Employment Rights Bill

Jonathan Reynolds Excerpts

2nd reading
Monday 21st October 2024 Commons Chamber

[Kevin Hollinrake]

I will make some progress. The Government’s own impact assessment acknowledges that the measures will mean price rises for consumers and job losses. In it, 40% of firms surveyed said that prices would go up, and 17% said that they will reduce the number of employees. That is hundreds of thousands of jobs at risk.

The criticism of the Bill does not stop there. The Institute for Fiscal Studies has warned that it risks lower employment rates and lower wages for employees. The Local Government Chronicle has warned that the Bill will place financial pressure on councils. The Recruitment and Employment Confederation has said that the Bill will fuel long and complex litigation. The Financial Times has warned that the Bill is causing deep unease among business leaders. In short, jobs down, wages down and prices up.

In their failed attempt to allays concerns about the Bill, the Deputy Prime Minister and the shadow Business Secretary have stated that they have consulted businesses—

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

You are the shadow Business Secretary.

[Kevin Hollinrake]

Sorry, though I think the Prime Minister is guilty of similar; I do apologise. The Deputy Prime Minister and the Business Secretary have stated that they have consulted businesses. Really? The Federation of Small Businesses said not only that the Bill will

“inevitably deter small employers from taking on new people”,

but that it is a

“rushed job, clumsy, chaotic and poorly planned”

and that the Government are guilty of shallow engagement. So much for the “strong horse”. Several representatives at this morning’s meeting said that they have been talked to but not listened to—including those representing the hospitality and retails sectors some of the most labour-intensive in our economy, which is acknowledged in the impact assessment.

--- Later in debate ---

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

I thank right hon. and hon. Members across the House for an informed debate on the Employment Rights Bill and the Government’s plan to make work pay. In closing, I declare to the House that I am a proud member of the Unite and USDAW trade unions. Even more proudly, I declare that I come from exactly the kind of working-class family that stands to gain from the measures.

As this is Second Reading, let us remember the history and context leading up to the debate. In recent times, work has changed a great deal. We have seen the impact of technology and the gig economy, and we have had working from home in the pandemic. Many things have changed what work is for many people. That has created a need to consider whether our employment laws are up to date.

Indeed, it was the Conservatives, under Boris Johnson, who first promised an employment Bill in their 2019 manifesto, but they did not deliver. The subsequent Queen’s Speech, after the 2019 election, included an employment Bill, but again the Conservatives did not deliver. In contrast, this Labour Government not only promised an employment Bill; we have delivered one, and in just 100 days. Meanwhile, it appears that some Conservative Members do not even support the existing provision of things like maternity pay, so there have been some differences in opinion between Members on opposite sides of the House today.

It is a proud day for the new Government, but it is a prouder day for Britain’s workers, many of whom can now look forward to a future with far greater security and stability than they have at present. Quite simply, good work and good wages are what this Labour Government were sent to this place to deliver, and that is exactly what this Bill is about.

I take pride in the fact that the new Government have worked closely with all parties in drawing up this legislation, acting pragmatically and listening at all times. The result is a Bill that will make a huge difference to the lives of millions of working people, while being proportionate, fair and reasonable in the asks it makes of business, recognising that the majority of businesses operating in the UK already do so to a higher standard than even this Bill would introduce.

We would not have known that from listening to the depressing speeches made by Conservative Members today. People would not know that Sainsbury’s already pays a living wage; that instead of zero-hours contacts, McDonald’s already offers contracts that provide guaranteed hours; that the Mace Group offers full trade union access to workers on construction sites; that Mars Wrigley offers equal parental leave; and that BT Group already has carer’s leave. Frankly, what we heard from the Conservatives today was binary, outdated and extremely depressing, but I was delighted to hear such significant support for the Bill from the Government Benches, and from all around the House.

Some Members raised specific points. I wish I had time to respond to all of them, but I want to acknowledge the tremendous maiden speeches we heard. The hon. Member for Leicester East (Shivani Raja) gave an incredibly gracious speech about her predecessors, in a very skilful way, which is not easy when she had to defeat several of them to get her place in the House. The hon. Member for Weald of Kent (Katie Lam) told an incredibly powerful family story, woven into a wonderful description of her constituency, and she extolled the romantic benefits of campaigning for the Labour party, which is something we can all get behind.

My hon. Friend the Member for Hyndburn (Sarah Smith) captured the glorious industrial heritage of her area in a way that was extremely relevant to today’s debate. My hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball) gave a speech that testified to the fact that politics can be a force for good, and it was wonderful to hear. My hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) showed passion and commitment in every word she spoke; I cannot wait to hear more from her. My hon. Friend the Member for Dover and Deal (Mike Tapp) showed his commitment to public service, which has run throughout his entire life; again, it was a wonderful speech to listen to. My hon. Friend the Member for Airdrie and Shotts (Kenneth Stevenson) managed to draw a comparison between his constituency and ancient Rome, which was particularly skilful. His speech was funny, warm, authentic and passionate. Finally, my hon. Friend the Member for Hamilton and Clyde Valley (Imogen Walker), the MP for the area known for Robert Owen, made a wonderful and apt contribution to the debate, with a tribute to hard work and the rewards it can bring—again, it was wonderful to listen to.

Unfortunately, I must give the House some negative advice: to reject the reasoned amendment in the name of the new shadow Secretary of State, the hon. Member for Thirsk and Malton (Kevin Hollinrake). Quite frankly, lads, it is a bit of a mess, isn’t it, as motions go? It claims credit for measures the Conservatives once opposed, such as the minimum wage. It opposes the fair work agency, which they used to support. It claims that there will be more strikes, when they presided over a record number of days lost to strike action, and it shows even less self-awareness when it comes to the burdens on small businesses. Let us not forget who called the referendum on leaving the European Union, with no preparation for either result.

The serious point is this: the Conservative record was one of stagnant wages, low business investment and low productivity. Frankly, it was a record of failure. That is why we must act differently. The shadow Secretary of State claims that the Bill is rushed. Nothing could be further from the truth. The fact that the Bill is ready in 100 days is testament to the brilliance of the civil service and the resilience of the British model of government.

The impact assessment we have published shows that these measures will increase total employment costs by 0.4%, but we know that smaller businesses face proportionately greater up-front costs from regulatory changes. That is why we are working with them closely to make sure that these reforms, and the speed at which they are implemented, work for them. However, I want to be clear that we will not allow for the creation of a two-tier market where someone’s protection as a worker depends on the size of their employer. That would create an uneven playing field and exactly the kind of disincentive to grow that we saw too many of under the last Conservative Government.

The shadow Secretary of State also raised the question of vexatious claims under day one rights. The point he missed was that there are already some day one rights. Protection for whistleblowers is a day one right. Disability discrimination protection is a day one right. If his worry is vexatious claims, those could be brought under the existing system. I thought that was a major weakness in his argument.

We heard speeches paying tribute to what this Bill will do on parental leave. On fire and rehire, I pay tribute to my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for his work preparing these measures.

I will also say one more thing on impact assessments to set that 0.4% impact on the UK’s total pay bill in context. Last year, the UK’s total wage costs were £1.3 trillion. To draft a Bill that will have such an impact for so many workers, with a direct benefit transferred to low-paid workers, and to keep it as proportionate as that is, I believe, an achievement.

Finally, on zero-hours contracts, we are not taking away flexibility, but making flexibility two-way. We are ensuring that workers have the right to a contract that reflects the number of hours they regularly work, while allowing them to remain on a zero-hours contract if that is what they want. We are making sure that flexibility works in both directions. There is no reason why that should in any way adversely affect seasonal work compared with what we have at present.

To close, this is a proud day for this Labour Government. This is a change of direction. It is a change to a better and more productive culture of industrial relations in this country. In the case we are making as a new Government, we are not alone. Study after study shows the benefits of investing in the workforce, in better productivity, better resilience and more market dynamism. This Bill makes good on our promise to the British people to change their lives for the better, to deliver an economy that works for them, and to end the poor pay, poor working conditions and poor job security that have held too many people back for too long. For all those reasons, I proudly commend this Bill to the House.

Question put, That the amendment be made.

Carbon Emissions (Buildings) Bill

Jonathan Reynolds Excerpts

Friday 25th November 2022 Commons Chamber

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

I start by putting on record my sincere condolences to Wales for their loss today, and I wish England the best of luck for their match against the USA later. We will all be very much cheering them on.

I sincerely thank my hon. Friend the Member for Broadland (Jerome Mayhew) for introducing the Bill, and for his incredible efforts to raise awareness of embedded carbon in construction. He is a fantastic champion for all things environmental, and has been right from the point of his election; protecting the local environment was part of his election plan, and he has been a great champion for the measures that we are discussing through his work on the Environmental Audit Committee.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Given the schedule that we are on today, our time would be best used by allowing the Minister to reply in full, but I congratulate the hon. Member for Broadland (Jerome Mayhew) on his Bill. We support it. I agree with his proposition that industry would welcome further regulation in this area, and I wish him well in his endeavours in this field.

[Dehenna Davison]

I completely echo the shadow Minister’s sentiments.

As hon. Members will know, the Government considered closely the Environmental Audit Committee’s report, “Building to net zero: costing carbon in construction”, and its recommendations. In our response, we were pleased to set out details of our work in this area, including our plan to consult next year on our approach to measuring and reducing embodied carbon. As we made clear in that response, reducing embodied carbon in construction is critical to meeting our net zero target. I think that all of us across the House can agree on that, but we disagree with my hon. Friend the Member for Broadland about the exact mechanisms and timings for achieving that. That is why, I am sorry to say, the Government cannot support the Bill today. It is not because we disagree with the Bill’s aims, but because ambitious work is already well under way in this area. Passing the Bill ahead of that work would risk adverse effects on our housing supply, on small and medium-sized enterprises and, given the reach of our construction industry and supply chains, on other sectors of the economy.

That said, although we are not supporting this Bill, I am incredibly grateful for my hon. Friend’s enthusiasm, and for keeping this topic at the forefront of our minds. The Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North East Derbyshire (Lee Rowley), who is responsible for local government and building safety, and officials in my Department are keen to work collaboratively on this vital agenda with my hon. Friend. I know that the Minister is happy to meet my hon. Friend the Member for Broadland to talk through the detail of his work.

On embodied carbon and the work being undertaken, my hon. Friend has already outlined the process for calculating whole-life carbon, so I will not go into that in too much detail, but we do know that the focus until now has been on reductions in operational carbon. As that process happens and we reduce the amount of operational carbon in construction, embodied carbon emissions will start accounting for more of a building’s whole-life carbon emissions. He is therefore absolutely right that we must act with the construction industry to address the issue now. Equally, we cannot be naive about the scale of the challenge ahead of us.

Reducing embodied carbon is exceptionally difficult across the built environment—not just in buildings—which is why the Government have been planning ahead to tackle those emissions head-on. The industrial decarbonisation strategy and the transport decarbonisation plan, for example, set out how large sectors of the economy will decarbonise, and the England trees action plan looks to increase the production of timber, which can be used to replace higher-carbon materials in construction when safe to do so. As those policies take effect and industries that supply construction decarbonise, we expect that in turn the embodied carbon emissions of buildings will fall.

We recognise that those efforts alone will not be enough. As pointed out by both the Climate Change Committee and the Environmental Audit Committee, our choice of materials and how we design and construct buildings will also need to change dramatically.

Greater Manchester Spatial Framework and the Green Belt

Jonathan Reynolds Excerpts

Wednesday 18th March 2020 Westminster Hall

[James Daly]

My hon. Friend speaks very powerfully on this issue and I agree with every word that he said.

I also bring to the Minister’s attention the fact that 2016 Office for National Statistics population forecast figures revised down Bury’s population by 43%, and recently released 2018 provisional figures show a further fall of 13%. On the basis of recent population projections, no homes would have to be built on the green belt in my constituency. Will the Minister confirm whether the Government will review the use of projections published six years ago?

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing the debate. The issue of “brownfield first” quite rightly comes up all the time and, as an Opposition MP, I point out that, in fairness, that is the Government’s policy. Certainly, in my constituency and in the Borough of Tameside, almost every bit of brownfield land has been found for use, even if its viability is borderline. Is the hon. Gentleman saying that the Government should find more money to make unviable sites viable, or is he saying that we should build fewer homes in Bury, Tameside, Greater Manchester and so on? Those are two different ways to solve the problem, and I want to understand his approach.

[James Daly]

There are three questions in the hon. Gentleman’s intervention. I have already commented on the funding that the Government are making available to assist local authorities in remediating brownfield sites—that will be very important. The question comes down to housing need. It is the easiest thing in the world simply to say, “We need to build more houses,” but we need a robust formula that allows each local authority to build the number of houses that they need and where they need them over the course of a local plan. I am making the point that using the most up-to-date population projections reduces the need to build on the green belt, and in my borough—I am sorry, I cannot comment in respect of the borough of the hon. Member for Stalybridge and Hyde (Jonathan Reynolds)—that would allow properties to be built on brownfield sites.

The question, though, is the “brownfield first” policy. “Brownfield first”, again, is a statement, but there is nothing within the GMSF to force councils to build on the brownfield first. If the GMSF was in place, the green belt would undoubtedly be concreted over and no developer would be interested in building truly affordable homes on brownfield sites.

Coming back to the point, we have to build homes for people who need them, at a price that is affordable, in the right place. In the GMSF in respect of Bury, there was virtually no comment regarding building affordable flats in the town centres within my borough. That is one of many reasons why I believe the document is not fit for purpose.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I had not intended to make a speech—but if there is an opportunity, why pass it up? It is good to have this debate with new colleagues who have come in as a result of the election; obviously, that change of composition is not entirely favourable to the Opposition side of the Chamber, but it is good to be having this discussion again.

It makes sense to do this housing plan together. Between the two speeches we have just heard, I could not help but notice that one of the attractions of a GMSF-style plan for boroughs such as Tameside, Oldham, Bolton and Stockport is that it transfers that housing allocation into, in the main, Manchester and Salford. If we are not to have the plan for Bury and we are not to have the plan for Salford, that presumably means fewer houses for Salford, but more for Bury. That has to be acknowledged and admitted.

[Mary Robinson (Cheadle) (Con)]

Of course, we are discussing the Greater Manchester spatial framework in the round, which encompasses the 10 local authorities that would be working with the Mayor of Greater Manchester to put this in place. One problem has been that where there are some pluses—for instance around common ground, which would allow movements between the various areas—that is very much top-down driven, so we are waiting for the Labour Mayor of Greater Manchester to tell us what we should have. I have been working with local residents, my constituents and neighbourhood groups, including Woodford Neighbourhood Forum and Save Heald Green Green Belt, and they want to know what is going to be right for their area. That depends on having the right figures, so we really do need guidance on those figures, and to bear in mind that we want a spatial framework or local plans that fit the needs of our local populations.

[Jonathan Reynolds]

I am grateful for the hon. Lady’s statement, and I agree with her. There have been huge problems with process, and I cannot easily see how we correct those, because the honest truth about the way we do housing allocation in this country is that we start with a piece of agricultural land. The minute we make that a piece of housing land, we increase its value tenfold, and that value does not stay in the public sector: it goes to the private sector, despite the fact that there has been no productive capacity increase. It is simply an administrative change that makes people very wealthy, so how and when we release that information to prevent land speculation is clearly a massive issue.

The hon. Lady asked about the figures, which are really what the debate has been about for the past few years. To be honest, sometimes we have had clarification from Ministers, but when the written version has come through, it has been something completely different from what Conservative Back Benchers were told at the time. However, my understanding is this: the Government set a housing target figure for each borough. The hon. Member for Bolton West (Chris Green) said that local areas should do that, which would be a revolutionary change in how the Government approach housing allocation. I am not sure that is where this Government are going, for the simple reason that if that system were to exist, I cannot imagine that the Government’s housing targets would get anywhere near fulfilled. Many parts of the country, particularly in the south-east, would just refuse to build any houses at all, so I cannot imagine a situation in which there is not national Government guidance. If that is going to happen, we would like to know that, because it would be revelatory.

Once that housing target figure is assessed, it is possible to do something like what we are trying to do together in Greater Manchester: work out a different figure for each borough, based on re-organising and re-allocating some of that housing need around Greater Manchester. Once there is a figure for a borough, as we have for Tameside, we look at the housing land supply and try to get everything we can into that, so as to avoid touching the green belt. That is the Government’s policy: we cannot touch the green belt until we have as much of the brownfield land supply in as possible.

There are sites in my constituency that, to be honest, would require tens of millions of pounds to remediate, but we got them in there because building on them is the right thing to do. We presume that central Government will come to help remediate those sites and make them viable, but I am not sure that commitment will be infinite. I know the phrase “whatever it takes” is in vogue right now, but there are surely limits to what the Ministry of Housing, Communities and Local Government will give Greater Manchester to remediate all those sites. That is the point at which we get to the green belt.

[Mary Robinson]

The hon. Gentleman is being very generous in giving way. One of our issues in Greater Manchester is that these areas have been allocated. I have allocations of green-belt housing of over 2,000 houses, so this is having a huge impact on my area, and people are fearful that the green belt is going to be built on. I have been pushing for “brownfield sites first”, and for a register in Stockport that should be entirely about building on those brownfield sites, but unfortunately, while those allocations are still in the Mayor’s plan, people feel we are going to have this housing there.

[Jonathan Reynolds]

I completely agree, but it goes back to the difficulties of the process. There are green-belt sites marked for allocation in my constituency that I oppose; Apethorn Lane, effectively, is the land between Stockport and Tameside. I have nothing against people from Stockport, but I want to maintain that green-belt barrier between us. We are close enough as it is.

[Robert Largan (High Peak) (Con)]

I am grateful to my constituency neighbour for giving way. Members might look a little surprised, given that I do not represent a Greater Manchester constituency. However, my constituency is right on the border and homes built in places such as Tameside or Stockport have a big impact on commuters in my seat, particularly on the A6 or through Mottram to try to get on the M67.

A big complaint has always been that we put in houses without the infrastructure to cope with them. To praise the GMSF—slightly unusually—one good thing is the proposal for a Gamesley railway station that is included in it. Will my constituency neighbour have words with his colleague, Andy Burnham, to see whether he can throw his full support behind that station, and will the Minister have words with the rail Minister about getting a train station built in Gamesley?

[Jonathan Reynolds]

It is great to see the hon. Member for High Peak (Robert Largan) here. To be frank, in Tameside we might say it is houses built in Derbyshire that have put infrastructure burdens on to us, but the fact that it is relevant to his constituency and his towns shows why this debate is so important.

We all agree on the crucial point about infrastructure and about how housing, if it is not organised through a plan like the GMSF, will be developer-led and of a size and scale that we would not necessarily want to see in our constituencies. I often tease Conservative friends about how they believe the market should determine lots of things, but apparently not, in this case, housing allocation.

Development is a huge problem. The speculative aspect—often seen as something that does not meet local needs and is not connected to local transport—is the biggest problem. I could see it coming from the minute I was first elected to Tameside Council. I was a Longdendale councillor on the border with High Peak. When I looked at housing policy, it was clear that we were running out of brownfield land sites. In Hyde we had built on all kinds of former employment sites, which, again, was the right thing to do, but that cannot go on for ever.

When we looked at what would inevitably happen in Tameside, we got to thinking about a garden village, where we would insist that, if were to allow housing to be built, it would come with infrastructure investment up front in schools and in transport—all the things that reflect the only time this country has ever done housing policy well, which is when the new towns were built after the war and then a few decades later. They were built in exchange for the establishment of the green belt. That was the deal. We built houses where the state and society wanted them to be. We demanded the infrastructure that goes with them and we would protect the rest from speculative development, particularly in an age when councils were incentivised to build houses because they got rates comparatively greater than they do now for the more houses that they allowed to be built.

Control is the key issue. I cannot fathom rejecting the GMSF altogether because it would mean more houses being built in places such as Bury. It would mean less control and our not working together. I cannot see the logic in that. Whether houses are built in High Peak or Stockport or anywhere else in Greater Manchester, they will have an impact on my constituency, so we have to start by saying, “Let us have a plan and work on it together. If it is not acceptable in terms of infrastructure or sites, we will work on it.”

If we do nothing, certainly in Tameside, we cannot guarantee the five-year land supply, which, again, goes back to the national planning policy framework that determines much of how planning is developed. If we do not do that, developers will pick the sites and build the things that we do not want. We will get no infrastructure and no contribution to any of the things that we all want to see. If we go forward with this, I can understand why there has to be the permission and consent of every part of Greater Manchester, but the way it is sometimes talked about does not reflect the reality that there are decisions to be made about housing.

If we want to do all the things that all of us say we want to, it comes down to working on a plan together. Even if the Government radically changed their policy on the numbers, I think they would still want the kind of approach that we are all talking about. I understand why this has been such a powerful electoral issue for everyone, but we have to reflect the reality and not promise our constituents things that we cannot deliver. We will need new houses, we will need to work together, and we will need infrastructure. That should be the basis for going forward.

--- Later in debate ---

[Christopher Pincher]

As I said, we believe it to be the better method. The hon. Gentleman has already pointed out that the more recent analysis has thrown up some anomalies, so we believe the 2014 figure to be the better one, but the Secretary of State has said that he will review the NPPF, so I hope that the hon. Gentleman will watch this space.

I would also like to highlight a number of Government priorities, which are reflected in our national policy, such as our protections of the green belt.

[Jonathan Reynolds]

Before the Minister moves on to Government policy and while he is still talking about the household projections, much of the argument in Greater Manchester has been based around what set of figures give us what set of outcomes. The ONS website clearly states that its household projections should not be the basis for allocating housing numbers; they are an analysis tool and, for example, do not take into account any policy objectives such as more affordable housing or higher levels of economic growth. Will he confirm that point, from a ministerial point of view? If we get to the position where we in Greater Manchester do not want a more prosperous Greater Manchester—more affordable housing—if we have a set of figures that gives us no room to improve things for our constituents, that is not satisfactory either. We have to get a clear view of that from the Minister.

[Christopher Pincher]

We want to ensure that we build more appropriate homes. We know that we need those houses and the right sort of houses, with the right quality. Local need needs to be determined locally. The starting point is the minimum, not the maximum figure. The Secretary of State will talk about potential changes to the NPPF in due course, so I encourage the hon. Gentleman to make his further points in his own unique and eloquent way when the time comes.

In a moment, I will speak about our priorities on the green belt—support for prioritising brownfield development and our desire to see plans in place—but my hon. Friend the Member for Bury North also mentioned flooding as an issue of concern. As he knows, in the Budget speech last week, the Chancellor announced £5.2 billion of investment in additional flood defences. That will seek to ensure that communities around the country know that future development will be safe from floods. We will assess whether existing protections in the NPPF are enough, and we will consider options for further reform in our wider ambitions for the planning system. I hope that gives my hon. Friend and other colleagues some reassurance.

My hon. Friend also mentioned housing type as an issue, with large numbers of four or five-bedroomed homes. I draw his attention and that of the Mayor and the local authorities in Greater Manchester to the NPPF, which is very clear that local authorities need to identify homes of the right size, type and tenure, as necessary for local people. That needs to be reflected in their planning priorities, which I am sure is a point that my hon. Friend the Member for Bury North will make to the Mayor and his local authority.

Leasehold and Commonhold Reform

Jonathan Reynolds Excerpts

Wednesday 2nd October 2019 Westminster Hall

[Ms McVey]

Everybody here can agree that is wrong, but it is about the steps that we will have to take to get the situation under control. We are looking at help for existing leaseholders, many of whom face, as the hon. Gentleman says, onerous fees and charges, including the doubling of ground rent in some cases. The Housing, Communities and Local Government Committee and many existing leaseholders want the Government to legislate to amend those. We are deeply concerned about the difficulties that people are having with those charges, but we clearly have to look at how to unpick those contracts, which are set in law.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I am grateful to the Minister for her generosity in giving way and to the hon. Member for Worthing West (Sir Peter Bottomley) for securing the debate.

One thing I would beg the Minister for is a simple right-to-buy formula, perhaps based on the number of years remaining—a multiple of the ground rent, in some way—that could be applied nationwide. I know there will be a lot of complexities in that, but is it something she is looking at in those plans? It would be great to hear if she were.

[Ms McVey]

We are indeed looking at a much simpler model that people can understand and make sense of, and at how to make it easier, smoother and quicker to do.

We have also made sure that there is a voluntary way for the sector to come together to solve the problems of its own creation. The industry pledge is an important first step. It has been signed by more than 60 leading developers, freeholders and managing agents. We will work with them and keep a vigilant eye on how it is working. Through that pledge, freeholders have committed to identifying any lease that doubles more frequently than every 20 years and contacting the relevant leaseholders to offer to amend their lease where necessary. I acknowledge those developers that have signed the pledge not to insert such clauses into future leases and welcome that. The pledge is an important first step, but we need to keep our eye on it. We will continue to monitor how effective it is in supporting leaseholders and we will take further action where necessary.

Leasehold Reform

Jonathan Reynolds Excerpts

Thursday 11th July 2019 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank my hon. Friend the Member for Sheffield South East (Mr Betts) for giving us another chance to debate this issue. I have spoken before on this issue many times, and I intend to keep doing so until we have some action, because I cannot stress enough just how big a problem it is in my area.

The hon. Member for Hendon (Dr Offord) rightly pointed out the impact on London because of the high proportion of flats sold here, but the figures helpfully provided by the Library show that in 2018, 16 of the top 20 constituencies for leasehold house sales were in the north-west, and staggeringly, 14 of those were in Greater Manchester. I know how bad this is in my constituency, and my constituency is not even on that list—what must that mean for those other places? The argument that there is some sort of price differential between freehold and leasehold, when the market is so concentrated in certain parts of the country, has nothing going for it whatsoever.

In a previous debate on this issue in Westminster Hall, I said:

“I am genuinely shocked by the stories I hear in my constituency and that we have heard in this debate. I am not a man prone to hyperbole, but I would go so far as to say that the only fair description of some of the practices we have heard about in this debate is legalised extortion. There is simply no relationship between the services being rendered and the costs charged for them.”—[Official Report, 21 December 2017; Vol. 633, c. 471WH.]

I stand by every word of that statement.

The problem in my constituency is with ground rents and service charges, and we need serious action on both. For example, residents of a block of flats in the Hattersley area of my constituency were quoted £32,000 just to paint the hallways—not to paint the flats, but just the communal hallways. Frankly, they could be painted with gold, and it should not come to £32,000. Another constituent was charged £180 just to ask what it would cost to buy the freehold—just for the inquiry and the quote that came back. Frequently, worse than that, people simply do not get a response or the information when they make an inquiry about buying the freehold. Often service charge bills are received with no information and no breakdown, sometimes even charging for works that predate a managing agent taking over. Those are just a fraction of the stories I could tell. I could use more than my five-minute allocation simply reading out examples.

Like colleagues who are present, I have made many of these points before. These are always good debates. There is a great deal of expertise, good will and consensus, but frankly, I have seen everyone in this Chamber today in previous debates. This is a group of people who really know the problems, but we need some action, because we are sick of making these points.

[Sir Peter Bottomley]

Does the hon. Gentleman agree that the best thing to do in England or England and Wales, with, I hope, the Law Commission’s support, is to pass a simple statutory instrument that provides for a table of information, so that instead of people having to ask and argue with surveyors, they can look at the table and see the number of years, the ground rent and so on?

[Jonathan Reynolds]

I have huge respect for the work that the hon. Gentleman has done on this issue, and I could not agree more.

There are five things that I would like to see happen. First, the sale of leasehold houses should be ended—that is obvious, and I think there is no disagreement about it. Ground rents should be capped at a percentage of the property value or an overall financial sum. The sum of £250 a year has been raised, and I would be more than happy with that. As the hon. Gentleman said, there should be a simple right-to-buy formula that is not bureaucratic, with additional administration or legal costs, but that can be used in every case to let people purchase their freehold. There should definitely be a crackdown on unfair terms and opaque service charges. Ultimately, we need to make it as simple as possible to let residents take over if they are in that flat situation. Some people will not want that, and there are some reputable people in the marketplace providing services in that situation, but the power should be with the residents to make those decisions.

I will conclude, because I know how many Members want to speak. I cannot stress enough how much people want to know when they will have a simple and straightforward way out of this. I want to make a point that was touched on earlier about the impact on investors. It is true to say that there is another side to this. We have heard about the bad deal that our constituents get, and those on the investor side who have bought the leasehold and freehold rights are clearly getting a very good deal out of it. I want to make two points on that. Colleagues will be aware that when I am not speaking from the Back Benches, I speak from the Dispatch Box for the Labour party’s shadow Treasury team as the shadow City Minister.

First, institutional investors—particularly those based in this country—have some of the best research and analytical functions of any businesses going. They assess all kinds of risk, including political risk, and I cannot understand how anyone would invest substantially in this area without knowing the political risk that has been raised frequently about the will of Parliament and our desire to see change in this area. Secondly, there are many precedents of this House legislating to limit unfair contract terms and conditions because the power balance and the relationship between both parties is not right. I simply cannot emphasise enough how much that applies in this case.

This is symptomatic of how our housing market does not work anywhere near how it should. I do not think that our land allocation system works. I do not think that the design of new homes works particularly well. I do not think that the power of developers is right in our system. I do not think that the affordability of homes is anywhere near correct, and I do not think that this leasehold system is fit for purpose at all. We can influence some of those things at a local level, and in my constituency we are trying to do that, but some things require parliamentary legislative action. This is one of them, as I think we all agree, so let us get on and do it.