Post Office Services: Edinburgh West

Debate between Kevin Hollinrake and Matt Rodda

Monday 27th November 2023 Commons Chamber

[Kevin Hollinrake]

Absolutely. This is a real opportunity for the network, and not just for a longer-term contract for more stability. It has the banking framework, which forms its relationship with the banks. The banks have made around £2.5 billion of cost savings through the closure of branches. We think that a greater share of those savings should be provided to the post office network to improve remuneration and invest in productivity tools for postmasters, such as cash-counting machines, so that the job of running a post office is more lucrative. We see that as a big opportunity.

In the banking framework, we have been clear with UK Finance and Post Office that they should be ambitious in negotiations and secure extra remuneration for the network. There were some improvements to remuneration in April, but I am aware, as I speak to postmasters all the time, that those improvements have not gone far enough in their view. I work closely with the National Federation of SubPostmasters, and we hear these views all the time, so we are very alive to the difficulties.

The other big opportunity that the hon. Lady implied is in the increasing number of parcels couriered around our country. There has been an exciting development in the parcels market for the Post Office, which has just launched something called Parcels Online. For the first time, Post Office will offer a multi-carrier in-branch proposition: because the exclusive agreement with Royal Mail has ended, a customer can go into a post office and use the services of DPD, Evri and others, which are being sold by postmasters. That is a great opportunity for postmasters and may well lift their revenue. That is the kind of future we see for post offices: providing access to cash and banking services—and getting paid better and more lucratively to do so—and offering parcel hub opportunities. Those are both really important services.

The hon. Lady mentioned banking hubs. That is a slight bone of contention, in my view. At the moment, they have not really been co-located with post offices, and I would like to explore with UK Finance more opportunities for co-location where space allows. It makes little sense to have two different units on the high street when we could have one really sustainable unit. That is something we are looking at too.

On what the Government can do through direct support, we have provided more than £2.5 billion over the past 10 years and will provide £335 million between 2022 and 2025. We have also provided around £50 million through the annual network subsidy for rural post offices, as well as other measures we provide to the general business community, such as rates support worth £13.6 billion. Another £4.3 billion was announced in the autumn statement.

[Matt Rodda]

Would the Minister reassure me on the interoperability of post office systems with those belonging to building societies? We have talked about that before, given some of the difficulties with accessing cash in my constituency. Will he also pass on my concerns and those of colleagues to Royal Mail about the lack of cover for postal staff when they are off sick? That appears to be driving some of the problems with delivery.

[Kevin Hollinrake]

The hon. Gentleman is absolutely right to highlight those issues. Through the work that the Economic Secretary to the Treasury and I have done with UK Finance, more clarity has been given to postmasters about the limits for certain banks that have particular problems. The feedback I have got from postmasters is that the situation has improved, but I am very happy to hear feedback from Members of the House, including the hon. Gentleman, if that is not the case.

Of course, Royal Mail and the Post Office are two different things. Royal Mail has recently been fined for its underperformance. It has been affected by many different issues, including, of course, industrial action; it has had its share of issues this year. Hopefully it is putting those issues behind it, but we certainly expect to see a much better performance from Royal Mail going forward.

Like all retailers, post offices are facing very significant challenges at the moment. We have been clear about their value, both socially and economically—for our communities and for our economy. We will continue to work with the Post Office to ensure that both the organisation itself and the network are sustainable and fit for the future. We very much appreciate the work that the hon. Member for Edinburgh West does in this area; she quite rightly challenges me all the time on this. We are very much on the same page when it comes to making sure we have a viable network around the country, not least in our rural areas.

Question put and agreed to.

Leasehold Reform (Ground Rent) Bill [Lords]

Debate between Kevin Hollinrake and Matt Rodda

2nd reading
Monday 29th November 2021 Commons Chamber

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

It is a pleasure to speak after my former colleague in the Cabinet Office, my hon. Friend the Member for Loughborough (Jane Hunt). She made some good points, not least on part-built developments. I support the Bill’s intent.

There is an expression that you should never take down a fence until you know why it was put there. As I set out in my intervention, I have one or two particular concerns. I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I have been involved in the property sector for a long time. I am not directly involved in it today and I have no vested interest—that is for the people who make comments on Twitter in particular, because I will not agree entirely with many of the points made about completely scrapping leasehold, in effect. I am actually a leaseholder, rather than a freeholder, in this context.

On the leasehold system, for most of my life, when it comes to selling and renting property, leasehold has been a perfectly workable form of tenure for most people—for most leaseholders and indeed freeholders. In recent years, there is no doubt that the system has been tremendously badly abused. It is right of the Government to act on that in no uncertain terms. However, the fence to which I referred is between freeholders and leaseholders, and it was put there to try to ensure a proper mechanism for resolving disputes. That is why we ended up with a professional landlord who had an overall interest in an entire block, rather than in a specific unit in that block. The Bill will in effect remove any interest that a professional landlord would have in a future block. My hon. Friend the Member for Wimbledon (Stephen Hammond) is therefore right that the default will become commonhold.

On freehold, in my formative years of selling property in York, most flats were leasehold, and those flats were perfectly saleable and rentable. However, if ever we came across a development of freehold flats—a block where all the owners were freeholders, or commonholders, in modern-day parlance—we found that those properties were almost impossible to sell. In fact, mortgage lenders would not lend on them because of concerns about maintenance. If there was not a method to ensure that the building was maintained or that its insurance continued, the building might fall into disrepair and the lender’s security over the property would not be sufficient to cover the mortgage. That is the concern we potentially have here, as we move to this system of commonhold. I think commonhold can work for quite a number of flats—most blocks of flats, indeed—if it is simple and easy to operate.

However, commonhold is far and away not, in any shape or form, a panacea. We can see that from the current experience. There are some effective leasehold or commonhold ways of managing blocks, with residential management companies or right to manage agreements, where in effect the leaseholders manage the block and take on the responsibility of a freeholder. However, there are disputes within such blocks or organisations. The trouble with the commonhold rules—as I understand it, and the Minister may tell me differently—is that each commonholder has the right to raise their own dispute regarding the particular property, and I do not think there is any clear means of resolving such a dispute.

Previously, in a leasehold agreement, the freeholder would have been able to say, “This is what is actually going to happen. These are the terms of the lease, and these are the terms of the lease that you must adhere to.” A simple example of that is the payment of insurance. As I am sure most Members in this debate will know, in a leasehold agreement the freeholder will normally arrange the buildings insurance for the entire block, which obviously covers communal areas, as well as things such as the roof. That would be the responsibility of the freeholder, who would pass on the costs to each individual leaseholder in proportion. If one leaseholder decides not to pay the insurance, the freeholder can say, “Well, you must pay the insurance”, and they can actually carry out debt collection on that leaseholder. If it is an absentee leaseholder, they can go even further: ultimately, they could disenfranchise that leaseholder completely, and take the apartment back from the leaseholder.

I know that that has been used in some draconian ways in leasehold, but generally there is a mechanism that makes sure everybody in the block pays a fair amount for maintenance and things such as the insurance, but I am not sure how that happens in commonhold. If somebody stops paying for their particular element of responsibility for the charges, I do not think there is any such mechanism. The others could take that person to court, but again, the problem is that the fellow residents—fellow commonholders—in that block would have to take one of their own residents to court, instead of a freeholder doing so who does not have a cheek-by-jowl relationship with the resident.

This is why I think we have some of the maintenance issues in Scotland, and in Scotland there are some big maintenance issues, as my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) mentioned. The hon. Member for Reading West asked about other jurisdictions. Australia has a very similar system, which I think is called the strata system. There are issues there about the recruitment of people to sit on the management boards, with 37% of companies expressing difficulties in recruiting residents to sit on these management boards.

[Matt Rodda]

I absolutely appreciate the difficulties that the hon. Gentleman is outlining, including indeed in relation to my constituency. I should say that my constituency is Reading East; Reading West is the COP26 President’s. In Reading and Woodley, which I represent, there are a number of private roads and other shared facilities where residents come together and share the ownership of assets. Certainly in my experience as the local MP and previously as a councillor, that can be done quite effectively. I do appreciate that there may be issues with very large blocks, and the point I was making to the right hon. Lady from Chipping Campden—[Interruption.] Sorry, I mean the right hon. Member for Chipping Barnet (Theresa Villiers); there are various interesting places around the country that we come from today. The point I was making is that we really should look at the wide range of jurisdictions overseas and try to work through some models of what is most appropriate in each given set of circumstances.

However, it is possible to bring residents together. Certainly, that is my experience locally, and in the example of shared private roads, that has been extremely successful. We have a number of areas where they are maintained to a very high standard, the residents all work together effectively and that is absolutely fine. So I do not think we should try unduly to put obstacles in the way of progress on this matter. At the end of the day, the real issue is moving on from this totally unequal system to one where individual householders are treated more equally, and work together in a collaborative and sensible way.

[Kevin Hollinrake]

The hon. Gentleman makes some good points and I am not saying that in certain circumstances commonhold cannot work. He pointed to the simple situation of a non-adopted road to which local residents have to contribute for the upkeep and it can certainly work in those situations, but I am just trying to point out that there are situations where it would prove difficult to make the system work.

Every jurisdiction—those in Australia or the US or Scotland—is different, and the UK is unique in various ways, one of which is in having a high proportion of absentee owners, such as in central London, where we all see blocks of flats that seem to be rarely occupied. Problems might arise in managing such blocks with for instance 100, 200 or 300 commonholders; there might be disputes and difficulties, such as in debt collection.

On the point about simple things to manage, the biggest issue is complex developments, as my right hon. Friend the Member for Chipping Barnet mentioned. Let us consider a block of 300 or 400 flats built above a tube station or adjoining a shopping mall; effectively there will be a common freehold in that development but would anybody here be keen to sit on a committee managing that entire block with, for example, joint M and E—mechanical and electrical—so joint electrical, heating, ventilation and broadband installations, managed not just between the 300 units but the other infrastructure in that development? There are concerns that that would be beyond the appetite of many commonholders who manage that kind of development.