Levelling-up and Regeneration Bill

Helen Morgan Excerpts

Report stage
Wednesday 23rd November 2022 Commons Chamber

[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.

[Helen Morgan (North Shropshire) (LD)]

High streets and market towns in constituencies such as mine are really struggling. Local residents are shopping less because of the cost of living crisis and businesses cannot compete with online retailers because of business rates, so I am surprised that the Government are not supporting new clause 46. After all, one of their 2019 manifesto commitments was to review business rates in order to come up with a better model that can allow our high streets to thrive and help to level up regions where market towns are struggling.

--- Later in debate ---

[Dehenna Davison]

One reason that we have asked the Law Commission to undertake the review is to ensure that we deliver in the most appropriate way, but I am happy to follow up separately with the hon. Member on hope value, because it is something that we will come to in the future.

The hon. Member for Westmorland and Lonsdale (Tim Farron) and I had a great time in Committee during the few days that I was there in my role as Minister. It was always incredibly good natured, and I thank him for that. He spoke on new clause 46, as did the hon. Member for North Shropshire (Helen Morgan), which is on business rates reform. As both hon. Members are no doubt aware, the Government recently conducted a business rates review, and the report was published at the time of the 2021 autumn Budget. A package of reforms announced then was worth £7 billion over five years. In the autumn statement incredibly recently, the Government went even further and announced a broad range of business rates measures worth an estimated additional £13.6 billion over the next five years, including freezing the multiplier. The Chancellor of the Exchequer also announced the extension of the retail, hospitality and leisure relief scheme, and a transitional relief scheme for the 2023 valuation.

[Helen Morgan]

I appreciate the points that the Minister makes, but they are tinkering around the edges of the existing system. We are asking for root and branch review of how business rates are levied.

[Dehenna Davison]

While I understand the intention behind the new clause, we consider it unnecessary on the basis that a review has been concluded only recently, and we have put in place an incredibly robust support package.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 21st November 2022 Commons Chamber

[Michael Gove]

That is the direction in which we wish to move, yes.

[Helen Morgan (North Shropshire) (LD)]

I have been proud to support a very good levelling-up bid in Oswestry in my constituency. With North Shropshire being such a large rural area, public transport is a really important part of levelling up the whole region, so will the Secretary of State look favourably on both Oswestry’s bid and Shropshire’s bid to improve bus services across the county?

[Dehenna Davison]

I am grateful to the hon. Lady for speaking so passionately about the bid for her constituency. I am certainly willing to engage with her and Ministers at the Department for Transport to see what more we can do.

Social Housing Standards

Helen Morgan Excerpts

Wednesday 16th November 2022 Commons Chamber

[Michael Gove]

My hon. Friend makes a very important point. It is important to stress that the overwhelming majority of landlords in the private rented sector provide a high-quality service, care for their tenants and want their properties to be kept up to the highest standards. However, a small minority, which often includes individuals or organisations based overseas who own property here, neglect the appropriate standards to which the property should be kept. The legislation that we will bring forward in due course will help to tackle those abuses.

[Helen Morgan (North Shropshire) (LD)]

I welcome the Secretary of State’s statement and send my deepest condolences to Awaab’s loved ones. Will the Secretary of State acknowledge that an overall chronic shortage of social housing is contributing to the problem of tenants living in dangerous or unsuitable conditions because there are no other options available? A less serious case, but an example from my constituency, is that of a family of six living in a two-bedroom property, whose son is falling behind at school because he cannot sleep at night. Will the Secretary of State commit to allowing councils and housing associations to keep 100% of the proceeds of homes sold under the right to buy scheme so that, at the very least, they can hope to maintain their current level of social housing stock?

[Michael Gove]

The hon. Lady makes a fair point about ensuring that we do everything possible to support local authorities to increase social housing stock. Of course, we do need to keep that under review and, again, we will be saying more about that in due course.

Management of the Economy and Ministerial Severance Payments

Helen Morgan Excerpts

Tuesday 15th November 2022 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I draw the House’s attention to my declaration of interests and the fact that I am a residential landlord.

We have discussed the cost of living on many occasions in this place, but as the fallout of the disastrous mini-Budget becomes apparent, I welcome the opportunity to discuss the impact on my constituents of soaring mortgage rates. I was disappointed to hear the Minister repeatedly speak of the need to restore credibility and restore stability without really acknowledging the cause of that instability and the lack of such credibility in the first place.

The Bank of England has said that a typical mortgage holder will see annual repayments rise by just under £3,000 over the next year, but according to the Resolution Foundation, at least £500 of that is purely due to the mini-Budget. The Joseph Rowntree Foundation has estimated that an extra 120,000 households in the UK—about 400,000 people—will be plunged into poverty when their current mortgage deal ends, and about 750,000 households or 2.4 million people with a mortgage are already in poverty. That is because, although interest rates have been historically low, there is a crisis of housing affordability. Housing now accounts for such a big proportion of people’s monthly income that they cannot afford any additional shock, whether that is in energy prices, food, council tax or, indeed, their mortgage interest payment.

It is not only mortgage holders who are affected. Those in private rented accommodation, who are already paying even more of their monthly income in housing costs than mortgage holders, are likely to be impacted too, as those who cannot pay their mortgage are forced to leave their homes and increase competition for rented homes, and buy to let landlords either leave the market or pass on higher mortgage costs to their tenants. Rented accommodation is already impossible to find in many parts of the country. I have a constituent who was asked to put down a deposit on a flat in a small market town in North Shropshire before he had seen it, and when he went to pick up the keys, he found a dilapidated, uninhabitable property. Local employers report being unable to attract workers because of the shortage of housing available to them, so any crisis in housing market will send shock waves throughout the economy and worsen this difficult situation.

That is on top of the extreme pressure that household finances are already under. People are paying twice as much to heat their homes this winter as they did last year, and food prices are soaring. The impact is even worse for people living in rural constituencies such as North Shropshire, where studies show that even before this intervention everything cost more than for their urban counterparts—whether that is food, housing, council tax, transport or fuel—alongside the fact that average wages in rural areas are significantly lower. Thus far, we have seen very little done to help those in rural areas, but over the weekend we have seen threats to cut the essential public services that are already thin on the ground here, threats to cut the pensions and benefits of those who are struggling to make ends meet, and threats to raise taxes for those working hard just to keep their heads above water.

So imagine such people’s fury at the fact that the Conservative turmoil has led to huge numbers of former Ministers being able to claim payouts, with the two reshuffles carried out since July potentially costing taxpayers hundreds of thousands of pounds. Ministers who were sacked just months ago but have since been reappointed are still able to claim thousands of pounds each in redundancy pay, as long as they have been out of a ministerial post for only three weeks. For example, the right hon. Member for Esher and Walton (Dominic Raab), who was sacked by the right hon. Member for South West Norfolk (Elizabeth Truss) in September but was later reappointed as Justice Secretary, would be eligible to receive £16,876, despite having been out of a ministerial job for seven weeks. To put that in context, that would be enough to rent a two-bedroom flat for more than two years in Whitchurch in my constituency. Everyone understands the need for legislation to provide severance payments, but as the hon. Member for Glasgow East (David Linden) pointed out, surely this legislation was not intended for this situation of chronic instability. After all, these Ministers have continued to draw their basic MP’s salary, at almost four times the national average, throughout the period of not having their ministerial role.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Lady is making a very fair point. Does she think one thing that could help to ameliorate this situation is if we had a rule, as we have for many public sector employees, that if someone receives a redundancy payment but goes back into a job that is similar to or the same as the previous job, they do not receive the redundancy payment?

[Helen Morgan]

I thank the hon. Gentleman for his intervention, and I think that is a sensible suggestion. However, we also need to reflect on the fact that, in the case of the former Prime Minister and Chancellor, they did not leave their jobs through redundancy; they were sacked for incompetence, and that would not normally lead to a severance payment. There is no question but that this chaotic political situation has caused farcical revolving-door bonuses, and I believe this money should be returned to the Treasury to help plug the hole for families struggling with the cost of living or, indeed, to help plug the hole created by the disastrous Budget.

I urge the Government to listen to the proposals made by the Liberal Democrats, because over the summer we have been leading the way on action to tackle the cost of living crisis. We were the first to call for a windfall tax on the record profits of the oil and gas giants, and we were the first to call for a freeze on energy bills over the summer. On top of this, we are the first to call for the Government to provide extra targeted support for mortgage holders on universal credit. We have proposed a mortgage protection fund, paid for by reversing the unfair and unnecessary tax cuts for the big banks, and we would like these measures targeted at those most at risk of repossession. We are also calling on the Government to act urgently to protect renters, to ban no fault evictions and to stop landlords threatening to evict current tenants just so they can hike their rents. We want to produce longer tenancies of three years or more, with fair annual rent increases built in, to give renters the certainty they need.

When those renters see their position become even less secure and those with mortgages struggle to make ends meet or even risk losing their homes, they must be sickened to see the potential scale of Government severance payments. When they see the Chancellor appear on TV to warm them up for cuts and tax rises, I imagine they would not expect the Ministers who have caused this situation with their terrible misjudgment to be benefiting financially. I ask the Minister to confirm whether those Ministers entitled to payments who were subsequently reappointed have accepted their initial severance payouts. Have the ex-Prime Minister, Cabinet members and the Chancellor who caused this situation waived their severance payments, and will the right hon. Member for South West Norfolk, having severely damaged the UK economic outlook, draw expenses of in excess of £100,000 a year while my constituents lie awake at night worrying how they are going to make ends meet?

Levelling Up Rural Britain

Helen Morgan Excerpts

Wednesday 9th November 2022 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

North Shropshire is a lovely place to live, with beautiful countryside, historic market towns and warm, welcoming people. I encourage everybody to come and visit. But behind the bucolic scenes, North Shropshire and indeed large parts of the rest of rural Britain are beginning to fall behind their urban counterparts.

Levelling up was the second most popular catchphrase of 2019. While it had not a lot of meaning for the northern towns that it was aimed at, it had virtually none at all for rural Britain. If we want our rural communities on a level playing field with the towns in the north, and indeed the south, we need to address the causes of the problems that have led to dysfunction in many sectors of the economy and society.

We have young people leaving rural areas in search of work at the same time that local employers from all sectors are struggling to fill vacancies. Our hospitals are full to capacity, with ambulances queuing outside the front, while beds are taken up by people who could be cared for at home. We have pensioners and young people desperate to get out into the towns to spend their money, but they have no cars and no alternative way to get there.

On Friday, I visited the excellent Robert Jones and Agnes Hunt Orthopaedic Hospital in Gobowen near Oswestry. It is a good example of how dysfunction can affect a place. It is undoubtedly one of the best hospitals in the country, with a fantastic reputation, excellent patient satisfaction and some of the world’s finest surgeons. Most medics would be honoured to work there, and yet it has a vacancy rate of 14%. Two key reasons behind that are a lack of affordable housing and a lack of public transport to the hospital. The nurses who work there are unable to get home after a 12-hour shift because a hospital with world-class facilities is being let down by a fourth-class public transport system. If they make the move to work in that top-class hospital environment, they will struggle to find a flat to rent not because they are too expensive but simply because not enough furnished flats are available on the market.

People of working age obviously need to be able to find a secure home in the area where they want to live and to be able to access all the public services that will give them a decent quality of life, but those services are being cut because local government budgets are taking the strain of the pandemic and of Conservative chaos. Our councils need to be properly funded, but the Local Government Association reports that local authorities face a funding gap of £3.4 billion next year and £4.5 billion in 2024-25 just to stand still, so improving services seems a distant prospect.

Shropshire council is reportedly spending 84% of its budget on social care. As the population gets older, the pressure on services gets higher and more young people leave—and the cycle continues. If rural Britain is going to thrive, that cycle needs to be reversed. It should start with the industry that is already the success story of rural Britain: farming. However, the Conservatives have taken our farmers for granted by bargaining away their level trading field for one pitched firmly in favour of their Australian and New Zealand competitors.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I very much hope that the hon. Lady will talk about the three cases in Shropshire up for assessment for levelling-up funding. The one for modernising Shrewsbury town centre in my constituency is extremely important. Will she welcome that project? As she knows, a thriving county town is good for the whole of our county.

[Helen Morgan]

I supported a levelling-up bid in my own constituency as well, but I will come on to the nature of bidding for small pots of money.

The Government have implemented a new subsidy scheme so complex and tedious to access that only 2,000 out of 83,000 farmers nationally have applied to join it, despite the aims of the scheme being good. Unable to plan ahead through the constant chaos, many farmers are leaving the industry, taking local jobs, and indeed food security, with them. Grand schemes and big infrastructure projects are all very well, and they benefit the towns that win them, but they are no use to the people who cannot get to those towns in the first place. I will come on to that shortly, but before I do I want to talk about digital infrastructure.

It is not surprising that the UK is one of the least efficient countries in Europe when, in 2022, one in 10 of my constituents still cannot get internet speeds above 10 megabytes per second. It is not fair to expect rural businesses to compete with their urban counterparts when they cannot connect with their customers or suppliers. Connecting rural areas both digitally and physically is key to improving their futures.

Last week, I heard from a pensioner near Market Drayton who was without a driving licence for 18 months —a Government failing for another day—and was therefore effectively under house arrest, only allowed out on day release once a week when the local charity bus passed by. He and his wife wanted to contribute to the local economy but were held back from doing so because they could not get to the high street. We live in a country where nearly £18 billion has been spent on a rail service in one of the best-connected cities in the world, but in Shropshire on a Sunday there is only one bus service running in the whole of the county, and Market Drayton is at risk of losing its one-hourly service on a Saturday as well. Boosting bus services will reconnect communities, enable young people to access work and social opportunities, and benefit healthcare, the economy and the environment.

The reality is that the Conservatives have taken the votes of rural Britain for granted for so long they have just stopped listening to its needs. Take the cost of living crisis, which is undoubtedly worse in rural areas. Housing costs are higher, food costs are higher and transport costs are higher. Houses are often older and more expensive to heat and wages are lower, but if your home is off-grid the support available is a measly £100, to which access is the best-kept secret in Britain.

We need to fund our councils fairly so they can provide not only the social care to free up our hospitals and ambulance services, but the other services taxpayers expect to improve the quality of life of all residents. We need to invest in our digital infrastructure for businesses, and to encourage young people to stay and work in the local area. We need to allow councils to develop and deliver housing plans that meet the specific requirements of their economies and communities. Councils bidding for small pots of money to spend on isolated projects that will go way over budget because of the economic chaos will not deliver that. Giving the power to our councils, properly funded to be able to deliver them, will deliver for our communities. We really need to address this point now.

Social Housing (Regulation) Bill [Lords]

Helen Morgan Excerpts

2nd reading
Monday 7th November 2022 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

On behalf of the Liberal Democrats, I too welcome the Secretary of State back to his position. I also broadly welcome the Bill. Above all, I congratulate everyone who has campaigned so effectively for these improvements following the terrible tragedy of the Grenfell fire, more than five years ago now, on their tenacity and tirelessness. However, I must repeat the question asked by Members on both sides of the House: what has taken the Government so long? Providing fairness and accountability for people living in social housing should have been a much higher priority, and we would have liked to see the Bill much, much sooner.

I want to say something about local government funding. The pandemic has significantly increased the financial pressure on local authorities, and that is being exacerbated by rampant inflation and high interest rates. While everyone is committed to improvements in the rights of tenants in social housing and their ability to hold their landlords to account, there is an urgent need for clarity on how that will be delivered and funded, given the stressed state of many council budgets. It is essential for the Government to find ways of filling the funding gap for local authorities to ensure that the most vulnerable people are protected.

At the beginning of the pandemic, the Conservative Government promised that no one would lose their home as a result of it, but now there are nearly 1.2 million people on council housing waiting lists. According to research carried out for the Local Government Association and its partners, every pound invested in a new social home generates £2.84 in the wider economy, with every new social home generating a saving of £780 a year in housing benefit. It makes sense to allow councils freedom to deal with the social housing need in their communities, and I urge the Minister to consider this as a matter of urgency.

A study published last December by the National Housing Federation found that one in five—about 2 million—children in England were living in homes that were cramped, unaffordable or unsuitable, and that 8.5 million people in England were facing some sort of housing need. However, that urgent need is not being met by the provision of new social housing in England, not least because local authorities do not retain 100% of the proceeds of houses sold under the right to buy.

As a brand-new MP at the beginning of this year—and with an inbox full of emails about social housing issues—I was astonished to learn, on meeting members of my local housing association, that homes bought by tenants under the right to buy were often immediately let by their owners into the private rented sector. When there are nearly 12 million households on social housing waiting lists, that is, in my view, a failure of policy. Measures to support home ownership should not lead to a reduction in the overall number of affordable social rented homes. Any loss of social rented housing risks pushing more families into the private rented sector, as well as driving up housing benefit rents and spending, and compounding the homelessness crisis. I therefore urge the Secretary of State to allow local authorities and housing associations to retain 100% of the proceeds of houses sold under the right to buy, in order to maintain and build the stock of social housing as appropriate for the needs of their communities.

We have discussed the urgent and pressing issue of the cost of living crisis on many occasions recently in this place. It seems that the Government have missed an opportunity to ensure that homes provided in the social housing sector are not unnecessarily expensive to heat or unnecessarily cold to live in. Moreover, about 21% of our carbon emissions come from our inefficient homes, of which social housing is often the worst offender. On the basis of personal experience, I can testify that the windows are easily the most problematic element.

In 2015, the Conservatives abandoned the Liberal Democrats’ zero- carbon homes policy, as a result of which 1 million homes have been built that cost more to heat and emit more carbon dioxide than they need to. So where are the provisions in the Bill to retrofit our social housing with insulation, and ensure that newly built social housing is warm and affordable? While including energy efficiency in the regulator’s objectives is a welcome step, it is clear that more could be done to reduce fuel poverty and help us achieve our net zero objectives.

There are some other items on my wish list—they may be for future legislation, but I would like to mention them. Along with colleagues on both sides of the House, I want to hear a firm commitment to ending no-fault evictions of those in both private rented accommodation and social housing. I also want the dangerous cladding that still affects much of the social housing stock to be dealt with as a matter of urgency, and I want to see an extension of the safeguards applying to faulty electrical appliances to online marketplaces, so that we can ensure that a terrible tragedy like Grenfell does not happen again because of unsafe appliances in people’s home.

In conclusion, the direction of travel in the Bill is certainly welcome, albeit a little overdue, and I urge the Secretary of State to work with parties across the House to improve it further.

Unfinished Housing Developments: Consumer Protection

Helen Morgan Excerpts

Tuesday 18th October 2022 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I thank the Minister for his attendance and response this evening. I secured this debate following a number of instances in my constituency in which the buyers of new homes have been left to pick up the pieces when critical infrastructure is not completed by the developer.

Let me tell the House first about The Brambles in Whitchurch. That is a development of 14 houses, built by developer Sherwood Homes Ltd in 2016 on land that had already been granted planning permission for development by Shropshire Council. It was a condition of the planning permission that the road, footpath and drainage should all be complete before the occupation of any houses occurred. However, despite those things never happening, building completion certificates were issued for all the properties and they were subsequently sold and inhabited. Unfortunately for the residents, the drainage system failed, leading on some days to raw sewage backing up in their 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 sewerage network was illegal, and neither were the road, lighting and footpath completed to an acceptable standard.

In October 2019, a creditor of Sherwood Homes Ltd, which appears to have shared some of the same directors, petitioned for it to be wound up and an order for insolvency was made by the court in December 2019. As a result, Shropshire Council could not take planning enforcement action against Sherwood Homes Ltd, and the residents of The Brambles, who are the successors in title to the private company established to manage the development, have been the subject of the enforcement process. They have been required to accept five-figure charges on their properties in order to rectify the issue of connecting the drainage to Welsh Water’s network. Indeed, the saga has also cost the rest of Shropshire’s taxpayers a considerable amount of time, as council officers have expended time and effort to attempt to rectify the situation.

Shropshire Council believes that the developer’s failure to complete the necessary works before the first house was occupied should have been established by conveyancing solicitors, and the lessons to be learned from this episode are, “buyer beware.” It may be right, but few residents have been able to establish that principle with their solicitors and would not have the resources to begin legal proceedings against them. I believe that some of the home buyers took up the offer of conveyancing services facilitated by the very developer who left them high and dry, raising serious concerns over a potential conflict of interest.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing the debate. Back home in Northern Ireland—I say this to inform the Minister as well—we have a very clear system whereby each developer must put a bond on the property. Therefore, should there be any difficulty in relation to the footpaths and roads not being finished, or if the streetlights are not done and the sewerage fails, that bond can be used for those repairs. Does the hon. Lady feel that the methodology used in Northern Ireland may settle the problems that she refers to, and that the Government and the Minister should look at that option?

[Helen Morgan]

I thank the hon. Gentleman for that sensible intervention; I will make a very similar suggestion in my speech.

The leader of the council declined my request to undertake a case review of the sequence of events that led to the situation at The Brambles to understand whether the council could have prevented the situation at any point as it evolved. As the law stands, it would appear that she is right. The Building Safety Act 2022 does not cover issues relating beyond the house itself, and the Local Government and Social Care Ombudsman declined to consider the case, arguing that:

“Caselaw has established that where a council issues a completion certificate and the work is later found to be substandard, liability for any defects rests with those who commissioned the work and those who carried it out. We cannot therefore hold the Council responsible for substandard work by the developer and we could not achieve any worthwhile outcome for”—

my constituent by investigating the complaint.

This is a very serious case—the most serious case I have seen in North Shropshire—but there are numerous instances in which roads have not been completed to a standard suitable for adoption, streetlights are not installed, shared areas are not landscaped as per planning permission and, in some cases, even the plot sizes vary from the original plan.

I can provide further examples. A development at Isherwoods Way in Wem has been without streetlights and a surfaced road for 10 years; although the situation is about to be resolved, it is not quite there yet. On the west side of my constituency, a site that I cannot name because legal proceedings are under way features an unadopted sewerage system that has not been completed to the required standard. A development in Ellesmere was left without an adopted road and open space when the developing company collapsed. The situation is only being resolved now that the development has been purchased by a major national house builder. The developer of another site in Wem has applied for insolvency despite the road being unadopted, the open spaces not having been landscaped and concerns having been expressed by residents about the water drainage system.

The cost to residents of these sites is not only financial. Untold distress and emotional strain have been caused and an enormous amount of precious time has been spent on resolving the situation. At a recent constituency surgery, one resident told me, “I’m a truck driver. I don’t have time to become an expert on planning control.” His neighbour, a construction worker, described the strain of worrying about everything that could go wrong with the drainage system, and about the cost involved in digging up the road to rectify the faults.

[John Spellar (Warley) (Lab)]

I have a similar problem in Cranford Street in Smethwick. I find it utterly deplorable that Severn Trent, which is making hundreds of millions and whose chief executive is paid millions, will not take over any responsibility for the sewage that is backing up into people’s homes. People have bought the home of their dreams and are now finding that it has turned into a nightmare.

[Helen Morgan]

I thank the right hon. Member for his intervention. I have had some productive discussions with Severn Trent on the issue and am about to propose a solution that I hope will help to rectify the situation.

It has become apparent that residents are tied into an impossible situation. They no longer want to live in their homes, but realistically they cannot sell them until the defects are rectified. There are also wider financial ramifications because if any resident defaults on their mortgage, a bank will not be able to sell the property to recover its investment.

The other common theme emerging from all these developments is that homebuyers will be expected to contribute to the costs of maintaining shared areas via a management company to which the title for the shared areas has passed. These companies typically pass on the management cost to the residents at zero profit. However, the ones that I have investigated then subcontract the work to a profit-making company. I am sure that the House will not be surprised to learn that in many such arrangements the subcontractor is related in some way to the original developer.

The companies can charge uncapped amounts indefinitely to the homebuyer, in what is known as a fleecehold—I am aware that several hon. Members have raised the plight of fleeceholders on previous occasions. The management company can be used not only to pass on to the homebuyer the financial responsibility for completing the development, but to extort money for years to come, often for substandard management services. I am aware that the Government have indicated that they will legislate to control such management charges. I urge the Minister not only to commit to a date for such legislation, but to ensure that protections are included to cover previously unfinished developments.

To tackle the issue up front, however, I propose a different course of action. I believe that it is possible for a water company or a local council to obtain a financial bond when a section 104 or section 106 agreement is put in place, such that when critical infrastructure is not completed, funds are still available to complete the work. In addition, there are mechanisms such as section 38 agreements incorporating financial bonds that can be used to ensure that roads are of an adoptable standard. Having spoken to colleagues, I believe that some councils, such as Oxfordshire County Council, use financial bonds for that purpose and to avoid the distressing situations that I have described. I have not been able to establish why that is not standard practice for all councils.

I urge the Minister to consider using the Levelling-up and Regeneration Bill to require councils to take a step involving a financial bond before planning conditions are discharged, so that unsuspecting homebuyers are not left with unmanageable costs if their developer goes bust before the site is completed. The principle has already been established in the Government: National Highways requires a bond from local authorities if they propose works affecting the strategic road network, so that significant disruption is avoided if the works are not completed. I am concerned to learn that the changes proposed to the Bill would reduce councils’ ability to use section 106 agreements for smaller developments and would remove current powers to protect homeowners.

The rationale for planning deregulation is that it will enable house building targets to be met by removing barriers to completion, but I would argue that, certainly in the case of North Shropshire, it is not necessary. The evidence does not show that planning regulations are behind slow rates of house building. Shropshire’s local plan contains a target of 30,500 new homes by 2038, but there are already 18,000 planning applications on which consideration has not yet commenced. The current build rate of just under 1,900 houses a year does not suggest that planning permission is the issue holding things up.

I appreciate that requiring a financial bond from new house builders might deter smaller companies from entering the market, but first I question whether homebuyers and council tax payers should be taking on the risk posed by a financially unviable housebuilder; and secondly, it should be possible to find an alternative, such as an investment bond, to combat that risk.

I am extremely concerned about the fact that councils lack the tools they need to ensure that the buyers of new-build homes do not fall victim to rogue developers, and the fact that the effectiveness of the tools they do have may be reduced by the Levelling-up and Regeneration Bill. I hope that the Minister will agree to consider making the use of financial bonds as part of section 106 or similar agreements a required practice for councils and water companies, to protect both homebuyers and councils’ own taxpayers from high-risk housing developers.

If the Minister rejects such a solution, however, will he agree to meet me and other stakeholders, such as the Local Government Association, to formulate a practical mechanism to prevent the distress and financial hardship caused by unfinished housing developments? Homebuyers, councils and the wider community need to be confident that they will not be left to the pick up the pieces when a developer fails to deliver. The owners of The Brambles are victims of a rogue developer, and we should act to ensure that their experience is not repeated elsewhere.

--- Later in debate ---

[Lee Rowley]

I will come to those two points, because I agree there are different elements that we need to consider and unpack. I would be happy to discuss the second point with the right hon. Gentleman in more detail, should he wish.

On completing new housing developments—I accept the hon. Member for North Shropshire made a broader point about further down the chain—the Government are clear that developments should be built out as soon as possible once planning permission is granted. The frustration of local communities where that does not occur is completely understandable. We expect developers and local authorities to work closely together to make this happen.

The Levelling-up and Regeneration Bill, which is in Committee today, will increase transparency on build-out, helping councils and residents to better understand what they can expect from development proposals and putting in place sanctions should the homebuilder fall short. Of course, there are examples where developers will need to vary their approach to building and constructing properties, and of course timeframes will both elongate and reduce as part of that process, but in general we are keen to see that when development is granted permission, often through difficult and sometimes controversial processes, and the clock starts ticking, the development should get moving and conclude as soon as possible.

The hon. Member for North Shropshire rightly highlighted infrastructure. Taking roads as an example—she mentioned a number of examples—when a new development is granted planning permission, councils can currently use section 106 planning obligations, as she indicated, to secure a commitment from developers to construct roads to a standard capable of being adopted by the local highway authority. It is up to developers and local planning authorities to agree on specifics such as timescales and funding, which may include the provision of a bond. This is currently a local decision and, notwithstanding the difficulty she rightly highlighted—she made a constructive suggestion on potential compulsion in this area—there are going to be different circumstances in different instances.

I encourage councils to use bonds where they think it is appropriate. Equally, I do not know whether we want to be so prescriptive as to mandate that from the centre, as there may be instances where it is neither appropriate nor necessary. Hundreds of thousands of houses are built each year in very different parts of the country, so we have to have regard to the fact there are different circumstances. None the less, I accept the premise of what the hon. Lady indicates and, where good practice exists—she indicated the good practice in Oxfordshire, and it also happens in Derbyshire—I encourage councils to use it, where appropriate and reasonable.

[Helen Morgan]

If compulsion is not appropriate, what about disseminating best practice to all councils in England to encourage them to use this mechanism, where appropriate, to avoid the situation that my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and I have described? That would be a positive way forward to prevent this happening in future.

[Lee Rowley]

Within the bounds of localism, and without an individual Minister directing councils to do so, I think it is reasonable to indicate that, where possible, reasonable and proportionate, and where councils think it is appropriate, they should consider using bonds, which are a helpful lever and tool to be used where possible, while accepting that individual local authorities may have different reasons and different views on either using them or not using them. Ultimately, I will leave it to the discretion of individual local authorities to determine the appropriateness of that utility.

Returning to the point about roads, the Government believe it should be made clear to potential purchasers what the arrangements are for the maintenance of roads. Section 38 agreements facilitate the adoption of such roads as highways maintained by the public purse. It is certainly possible for local authorities to adopt streets and roads. Ultimately, though, that is a decision that is taken in relation to how these estates are created and how local authorities want to approach ensuring that they have highways that are at a standard that they can then maintain.

Although I recognise, as has been indicated, that this does not work in a number of instances, if we can balance the appropriateness of localism—of making sure that local areas have the ability to vary how they approach this—while also ensuring that there is a general usage of the tools that are available, I hope that will be reasonable and proportionate.

The other element of the discussion is effectively around the quality of what is delivered at the end of the process when people move in—or by the time they move in. The Department for Levelling Up, Housing and Communities has also provided local planning authorities with tools to enforce requirements with strong penalties for non-compliance. Again, we encourage councils to use them where possible, and, again, through the Levelling Up and Regeneration Bill we are seeking to strengthen those measures.

I should add that when residents have a complaint about the local planning and highways authority that has not been adequately resolved, they may be able to complain to the Local Government and Social Care Ombudsman. I know that, in at least one incident, as the hon. Lady said, the residents of North Shropshire tried to do that. Obviously, the ombudsman is independent, but it is worth reiterating that it is there to redress issues, and I hope that anybody watching this debate who has a similar concern will consider its usage should that be appropriate.

On the matter of delays to completion, warranties and the actual quality of new homes themselves, I know of the problems that new home buyers face regularly and we do not underestimate the detrimental impact that this has. Most new-build home contracts typically have a “short-stop” date, which is an estimated completion date, and a “long-stop” date, which is the date by which a home must be completed in the contract. The rights and responsibilities of the homebuyer and developer should be set out in that contract, including the circumstances in which a deposit and other money is returned.

There are other routes to redress, which we are strengthening, and I will come to those in a moment, because they offer alternatives that the hon. Lady may wish to consider. The status quo currently is that most new-build homes are issued with a 10-year new-build warranty. Home buyers may also be able to complain to the Financial Ombudsman Service about their insurance cover.

Within the first two years of most warranties home buyers may be able to seek to resolve issues with their new homes through that warranty provider. If the new home is covered by one of the consumer codes, they may also be able to help resolve the issues that residents unfortunately face.

Even with those options available to home buyers, we recognise that the system is not in a perfect place. That is why the Government have committed to taking further steps to improve consumer redress. Through the Building Safety Act 2022, we have included a provision that contains a statutory new homes ombudsman scheme, which will place greater accountability on developers and make it easier and simpler for new home buyers to seek redress when things go wrong, which perhaps will move us closer to the Northern Ireland model in terms of outcomes.

In the meantime, and as we consider the next steps for the statutory scheme, the independent New Homes Quality Board has progressed work to set up the voluntary New Homes Ombudsman Service, which will launch shortly. My second visit was to see the launch of a New Homes Quality Board and to see the first developers to be brought onto that scheme. I went to Solihull a couple of weeks ago, and I am grateful to the chief executive for meeting me. It is an important step forward. The scheme is voluntary at the moment, but, equally, that voluntarism gives the opportunity for home buyers to see the different ways in which developers are engaging with that system, and I hope that most developers will in the end engage with that system.

The hon. Lady talked about leasehold at the end of her speech and I just want to dwell on that for a few seconds. We acknowledge that there are practices that are not where they need to be within the leasehold sector, and the Government and previous Ministers have given commitments that we will reform leasehold. We remain of the view that that is what should be done. Although I cannot give the hon. Lady the date she seeks, I am personally committed to trying to take the matter forward and I hope I will be able, with my colleagues, to give further information in fairly short order on the process for that.

In conclusion, this is an important area of policy, and I am grateful to the hon. Lady and all those who have contributed to the debate tonight for the opportunity to talk about it. It is important to note that there are processes already in place that homeowners should use if they are in the unfortunate place described by some people in North Shropshire, which I know is also the case elsewhere. They should seek to use those and seek to—

Oral Answers to Questions

Helen Morgan Excerpts

Monday 16th May 2022 Commons Chamber

[Stuart Andrew]

Of course, I would be happy to meet the hon. Gentleman to discuss the issue he raises. The whole point of the Bill is to strengthen the development of local plans in the first place, so local planning authorities can address the housing needs they have in their area, including the types of housing they need; and to strengthen enforcement issues around planning applications. I am more than happy to speak to him further to understand the issue in greater detail.

[Helen Morgan (North Shropshire) (LD)]

5. What discussions he has had with Cabinet colleagues on taking steps to improve access to employment for those without car access in (a) North Shropshire and (b) other rural areas as part of the levelling-up agenda.

[The Minister for Levelling Up Communities (Kemi Badenoch)]

The levelling-up fund announced at the last spending review saw £1.7 billion awarded to 105 successful projects across the UK, including projects to improve access to employment for those without the use of a car in rural areas.

[Helen Morgan]

Market Drayton and a number of other towns in North Shropshire are seeing cuts to their bus services, with Market Drayton set to lose them all together at weekends. It has received none of the funding that it has applied for to date, including from the Bus Back Better fund. Like many other towns across Britain, its beautiful high street is struggling to recover from the pandemic. For such towns that have been unsuccessful in their bids so far, and where people are struggling to get in and out of them, what is the Government’s plan to level them up?

[Kemi Badenoch]

The hon. Lady needs to work with her local transport authority—that would be Shropshire Council—to look into resolving those issues. The pandemic had a huge impact on the delivery of local services and the Government provided nearly £1.86 billion in grant funding for bus services in England. Shropshire Council received about £2.17 million of that, so I encourage her to speak to the council to see what it, along with commercial bus operators, can do.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O’Brien)]

I pay tribute to David Wright and North Warwickshire Borough Council, because they have done a fantastic job, particularly during covid, in supporting the local community and local business. I would be delighted to visit—to hop across the A5—not least because it is only 20 minutes away from Harborough.

[Helen Morgan (North Shropshire) (LD)]

T5. Just last year, Shropshire’s Conservative-run council missed out on three levelling-up bids, and it missed out on a bus service improvement plan bid, under the Bus Back Better fund, this year. There is no doubt that Shropshire has need of these funds, so I would like to understand: what steps is the Secretary of State taking to ensure that levelling-up funds are allocated on the basis of need, rather than through some opaque bidding process that seems to be influenced by a council’s ability to direct resources at that bid?

[Michael Gove]

We allocate levelling-up fund bids, as the Local Government Minister pointed out earlier, on the basis of appropriate competition in order to ensure value for money, but I have had a chance to talk to the excellent Conservative leader of Shropshire Council, Lezley Picton, to make sure that she and her superb team of Conservative councillors can deliver for the people of Shropshire, as Conservatives always have.