northern Ireland, they set out in great detail why the legislation was necessary. Why is it good enough for one valued part of our United Kingdom but not good enough for the electors of Great Britain?

[Helen Morgan (North Shropshire) (LD)]

As the Local Government Association indicated earlier this month, and as the hon. Member for Lancaster and Fleetwood (Cat Smith) has reiterated, there are significant practical problems for polling clerks. Meanwhile, the chief executive of the Association of Electoral Administrators has said that discussions are taking place with the police for extra resources on polling day. With a week to go, can the Minister confirm whether enough polling clerks have been recruited and whether additional police resources have been secured to support the additional burden next Thursday? What strain will this place on police services?

[Rachel Maclean]

The hon. Lady is right to highlight all the practical work that is going on, and I want to thank local authorities very much for the way they have delivered those additional measures that are going to be needed, backed by £4.75 million of central Government funding through the new burdens process. Of course, the Government will take very seriously all the lessons learned about this exercise, but I return once more to the point: when this process was introduced in Northern Ireland, under a Labour Government, none of the issues that are being raised regularly by Opposition Members were found to have turned out in practice to be the case.

Budget Resolutions and Economic Situation

Helen Morgan Excerpts

Tuesday 21st March 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

Let me begin by declaring an interest as a vice-president of the Local Government Authority.

Overall, this was a disappointing Budget for North Shropshire and for rural communities across the country. Instead of allocating levelling-up funding on the basis of need, councils will once again be forced to spend thousands in consultant and officer time, competing against each other for small pots of money which, ultimately, they may not win. Surely it is time to assess the needs of each area objectively and invest accordingly. Personally, I would not consider a marginal seat to be an indication of need, but Wednesday’s statement shamelessly funnelled funding into marginal seats, largely ignoring the urgent need in rural Britain for investment in public transport and key infrastructure.

I would welcome clarity from the Chief Secretary to the Treasury on the proposals for local enterprise partnerships. The LEP in the Marches covers a number of local authority areas, and has been a driver of public and private sector investment. How will its activities be effectively absorbed across a number of different overstretched councils?

The rest of the Budget was largely taking with one hand and giving away with the other. Money to repair potholes is welcome, but the entire national potholes budget would probably not be enough to repair the badly neglected roads of Shropshire, while the active travel fund, which might have brought real benefits to all areas, has been cut. The £63 million to keep swimming pools open is welcome, but it involves another largely competitive bidding process for capital investment and energy efficiency measures. Community Leisure UK still predicts that many pools will be unable to reopen without additional funding to help with the soaring energy bills that forced them to close in the first place.

The Chancellor claimed that 100% capital allowances for businesses investing in plant and machinery would offset their corporation tax rise, but those businesses have to have the cash to invest and they need to be turning a profit to offset those capital allowances against. Rural businesses in North Shropshire have told me that the astronomical cost of energy means that they are struggling to stay afloat, not turning a comfortable profit or generating cash to invest.

[Wendy Chamberlain (North East Fife) (LD)]

A very easy way to help small businesses to grow is to do something about the VAT tax threshold, which has not increased in line with inflation since 2017. Does my hon. Friend agree that this is preventing businesses from growing further and that the Government could have done that instead of stealth-taxing small businesses?

[Helen Morgan]

I thank my hon. Friend for her intervention, and I agree.

Duty on draught beer has been cut, and that is obviously welcome for the pubs that sit at the heart of the communities in our towns and villages, but many small businesses were locked into gas and electricity contracts last year in a period of soaring prices as a result of the terrible invasion of Ukraine. Just this morning, I was contacted by a popular village pub to say that it was facing closure—despite always being too busy to fit me in for a table. It is facing a fourfold increase in its energy costs, but this Budget has cut the support that it is going to be offered, even while wholesale prices fall and it costs the Government less.

We all want to get people back into work, but there has been a real-terms cut to the public health budget, with nothing more for adult and children’s social care at a time when illness and caring responsibilities have placed enormous pressure on the workforce across every sector. Staff shortages underpin the crises in social care, the health service and the wider rural economy, and we feel them strongly in North Shropshire. In summary, this is a missed opportunity for North Shropshire and for rural communities across Britain.