Local Government Finance

Kevin Hollinrake Excerpts

Tuesday 5th February 2019 Commons Chamber

[James Brokenshire]

Obviously we will look at all the representations that continue to be made during the review of relative needs and resources, but our analysis in the review demonstrates that, overall, population is by far the most important cost driver for both the upper-tier and lower-tier foundation formulae. Although in aggregate terms deprivation is not shown to be a major cost driver for the services included in the foundation formulae, I am of the view that relative levels of deprivation remain an important cost driver for some specific service areas such as social care. I welcome views as part of the current consultation, and I am sure the Select Committee will continue to focus on this important work.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Can it be right that prior to the new fairer funding formula central Government grants for inner London were £437 per person per year, whereas the grants for county areas were £153 per person per year? Do we not simply need a fairer funding formula?

[James Brokenshire]

My hon. Friend makes the case clearly for undertaking this review and looking at this properly. We need to look at the starting point and take the approach he highlights to ensure that fair distribution can be made.

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[Andrew Gwynne]

My hon. Friend, who is a doughty champion of the people of the city of Coventry, is absolutely right. What we have seen today from this Secretary of State is smoke and mirrors. He can talk about a spending power increase across local government, but that is predicated on every English local authority increasing council tax by the maximum level possible—an eye-watering, inflation-busting increase. We know that not every local authority can raise sufficient money by council tax alone, which is the reason behind the revenue support grant. A 50% cut to the revenue support grant of my hon. Friend’s city of Coventry is a big cut by monetary standards. Coventry’s council tax base does not allow the city council to raise anything like enough money to plug that gap.

[Kevin Hollinrake]

The hon. Gentleman talks about the revenue support grant. How can it be right that a person in London gets £437 per year allocated to them from the central Government grant, a person in a metropolitan borough £319, and a person in a county £153? How can that be fair or right?

[Andrew Gwynne]

I will answer that: a third of the services are more expensive to deliver in urban areas. That is the fact. It is in the Government’s own report that was commissioned for the then Department for Communities and Local Government. Some Tories do not get the reality of this, but I imagine that those who represent urban areas probably—silently—do. The fact is that revenue support grant is there because Governments of all political persuasions recognise that not every area is the same. The baseline is not the same. In some urban areas, the council tax base is low.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Andrew Gwynne]

No, I am answering the hon. Gentleman, if he will do me the courtesy of listening.

Every local area has a different council tax base. I hazard a guess—I do not have the facts in front of me —that a 1% increase in council tax for Tameside Council, which I partly represent, will raise significantly less than a 1% increase in his area’s council tax, but the needs of Tameside are as great, if not greater, than some of the needs of his constituents.

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[Andrew Gwynne]

My hon. Friend is absolutely right. I pay tribute to his council for all the hard work that it is doing in very difficult circumstances. Cuts do have consequences, and cuts that are outside the control of the local authority are now presenting themselves as spending problems for town and county halls across England. That is why we are so angry about what this Government are doing.

[Kevin Hollinrake]

rose—

[Bob Blackman (Harrow East) (Con)]

rose—

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[Mr Clive Betts (Sheffield South East) (Lab)]

I probably agree with most of the points about devolution made by the hon. Member for Carlisle (John Stevenson), but I strongly disagreed with his comments about the situation in 2010. It was clear that we had an international financial crisis, and Gordon Brown deserves a great deal of credit for mitigating its consequences on the international stage. That should be put firmly on record.

[Kevin Hollinrake]

The hon. Gentleman is right about the financial crisis, but does he agree that Labour balanced the books in only 10 of its 13 years in power and ran up a collective deficit of £440 billion?

[Mr Betts]

That is quite a good record. If the hon. Gentleman looks back, he will find that one of the problems was the lack of regulation of financial institutions, but the Conservatives criticised Labour for regulating too strongly throughout that period.

I will try to be charitable to the Government by saying that I can welcome some elements of the spending review, including an extra £650 million for social care. However, that has to be set against the LGA’s analysis of a £1 billion deficit in both children’s and adult social care, which will rise to £3 billion for each in 2025. I can welcome the fact that the spending power of councils as a whole will not fall in real terms—there is a 2.8% increase in cash terms—but that is spread differently across various authorities, and is cushioned by increases in council tax. Those increases bring in more money in richer areas, of course, and those are the areas that have received the smallest cuts to their grants since 2010. Those two things do not sit well together.

Sheffield has seen a 50% cut in grants since 2010 and major cuts to services. Social care services for both children and adults overspent by £15 million last year and will do so again this year. This is not a local authority out of financial control. It has not yet used its reserves, but next year, for the first time, it is planning to do so. Of course, that can be done for only a limited number of years. Many authorities across the political spectrum are in the same position.

Care is very important, but there are other services to consider. Sheffield and most authorities have done the right thing by concentrating on care, because they have statutory responsibilities to the elderly, children in care and people with disabilities, but National Audit Office figures for cuts to other services since 2010 show that private sector housing has been cut by 60%, that traffic management and road safety has been cut by 60%, that recreation and sport has been cut by 50%, that libraries have been cut by 30%, and that planning and development has been cut by 50%. Those cuts are hitting communities. In the end, it is not councils that are hit by such cuts; it is communities. It has happened in my city, where libraries are having to be staffed by volunteers, grass-cutting is done less often and private sector housing officers are not sufficient to bring selective licensing on the scale that we would like. There are cuts to funding for road safety, with bus routes scrapped, and children’s centres and youth centres closed. That is happening in the constituencies and local authorities of Conservative Members, too. What worries me is that as most people do not have family members in care, they see the other council services: parks, buses, libraries, road maintenance and refuse collection. Those are the services that matter to them, but they are the services that are subject to the biggest cuts of all.

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[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to speak in this debate, and I warmly welcome the Secretary of State’s remarks. This is of course the fourth year of a longer term framework for local government funding, and the key element is the need for a fairer funding formula. We also need to deal with some of the underlying pressures for local authorities, particularly the time bomb that is adult social care. An extra £10 billion of funding for adult social care to 2020, including £650 million committed by the 2018 Budget, will go a long way to help in the short term. In the longer term, we need the fairer funding formula underpinned by the business rates retention pilots. I am delighted to see that North Yorkshire County Council has been entrusted with one of those pilots.

The fairer funding review and the spending review that comes with it are vital. If fairer funding is simply a redistribution of money—moving money from one local authority to another—it will be difficult for some authorities. We must learn the lessons of the fairer funding review in education, and fairer funding must come with extra money in the pot generally, to make it possible for some local authorities to manage as we redress the balance and make things fairer.

The present situation is unfair. Nine out of the 10 best funded authorities per capita per year are in London; they have about £1,000 spending power per person a year. In North Yorkshire we have £770 per person a year, despite the fact that a much larger proportion of that £770 is made up of council tax. We are contributing more but getting less in services. As my hon. Friend the Member for Waveney (Peter Aldous) pointed out, central Government grants to local authorities to inner-London councils are £437 per person per year, for metropolitan boroughs they are £319, for unitaries they are £225 and for counties £153. The hon. Member for Denton and Reddish (Andrew Gwynne) cannot talk about unfairness and avoid those figures. We must move to a fairer funding settlement.

I pay tribute to my neighbour, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Richmond (Yorks) (Rishi Sunak), who has looked at this issue and tried to simplify the system. Simplicity is the ultimate sophistication, as da Vinci said many years ago. My hon. Friend is right to try to simplify this and make it fairer. We must take on board many of the comments that have been made to make sure that the funding formula is fairer in the future.

Adult social care is putting more pressure on my constituency than any other issue and we need to take a more strategic approach to its funding. The Select Committees on Housing, Communities and Local Government and on Health and Social Care had a long joint inquiry on this and came up with a simple recommendation—to emulate the German system of social insurance, which involves a social care premium. It is a simple, scalable and sustainable solution. It is a small amount that everybody pays—everybody pays something so nobody has to pay everything. That is the key to it. It was introduced in Germany in 1995 to replace a system of local government funding, and it has been incredibly successful. It was a unanimous recommendation of those cross-party Select Committees.

The key element of the system is not the small amount people pay in, but how they get the money out. If someone is defined as in need of social care—a young adult or someone in later life—they can take it in the form of local authority provision, third-party provision or as a cash settlement every month which can be paid to a neighbour or loved one, be it daughter, son, nephew or whatever. It also helps to strengthen the social fabric by making sure that people are looked after by those who love them most and understand their needs the most. It is something that we should adopt, and I hope it will be in the Green Paper that is expected shortly.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 28th January 2019 Commons Chamber

[Mr Speaker]

The hon. Member for Thirsk and Malton (Kevin Hollinrake) knows all about houses as a whizz kid estate agent. Let us hear from the fellow.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

If you are ever thinking of moving, Mr Speaker, do let me know.

Councils across North Yorkshire, such as Richmondshire and Hambleton, are delivering more affordable housing to purchase through the category of discount market sale. What plans does the Secretary of State have to roll this policy out nationally?

[James Brokenshire]

I congratulate my hon. Friend on the veritable skills he clearly has in so many different areas, and on championing this particular course of action. It is right to recognise that we have delivered more affordable homes in the last eight years than there were in the last eight years of the last Labour Government. It is the sort of schemes that he identifies that are helping to make that difference, and we are examining carefully how such initiatives can be rolled forward.

Tenant Fees Bill

Kevin Hollinrake Excerpts

Ping Pong: House of Commons
Wednesday 23rd January 2019 Commons Chamber

[Mrs Wheeler]

I could not have put it better myself. We do not want to create a situation that encourages landlords to withdraw from the market or ask tenants for more rent in advance, thus decreasing the overall net benefit of the ban on unfair charges. Also, we do not want to legislate in a way that would disadvantage certain groups, including pet owners and those who have lived abroad or have a poor financial history.

The real risk, as we have heard throughout the parliamentary process, is that a cap of four or three weeks’ rent could encourage tenants to forgo their final month’s rent payment. The Housing, Communities and Local Government Committee and peers in all parts of the other House recognised that risk and agreed that a deposit of five weeks’ rent was the right compromise. Lords amendments 36 and 37 are the result of cross-party discussion and agreement. It is worth noting that the hon. Member for Great Grimsby publicly welcomed the five-week deposit cap when it was announced. With that in mind, I hope hon. Members recognise that the Government have already proposed the best solution to the tenancy deposit cap.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Is my hon. Friend aware of anywhere in the world, and certainly any part of the United Kingdom, where deposits are capped at three weeks’ rent? Indeed, as she knows, the cap in Scotland is eight weeks’ rent.

[Mrs Wheeler]

I thank my hon. Friend. He has great knowledge of these matters and it is always helpful to hear that. In Scotland, it is eight weeks. We are putting forward five weeks. No, I am not aware of a cap at three weeks.

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[Mrs Wheeler]

Yes, indeed. I thank the hon. Lady for her intervention. I will get on to that point later in my speech, so she will have to stay and listen to the end, I am afraid.

[Kevin Hollinrake]

I must draw the House’s attention to my entry in the Register of Members’ Financial Interests. The Minister talks about agents and landlords having reassurance about being able to make reasonable charges where their action or work is required through the fault of the tenant. The Bill does make provision for this in a situation with the loss of keys, but it makes no provision for the costs of chasing late rent, despite the fact that it may take several attempts to collect it. In effect, that means that charges would be increased on the landlord at the expense of good tenants, on the basis that some bad tenants who do not pay their rent on time create a lot more work for the agent or the landlord.

[Mrs Wheeler]

Again, I thank my hon. Friend for his intervention. He is so deeply imbued with knowledge of these issues that I take note of it. I think he will find that later in the Bill there is a clause that might be helpful to him.

There is also a power in clause 3 to amend the list of permitted payments, including the level of the deposit cap and types of default fees that can be charged, should this be required.

Lords amendment 48 clarifies that landlords and agents will still be able to charge for any damages for contractual breaches as they do now. On this point, the hon. Member for Great Grimsby has tabled an amendment seeking to ensure that, where a landlord or agent wishes to charge a payment for damages, they must provide evidence in writing to demonstrate that their costs are reasonable. I would like to reassure her, and other hon. Members, that that amendment is not necessary. It has never been the intention that the Bill affects a landlord or an agent’s right to recover damages for breach of contract under common law. That is why we brought forward Lords amendment 48 to clarify the position and to ensure that such payments will not be outlawed under the ban. I want to reassure hon. Members that this does not create a back door to charging fees. I repeat: it does not create a back door to charging fees. Damages are generally not meant to do anything more than put the innocent party back in the position they would have been in had the contract not been breached. No reasonableness test is therefore needed. There are already large amounts of case law that deal with what is appropriate in a damages case. If an agent or a landlord attempts to insert a clause that requires a payment—for example, saying, “If you do X, you must make a payment”—this will be prohibited under clause 1(6)(b) or clause 2(5)(b). Further, landlords or agents are required to go to court if they want to enforce a damages claim, or they could seek to recover them from the tenancy deposit. In both cases, they would need to provide evidence to substantiate any claim, and they would only be awarded any fair costs.

As such, the hon. Lady’s amendment is unnecessary. It would also not be appropriate for this Bill to start tweaking years of existing case law regarding damages payments. We are more likely to confuse the landscape than to clarify it. We are committed, on this matter, to working with Citizens Advice, Shelter and other industry groups to ensure that tenants fully understand their existing rights with regard to paying and challenging contractual damages. We have already taken steps to update our guidance to make this point clear. I hope that, with those reassurances, the hon. Lady feels able to withdraw her amendment.

Hon. Members will be aware that the Bill introduces a clear set of rules around holding deposits. This will improve transparency and provide assurances from both tenant and landlord around the commitment to entering into a tenancy agreement. To minimise the risk of abuse, Lords amendment 54 introduces a formal requirement for landlords and agents to set out in writing why they are retaining a deposit. This will empower tenants to challenge decisions that they believe to be unfair. It will also ensure that tenants do not continue to apply for properties and risk losing their holding deposit time and again without understanding why.

We also agree that it is not right that landlords and agents accept multiple holding deposits for the same property. That is why Lords amendment 41 ensures that a landlord or an agent can only take one holding deposit at any one time for a property, unless permitted to retain the earlier deposit. Lords amendment 50 will ensure that a tenant receives their holding deposit back when the tenancy agreement is entered into. Previously, it could have been the case that a landlord might have had grounds to retain the holding deposit, and done so but entered into the tenancy anyway. Further, Lords amendment 59 clarifies that a holding deposit must be refunded where a landlord or an agent imposes a requirement that breaches the ban or behaves in such a manner that it would be unreasonable to expect the tenant or relevant person to enter the tenancy. This will, for example, give tenants greater power to object where a landlord or agent has asked them to pay an unlawful fee or to enter into an agreement with unfair terms.

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[Melanie Onn]

It is a busy day in other parts of the Palace of Westminster; we should give colleagues credit for the fact that they have other work to do. I shall come on to the detail of my amendment and the issue of five weeks. I think that the hon. Gentleman has misremembered the extent of my acceptance of the five-week period. It was a reluctant acceptance at the time, with a view to tabling a further amendment if we thought that necessary. Having heard the Minister’s explanation, I think that it is still necessary to press that point, and I shall address it further in my speech.

I am discussing the damages that landlords can claim if a tenancy agreement is breached, rather than the issue of deposits. I urge the hon. Gentleman to bear with me and allow me to finish making that point. The fact that this is the first reference in the Bill to claiming damages shows that the Government were confident until recently that the Bill as originally drafted would not interfere with the current system. Indeed, the Government’s draft guidance, which we received from the Minister on 5 November, said:

“The Act does not affect any entitlement to recover damages for breach of contract…If a tenancy agreement does not permit a landlord or agent to charge default fees, the landlord or agent may still be able to recover damages.”

It continued:

“What is the difference between a default fee and damages? A default fee is a payment that can be required by a landlord or agent under an express provision in the tenancy agreement and would therefore be permitted under the Tenant Fees Act.”

Finally, it said:

“Can a landlord or agent recover costs for damages if they didn’t write them into the tenancy agreement? Yes. The Act does not affect the landlord’s entitlement to recover damages”.

The draft guidance that we received from the Minister’s Department only two months ago indicated on multiple occasions that the Bill would not impact on a landlord’s ability to claim damages, and it spelt out the difference between a default and a deposit. There is therefore a concern, because what was seemingly settled has become unsettled as the result of an addition which, to all intents and purposes, and given the explanation that we received, does not need to be made. What is the purpose of that? However, the Minister’s assurance on the intention to reassure landlords and innocent parties that they are simply going to be in the position that they were in before any such harm was caused perhaps gives me reason to reconsider.

[Kevin Hollinrake]

Does the hon. Lady think that good tenants who comply should subsidise poor tenants who do not comply?

[Melanie Onn]

I think it is absolutely right that if a landlord experiences a breach of tenancy, those tenants are considered responsible for the situation. It should not rest on others who adhere to the tenancy agreement that they signed, so I concur with the hon. Gentleman.

I really do not see why Lords amendment 47 on default fees necessitates change, as the Government clearly defined damages as separate from defaults. I therefore wonder why Lords amendment 48 is necessary in the first place. Without it, would the Bill impede the current system? Would it prevent landlords from claiming damages through deposits or the courts? Can the Government reassure me—I would say that perhaps they have done so to some extent—that Lords amendment 48 will not create powers for landlords to bypass current systems and charge as they see fit? I certainly hope that the Minister believes that to be the case. If Lords amendment 48 is not necessary, perhaps it is in the Minister’s gift to reconsider the position and remove the provision, rather than adding confusion, as it is not necessary, and previous statements have made it clear that it is not necessary.

My amendment (a) to Lords amendment 48 would bring that into symmetry with powers in the Bill and add a requirement for charges brought under the amendment to be reasonable, and to be evidenced by invoices. That is just to ensure that no loophole is sought. Throughout the debate we have discussed the need for permitted payments in the Bill to be subject to rigorous checks and balances, to ensure that unscrupulous landlords and letting agents cannot continue to charge unjustified amounts for things such as a lost key. Thanks to the hard work in both Houses, we have closed a number of loopholes that could have been exploited to allow some landlords to profit from tenants by unfair and unjustified means.

Lords amendment 48 does not contain those protections and seemingly could allow for open-ended charges without mind to the cost to the landlord, and to whether the charges could be backed up by evidence. I do not intend to press the amendment to a Division, but I would welcome additional reassurances from the Government that the principles discussed throughout the Bill will not be undermined by the Lords amendment, and that it is not a new loophole that landlords and letting agents can exploit for profit.

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[Melanie Onn]

Having served on that Committee with the hon. Gentleman previously, I absolutely support its work and congratulate it, but it is always in the interests of a Select Committee to achieve consensus whenever possible and to try to agree a report that has unanimous support. That is the purpose and intention, and this case is a demonstration of excellent chairmanship and co-operation.

I congratulate the hon. Gentleman on playing his part in that, but it is the Opposition’s role to speak up for tenants. If we can make the process better, and if there is an opportunity for the Government to go further in assisting tenants—tenants are hard-pressed and this is a very expensive period of their lives—it is right that we speak up for them. We should try to encourage the Government to accept that they can reduce the barrier of high deposits to assist people directly. I just cannot support the view that charging more will assist renters in any way.

The Minister mentioned that I welcomed the Government’s reduction. I am delighted that they have listened to common sense and reasonableness, and that they have reduced the cap to five weeks from six, which was far too high, but it is not enough. If the Government can go further, I believe they always should.

[Kevin Hollinrake]

rose—

[Richard Graham]

rose—

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[Angela Crawley]

As the lonely Member on the SNP Benches, and given that the Bill applies solely to England, I will endeavour to keep my comments brief. The Government’s Bill is, however, welcome.

This Government are playing catch-up with the Scottish Government, who abolished tenant fees in 2011. The Scottish reforms gave tenants longer notice periods, indefinite security of tenure and limited rent rises, so it is most welcome that this Government are making changes here now. In Scotland, in many instances, money has gone back into the pockets of Scottish renters, but renters in England are currently losing out due to this Government’s inaction and failure to offer the same protections.

The Government have maintained the right-to-buy policy, but they must recognise that to give people the greatest choice and flexibility, they have to ensure that the opportunity of the right to buy is matched with an increase in home building and access to socially affordable housing. I am afraid the Government have not quite hit the mark on that yet, and people are simply being driven into the private rented sector, which limits their options and opportunities.

The Bill is very welcome. As we heard from Conservative Members, there remains the fear that this policy will mean that the costs of the abolished fees will be passed on to tenants in an underhand way, but that concern is unfounded. It has not happened in Scotland, where there has not been a significant spike in rents since the ban on fees, so I hope that the Government will take heed of that fact. Independent research commissioned by Shelter found that since 2012 landlords in Scotland had been no more likely to increase rents than landlords in other parts of the UK. Between 2012 and 2016, rents increased by 5% in Scotland, compared with 9% in England, so the abolition of tenant fees does not appear to have had a significant impact on costs.

That said, although such a policy has been shown to work in tenants’ favour, we must be vigilant about rent prices, so I hope that the Minister will outline how the Government will ensure that their policy puts tenants first. Landlords in Scotland can only increase rents with three months’ notice and no more than once a year, and tenants can contact a rent officer if they think that a rent increase is too high. I would be interested to know whether the Minister envisages similar protections and criteria for the policy in England. In Scotland, other than rent and a refundable deposit, which is capped at no more than two months’ rent, landlords cannot levy any additional charges, which means no holding deposits, administration fees, premiums or additional charges, whether refundable or not.

Tenants are secure when landlords can end a tenancy only on strict eviction grounds. The Scottish National party commends the work of charities and campaigners who secured additional renters’ rights from the Government in the House of Lords, and both Shelter UK and Generation Rent are happy for the Bill to pass with the Lords amendments. These rights include a short definitive list limiting default fees to charges for chasing late rents and for replacing lost keys or equivalent security devices. I noted the comments made by the hon. Member for Thirsk and Malton (Kevin Hollinrake) and I hope he is reassured that welcome mechanisms are in place. The provision closes the default fee loophole so that landlords will no longer be able to charge for a whole host of spurious defaults. It is also clear to landlords that they can continue to recover damages as they do now.

I welcomed the comments of the hon. Member for Harrow East (Bob Blackman), who, when comparing the position with the cap set in Scotland, rightly mentioned the greater availability of social housing in Scotland. He observed that a five-week cap was welcome, especially given that rents in England and Wales can be two to three times higher than those in Scotland. A five-week deposit cap is reasonable and will help renters to meet the initial fees needed to secure a home. Although Shelter originally argued for a lower cap, even it has said that it is

“pleased that the government didn’t stick at 6 weeks and we believe the 5-week cap will be a big improvement”.

That takes heed of the fact that costs are substantially higher in England, meaning that a five-week cap is much more reasonable.

Holding deposits are now illegal in Scotland, and that ought to be the case in England as well. Under the Lords amendments, if a tenancy does not go ahead, landlords or letting agents will be required to set out in writing the reasons why—they will also be required to give reasons for withholding some of a deposit—and they will have to do so within seven days of the decision not to progress with the tenancy. That will give tenants some clarity on exactly what happened to their money and ensure that there is a paper trail, which will make challenging unfair practices easier. Ultimately, both the landlord and the tenant will have more protection.

The ban on tenants fees in Scotland has made the rental sector fairer and easier to access. While I congratulate the Government on taking this positive step in the interests of people in rented accommodation, I urge the Minister to consider my points about abolishing tenant fees, while balancing protections for landlords with the rights of renters. The Bill will protect renters, many of whom do not have the luxury of owning their own home, and that ultimately is what we all want.

[Kevin Hollinrake]

I will try to keep my comments brief—apparently time is pressing—although there is much I would like to say about the Bill. I draw the House’s attention yet again to my entry in the Register of Members’ Financial Interests.

I am in principle and in practice very supportive of the Bill—I have been right from the start—despite my business interests and despite the extreme consternation within the industry at my support. It is absolutely right that there be a firewall around a tenant’s ability to shop around when they have found a house or flat they want to rent. We are right to believe in free and competitive markets. This was not a free and competitive market, and it is right that we act in this area. It is right that landlords pay for their own tenancy agreements, inventories and referencing. I support all those things. I also want to put on the record my support for the Minister. She has done a great job on the Bill and engaged with me and other colleagues who have had concerns about some of its provisions.

I would like to touch on two things: deposits and default fees. I will begin with Lords amendments 36 and 37. To say that three weeks would be an appropriate deposit length, as the hon. Member for Great Grimsby (Melanie Onn) has done, shows a complete misunderstanding of the issues. She is absolutely right to want to protect tenants—everyone in this place wants to protect tenants—but to do that we must be fair to landlords as well. She asked how a longer deposit period would help tenants. It would not help tenants not to be able to find properties to rent. If we deterred landlords from entering the marketplace, as a three-week cap would do, that would not help tenants.

I speak as somebody who has been in this business for 30 years. When I started, the only thing I could find in the marketplace was a shabby, damp, dark terraced house in the middle of York. It was not like today’s marketplace; tenants now have a breadth of choice, and that is because landlords have invested because they are treated fairly. The hon. Lady wants to treat tenants fairly, as I do, but we would not be treating them fairly if our policies resulted in their being refused tenancies by landlords worried about not getting their rent, not regaining possession of a property that had had significant damage done to it or not having enough deposit left for the remedial work. Her proposals would potentially put landlords in that situation, given that many tenants use their deposit as the last month’s rent, meaning there would be nothing left.

I still have concerns about restricting the deposit length to five weeks. As we know, it is eight weeks in Scotland. The average deposit in London is five and a half to six weeks, and in the rest of England it is not far below that, so the Bill will mean a change for many landlords, and we will have to keep this under review to make sure it does not have adverse consequences for tenants—that is the principle. Landlords are happy as long as they keep their properties well maintained and the rent is paid. If that is not the case, landlords will exit the market, which is not good for the tenants the hon. Lady looks to protect.

[Bob Blackman]

Does my hon. Friend recall that, during the Select Committee process, one of our considerations was that, if we set a six-week deposit limit, every landlord would rapidly move to six weeks from the current UK average of between four and a half and five and a half weeks?

[Kevin Hollinrake]

No, I do not agree with that because at the moment we have some flexibility. Under the Bill, we have no flexibility above five weeks. The trouble with that is this. I could charge a tenant five weeks, but what if they have a pet or certain other circumstances that make me less likely to want to rent it to them? I, as a landlord, will be less likely to rent to that person, under this measure, whereas with six weeks I would have some flexibility. We must make sure that this does not deter landlords from renting properties to people with pets. We do not want that, but it could happen. The Minister has promised to keep this measure under review, and I am absolutely sure that she will.

I want to touch on default fees and amendments 42 to 47. I welcome the clarification from the Minister in the letter she sent me a couple of days ago. She assured me that landlords and agents would still be able to charge for things above and beyond their existing obligations, and that is absolutely right, but the Bill itself only makes a couple of provisions on default fees, and one of those is for the replacement of keys. It sounds like a simple process, but it is possible to spend hours and hours chasing the tenant, chasing the keys, and then chasing the tenant to come and collect the keys. Someone has to pay for that work. It is not a question of the keys themselves; it is a question of the time and labour involved in their delivery.

Tower Blocks: Dangerous Cladding

Kevin Hollinrake Excerpts

Tuesday 22nd January 2019 Commons Chamber

[Kit Malthouse]

The hon. Lady is quite right; given the story on the front of the paper, anyone who lived in that block would be worried. We have reassured ourselves that the Greater Manchester fire and rescue service is satisfied that everybody resident in that block is safe tonight, and that there has been sufficient engagement by the owners and managing agents to make sure that the temporary measures that are in place are adequate to keep residents safe.

We understand that there is work under way. I believe that that work has been contracted, but it is yet to be made clear who will pay. We will put pressure on the owners and managers of that building, as we are doing with all owners and managers, to make sure that it is not the leaseholders who pay. At this stage, we are not ruling out any particular measure for making sure that that is the case.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Housing Minister is doing excellent work on the matter, both behind the scenes and out in front. I have spoken to him about it on a number of occasions. Particularly with private sector buildings where there is no obvious freeholder responsible for replacing the cladding, does he consider that central Government should step in and fund the cost of replacement until it can be established who is responsible for it, after which they should reclaim that money?

[Kit Malthouse]

My hon. Friend is quite right, and he points to something that will become an increasingly difficult issue. In a number of cases, the freeholder of a building—essentially, the owner of the building—may well be obscure, overseas, difficult to contact or, indeed, a dormant company. In those circumstances, as the Chair of the Select Committee pointed out, local authorities have the power to enter the premises and do the work. We have offered financial support to make sure that it gets done.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 10th December 2018 Commons Chamber

[Rishi Sunak]

Speaking of reserves, reserves in the hon. Gentleman’s constituency and area have actually increased by 40% since 2011. Beyond funding, the delivery of social care is a function of joined-up thinking with the NHS. I was delighted to meet the chief officer for Greater Manchester Health and Social Care Partnership in Manchester recently, and I am glad that almost all local authorities agree that our better care fund has improved joint working between health and social care.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Does my hon. Friend agree that the adoption of a German-style social insurance premium, as recommended by the joint inquiry of the Select Committees on Health and on Communities and Local Government, would ease funding pressures on local authorities and ensure that everyone had access to the social care that they needed?

[Rishi Sunak]

I thank my hon. Friend and all members of the two Select Committees for their thoughtful and detailed work in this area. I know that my colleagues in the Department of Health and Social Care are seriously considering all options in advance of the social care Green Paper, and the Committees’ recommendations are very much a part of the those deliberations.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 5th November 2018 Commons Chamber

[Kit Malthouse]

I am engaged in an intensive amount of activity on the subject of public land with my ministerial colleagues and those elsewhere. Hon. Members will have seen that we have recently changed the rules so that local authorities can dispose of their own public land at less than market value if they deem there is a social need to do so. Whether or not we can give them first refusal on acquiring that land will depend on their ability to deliver the homes that people need. I am very focused on numbers of homes rather than principles of disposal.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Our policies on affordable homes are almost entirely focused on affordable homes to rent. Does my hon. Friend agree that we should also deliver more affordable homes to purchase?

[Kit Malthouse]

My hon. Friend is one of the most innovative thinkers in housing policy generally, certainly on the Conservative Benches—not that there is much innovation on the Labour Benches, but there we are. He points to an area where there is strong demand. Very large numbers of people who would otherwise be tenants have a strong desire to own, and we would love to see them owning on a discounted basis. Hon. Members will have seen in the Budget the announcement of funding for neighbourhood plans to enable an allocation of discounted homes for sale, particularly in rural areas, and I would be keen to explore the idea further with my hon. Friend.

Shale Gas Development

Kevin Hollinrake Excerpts

Wednesday 31st October 2018 Westminster Hall

[Mark Menzies]

I will try to make some progress, but I shall also try to be generous in taking interventions.

It cannot be the case that decisions that were taking so long are now simply being sped up by the Government’s introduction of applications under permitted development rights. When we are talking about exploration sites, it can sound a bit innocent, but the scale of an exploration site is something to behold.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

My hon. Friend mentioned rural Pennsylvania, where I went to look at this issue in 2015. I came back with the distinct impression that it can be done in a way that is sensitive to the countryside, but it needs careful planning. North Yorkshire County Council developed a plan that restricts proliferation and density, but the concern with NSIP and permitted development is that they will ride a coach and horses through those restrictions. We need to restrict the development of shale as it is rolled out.

[Mark Menzies]

Like me, my hon. Friend has experience of dealing with the issue in his constituency.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Kevin Hollinrake Excerpts

Tuesday 16th October 2018 Commons Chamber

[Rishi Sunak]

I am always happy to visit all local authorities, and many of the authorities in Lancashire have submitted proposals to be in the upcoming 75% business rates retention pilots. I am pleased to see lots of local authorities in Lancashire working together, and I look forward to reading that application with interest in the light of those comments.

As we have seen, different areas, from Redditch to Lancashire, will have different housing needs and different numbers of long-term-empty homes, so it is absolutely right that decisions on whether to apply a premium, and the exact rate to charge, should be taken at local level, as they were before. Councils are acutely aware of the needs and demands of their areas. We recognise that local authorities will want to reflect carefully on the local housing market when deciding whether to issue a determination—for example, where a homeowner is struggling to rent or sell a property in a challenging market. We are clear that the premium should not be used to penalise owners of homes that are genuinely on the market for rent or sale.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I also put on the record my support for these proposals. At a time of housing crisis, it is incredibly important that we bring more homes back into use, which is exactly what this measure will do. Will the Minister set out measures for similar situations in which retail premises are unused? Filey, in my constituency, has a shop—I am sorry, Mr Deputy Speaker; I am about to conclude—that has been disused for some time and is a blight on its street. What can the local authority do about that?

[Rishi Sunak]

It is always a pleasure to take an intervention from my constituency neighbour, who represents what is without doubt the second most beautiful part of the country. I must admit that I am not familiar with that particular shop in Filey, but I will be delighted to chat with my hon. Friend afterwards, to make sure that the full resources of the Department can supply him with as many options as he can supply to the local authority in question.

--- Later in debate ---

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It takes a very good education to be able to talk at length without saying much at all.

We are at the end of a process as we reflect on the Lords amendment, which I should say is entirely in line with Labour’s manifesto. If anything, it could have gone much further. While the Lords have suggested a 10-year period regarding the charge on empty properties, the Labour manifesto proposed that after a year, because we recognise not only that there are lots of people on the housing waiting list and many people who are homeless—sofa-surfing and on the streets—but that these properties are often a blight on their local communities. It is right that the owners of the properties are held to account, and a charge is one way of doing so. Of course we welcome the amendment, but we would have liked it to go much further.

We have heard in Committee and in the Chamber that the staircase tax was about listening to the interests of business and how the business rates system was adversely affecting them, but it is slightly odd that of all the issues that businesses are raising when it comes to business rates, this is the sole one that has been picked out for this place to address. There is absolutely nothing about the condition of our high streets and town centres, and nothing about business rates’ impact on our pubs. There is no recognition that while we have rural rate relief for the last pub in a village, council estates are not given the same luxury for the last pub on the estate. Businesses are raising plenty of important issues.

Fundamentally, we see with rates the same thing that we are seeing with council tax: we are incrementally putting more and more pressure on what is a diminishing resource in many places. We have seen that with the revaluation, where the value shifted to London and the south-east, and certainly away from my region. The Conservative party has been in power for 10 years, through the coalition and more recently with the support of the Democratic Unionist party, and the housing shame in this country is a national scandal.

[Kevin Hollinrake]

The hon. Gentleman says that the Government are doing nothing to tackle some of the issues on the high street. Is he not aware of the Government inquiry that is led by Sir John Timpson on the difficulties the high street is facing and what we should do about it? Is it not a sensible starting point that we gather some evidence before we decide what we should do?

[Jim McMahon]

If all we had was time, we could carry out an inquiry and a review every few months, but the fact is that that leads to almost no change. Our tax base system is getting to a point where it will not be fit for purpose. How can we have a situation where someone’s ability to get adult social care in later life will be predicated on their local authority’s ability to raise money from a diminishing base of council tax and business rates, thereby putting more and more pressure on the communities that can least afford it? How can it be right that a child’s ability to get the protection they need will be based on house values in 1991 when the Government walk off the pitch and end revenue support grant completely? How can that be fair?

[Kevin Hollinrake]

The hon. Gentleman is being generous in giving way. Will he set out his party’s policies on rejuvenating the high street and replacing business rates?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. The debate is not about business rates.

[Kevin Hollinrake]

The hon. Gentleman raised it.

[Mr Deputy Speaker]

I know. I have allowed Members to generalise. I do not want to narrow down what the shadow Minister has to say. I allowed the Minister to spread his wings—perhaps I was a bit too open in allowing that. I do not want to concentrate on just one area.

--- Later in debate ---

[Simon Hoare]

Mr Deputy Speaker, I was about to talk about natural disasters such as fire or flood. A house that has been significantly damaged by flood may have to be rewired and replastered, meaning that people cannot move back in.

[Kevin Hollinrake]

Does that not reinforce the importance of local authorities using their discretion before levying extra charges on empty properties? They need to use their judgment.

[Simon Hoare]

My hon. Friend strikes at the beating heart of my argument and the importance of that three-letter word “may”. The word is not “shall”, not “would” and not “must”, but “may”.

What is entirely proper—this was implicit in my hon. Friend’s contribution—is the discretion that local authorities, with their local knowledge, will have. It is not for the Minister and his bowler-hatted officials—I see all the bowler hats in the official Box—to be absolutely prescriptive. Local authorities will know some of the rogues and chancers in their area, and they will know if there is a difficulty in the planning process. They should—I have little or no doubt that, with the exhortation of our hon. Friend the Minister, they will—understand the vital importance of the word “may”.

Trans-Pennine Rail Travel and Delays

Kevin Hollinrake Excerpts

Tuesday 11th September 2018 Westminster Hall

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I beg to move,

That this House has considered Trans-Pennine rail travel and delays.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Like those of many of my colleagues, my postbag has made for pretty grim reading this summer, with letter after letter from frustrated passengers. We have seen totally unacceptable delays and cancellations of trains, leading to a decline in punctuality from 91.5% in April 2017 to 85% in April 2018, and to as low as 62.1% this May.

First, it was the delayed completion of engineering works in the north-west by Network Rail and the lack of notice for operators of the new timetables that had a knock-on effect right across the north.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

I am sure the hon. Gentleman agrees that it is about not just the delays to the service but the timetable itself. The timetable that has been designed for Hull already leads to slower train times, without the added complication of additional delays.

[Kevin Hollinrake]

The hon. Lady makes some good points. There are longer term benefits to some of the work. It has been poorly executed, but I can speak only for my constituency, where, in the longer term, we will see a doubling of rail journeys between York and Scarborough. That is good news, but in the short term the delays are totally unacceptable.

Other issues have combined to make the situation even worse, such as the incomplete signalling works at Leeds station and significant congestion on Manchester services. As things were seemingly getting better—we had a meeting with TransPennine Express, which improved the rosters of its drivers—further disruptions were suddenly caused by a new policy to cut the number of late-running trains on the east coast main line. That policy prioritised trains and passengers travelling north to south over those travelling east to west.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

My hon. Friend is absolutely right to talk about the problem with rosters. When a train is delayed arriving at York and bound through his constituency via Malton to Scarborough, often the driver does not have enough hours left to get back to York without having to get off the train at Seamer or somewhere else. I hope that a little leeway can be introduced into the rosters, so that drivers can cope with a slight delay.

[Kevin Hollinrake]

My right hon. Friend is absolutely right: operators can take a number of measures to reduce the impact of some of the problems.

To give some examples of passengers I have spoken to or corresponded with, one told me that, since the end of May, because of the new timetables, his train

“had been cancelled or delayed nearly every single day”.

Another complained:

“Whether I get to work now is a painful lottery.”

Another frustrated rail user described how, on one day, two trains were cancelled, with 100 people, including the elderly and infirm, left without warning on the platforms at Malton station. At Malton, there are no toilet facilities, and the café opens for only limited hours each day.

[Emma Hardy]

I am sure the hon. Gentleman shares my frustration with the facilities at Hull station, which is managed very badly by TransPennine Express. We had to run a campaign to get a toilet attendant at the station, and my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) recently wrote to the managing director of TransPennine Express to express her disgust that the station does not have a manager. TransPennine Express is failing us with not only the railways but the stations.

[Kevin Hollinrake]

The hon. Lady makes some good points on behalf of her constituents. Although some issues, which I will come to later, are beyond the control of TransPennine Express, the operator clearly could deal with some issues that would alleviate many of the problems, and it is absolutely right that she draws attention to them.

Another traveller contacted me this week on Twitter to say:

“two days in a row no driver for the 15.17 from Manchester Piccadilly.”

The late departure of her train from Huddersfield meant that she would not make the 16.01 connection to Malton and would have over an hour to wait.

There are many others. Another gentleman said:

“TransPennine seem to cancel trains regularly to Malton and Scarborough which should not be happening. The frustration of passengers is starting to boil over and I know that some TPE staff are fearing for their safety. One of the staff told me on Sunday that nurses and doctors from Malton working at Scarborough Hospital were not getting to work on time on a regular basis. People are losing their jobs over the delays and cancellations.”

[Liz McInnes (Heywood and Middleton) (Lab)]

Just to add to that catalogue of woes, one problem in Manchester is that, owing to train cancellations, trains frequently have to stop in the centre of Manchester and do not carry on to Manchester airport. That causes a great deal of disruption. The whole point of TransPennine Express is that it should work for the whole of the north, not just part of it.

[Kevin Hollinrake]

The hon. Lady makes a good point. We have had similar issues from York travelling east, and from east travelling west, which I will come on to in a second.

There is also the problem of overcrowding due to cancellations and the short-forming of trains, which is when they travel with fewer carriages than specified. My constituent explained:

“the late-running train from Malton was so overcrowded on arrival some passengers had to wait for the next train, hopefully an hour later…Typically on the return journey from Leeds or York you can wait for 90 minutes for a York/Scarborough train.”

The theme is the same: people are completely fed up with the delays, the cancellations and the lack of information and clear communication. Many people are leaving York only to be dumped at Malton, which is a great place, but not if they do not want to be there at that time. If people were notified that that was going to happen, they would probably stay at York where there are facilities. Again, it is about communication. These things have a knock-on effect on work and other appointments. They also put huge stress on holidaymakers trying to make it to Manchester airport. The result is general, costly inconvenience.

In this day and age, people are entitled to expect a reliable service. It is not unreasonable to think that, if someone plans to take a scheduled train on a specific date at a specific time, it will be there and they will not be hanging around for hours on end waiting—a huge inconvenience for not just the person themselves but everyone involved in their day. Recently there have been more delays, more cancellations and more people stranded. In one instance, spectators trying to get to the cricket at Scarborough were turned back at Malton. For the county’s cricketing faithful, missing Scarborough festival is as close to sacrilege as it can get in Yorkshire.

To put the situation in context, over a three-month period in the summer of 2017 in my constituency, six trains were cancelled at Malton. This year, over the same period, 56 trains were cancelled. During that period in 2017, 110 trains between Leeds and Scarborough were more than nine minutes late. This year, there were more than four times as many—a total of 479 delayed trains.

We need much more joined-up thinking and a far more collaborative approach between Network Rail and the operators. They need to work together to put the needs of passengers first—or perhaps train operators should have more control over the tracks. I know that the Minister and the Transport Secretary are looking at that possibility very closely and are keen to explore it further.

Whichever solution we come to, people are entitled to a reliable service. They should be able to expect to get to work, to appointments to school and to their holiday on time or, at the very least, to get up-to-date information about what is happening. Otherwise, people will inevitably stop using our rail service and return to their cars. That will, of course, put further pressure on already congested roads.

Although punctuality has improved to 80%, that still means unacceptable delays. To improve matters in the short term, TransPennine has proposed timetable and other changes to Network Rail, to take effect in December. I very much hope the Minister, who I know is keen to resolve the issues, will do all he can to support the changes and bring them into effect. Given that it takes eight weeks to implement changes, as he will know, time is critical, and we need to get Network Rail to accept the proposed changes if those will bring about an improvement in performance.

In the medium term, the Minister is undertaking a review of rail disruption. It is absolutely right that we look at the issues and identify what has gone wrong, rather than jumping to conclusions, before we start trying to apportion blame. The Minister is examining the issue with Councillor Judith Blake, leader of Leeds City Council, which I welcome. We look forward to that review with keen interest. It is right that when we determine who is responsible, they are held to account and we put measures in place to make sure that these things do not happen again.

Looking at the wider perspective, if there was ever an example of why we need more powers devolved to the north to resolve these kinds of problems and to prevent them in the future, this is one. In terms of the strategic, longer term approach, Transport for the North is keen to be given more powers over infrastructure and operators in the north of England so that the region can take responsibility for the delivery of a much better, more efficient and more tailored service. That call is supported by many, including the train operators themselves. I know that there are issues about the giving up of powers by one authority to another. I know that the Minister is looking at that closely and that it is not as straightforward as it may seem, but if it would improve performance and allow decision-making powers to be returned to a more effective local organisation that could look at these things holistically, it has got to be seriously considered.

The summer’s disruption has shown that we really do need the tools in the north. By that, I mean the powers, but also the investment. Part of the problem has come from the fact that we are investing in the lines. The changes have not been implemented as they should have been, but the fact that we are investing, which will ultimately lead to an improved service, is to be welcomed, as is the Government’s planned £3 billion upgrade of the TransPennine route and their commitment to Northern Powerhouse Rail. Those measures and proposals are to be welcomed and celebrated.

Transport for the North has made a plea. I am one of the chairs of the all-party parliamentary group for the northern powerhouse, and we are asking the Minister and the Chancellor to look at bringing forward Northern Powerhouse Rail to coincide with the completion of High Speed 2. At the moment, Northern Powerhouse Rail is scheduled to be completed in 2040. We are asking for the delivery of that new, transformational service, which will halve journey times between Leeds and Manchester, to be brought forward to 2032. I hope the Minister will comment on that. With investment and the powers to make decisions, the region can transform our transport system to provide a service passengers deserve and, at the same time, bring massive and long overdue economic benefits to our region, through increased productivity and the creation of more jobs.

--- Later in debate ---

[Joseph Johnson]

As I said when I met the delegation that the hon. Lady refers to, I am keen to look at Hull’s services and see how we can improve them for the future. Hull is a critical city and we want to ensure that the hon. Lady’s constituents are getting the kind of services that they need so that Hull and its economy can thrive. I am happy to see any further representations that she wants to make about where she sees the timetable falling short and the kinds of changes she wants to see in the future. It remains the Department’s overriding priority to make sure that the industry restores reliability for passengers as soon as possible.

With respect to Manchester, York and Scarborough, with services affected by congestion in the central Manchester area and the rules applied by Network Rail when considering which services are given priority at key pinch points, many of the York/Scarborough services have been subjected to an agreed performance recovery plan. That requires them to terminate services short of destination in certain circumstances in order to limit the potential for a reactionary knock-on for other services.

In the light of that plan, TransPennine Express has been implementing a number of measures to improve performance on the line. For example, it has pledged to change the schedules of its drivers to reduce the circumstances where trains need to be terminated prior to arriving in Scarborough. It has also promised to advise passengers, wherever possible, prior to their departure from York if a train does need to be terminated at Malton, so that they can wait for the next train from York if they so wish.

My hon. Friend the Member for Thirsk and Malton mentioned communication shortfalls. TPE is also working with London North Eastern Railway on the east coast to ensure that communications at York during disruptions are improved for passengers, with clear guidance, advice and information, and arrangements to allow eligible season ticket holders to claim compensation, in addition to the ongoing and regular delay repay process.

[Kevin Hollinrake]

The Minister mentions rosters and communication, but TransPennine promised those measures to me in a meeting four or five weeks ago. Does he know whether it has implemented them? It would be interesting to see whether it has actually implemented them or whether it is still promising them.

[Joseph Johnson]

My hon. Friend is rightly anxious to see progress on behalf of his constituents. The Department will hold TPE to account for the delivery of its promises. It is vital that we see rostering at a sufficient scale to enable the services to proceed as scheduled. It is also vital that communications are of the quality that his constituents expect.

It is right that passengers are compensated after severe disruptions. Like Northern, TPE has opened compensation for season ticket holders. TPE season ticket holders on routes that were disrupted are eligible for up to a week’s compensation. Both train operators—Northern and TPE—will be opening an additional compensation scheme to ensure people who travel regularly on the disrupted routes without a season ticket are also eligible for compensation. That was announced at the end of July by Transport for the North, which is leading on the design of the scheme. Further details will be announced shortly.

More broadly, the Secretary of State has commissioned an independent inquiry by the Office of Rail and Road, the independent regulator, to examine why we were in that situation and to reduce the chances of it ever happening again. An interim report is expected to be published this month ahead of a final report towards the end of the year. Following recommendations from a joint industry group including TPE and Northern, the operator will implement a number of further performance improvement measures from December 2018 focused on the north trans-Pennine route, where performance has been poorest. A number of other improvements are also due across the region in the next year or so. In 2019, TPE will be introducing its three brand new Nova train fleets, which will provide additional capacity across the network. Customers will benefit from more seats, faster journey times and improved comfort with greater leg room.

Investment across the north will deliver more services by 2020. We plan to deliver additional services and capacity in the next two years over a series of timetable changes. However, they are to a degree predicated on infrastructure works being delivered in time by Network Rail.

[Kevin Hollinrake]

I am grateful to the Minister for his comments. Is he able to shed any light on the issue of short-forming? Is it appropriate policy, and what can we do about it? It is clearly causing significant overcrowding on some routes, and some people are being prevented from travelling on certain trains and have to catch later trains.

[Joseph Johnson]

The Department monitors short-forming very closely as part of its supervision, jointly with Transport for the North, of the Northern and TPE franchises, which are jointly managed with Transport for the North. The operators are required to provide specified levels of capacity, and if they short-form trains or provide fewer carriages than they are meant to, the Department takes that very seriously and holds the operator to account for it.

Tenant Fees Bill

Kevin Hollinrake Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[Rishi Sunak]

On that relatively unrelated point, it is worth pointing out that when similar legislation was introduced in Scotland, we did not see any greater increase in rents than we would have anticipated.

On the specific question asked by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) about tenants’ ability to enforce and the ease of their doing so, it is worth bearing in mind that default fees are specifically required to be identified in the tenancy agreement. Up front, at the outset of a new tenancy agreement, the new tenant’s contract has to say exactly what default fees may be relevant under that contract—for example involving the loss of keys, late rent or the loss of an alarm fob. That has to be there in black and white; it is not as though the landlord can come up later on with something that they want to charge the tenant for. That will also be spelled out in the guidance, so it will be very easy for tenants to know whether the default fees they are being charged are appropriate.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the Minister give way?

[John Stevenson (Carlisle) (Con)]

Will the Minister give way?

[Rishi Sunak]

I am happy to give way to my constituency neighbour.

[Kevin Hollinrake]

May I take this opportunity to draw the House’s attention to my entry in the Register of Members’ Financial Interests?

On the point the Minister was making about redress for a tenant, does he agree that the vast majority of these problems are very easily solved by contacting the redress schemes, which are very effective at resolving any disputes that may arise? Will he clarify the point about cleaning? The cleaning of a property that a tenant has left in an inferior condition should still be the responsibility of the tenant, and that is a reasonable requirement to put into any tenancy agreement.

[Rishi Sunak]

We are very lucky to have the insights today of my hon. Friend and constituency neighbour. He has been a successful business operator in this particular industry and I always listen to what he says with keen interest. I can tell him that he is absolutely right with regard to redress schemes. Our experience—we have heard this throughout the Bill process—is that they do work well and provide a very easy way to resolve most issues. Simply talking directly to the agent and the landlord in the first place is also a way to resolve the vast majority of issues without having to turn to a specific or formal redress scheme.

On the second point, of course a state of condition and an inventory may be attached to a tenancy, and such a cost would be recovered during the normal course of a deposit return. The tenant would obviously have obligations in that regard, and a breach of those terms would be considered damages in the normal way. However, there will not be a specific charging of fees at the outset of a tenancy; unless otherwise broadly agreed, that is covered by the damages provision in a contract.

I believe my hon. Friend the Member for Carlisle (John Stevenson) wanted to intervene.

--- Later in debate ---

[Rishi Sunak]

As I mentioned previously, Newham is obviously ahead of the curve, and the Committee did hear evidence about that, but many other local authorities are now following suit. Liverpool, Camden and Torbay are examples of local authorities that are getting to grips with the new legislation and putting it into effect in good order. I am pleased to say that, as these are relatively new powers, over the summer recess my Department conducted an extensive engagement activity across five different events throughout the country, involving almost 200 different local authorities, to talk specifically about the enforcement of regulations in the sector. Those conversations have sparked a lot of interesting collaboration across local authorities as they contemplate using the existing regulations and the new legislation in future. As we go forward together, with greater awareness and collaboration and, indeed, the greater funding that will come as a result of the legislation, I am confident that we will see enhanced enforcement activity from local authorities, where required.

[Kevin Hollinrake]

The Minister is doing an excellent job at the Dispatch Box, as always. Does he agree that another method of sanctioning landlords and agents who will not comply with reasonable regulations is through the redress process? The requirement for agents to be members of a redress scheme was introduced by our Administration in 2014. It was a seminal moment in the raising of standards in the industry. The requirement to be a member of a redress scheme, with an agreement going across the other two redress schemes, means that a practitioner can in effect be banned from the sector because they are not allowed to be a member of a redress scheme. If that idea is expanded to landlords, we will have another method of excluding from the sector people who will not do the right thing in the right way.

[Rishi Sunak]

I thank my hon. Friend for that clear example of an activity that is already happening that enables redress to be found. He is absolutely right to highlight the potential extension of membership of redress schemes from agents to landlords, which would further improve tenants’ ability to seek redress when they need it and would more generally act as an incentive for good behaviour in the first place. He will know that the Government are conducting a broader conversation about the regulation of estate agents, about ensuring that the industry is properly regulated and that standards are high and about ensuring that the actions of a small minority do not jeopardise the health of the great majority of the sector. That is an ongoing piece of work, and I am sure that we will discuss it in the House in due course.

As we discussed in Committee, when a tenant has paid an unlawful fee, it is only fair that they should be given a say in how those fees are reimbursed, and the hon. Members for Great Grimsby (Melanie Onn) and for Croydon Central (Sarah Jones), whom I am pleased to see the in their places on the Front Bench, tabled an amendment to that specific effect. As I said I would in Committee, I have considered their amendment and agree that such a provision would be a worthwhile addition to the legislation. As such, amendments 9, 10, 12, 18, 19 and 43 will place a requirement on landlords and agents to seek consent if they wish to offset such a fee against a tenancy deposit or rent payment. I hope that those hon. Members will be happy with that incorporation.

I am pleased to say that our amendments go slightly further than the one proposed by the Opposition Front-Bench team, by also requiring agents and landlords to seek the tenant’s consent if they wish to offset the holding deposit from the tenancy deposit or a future rent payment. If the landlord or agent does not seek consent from the tenant or relevant person about how the prohibited payment or holding deposit should be refunded, they will be judged not to have fulfilled their obligation to repay the fee. That will leave the landlord or agent liable for a financial penalty and give the tenant the right to recover their fee through the relevant enforcement authority. It will also restrict the landlord’s ability to serve a section 21 eviction notice.

I have already explained why we do not support the amendment tabled by the hon. Member for Great Grimsby on the default fee provision and why our proposed alternative is fairer and more workable. I wish briefly to address amendment 1, which she also tabled and which would increase the financial penalty for a breach of the ban from £5,000 to £30,000, and explain why we do not support it. We want the fine to act as a serious deterrent to non-compliance. We have listened to feedback from across the sector, and we firmly believe that financial penalties provided in the Bill are the right ones. I think that most people would agree that a £30,000 fine for an initial breach of the ban, as proposed in the amendment, would be excessive. We do not want unfairly to penalise landlords and agents who may inadvertently breach the ban on fees. In particular, that might seriously financially hurt individual landlords who, for context, collect on average rent of around £8,000 from a single properly. A £30,000 fine is almost four multiples of that.

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[Melanie Onn (Great Grimsby) (Lab)]

I welcome the Government’s amendments. They go some way towards making the Bill much more meaningful, and we will support them. I remain, however, disappointed at the lack of movement on the requirement for deposits, which will stay at up to six weeks. I believe that that remains a significant financial barrier into the private rented sector for many people. Deposits are currently in the region of four weeks at a natural level. Allowing deposits of up to six weeks is likely to encourage more landlords or agents to increase their length and make it even harder for people to access the private rented sector.

[Kevin Hollinrake]

The hon. Lady makes a point about the length of deposits. Does she not acknowledge that there can be different circumstances? For example, a tenant with pets may damage a property more than a tenant without pets. If we do not allow some flexibility, people in those circumstances might not be able to rent a property at all. Scotland provides a basis for many of the measures in the proposed legislation, and the length of a deposit in Scotland can be up to two months. Does she therefore not agree that six weeks is actually fair and covers more circumstances than simply keeping it at a month?

[Melanie Onn]

I respectfully disagree with the hon. Gentleman’s perspective. Four weeks is an acceptable deposit. Introducing the possibility of an increase to a maximum of six weeks is unnecessary, and I urge the Government to look at that again.

Before I move on to amendments 3, 1 and 2, I would like to return to a number of important issues raised in Committee that have not been addressed in the Government’s amendments. I hope that the Minister will provide more clarification on them. Perhaps they could be considered as the Bill goes through its next stages.

It is about 12 weeks since we last discussed the Bill, which is something like the timeframe that I and many of us had in mind when the Minister said in Committee that its main provisions would come into force in “a few months” after the Bill had passed. However, on her YouTube channel, “Agent Rainmaker—Letting Agent Growth”, Sally Lawson, the former president of ARLA Propertymark, tells us that the measures in the Bill will not come into force until April next year. That seemed to be a fairly definite date. Can the Minister advise the House on whether that is simply speculation, or whether it is the very earliest the Government can manage to bring forward these very important measures?

I would like further clarification regarding erroneous right to rent decisions by the Home Office and their impact on the return of a holding deposit. Will the Minister confirm that, if the Home Office makes a mistake with a right to rent check and misinforms the landlord that a tenant has failed the check, the landlord will not be liable for a financial penalty? Will he confirm that the landlord will simply be required to return the holding deposit to the tenant, as recommended by the Housing, Communities and Local Government Committee?

Despite the need for further clarification on those issues, I am pleased that the Government have acceded to common sense on a number of issues that we in the Opposition raised in Committee. First, I welcome the Government’s acceptance of the amendment we tabled in Committee to give tenants who are owed money following a prohibited payment a choice over how it is repaid. The original wording could have caused problems for tenants in certain circumstances. More widely, it would have contravened the principle that the money belongs to the tenant and that it is for the tenant to decide what to do with it.

Secondly, after a lot of persuasion from the Opposition, the Government are taking steps in a positive direction on their description of a default fee. It is right that it includes the definition of “reasonable” in association with costs and that there will now be a requirement to produce audits or invoices of any costs levied. Those changes will add substantial benefits to the Government’s definition of default fees and help to prevent the very worst offenders from defining unreasonable costs as a loss.

Similarly, requiring landlords or agents to provide invoices for their costs will provide greater transparency for tenants and represents a substantial shift from the Government’s position in Committee. Giving tenants an invoice allows them to account for what they are being charged and provides a platform for an appropriate challenge when the fee is considered unreasonable or prohibited. I am reassured by the Government amendments that the Minister has heard the point that simply relying on guidance, which was the initial proposal, would not be enough to prevent the continuation of tenants being overcharged. The only way to end punitive default fees, which unfortunately have turned into a cash cow for some unscrupulous landlords and letting agents, is to spell out firmly in the Bill what is and is not acceptable, rather than to rely on guidance.

Less than half of renters in this country see their deposit agreement before handing over their money, and a third have signed a tenancy agreement without fully understanding it. The Bill provides a loophole for unscrupulous landlords and agents to exploit that by placing unfair terms in their tenancy agreements. That is why I ask all Members to support amendment 3. It would provide a clear list of acceptable payments that cover a loss to the landlord. It would allow for fees to be charged only when there was a clear and indisputable cost, and it would prevent the use of tenancy agreements as a device through which to include additional charges. Although we set out a limited set of terms for permitted payments in the amendment, it would not stop landlords claiming damages or taking money out of a deposit where needed. The amendment relates only to situations where there is no dispute and there is a real, additional or exceptional cost to the landlord that falls outside usual expected business costs, such as sending a letter or email to a tenant.

[Kevin Hollinrake]

Are the fair conditions in amendment 3 examples of charges that may be levied or a definitive list? One thing the hon. Lady has neglected to put in the amendment, for example, is what happens if a tenant breaks the terms of the agreement and wants to leave early or change the sharer. That can result in significant costs to a landlord or agent. Is she excluding that possibility with the amendment?

[Melanie Onn]

I accept what the hon. Gentleman says. The amendment would serve as an example. I would be happy for it to be adopted and then to be taken on further by the Lords. It sets out examples, rather than being a full definition of the circumstances in which a tenant could be charged.

In principle, putting in place a simple paragraph such as that in amendment 3 would make it far clearer to tenants when a breach had taken place. As it stands, the Bill will still be extremely confusing for any tenant trying to tell whether a breach has taken place. That, in turn, will inhibit the right and opportunity of a tenant to properly challenge a landlord or letting agent at a tribunal. Providing clarity on the face of the Bill would remove the ambiguity. Under amendment 3, it would be easy for a tenant to tell if they had been charged an unfair fee, and they would be better able to self-enforce their rights.

Such self-enforcement may be necessary. The Minister talked about it in very positive terms, but I am not sure it is so positive. It reinforces the point that the Bill does not carry the weight of enforcement behind it to take landlords and letting agents to task properly when they continue to break the law. For the Bill to succeed, it must be backed by sufficient enforcement power.

That is why we propose amendments 1 and 2, the primary aim of which is to allow trading councils the freedom to apply higher fines to those who break the rules. That would improve the enforcement of the Bill twofold. First, it would deter landlords and letting agents from taking the chance of applying prohibited levels of fines towards tenants. Even with strong legislation, we know that tenants can often end up in illegal renting situations owing to a lack of knowledge, a lack of confidence to challenge an unfair decision or the fear that a complaint or relationship breakdown could leave them without a house and on the street. We can see this in the Citizens Advice report “Touch and go”, which highlighted the fact that 44% of tenants did not complain about a category 1 hazard in their house.

Secondly, the Opposition are worried that unscrupulous landlords and letting agents may still be tempted to charge prohibited fees in the belief that they will not be challenged until they have taken well over £5,000 in prohibited fees, and that as a result they will see those fines as a business cost. As the hon. Member for Harrow East (Bob Blackman) pointed out, it is just the cost of doing business, rather than the real deterrent it should be. I echo his point that some of the people who local authorities have been enforcing against are not genuine, upstanding, licensed and registered, above-board landlords and agents, but criminals and crooks, and the fine of £5,000 will simply not be enough to deter them.

The Minister had concerns about the £30,000 fine, but amendment 2 states only that it “must not exceed” £30,000. That need not necessarily be the first fine—that would be for the enforcement agency to determine, given the circumstances and an understanding of the situation. Still, to provide a full deterrent would certainly increase the odds against those who take the chance and charge prohibited fees.

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[Bob Blackman]

It is a pleasure to follow the hon. Member for Oxford East (Anneliese Dodds) and the passionate view of her constituents. May I draw the attention of the House to my entry in the Register of Members’ Financial Interests?

In the absence of the Chair of the Housing, Communities and Local Government Committee, I had the honour of chairing the Select Committee pre-inquiry into this legislation. We looked at a lot of the evidence that is now coming forward. I am delighted that the Minister has seen fit to make some changes during the passage of the Bill and to accept many of the Select Committee’s recommendations.

The hon. Member for Great Grimsby (Melanie Onn) raised the matter of how many weeks’ rent a deposit should be. It is a shame that she has not tabled an amendment to that issue on Report, because I think several Conservative Members would feel very sympathetic towards restoring what the Select Committee recommended, which was a compromise. There was an argument for four weeks and an argument for six weeks, and we took the view that five weeks was the appropriate compromise for two reasons. First, if the limit is four weeks’ rent, there is a risk that the tenant will just refuse to pay the last month’s rent at the end of a tenancy. Secondly, a deposit of six weeks’ rent would almost certainly become the norm for most landlords, and would therefore be inflationary on the amount of deposit that would be charged.

I gently remind the Minister that in the last Budget the Chancellor allocated some £20 million towards a national rental deposit scheme, following representations from me and several other colleagues to set one up. The Department has not yet set up that scheme, but by saying that the limit will now be six weeks, instead of four or five, the Minister is going to reduce straightaway the number of families that can be assisted under the national rental deposit scheme when the Department finally does bring it forward. I ask him to look at this figure again, because it will limit the number of people who could be assisted through this programme.

On the issue of enforcement, I welcome the changes proposed by the Minister. Many of the changes, which are very clear, go above and beyond those proposed by the Opposition. Having looked at the evidence in relation to this legislation, many of us will share concerns about the difference between what I would classify as true costs, and charges. In answer to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), the key question is, who does the letting agent work for? The letting agent works for the landlord, not the tenant. It is the responsibility of the letting agent to acquire tenants on behalf of their employer—namely, the landlord—and therefore there should not be two charges incurred. The letting agent should charge the landlord for their fees, not charge the tenant for acquiring.

However, there are costs associated with acquiring a tenant—for example, when there is a requirement for a credit check. If a prospective tenant were to fail that test, there is a cost that someone has to collect. If an applicant makes a request through a letting agent and a credit check is then undertaken that is failed by the prospective tenant, it is reasonable that the cost should be passed on to that individual, particularly if they were going to knowingly fail the credit check in the first place. That is an example of a true cost as opposed to a fee charge. My hon. Friend has set out a set of areas and then a limit on the charges that a letting agent may charge a tenant. I trust that he will not press his amendment to a vote, because that goes completely against the spirit of this Bill and what we are proposing.

[Kevin Hollinrake]

My hon. Friend is making an important point on referencing. Does he agree that it might be beneficial if the Bill were clarified so that everybody was clear about circumstances in which some of the holding deposit might be retained by the landlord or the agent in the case of somebody failing a reference check? If that were not the case, people on low incomes, for example, could be discriminated against when they apply to rent a property.

[Bob Blackman]

I thank my hon. Friend for that intervention. We clearly need to be more specific. I accept the principle set out by my hon. Friend the Minister that we should not put this in the Bill, but it should be put in regulations, because we can change regulations rather more easily and add things to them at an appropriate time without having to go through primary legislation once again. This is a question of detail that I ask my hon. Friend the Minister to look at again.

The other issue is charges for, for example, lost keys, cleaning or damage that may be done to a property. Those are reasonable costs that a tenant should incur. If that has to be set out in the tenancy agreement, it must be made crystal clear in what we lay out in regulations and guidance to landlords what is allowed and what is not allowed. In particular, things that are not allowed must be specified as being completely outwith the potential of the Bill, as opposed to being in the Bill.

I thank the Minister and his team for looking at and reflecting many of the recommendations that the Select Committee made on the draft Bill. With a few more tweaks, this can be an excellent Bill that we can all be very proud of.

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[Sir Christopher Chope]

No, I will not give way, because I want to allow hon. Members who have not yet spoken to get in.

Why are we preventing letting agents from charging for credit reference searches, identity and passport checks, and all the rest? When one looks at the evidence in support of the Bill, it is quite clear that if the existing laws were properly enforced, the need for the Bill would not have arisen. I am extremely sceptical about the Government’s assertion that enforcement will be a lot more effective. If they really believe that, why do they not place a duty on local authorities to enforce the legislation, rather than leaving it as a mere power?

The legislation will have a lot of unintended consequences. It is already difficult enough for tenants to obtain rented accommodation if they have pets. It is very difficult for tenants on housing benefit to obtain accommodation. It is very difficult for tenants who do not have clear British citizenship to get rented accommodation. All those things will become a lot more difficult as a result of this additional burden on the private rented sector.

Some 30 years ago, I was a junior Housing Minister. I was much associated with deregulating the sector—introducing shortholds, getting rid of controlled tenancies and enabling the growth that has taken place in the private rented sector. I am disappointed to see my Government working in the opposite direction. I signed amendment 4, which was tabled by my hon. Friend the Member for Shrewsbury and Atcham. I understand that he has been bought off by the Government, so I will not press the matter to a vote. However, I think that there is too much crowd-pleasing on the part of the Government and not enough sensible regulation and recognition of the important work done by those in the private rented sector.

[Kevin Hollinrake]

This is the perfect opportunity for me to speak. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as a result of which I recused myself from the Select Committee’s pre-legislative scrutiny of the Bill. On the face of it, the Bill will cost my business more money than I wish to think about, and it is certainly keeping my finance director awake at night; we are talking about significant sums. Nevertheless, I disagree with my hon. Friend the Member for Christchurch (Sir Christopher Chope), because we do not have a free market here. I think that it is an entirely Conservative policy to make sure that we have free enterprise and a free market.

Tenants choose properties; they do not choose letting agents. Landlords choose letting agents. Despite the cost, we should be standing up for the values of free enterprise. The business I have mentioned, which I am still involved with today, could not have been built without the opportunities provided by free enterprise, so there is no way that I could not support the Bill. I appreciate the amendment tabled by my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), but I think that even a cap is the wrong approach. We need to abolish these fees completely, as I have consistently argued to the industry.

I want to make a couple of points about free enterprise and the private rented sector. The shadow Minister, the hon. Member for Great Grimsby (Melanie Onn), said that the private rented sector had increased exponentially over the past few years. When I started 30 years ago in this business, I operated in York, where the lack of supply meant that anyone who wanted to rent a home would probably get a shabby, damp, dark terraced house. It is because of private sector investment that we now have such tremendous supply in this marketplace, generally at fair rents.

I am not sure where the hon. Member for Oxford East (Anneliese Dodds)—she is not in her place—got the figure of an 18% yield from, but that seems incredible. On that basis, there is probably a march of investors heading down the road to Oxford East to buy property. Generally, yields in the sector are very tight—about 4%, not 18%—because of the competitive nature of the market.

I support the Government amendments to ensure that any charges are clearly defined in a tenancy agreement.

[Dr Allin-Khan]

Will the hon. Gentleman give way?

[Kevin Hollinrake]

I am sorry; I cannot, because of the time. Many people have been here for the whole debate and want to speak.

I cannot support amendment 3, because it is restricted to two elements: a lost key, or a late rent payment. Tenants create many other costs for landlords and agents, and it is only fair that landlords and agents should be reimbursed. As an example, one tenant recently rang one of our offices late at night on the out-of-hours phone number and said that they had forgotten where they lived and asked whether we could go and pick them up and take them back home, because they had had a little bit too much to drink. That is not a typical scenario, but there are lots of different situations in which landlords and agents may incur costs. I am thinking particularly about the chasing of rent and a change of sharer, which represent significant costs to landlords. I would support a limited and fair list—and most agents will be fair.