Sale of Park Homes

Iain Wright Excerpts

Thursday 30th October 2014 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

May I begin, Madam Deputy Speaker, by apologising to you, to the right hon. Member for Mid Dorset and North Poole (Annette Brooke) and to the House for not being present for most of the debate? I have been in Committee considering the Small Business, Enterprise and Employment Bill and have just hot-footed it from Committee Room 10. I want to pay tribute to the Minister there, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who has allowed me to come here, and to the Labour Whip, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is holding the fort at the moment. However, my constituents come first when I am dealing with matters in this place, which is why I wanted to contribute in this debate.

I am pleased that the Backbench Business Committee considered this matter to be worthy of debate. I pay tribute to my hon. Friend the Member for North East Derbyshire (Natascha Engel) for her work and her strong interest in this matter and to the right hon. Member for Mid Dorset and North Poole for pursuing her case so professionally and with such tenacity.

I wish to make representations on behalf of my constituents who live in Elmtree Park, which is close to the coast at Seaton Carew in my constituency. Comprising 100 park homes, the site caters for people without children who are over the age of 50, and it has a vibrant community life. Indeed, it is a great community, and the people who live on that park are its greatest assets. It is always a pleasure for me to visit the residents, eat their scones, drink their coffee and discuss matters relating to the ownership of their homes.

It is clear, from speaking to the residents of Elmtree Park over many years and from my time as a Department for Communities and Local Government Minister with responsibility for park homes, that the current business model is broken, as it provides far too much power to site owners at the expense of park home owners. Although there are many good site owners who invest for the long term and who want a good and mutually beneficial relationship with residents, far too often the sector sees malpractice, a lack of investment, poor if any maintenance and unscrupulous and often criminal site owners who are content to make a fast buck and fleece residents. Time and again I hear of unfair fees that are opaque and subject to no challenge, poor maintenance of the land, and site owners either making it difficult for home owners to sell their homes or hounding people out so that they can consolidate pitches. Either way, the owners often take a whopping profit when park homes are sold.

During my time as Minister, I was particularly keen to reform the licensing regime to ensure that we incentivised the good park home site owners and punished the bad, to the point of driving them from the industry. I wanted to push the concept of fit and proper persons for site owners so that the sector encouraged responsible owners, good behaviour and good conduct, and to ensure that this responsibility was reinforced through effective regulation. I also wanted to make the fee regime transparent, so that park home owners knew precisely what they were paying for. I also wanted them to have the opportunity to negotiate and discuss the fee with the site owner before it was finalised.

It is the fee regime that most concerns my constituents on Elmtree Park. A balance needs to be struck between allowing site owners to raise enough revenue to maintain the site, provide amenities and produce a reasonable return while, at the same time, protecting residents from unfair costs. As a Minister and a constituency MP, I have always been struck by the lack of consensus on whether the 10% commission on sales should be reduced. Some people see their park homes as homes for life and so would rather see a reduced annual pitch fee than a reduction in the commission on sales; conversely, others would like to ensure that the commission was reduced or even eliminated, maximising their income on any sale.

Despite the lack of consensus, it is clear that too much power lies in the hands of the site owner, at the expense of the park home resident. The current regime allows for site owners to benefit twice from any sale, which is very wrong. It allows them to coerce a park home owner, through fear and intimidation, to sell their home to them for a reduced price—the so-called site blocking. The site owner collects 10% on that sale. He or she can then bundle up sites or sell the home, often at a huge profit. All the upside and none of the risk is with the site owner and that cannot be fair.

[Peter Aldous]

The hon. Gentleman is making a passionate speech with which I wholeheartedly agree. However, does the Mobile Home Act 2013 not provide local authorities and park home owners with the ability to stop those problems?

[Mr Wright]

I understand where the hon. Gentleman is coming from, but my main point is to do with that 10% commission on sales as part of the overall fee regime. With his permission, I will elaborate on that, as it is an incredibly important matter. Forgive me, Madam Deputy Speaker, for not being here at the start of the debate when this issue must have been touched on time and again. I am keen to push the idea that the fee regime should be as transparent as possible.

I want to preserve the unique character of park homes that attracts older owners to want to live there. In many respects, therefore, there is possibly an argument that the site owner should be able to vet potential buyers. However, it cannot be right that the home owner is unable to sell his or her asset, in most cases the biggest asset they have, without first seeking approval from the site owner and then paying 10% for the privilege of doing so. I cannot see how that is fair at all.

[Stephen Lloyd]

Does the hon. Gentleman agree that it is almost feudal to expect park home owners to go through that process?

[Mr Wright]

I came into the debate during the hon. Gentleman’s excellent contribution, and I agree with him. I was going to touch on that. He used the word “feudal”; I have the word “archaic”. It is so old-fashioned in the 21st century, and not appropriate these days. We need to ensure that the balance of risk and reward is pushed more firmly towards home owners than site owners. That is why the Government should look again at the 10% commission on sales, as part of the wider review of all costs and fees relating to park homes. I really liked what the hon. Gentleman was saying as I came into the Chamber, which was about ensuring that any commission was linked to proper clarity on maintenance and improvement of homes. At the moment, we do not have that relationship, so the costs of maintaining and improving sites and how that will be paid for are not clearly stated and understood. The hon. Gentleman was absolutely right, and I would like to see that.

There are long-standing problems within the sector, and, as I have said, far too often the balance of power tilts away from the home owner. When I was in office, I was keen, on behalf of the residents of Elmtree and others throughout the country, to ensure that they received fairness as part of a well-functioning park homes sector. That 10% commission now needs to be driven down as much as possible, if not eliminated. Greater transparency on fees needs to be considered as part of that wider regime. I hope that the Minister will reflect on that and wish to advance those aims on behalf of park home owners everywhere.

--- Later in debate ---

[Brandon Lewis]

It is not for me to question the decisions of the Select Committee or its Chair about how they go forward, but I will turn in a few moments to how what they looked at can be taken forward. I now want to make a bit of progress with my speech.

As other Members have rightly said, the justice campaign and its founder, Sonia McColl, are to be congratulated on their fantastic, sterling work in raising issues about problems with the park home sector and on the need for reform. As I have explained, we believe that commission is a legitimate income strand. It does not result in profiteering—at the moment, the evidence does not back up such a claim—and site owners who run a legitimate business within the law are entitled, like any such business, to make a reasonable profit. If the commission were changed, compensatory relief would be needed. There are good site owners who run professional businesses within the law. I am sure that all Members want them, for the benefit of their residents and of the economy, to thrive and grow. We therefore do not want to put in place measures that could affect their continuing viability.

I appreciate that that may be unwelcome to some home owners who have campaigned for a reduction in the commission or its abolition. We should not, however, lose sight of the substantial reforms that were introduced by the 2013 Act. It targets unscrupulous and criminal operators who think that the law does not apply to them: it does, it should and it must. Apart from introducing new provisions to prevent the blocking of sales and a new scheme for selling homes, the Act requires site operators to use a statutory form, and to set out what is included in any proposed new pitch fee and how that fee has been calculated. We are therefore starting to see the transparency that we want to exist more widely. The Act has banned certain types of rules that can be used to block sales on sites. It also introduced important provisions to reform local authority site licensing, which came into force on 1 April this year. These hugely important changes for the first time give local authorities powers to take enforcement action against rogues who refuse to maintain their sites.

I want to reassure the House that the Government recognise that more work needs to be done to change the culture of the sector and to crack down on the rogues operating within it who give everybody in the sector a bad name and affect the lives of residents unfortunate to live in such areas. To achieve that, we will continue to work with partners to raise standards generally, and to remove criminality from this sector.

In particular, I am determined to stamp out the continuing bad practices in the industry, such as unlawful sale blocking, or local authorities and other agencies not using their powers effectively to protect home owners. That is why I have asked a ministerial colleague to bring together representatives from across the sector to identify evidence of poor practice where it exists, and investigate how best to raise standards further and tackle abuse. That group will significantly help to shape the review of the Mobile Homes Act.

I agree with hon. Members, not least my right hon. Friend, that the review should have an independent chair. The review will be undertaken in 2017, which will give us a couple of years to see the impact of the new laws before we review how they are working. However, I would be very happy for that group, under its own auspices, to consider a wider review of the issues that have been raised today. I hope that my right hon. Friend will take up the opportunity to be part of the group. I know that the Under-Secretary will welcome Members who want to contribute to and be part of it.

[Mr Iain Wright]

I might be giving the right hon. Member for Mid Dorset and North Poole (Annette Brooke) responsibilities that she does not want, but should she not chair the group?