Private Rented Sector Housing

Justin Madders Excerpts

Tuesday 15th March 2022 Westminster Hall

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

It is a pleasure to see you in the chair, Sir Gary. I start by congratulating my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) on securing the debate and on his excellent introduction.

As I have said before, if the issues that we debate in this place were guided by the issues that constituents come to see us about, housing would be very near the top of the list and debated far more often than it is. Whether it is tenants facing eviction, or tenants coming back to see me in my constituency surgery for a fourth or fifth time because the damp still has not been fixed, it is clear that we do not have enough housing in the right place, of the right quality or of the right tenure. That is in part because the private rented sector has changed beyond all recognition in recent years and legislation has not kept pace with those changes. The last piece of comprehensive legislation to affect the private rented sector was over 30 years ago, with the Housing Act 1988. Since then the sector has doubled in size, and that exceptional market growth, made possible by financial incentives for landlords, together with the lack of regulation, has been characterised by insecurity, poor conditions and sky-high prices.

The biggest irony, certainly in my constituency, is that many of these private sector properties were once in public ownership, before they were sold off at a discount rate, allowing many people to own their home for the first time, which is a good thing; but that generation has moved on. Those council houses were not replaced and the first proud home owners have often been usurped by private sector landlords. So we now have the ludicrous situation where in two properties, standing side by side, one tenant will have a much lower rent, much greater security and can usually be confident that any issues they have with the property will be dealt with by the regulated, accountable social landlord, but the other has none of those things. If anything demonstrates the short-term thinking that has guided housing policy for decades, that is it.

In a debate only last week, I described how reliance on the private sector had increased in my constituency due to the chronic lack of affordable and council housing, and how it was now rare to see properties offered at a rental value equivalent to the local housing allowance. A recent search of locally available properties revealed only two within the rental liability that would be covered by the LHA, with others ranging from £30 to over £200 above the required rate.

That is not a sustainable situation. People simply cannot afford to put a roof over their head in that situation, let alone pay for the increasing bills, energy, food and council tax that we hear so much about. But today’s debate, as we know, focuses specifically on poor conditions in the private rented sector and rightly so, because private renters live in the poorest-quality homes in this country, with more than one in five properties in the private sector classed as non-decent. That may well be because, in part at least, it accounts for some of the oldest housing stock, with a third of all private rented sector properties built before 1919, so it is not a surprise, perhaps, that on average private rented sector properties have worse energy standards, meaning that the tenants have to pay significantly higher heating bills due to poor insulation, inefficient heating systems or a lack of double glazing. This is important because, as the cost of living crisis starts to bite and energy prices continue to go up, it is private renters, who are already paying higher housing costs, who will be worst affected. Of course, many private rents are higher than mortgage payments and certainly higher than social housing costs. How can we justify that situation?

As we have heard, many constituents have come to their Members of Parliament with issues with their properties. I will give one example: a property that was not watertight, so that the back door leaked every time it rained; pest control issues; electrical issues, with some of the plug sockets not fitted to the wall correctly; and issues with windows sealed shut and others that could not be closed or locked. I am sure we can all agree that that is just a snapshot of the conditions that people have to live with.

Too often, people are scared of raising concerns because of the risk of retaliation by the landlord. As we have heard, tenants who received a section 21 eviction notice were twice as likely to have complained directly to their landlord, five times more likely to have gone to their local authority and eight times more likely to have complained to a redress scheme, prior to receiving their eviction notice, resulting in a staggering 46% chance of their being served with a section 21 notice within six months of the complaint.

I met a couple this weekend who were in that position. They told me that they had been raising disrepair issues with their landlord for five years. When he finally acted, what did he do? He began work on repairs but decided to evict them at the same time. They are now living in temporary accommodation. No wonder people are reluctant to challenge landlords.

For too long, private rental properties have not had the priority they deserve from Government. A need for improvement of renters’ position was acknowledged in 2019, and again in the Queen’s Speech of 2021. Both committed to bringing forward reforms to drive improvements and standards in the private rented sector but, as we have heard, we are still waiting for those improvements. We were expecting a White Paper last autumn. In reply to my written question on the matter last month, the Minister said that would now be spring. We are now in spring, and I am hoping to hear from the Minister when we might see that White Paper and the Government finally taking the action that many Members want to see.

Housing is a basic human right. Decent and affordable housing has the power to improve people’s lives fundamentally and the life chances of children in my constituency and throughout the country. Every day that the Government delay reform is another day that people are living in cold, unsafe, insecure and unaffordable homes. For millions of people, that is an unacceptable situation that has to change, because they deserve better.

Levelling Up

Justin Madders Excerpts

Wednesday 2nd February 2022 Commons Chamber

[Michael Gove]

I absolutely appreciate that and Martin Tett, the leader of Buckinghamshire Council, is a first-rate local authority leader. I cannot give a timescale at the moment. We want to make sure that the first nine county deals are successful, but we want to move on rapidly thereafter to expand the scope of county deals.

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

My constituency is repeatedly overlooked for funding, whether that is for the future high streets fund, the towns fund or the levelling-up fund, but at the same time, bids from other areas that score lower on the Government’s criteria are successful. The Secretary of State will appreciate that there is little trust that the White Paper will deliver anything for my community, so what assurances can he give me that any future bids for funding will be judged fairly and that my constituency will finally get the cash that it deserves?

[Michael Gove]

There are clear and objective criteria for funding, but it is also the case that some local authorities may need help with building capacity to make sure that their bids are as effective as possible. I extend the resources of the Department to the hon. Gentleman and his local authority to make sure that they put in the best bids possible.

Leasehold Reform (Ground Rent) Bill [Lords]

Justin Madders Excerpts

Report stage & 3rd reading
Monday 24th January 2022 Commons Chamber

[Sir Desmond Swayne]

I draw your attention, Madam Deputy Speaker, and the attention of the House to my entry in the Register of Members’ Financial Interests.

I am deeply embarrassed about the way that the retirement living industry has been treated over the past few years in the progress to this Bill. In recognition of the significantly greater capital costs of building developments that have communal areas, which have traditionally been funded through an income stream of ground rent, the industry was granted an exemption, or an assurance that it would be exempt from the provisions of the Bill, back in June 2019. That exemption was then withdrawn in January 2021. I understand that the decision to withdraw the exemption was made almost a year earlier, in February 2020, and that discussions about revoking the assurance of exemption had actually begun in August 2019. Throughout all that period, the industry continued to be reassured that the exemption was good and would hold, and it was not.

Throughout that period, the industry continued to raise capital on the basis of the model with which they had been told they could continue. The amendment goes one tiny little bit towards trying to remedy the damage that has been done. It accepts that the practice will have to end, but it asks for one tiny concession, namely that, when the provisions of the Bill bite in March 2023, properties that are part-sold can continue to sell the residual remaining flats or properties on the basis of a continued ground rent. Without that, what we will have is some properties within a development being worth significantly more in terms of the purchase price than others, and some properties paying a ground rent and others not. It will be hugely complicated and divisive. Therefore, the amendment merely asks for that to be addressed. At the most, if the provision were to pass, we anticipate that this would account for about 2,000 properties. I ask the Minister to reflect on this, and, even at this late hour, accept the amendment.

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

I rise to speak in support of new clause 1, tabled by my hon. Friend the Member for Weaver Vale (Mike Amesbury).

To respond to the previous speaker, the right hon. Member for New Forest West (Sir Desmond Swayne), on the issue of ground rents, it is clear that service charges are for communal areas. Indeed, McCarthy Stone’s website says very clearly—

[Sir Desmond Swayne]

rose—

[Justin Madders]

Go on then.

[Sir Desmond Swayne]

It is unlawful to charge ground rent for the maintenance of a communal area. They are clean different things.

[Justin Madders]

Indeed: ground rents are payments for which nothing is received in return, which is why they should be abolished. For the record, I am a co-chair of the all-party parliamentary group on leasehold and commonhold reform and have campaigned for the abolition of ground rents for a number of years, having seen the impact on individuals of their use and abuse.

I thank my hon. Friend the Member for Weaver Vale for tabling the new clause and for being a consistently strong advocate for leaseholders during his time as an Opposition spokesperson. He apologised at the start of his speech; I would ask him to resign based on that apology had he not already been moved to another position. [Laughter.] He has done a sterling job in this brief, and the new clause is typical of the way he has used every opportunity available to him to push forward the cause for leaseholders.

As we know, new clause 1 would not abolish ground rents altogether but, if it is agreed to, will set a timescale by which concrete proposals on their abolition must be put forward. That is important because for too long my constituents and thousands of others have suffered because of the leasehold scandal.

I know that the overturning of a system that has been in place for 1,000 years is not necessarily straightforward, and arguments will always be made as to why things cannot happen, but, as has been said so many times—I have already said it once in this debate myself, but it is worth saying it again and again because it is such a powerful point that can never be made enough—ground rent is a payment made for which absolutely nothing is received in return. Why, then, can we not get on and reduce that payment to effectively nothing so that the legal position reflects the reality of the situation? That would send out an important signal—not just a departmental press release but a signal that will make a tangible difference to people’s lives: that the days of leasehold are numbered and that this place does not accept that ground rent is a legitimate payment.

We see ground rent for what it is: a feudal device used to suck money away from people who get no benefit and no advantage from the payment but risk losing their home if they do not make it. Such arrangements have no place in the 21st century or, indeed, any century.

Some say that we should not ban ground rents on existing leases because that would introduce an element of retrospective impact on long-standing investments, including pension funds, but that is not an argument I have any sympathy with. The toxicity of leasehold has now been known for at least five years, which is plenty long enough for any investor to have taken a closer look at what they were involved in, looked for alternative sources of income and realised that nobody with an ounce of humanity should be using people’s homes as an investment vehicle—and especially not ones that included leases that were so onerous they made the homes unsellable.

Yes, there is a concern that we should not readily change the law so that it works retrospectively and changes the legal nature of a contract after it has already been entered into, but let us not forget that this place voted to introduce the loan charge, which retrospectively changed the law, arguably to the considerable detriment of many who say they were misled about what they signed up to at the time. There are parallels, because let us not forget that the victims of leasehold did not sign up to leases in the full knowledge of what they entailed. The developers, lenders and lawyers all have some degree of culpability, but the innocent victims—the leaseholders—do not.

The Competition and Markets Authority has been clear on several occasions that leaseholders have been wronged, and I welcome its decisions, but of course those decisions do not cover everyone, which is why we in this place need to step in. We often talk in the House about the plight of the Women Against State Pension Inequality—did the WASPI women not sign up for something very different from what they ended up with?

I know there are legal opinions about freeholders’ human rights, but what about my constituents’ human rights? In fact, I would love the owner of a set of freeholds to get on the witness stand and try to convince a judge that they are the wronged party in all this. I would love to ask them whether they think people should have the right to live in their own homes without them being used as an income stream for someone else.

The irony of what we are debating is that many of those who have done the most to bring the leasehold scandal to the public’s attention—I think in particular of the National Leasehold Campaign—stand to benefit the least from this Bill because there is nothing in it to help existing leaseholders. That is why new clause 1 is so important. Four years ago, when he was Communities Secretary, the right hon. Member for Bromsgrove (Sajid Javid) promised an outright ban on leasehold houses, and we all hoped that by now a law would be in place for everyone so that these wrongs could be righted. Those people deserve an end to this. They deserve hope that something will finally be done to make their lives a little better. If the Government cannot support the new clause, then, at the very least, I would like to hear from the Dispatch Box a commitment in the form of a final date by which the scourge of leasehold will finally be consigned to the history books. The wronged leaseholders deserve that, and it is about time it happened.

[Andy Carter (Warrington South) (Con)]

It is a pleasure to follow the hon. Member for Ellesmere Port and Neston (Justin Madders). I share his concerns and those of the hon. Member for Weaver Vale (Mike Amesbury), because a significant number of new homes built in the north-west of England, particularly in my constituency and in theirs too, have been on leasehold contracts. Although I recognise the aim of the new clause, I am not completely sure that it will resolve all the issues for my constituents, and I want to talk through some of the issues that they have told me about over the past couple of months.

I welcome many of the proposals set out in the Bill and recognise the important role that they will have in protecting leaseholders moving forward. I am, though, concerned that, as the hon. Member for Ellesmere Port and Neston said, they will offer little comfort for the thousands of homeowners who have become trapped in historical leases, which I am afraid many were even unaware they were purchasing when they signed for their new home. That includes an number of constituents in Warrington South who have spent the past 12 years trying to resolve a situation that they were inadvertently drawn into when they were mis-sold their properties on the Steinbeck Grange estate in Chapelford village by David Wilson Homes.

My constituents believed they were purchasing their properties freehold, and many were not disabused of this position until several months after they moved in, when they received an invoice. One might rightly ask why their lawyers did not make them aware when they were signing the contract. It has become clear that most of them used a legal firm recommended by the developer—by the house builder’s sales team—and those lawyers failed to point out the tenure under which the properties were being sold, and failed to make Steinbeck residents aware of the important clause in their contract documents. By using their first names in dealings with clients, they made sure they could not be traced by dissatisfied customers once they became aware of the situation. The law firm went into administration within days of the estate being completed.

I note with interest that the Law Society’s response to the Bill states that it is not the solicitor’s place to dissuade a client from entering into a particular transaction; their role is to ensure that the transaction is legally sound and efficiently completed. I agree with that, but I believe that every lawyer has a responsibility to their clients, and in this case the client was not the developer but the homeowner, or prospective homeowner. They should have made clear all the elements of the contract and their clients should have been advised accordingly. I am aware of one Warrington solicitor who, when looking at the contract that was brought to him, advised the purchaser not to proceed because of the leasehold situation, and has come forward to give me all those details.

As hon. Members have mentioned, the Competition and Markets Authority is currently investigating several issues surrounding the potential mis-selling of leasehold properties. I thank the CMA for its endeavours in addressing this poor practice. It has been to Warrington and engaged with my constituents, and I am incredibly grateful for the work that it is doing there. These investigations have looked at four developers—Persimmon, Countrywide, Taylor Wimpey and Barratt Homes, which is the parent company of David Wilson Homes. To date, the CMA has reached agreements with the first three. I therefore encourage the management of Barratts to recognise the harm that has been caused by its past sales polices and agree a way forward with the CMA as soon as possible to put things right.

Many hon. and right hon. Members have raised these issues in this House, but progress is also down to the tenacity of the men and women trapped in unfair leasehold contracts across the country who have continued to fight for their rights. I particularly praise my constituent Mr Mike Carroll, who has refused to take no for an answer and is continuing to work tirelessly with me and his neighbours to achieve the right and just outcome for them.

Ministers also need to look again at how consumer bodies around the country, particularly trading standards, should be working in the interests of homeowners, to help them resolve some of these issues. In the case of homeowners in Warrington, trading standards appear not to have been interested and have done little to involve themselves in any investigations. That is not the case in other parts of the country, where resolutions have been reached. I note in particular that Cardiff trading standards got involved and looked very closely at some of these practices.

--- Later in debate ---

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

This is a bit like the Rolling Stones tour in that I said goodbye to the hon. Member for Weaver Vale (Mike Amesbury) and he has come back for an encore, for another concert. However, like the Rolling Stones, it is good to see him back again. I thank all right hon. and hon. Members for their contribution to this debate and for the constructive way in which they have engaged with the Bill throughout its passage. I particularly thank the Opposition Front Bench team for their helpful contributions.

I will address each amendment, starting with amendment 1 in the name of the hon. Gentleman. The difficulties faced by existing leaseholders have rightly been raised by Members across the House, both in Committee and in correspondence. I understand Members’ points about the fact that the Bill relates only to new leases. I point out, however, as I did in Committee, that the Bill is just the first of two-part legislation to reform the leasehold system and that further legislation will follow in this Parliament, so I encourage others, including my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), to engage with me in discussions on the second part of the legislation as it begins to form.

The Government understand the urgency of the need for changes for leaseholders paying out unacceptable charges day to day. However, I do not think that the arbitrary deadline in new clause 1 is useful in this context, and similar is true of the alternative deadlines suggested by the hon. Member for Sheffield South East (Mr Betts). Although I appreciate that this is not completely relevant, Madam Deputy Speaker, on what he said about new burdens, the point of legislation such as this is to encourage people to behave appropriately so that they treat leaseholders fairly and there are no cases. However, as the Bill is implemented and we see how it develops, I look forward to discussing with him and the Levelling Up, Housing and Communities Committee the impact that that will have on councils.

[Justin Madders]

The new clause is obviously not going to find favour with the Minister tonight, but could he at least give us the date—maybe even just the year—by which leasehold will finally be in the history books?

--- Later in debate ---

[Justin Madders]

It is a pleasure, as always, to follow the Father of the House. As we have already mentioned this evening, we are now four years on from the promises that were made about reforming leasehold, and the Bill, as we have all accepted, is a step in the right direction. However, as we have all acknowledged as well, it is little comfort to those who are still trapped in homes that they cannot sell because of the onerous leases with which they have been left, and we must do something about that. I tried to get the Minister to give us a year when that might happen, but we could not get anything out of him. None the less, I can assure him and the House that we will keep pushing on the issue, because justice demands that it is resolved.

It is also worth commenting on the fact that one in three houses sold in the north-west in the past 10 years is leasehold. There has been much talk about levelling up. Who can doubt that a person’s home is the biggest investment they will make? So it is simply unacceptable for so many homes in my part of the world to have been built off the back of an exploitative and unjust business model. Surely, if levelling up is to mean anything, it should at the very least mean that people’s homes are owned on the same basis wherever they live in the country.

The ending of ground rents for new homes is a positive, but it will create a strange situation. There will be houses within a stone’s throw of one another that have a different form of ownership. That will just add more weight to the sense of injustice that existing leaseholders feel, which is why I am so keen for us to push on and deal with that issue.

As many Members have said, a lot more needs to be done. A whole range of issues have been mentioned tonight. We have, for example, barely touched on park homes. There are so many scandalous things going on there, and we really should be paying them more attention. For homeowners, we see the following: management fees, which are a rip-off; non-transparent service charges; the cost of enfranchisement; insurance scams; obscure penalty clauses; and other costs that appear everywhere we turn in a lease. They are all baked into the business models of those avaricious companies which, let us not forget, are still out there building houses.

I am a little concerned that the companies on which we rely to build the houses that we need are responsible for many of the injustices that we have discussed tonight. We need to keep a close eye on their practices in future. I still think that we need an inquiry into the whole industry. We have previously discussed some of the things that we touched on tonight, and the question of how close lawyers were to developers and whether they were acting in the best interests of their clients needs further examination. We need to look at the lenders and surveyors and what the developers were saying to people, often first-time buyers, who were misled about what they were buying. We need to make sure that the system is examined thoroughly so that there is no repeat of the scandal that we have seen over the past five years.

People who buy a home should have a right not to expect it to become an ongoing income stream for a third party. If we have that as our guiding principle we will not go far wrong, so let us crack on with legislating so that that can become a reality for everyone. As many Members have done, I want to acknowledge the fantastic work of the many campaigners who have been active in bringing this issue to the fore including, as we have heard, the Leasehold Knowledge Partnership, Martin Boyd, Sebastian O’Kelly, the late Louie Burns, the National Leasehold Campaign, Catherine Williams, Katie Kendrick, Jo Darbyshire and many others, with the Father of the House being one of the biggest cheerleaders. There are many people who have contributed to bringing the issue to the attention of the House, but there is much more that we need to do. It feels at times as if progress is painfully slow, but that should not dim our determination finally to consign leasehold to the dustbin.

[Sir Peter Bottomley]

We know about some of the abuses, because people who were working in firms that I would respectfully declare to be dodgy provided information anonymously. Will the hon. Gentleman join me in saying to Richard Davidoff, who might take defamation action against people who have blown the whistle on practices that we would condemn, that the courts should not be used to stop people blowing the whistle on practices that are questionable, if not completely wrong?

[Justin Madders]

As always, I find myself in agreement with the Father of the House. Whistleblowers should be able to speak up freely. With my other hat on, it is probably time that we had a review of whistleblowing legislation to make sure that people are adequately protected. We owe a debt to people who are prepared to speak up and put their head above the parapet, possibly at great personal expense. The scams have to be stopped, and people need to be supported.

On that note, we have made a little progress tonight, and I want to keep making progress. I am sure that the majority of the House will want leasehold finally to enter the history books, rather than being something that we deal with on a day-to-day basis.

Building Safety

Justin Madders Excerpts

Monday 10th January 2022 Commons Chamber

[Michael Gove]

My hon. Friend is absolutely right. That is exactly our intention, and it is the fruit of the work read by my hon. Friend and others.

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

As a co-chair of the all-party parliamentary group on leasehold and commonhold reform, I pay tribute to all the campaigners up and down the country who have done a sterling job at keeping this issue on the political agenda. They will certainly welcome the principle, set out in the statement, that innocent leaseholders must not shoulder the burden. I hope that applies equally—not just to cladding, but to any other fire safety defects and to the cost of the interim safety measures that have been necessary. The Secretary of State recognised that in the statement by referring to the extra £27 million for waking watches, but leaseholders will have already paid out thousands of pounds for waking watches. Should they now expect some reimbursement for those costs?

New Homes: Developers, Housebuilders and Management Companies

Justin Madders Excerpts

Wednesday 5th January 2022 Westminster Hall

[David Johnston (Wantage) (Con)]

I beg to move,

That this House has considered the role of developers, housebuilders and management companies in new homes.

It is a pleasure to serve under your chairmanship, Mr Betts. Happy new year to you and to everybody else who is here this morning. This is a 90-minute debate, and I have said to quite a number of people that I could easily speak for at least 90 minutes on this topic—it will be a relief to everyone that I am not going to do that. The reason is that it is a source of huge frustration in my constituency. Owning a new home and the development of new homes should be a source of great joy, but too often it is a source of great distress. There are a few reasons for that that I want to talk about, but before I go into those, I want to say at the outset that, contrary to some of the media stereotypes about areas such as mine, most people in my constituency are not opposed to new homes. If they are homeowners themselves, they entirely understand why other people want to own a home. They often have children and grandchildren whom they are trying to help get on the housing ladder. They know that we need housing for key workers. They know that sometimes people just want to move into one of these new homes from where they already live in the constituency. But people have real frustration with the way in which these things are developing and the problems they are causing in the local area.

The first issue is simply the quality of a lot of the homes that go up, because it is often poor. Sometimes it is very good, but too often it is poor, and constituents’ homes have major defects that take years to try to deal with. I have constituents who have spent two, three or four years—sometimes more—trying to get these defects repaired. This is not like buying a cheap version of something on eBay, half-expecting that there might be something wrong with it. This is the biggest purchase that any of us will make, and we do not expect to then have years of trying to sort out the problems with it. Unfortunately, when constituents try to do that, they feel completely outmatched by the builder that built their home. Sometimes the builder will blame the contractor; sometimes they will say that there is nothing wrong: “We signed it off according to building regulations.” But I have been in some of these places and we can see these huge issues. It is completely unacceptable that people are experiencing them.

The second issue is about the impact of these homes on the environment. That has two major aspects to it. One is what it does to the local environment around the area. Naturally, people can see greenfield sites disappearing. One constituent wrote to me and said that the biodiversity commitments that a particular house builder had made had not been kept whatsoever. There is an impact on air quality and water quality, but the other aspect is how the homes themselves are built. I am continually asked by constituents, “Why are we building so many homes that we know we will have to retrofit in a few years’ time?”, and there is no easy answer to that. I am continually asked, “Why can’t every new home have solar panels? Why can’t every new home have a heat pump?” I understand why: there are various reasons why we might not put the same thing in every kind of house.

I completely welcome the Government’s commitment to having electric charging points in every new home. I really welcome the future homes standard, which will make new homes from 2025 net zero ready, with a 75% reduction in their emissions. But the point still stands that thousands of homes are going up right now and we know that because of our ambitious net zero goals, we will have to retrofit a lot of them. The reason is that it is cheaper for the house builders to build them that way today.

The third issue is affordability. I have said a few times in this place that no one who rents has ever said to me, “There are too many new homes going up.” They say only that those homes are not affordable. They say that they have saved for years and years, and it does not matter how much they save; they do not get close to being able to afford one. The average house price in my constituency is £335,000. The average house price in my constituency is £335,000. To London ears that might sound fine, but it is 9.2 times median income, and that is out of reach for most people. An affordability threshold of 80% of that is still not affordable. Again, we run into bad practices. We all know that developers commit to a certain number of affordable homes, but time after time that number is driven down on the grounds that the development would not be viable if that commitment were maintained, so broken promises are a constant theme.

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

The hon. Gentleman makes a particularly important point about affordable housing. I am often told that developers who make such arguments about viability are working on a 20% profit margin per property. Does he agree that that is completely unsustainable?

[David Johnston]

The hon. Gentleman makes an important point. I was just about to say that when the taxpayer is subsidising the development of affordable homes and when the profits of house builders are so large—often bordering on 30%, come rain or shine; they are making these profits in all weathers—it is completely unacceptable for them to play this game so that people are unable to get on the housing ladder.

The fourth aspect that I want to talk about is the role of management companies. After someone has purchased one of these new homes, the costs do not always stop. People are often signed up to quite expensive contracts with management companies who purport to provide services to maintain communal areas, and it is often very difficult for residents to find out what is being done for that money. The charge goes up year after year, but their communal area is not maintained. They are told that staff are employed to do things, but they never see the staff. They work hard to try to get transparency about what is being provided for the money, but they cannot get it. They get a basic summary, and that is about it. The people who try to get the information are often well qualified, but they cannot get it.

I know of a management company—the residents do not want me to name them, so I will not—where many of the residents are elderly, sick or vulnerable, and they feel completely bullied and exploited by their management company. Right now they are being pressured into taking a new lease, which they do not want to take because they know it will be bad for them, but they fear the repercussions if they do not or if they go to someone to talk about it. They have talked to me, but, as I have said, they do not want to me to talk about who they are. That is an appalling situation for people to be in. Far too often there is a real problem with the way in which management companies fleece people in new homes when those people have already spent so much money.

--- Later in debate ---

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

It is a pleasure to see you in the Chair, Mr Betts. Happy new year to everyone who is here today. I congratulate the hon. Member for Wantage (David Johnston) on securing the debate, on his useful introduction and on the interesting points he made. This may be the first debate of 2022 and it may be a new year, but, as we have heard, many of the issues we are debating are not new and, aside from the leasehold scandal, have had insufficient attention from this place.

We absolutely need more places for people to live; I doubt there is a Member in this place who disagrees with that. While the Government set some general targets about how many homes should be built, the detail is rightly left, in the main, to local councils. In reality, they and the communities they represent have limited say over what sort of homes are built, where they are built and, as the hon. Member for Wantage mentioned, how the infrastructure that goes with them is delivered. That is the nub of the problem, because we are often told that the wrong type of home is being built in the wrong type of place. That can be argued ad infinitum, and it often is. The bottom line is that we are continually falling short in achieving enough decent affordable housing.

Decent housing is critical to the national infrastructure. It is the bedrock of people’s lives, yet it is too often left to the market to resolve, and the market is clearly failing. In my experience, developers all too often show contempt for local communities by riding roughshod over the development conditions imposed on them: working longer hours, making more noise, and building higher and closer than they should to existing properties. That creates more work for the beleaguered planning department and puts more demands on councils that, after a decade of austerity, simply do not have the powers and resources to keep up.

By the time the council manages to catch up with a complaint, quite often the house is already built and the drains put in. It is a massive financial, logistical and legal battle to get developers to stick to plans when they have got that far down the road. Many councils simply do not have the capacity to get into such fights, especially when the case is about a couple of metres. It might not look much on a plan, but for someone living next door, a couple of metres makes a huge difference.

What about roads being brought up to an acceptable standard, so that they can be adopted by the local authority? People are waiting years for roads to be adopted. I do not blame the local authority, which sets out what needs to be done but does not have the resources or time to continually chase developers who have sold the homes and moved on. Where is the incentive for developers to come back and finish the job they started?

I want to say a few words about the massive expansion of estate management companies. It seems that the idea of the developer paying the local authority a commuted sum to cut the grass and maintain common parts has had its day. This reduces developers’ costs, although it does not seem to lead to cheaper house prices. It costs the homeowner far more in the long run because they are, in effect, paying twice for the maintenance of open spaces: once through a management fee and once through their council tax. Once again, though, it is the council that gets lumbered with all the grief and blame.

With developers looking to replace their lost funding streams, with what I hope will be the end of leasehold, I am concerned that estate management companies will become the new payment protection insurance of the house building industry. There is little regulation or transparency and, if we are honest, little need for estate management companies in most settings, so why do we have them? House builders build houses—that is their core business; they are not interested in managing estates. Indeed, they cannot wait to get rid of them to a company that specialises in such things.

Developers creating an estate management company is nothing more than a calculation on the balance sheet. They have zero interest in keeping the verges neat and tidy after they have gone. If they can make the bottom line look more attractive by getting in a management company, they will. They keep getting away with it because we let them. Why can we not start from the basic principle that the local council should be doing those jobs and that estate management companies are an unnecessary tax on homeowners? How many people are told of the implications of an estate management company or how much it costs?

What developers say to new buyers in the showroom and what is in the final contract are often very different. By the time the paperwork arrives, it is too late. People may have spent thousands on the move, never mind the psychological commitment they have made. What is said in the showroom often does not appear in any documentation. There is a classic example in my constituency where residents now look out on a 30-feet-high warehouse, which the developers conveniently forgot to mention already had planning permission when they sold buyers their homes. They are still waiting for the KFC that they were told was going to be there. Because that is just sales patter, there is no legal accountability for the lies that are told.

This is the biggest single purchase people will ever make. There needs to be far greater accountability for what developers say and what they build. At the moment, they seem to have a free pass. Developers with household names work across the country, moving from one project to the next, sometimes leaving behind problems that take years to resolve. Another development in my constituency has ended up in court, with one group of residents pitted against another and maintenance bills racking up in their thousands, because the developers did not do the paperwork or the job properly in the first place. I know that they are causing havoc elsewhere, because other hon. Members have told me. What can councils do? They have no grounds to refuse planning permission on the basis that the developer has been a poor performer elsewhere. How about a fit and proper person test for the directors of those companies?

In conclusion, I would like much greater political direction and oversight of the house building industry. After all, it will build the homes that we need, but at the moment it quite understandably organises affairs to maximise profits. Housing is a critical part of our infrastructure—having a roof over one’s head is fundamental—but it has been shown time and again that we cannot rely on the market alone to deliver that. Four and a half years on from Grenfell, we still have not really had a decision on who is liable for the defects that were created there, and there is clearly a reluctance in Government to grasp the nettle and take some ownership of the industry.

Leasehold Reform (Ground Rent) Bill [Lords]

Justin Madders Excerpts

2nd reading
Monday 29th November 2021 Commons Chamber

[Lucy Powell]

Absolutely; my right hon. Friend makes a very good point as well. Many people, especially first-time buyers, do not understand the difference between leasehold, freehold and so on, and many of these issues come to light only as problems arise later or when they try to sell the property.

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

On legal advice, it is worth pointing out that not only were some people told that they had to use particular solicitors, in breach of Law Society guidelines, but some were also told that they had to complete within a certain period of time, so even if they had used a different solicitor, it just would not have been practical for them to analyse or understand the documents correctly. That suggests to me that there needs to be a complete overhaul and inquiry into how the scandal was allowed to develop in the first place.

[Lucy Powell]

My hon. Friend makes an excellent point, and there is a very strong basis for a wider mis-selling scandal inquiry. Many properties are affected: in terms of houses, for which the practice has been particularly egregious, more than 500,000 leasehold houses have been built over the past 10 years. The vast majority of them are in the north-west of England and north Wales, which is why so many colleagues from those areas are here this evening.

The rights to collect the ground rents are bought and sold on the financial markets as steady income streams to investors, while leaseholders get nothing back for—in some cases—thousands of pounds a year. There is hardly a clearer illustration of the damaging pervasive tendency to treat housing as an investment opportunity—as a product to trade on the market—rather than as homes where people live and build their lives around. That should be the basis of housing in this country. We have lost somewhere what housing is: homes, places where we live, where lives are built, where we become successful —or not—and where we bring up a family. Housing is not a commodity to be traded on the financial market. We have seen more starkly than ever over the past two years that housing is also a public health issue, an educational issue, and a work, security and happiness issue, and we should begin to treat it as such.

Although we welcome this Bill, it is a very narrow first step; there are many glaring omissions—measures which could have been included even in such a narrow Bill. First, there is nothing to prevent freeholders from simply transferring their income stream from ground rents to service charges or administration or other charges, as has been highlighted. As shown by the ground rent scandal itself, there is no limit to the ingenuity that some freeholders will draw on to capitalise off the back of leaseholders. Service charges and administration charges are opaque at best, and far too hard to challenge. Will the Minister address that issue later on?

--- Later in debate ---

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

Let me first put it on record that, alongside the hon. Members for Worthing West (Sir Peter Bottomley) and for St Albans (Daisy Cooper), l am a co-chair of the all-party parliamentary group on leasehold and commonhold reform. The group is assisted by the Leasehold Knowledge Partnership, which has been campaigning for many years for the kind of reform that we are debating today.

We might have expected the Bill to be a cause for celebration, and indeed any legislation that puts another nail in the coffin of leasehold is to be welcomed, but we are left with a feeling that it is a rather modest measure. Given that it took four years for us to reach this point, it seems that we are making glacial progress. Perhaps four years is not much in comparison with 1,000 years of leasehold, but for those who are still trapped in unsellable or seriously devalued homes because of the leases they signed, progress is not being made quickly enough.

I am not generally a fan of market-based solutions—the market is responsible for most of the egregious injustices that we have seen in leasehold—but, to a significant extent, the market has already moved away from imposing ground rents for most houses, not because those who concocted the leasehold scandal have had a prick of conscience but because a spotlight has been shone on the devastating consequences of their sharp practice. In that respect, I pay tribute to the fantastic work of the National Leasehold Campaign, which has done more than just about anyone to bring the unfairness of leasehold to the public’s attention. It is an irony that those campaigners do not stand to benefit from the Bill because, as has been pointed out already, it does nothing to tackle the existing problems. That said, however, their influence has already benefited my constituents and many others.

A new Redrow estate not far from where I live originally had properties being sold on a leasehold basis. After some pretty determined campaigning from the National Leasehold Campaign, Redrow decided to stop the sale of homes in the second phase as leasehold, but unfortunately not before several hundred people had already bought their homes as leasehold. To be fair to Redrow, I should add that it did then offer them the opportunity to purchase the freehold after two years, although it was a little unfortunate, to say the least, when it subsequently lowered the purchase price for the freehold again, creating another unfairness. While I give Redrow credit for stepping back and weaning itself off the leasehold drug, that should not obscure the fact that all this could have been avoided had it not sold the properties as leasehold in the first place. That takes me back to the basic concern that remains with the Bill, which is that it enshrines in law a two-tier system of home ownership when really we should be ending it altogether.

Very few new houses are now being sold as leasehold, but around 1.5 million houses will remain leasehold after this Bill becomes law. Is there a risk that choking off income streams from those who see other people’s homes as an investment will cause them to turn their attention to redoubling their efforts to squeeze as much as they can out of the existing properties? A number of Members have already mentioned that, and I will return to it later.

Turning to the details of the Bill, I know that a lot of consideration has been given to how we define a ground rent. That debate is instructive, because how can a payment for which nothing is received in return be considered a proper legal payment? The short answer is that it cannot, and I believe that that is another reason to abolish leasehold altogether. The reality is that ground rent is a legal fiction and a method of maintaining control and securing an income for which the recipient is required to do precisely nothing.

It is therefore disappointing that lease extensions for houses are exempt from the Bill, because there is significant concern that freeholders will put in massive multipliers when offering informal lease extensions, just to make the premium look lower and more attractive. They would then make their money back through allowing the ground rents to continue. Let us not forget that both parties do not have equal bargaining power. This all just adds weight to the argument that what we have here is a minor change that will help people in the future, when what we really need to do is to deal with the injustices of the present, and the best way to do that is of course to abolish leasehold altogether.

As I said earlier, we also need to keep an eye on whether those who have been involved in the systematic deception and mis-selling change their sights to deal with the new environment that the Bill represents. They have not gone away, those offshore accounts, those trust funds and those private equity investors who see people’s homes as an opportunity to cream off the cash long after the people living in them think that they have bought them. In particular, we have to keep a close eye on estate management companies, because that is one area in which charges could easily be inflated to more than cover the loss of a ground rent.

[Matt Rodda]

My hon. Friend is making an important speech and he has hit on a number of central issues, particularly when dealing with his own legal experience of these dysfunctional markets where on the one hand we have developers with enormous financial power and legal resources and on the other we have humble first-time buyers. Does he agree that there needs to be a rebalancing, with far greater protection for first-time buyers and ordinary householders, and with a much greater attempt by the Government to hold these large developers to account?

[Justin Madders]

My hon. Friend makes an interesting point. There is clearly an imbalance. We have already talked about how some enthusiastic first-time buyers who just want to get into their new homes put their trust in the people who have been assigned to deliver the legal niceties such as putting a value on the property and doing the conveyancing. They put their trust in those people, and sometimes that trust is betrayed through the egregious injustices that we have talked about.

[Mark Tami]

My hon. Friend has mentioned management fees, which I see as the next scandal coming down the road. People who bought their properties and were being charged perhaps £100 or £200 a year will have thought that that was okay, but that might now have gone up to £500 or £600 and there are often additional charges because, for example, fences or certain parts of the ground are not covered. People have told me that they feel they are paying their council tax twice. That is how they see it, and it is totally unfair.

[Justin Madders]

I thank my right hon. Friend and neighbour for his intervention, which leads me beautifully into the next section of my speech, in which I shall talk about exactly that.

I will never accept that it is right for developers to choose not to pay a sum to councils to adopt the communal areas, and that they instead save themselves money by passing on that cost to the homeowners and then make even more money from the homeowners by charging them for things that ought to be coming out of their council tax. Like my right hon. Friend, I worry that this trend will be accelerated because the ground rent gravy train is coming to an end, and that we will hear more and more stories of homeowners having no choice but to pay inflated annual service charges that, given the choice, they would prefer to pay through their council tax.

[Kevin Hollinrake]

The hon. Gentleman is making a good point about what is referred to as “fleecehold.” Does he agree it is entirely within the gift of the local authority to require the development to be made to adoptable standards in terms of roads and drainage, for example? It can then be adopted by the local authority, so people do not have to pay twice for such services.

[Justin Madders]

That is a fair point in theory, but I find it does not happen in practice. I have estates in my constituency that were built a dozen years ago and still have not been adopted because the developers have not put them up to the required standard. The to and fro never ends, because the developers have left town and they have no interest or incentive to bring those areas up to the adoptable standard.

[Christian Matheson]

I am grateful for the advice my hon. Friend has given to me and my constituents on this matter, as he is a neighbouring MP with particular expertise. He will be aware of one estate in my constituency that has been parcelled up and given to different developers, and it has been developed at different times. Not only do we have a problem with the local authority, but he will recall that we have a problem with different developers playing themselves off against each other in order not to bring the estate up to standard, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) suggests.

[Justin Madders]

My hon. Friend and constituency neighbour makes the point well. It all points to the lack of capacity in local authorities to tackle these issues. I do not want to make a party political point, but we have had a decade of austerity and we are now seeing the consequences in how local authorities police these things.

I would like to see a crackdown on unfair fees and contract terms by having an enforceable list of what are considered to be reasonable charges. We should require transparency on those charges and give leaseholders the right to challenge rip-off fees and poor performance. We should also try to ensure that residents are given greater powers to take over the management of their homes, if that is where we are going.

As my hon. Friend the Member for City of Chester (Christian Matheson) said, I do not want to be standing here in a few years’ time talking about another PPI for the house-building industry because the Government have once again failed to act on the warning signs that are there for us all to see.

This Bill must be promptly followed with the promised wider leasehold reforms, particularly the promised reforms for which we have been crying out that will enable leaseholders to buy their freehold quicker, easier and cheaper. I have had a private Member’s Bill ready to go for three years that would allow us to do just that. It could have already become law if there had been the will to take on the freeholder interests that would lose out as a result.

I have now got the message that my Bill will not find favour with the Government. I am aware the Bill would not have meant an end to leasehold, but it would at least have given the victims of this industrial-scale con an opportunity to take back control of their property at an affordable price. I thought this Government were all about taking back control. Do they not realise that leaseholders do not have control?

What is stopping firmer action being taken against freeholders? I know there are legal opinions floating about on freeholders’ human rights, but what about my constituents’ human rights? Do they not have the right to live in their own home without someone else trying to make it into a cash cow? Do they not have the right to expect that the biggest purchase they ever make will be done fairly and will be properly regulated? Do they not have the right to have a Government who are serious about stopping the industrial-scale foul play we have talked about tonight?

It is disappointing that, although on the one hand the Government accept that unfair practices in the leasehold market can turn people’s home-ownership dreams “into a nightmare,” we are still waiting for action for the many leaseholders who have been trapped in this web that they did not sign up to. We have made it clear that there are a number of reasons why they have found themselves in this position, not all of which are resolved by the Bill.

We know that one in three houses sold in the north-west in the past 10 years is leasehold, and those people will not benefit from the Bill. My constituents and my hon. Friend’s constituents have been disproportionately affected by the leasehold scandal, and they are still waiting for something that will help. If we are to talk about levelling up in this place, we should be looking at something like that as it will deliver true justice, fairness and levelling up.

We need some clear timescales from the Minister for when existing leaseholders can expect to see action on their concerns. What commitments can they expect? I think we all agree that what has happened is unfair and a significant injustice, but when are we going to see action to put things right for existing leaseholders? The right hon. Member for Bromsgrove (Sajid Javid), when he was Communities Secretary, promised an outright ban on leasehold for all houses four years ago. That is four years of people being trapped in homes that they cannot sell because of onerous ground rents, and four years of stress and uncertainty about whether they should try to buy their freeholds now or wait until the law is reformed. I get asked regularly, “What should I do? Should I wait until the law changes?” It is very difficult to give an answer on that because we still have no clarity on when that law will be changed. So let us end four years of jam tomorrow. Let us deliver solutions for leaseholders today. Let us stand up to the vested interests and please, finally, abolish leasehold.

Oral Answers to Questions

Justin Madders Excerpts

Monday 25th October 2021 Commons Chamber

[Michael Gove]

My right hon. Friend is right: east Lancashire is one area that we will focus on in the coming months. Much more needs to be done, and he has been at the forefront of ensuring that the voice of the whole of the north of England—not just that of east Lancashire—is heard clearly in Whitehall. The Chancellor of the Exchequer will be in a position to share details of the next round with the House a wee bit later.

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

6. What assessment he has made of the potential impact of the UK community renewal fund on communities with high levels of deprivation.

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

We are committed to ensuring that the community renewal fund reaches those most in need. To achieve that, we identified 100 priority places across Great Britain based on an index of economic resilience measuring productivity, household income, unemployment, skills and population density. Other places were also able to bid and the assessment process considered both the strategic fit and the deliverability of bids.

[Justin Madders]

Could the Minister tell us, when the pilots have concluded, how the shared prosperity and community renewal funds will interact with levelling-up bids? In future, will there be an overlap? Will it be possible to bid for both? On the levelling-up process, will he meet me to discuss Ellesmere Port’s excellent and ambitious levelling-up fund bid?

[Neil O'Brien]

I would be delighted to meet the hon. Gentleman. As he knows, the community renewal fund is intended to act as an innovative source of funding to try new ways of doing things as we move on from EU structural funds, and to enable us to start working on new ideas ahead of the levelling-up fund.

Building Safety Bill

Justin Madders Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

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

I first place it on the record that I co-chair the all-party parliamentary group on leasehold and commonhold reform with the hon. Members for Worthing West (Sir Peter Bottomley) and for St Albans (Daisy Cooper). Ably assisted by the Leasehold Knowledge Partnership, we have been looking at issues surrounding building safety for some time. We had an informative meeting last week, alongside the fire safety and rescue APPG, with Ted Baillieu, who co-chaired the Victoria cladding taskforce and gave a frank and compelling account of his experience when his state dealt with many of the issues covered by the Bill. Put simply, we take his advice that Government have to take a far bigger role in sorting this out than currently envisaged, and will have to dig far deeper into their pockets. It is better to learn from his experience and bite the bullet now, rather than let things drift unsatisfactorily for a few more years before coming to the inevitable conclusion.

I say that partly because the biggest concern is not the expense or the uncertainty but the time it will take to get any kind of restitution. It could be years, and leaseholders—the young couple who cannot start a family; the professional in fear of bankruptcy—cannot wait that long. Too many lives are on hold, and we must not underestimate the mental toll on someone of knowing every day that they are living in a potential death trap and there is nothing they can do to get out of it. These people cannot wait.

Although the Bill is step in the right direction, it feels that, for many, resolution is still years off, and it may yet come with a heavy price tag. The only certain winners from this legislation will be the lawyers, who will have a plethora of new legal avenues to argue over.

Let us start with the extension of the limitation period. On the face of it, that is a positive thing, but it does not create any new rights; it only extends existing ones. As the Bill makes clear, the 15-year rule is available only if it somehow does not impact the developer’s human rights. Of course, developers are always going to claim that it will, so the first field day for the lawyers will be arguing over that.

Critically, of course, the extension is available only if the developer is still in business. As we know, many are not. Even if the extension does increase the number of people who can take legal action, they will still face the same hurdles of expensive litigation. If the developer is still in business and worth suing, it will be in a far stronger position to fight the action than the leaseholders. The inequality of arms in litigation will be immense.

Despite the Government’s repeated promises in recent months, there are no guaranteed means of forcing regulators and developers, who are the architects of this crisis, to be held to account. The inquiry into Grenfell continues, but it is already clear that the materials used there should never have been used. Some of those materials were certified as safe at the time but never should have been. Cladding systems had been designed by architects, planners and fire engineers, costs were knowingly cut, and safety concerns were ignored. Leaseholders are the only truly innocent party in this mess, but they still face the biggest burden to fix it, and that is wrong.

Oral Answers to Questions

Justin Madders Excerpts

Monday 19th April 2021 Commons Chamber

[Robert Jenrick]

The hon. Lady will be aware that we have approached this issue with great caution and due consideration. We have consulted on those matters and received thousands of responses, and we have made our proposals on the back of that, so they have been carefully thought out to consider some of the issues she has raised. We made a number of changes, to protect, for example, nurseries and to provide further protections for conservation areas, but the Opposition’s approach, which could be characterised as the ostrich’s head in the sand, is not the one that we have chosen to take. We think that high streets and town centres are undergoing the biggest transformation not just in our lifetime but at least since the second world war and that we need to introduce measures that are proportionate to the scale of the challenge. That is why we are making billions of pounds of investment through our towns and high streets and levelling-up funds, and that is why we are pursuing the planning reforms that the hon. Lady refers to, and I think most reasonable people across the country would agree. I note that in her own constituency Mike Cartwright, who runs the Bradford chamber of commerce, seems to agree. He says:

“Having unused space is bad for the economy,”

and

“buildings remaining empty for years is to no one’s benefit.”

We agree; that is why we are taking action.

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

What recent estimate he has made of the number of additional council and housing association homes required to meet demand for social housing.

[The Minister for Housing (Christopher Pincher)]

Planning policy is clear: it is for local authorities to identify the size, type and tenure of the housing needed for different groups in the community, including those who require affordable housing. We are committed to increasing the supply of affordable housing and are investing over £12 billion in the affordable housing programme over the next five years, the largest investment in affordable housing in over a decade.

[Justin Madders]

Many of my constituents cannot afford to buy a house of their own and are finding that private sector landlords are using various devices to block access to that market as well, such as through guarantees and bond requirements, so council housing or social housing is the only option, but demand is outstripping supply, and, according to the Chartered Institute of Housing, outside London only a third of all the social housing needed will actually be built in the next five years. So what does the Minister say to my constituents who find themselves with no housing options at all at the moment?

[Christopher Pincher]

Over the last 10 years around 150,000 new homes for social rent have been built. We have made it easier for local authorities to build their own council homes by changing the rules around the housing revenue account and by making it easier for them to get cheap loans through the Public Works Loan Board. Our new affordable homes programme, investing £12 billion-plus in new homes over the next five years, will double the number of socially rentable homes built to 32,000. I rather hope the hon. Gentleman’s local authority will take advantage of the reforms that we have undertaken and the powers we have given local authorities, because in 2019-20, before the covid emergency, it built no social houses at all.

Covid-19: Hospitality Industry

Justin Madders Excerpts

Wednesday 24th March 2021 Commons Chamber

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

The last year has been difficult for us all, with every aspect of our lives and livelihoods impacted by covid, but the hospitality sector has perhaps faced more challenges than most. Apart from a few months over the summer, many pubs and clubs have not been able to trade at all, and when they have been able to open, they have faced such onerous trading conditions that, if they have chosen to trade, they have often done so at a loss.

I understand, of course, why restrictions were needed on how people interacted in pubs, but the way we ended up, in the space of a few weeks last September, lurching from debates about whether Scotch eggs were substantial meals to whether 10 pm closures did more harm than good shows just how confused the response was, with rapid, almost weekly changes to how pubs were meant to operate. That constant chopping and changing only added to the financial burden that pubs face. What about the farce of Test and Trace check-ins for hospitality venues? They were used 100 million times but resulted in only 284 alerts. The Government should make sure that these things work properly if they are going to insist on them in the future.

When I look at some of the pubs in my locality that have not opened their doors for a year, I worry that they may never do so again. We know that in the last decade, a pub has closed once every 14 hours. My concern is that that shocking figure may end up being dwarfed once we see the true impact of covid on the sector. We must look at the sector as a whole—not just the bit we see as customers, but those in the supply chain. The brewers, the cleaners, those who supply the vending machines and the pool tables—all those businesses rely on a thriving hospitality sector to survive, and the importance of their making it beyond the next three months must be clear.

It is welcome that we now have a clear road map for the opening of venues, which is necessary to give sectors confidence. The last thing they need—the last thing we all need—is the stop-start, boom-and-bust approach that we saw last year, when where a business was based and what it provided dictated whether it could open at all, almost on a day-to-day basis.

Even when pubs reopen on 12 April, we need to recognise that that does not mean all pubs will be able to reopen. Those that do not have outdoor facilities will still be shut, and, frankly, we cannot be confident that the great British summer will come early enough to encourage people to drink outside in April. That gap has to be bridged. We must also remember that, when we hopefully get to full reopening in May, the road map requires table service only to be in operation. With social distancing, that means there will be, by definition, a limit on the number of customers a pub can have, and that limit is likely to be well below the capacity it used to enjoy. Again, that is a gap that has to be bridged, and many Members have already spoken today about how we can do that.

We all hope that this lockdown is the last, but I hope it has been made clear to the Minister today that, even if that is the case, there will still be challenges to the sector for many months to come. I will do my best personally to support the hospitality sector—within reasonable limits, of course—but I cannot do it on my own, and the sector cannot do it without Government support until the pandemic is completely over.