Draft Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022

Maria Eagle Excerpts

Monday 20th June 2022 General Committees

[Maria Eagle (Garston and Halewood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I begin by congratulating the Minister on introducing something he wanted to introduce as a Back Bencher. That does not always happen when one is a Minister, so he should enjoy it while he can. He is doing the right thing.

There are a couple of points I would like the Minister to deal with. One was alluded to by my right hon. Friend the Member for Leeds Central, who asked whether replacing a battery counts as a repair. My own view is that it probably does not, but it possibly ought to. We are left with some ambiguity as to who would be responsible. It is easy to say, “Surely the tenant will just replace the battery,” and many tenants will, but not everybody can. Some tenants are elderly and live alone, or they may be disabled, so they cannot reach up to change the battery. Indeed, some people cannot afford things such as batteries. I just wonder whether a little more clarity in the regulations might help make it absolutely clear whose responsibility this is, because they seem slightly ambiguous.

At the back of this instrument is something called an explanatory note, which I cannot say I have seen that often—if at all—in an SI. I am probably wrong; they are probably published all the time. We also have an explanatory memorandum, although I am not quite sure what the difference is. The explanatory note says:

“An impact assessment of the effect of this instrument on the costs of business, the voluntary sector and the public sector is published with this instrument on www.legislation.gov.uk”.

However, when one goes to that website for this instrument, it says that no such impact assessment has been published—there isn't one, which is not very “explanatory”. If that is the explanation in the explanatory note, I am not sure what the explanatory note adds.

However, in the explanatory memorandum, there is reference to an earlier impact assessment that was done during some of the consultation. One assumes—perhaps the Minister can confirm one way or another—that that impact assessment was thought to be adequate and that things have not changed since it was done. If that is the case, the wording in the explanatory note and on the website can be said, at best, not to be helpful. I felt like I was being sent round in circles between the explanatory note, the explanatory memorandum and www.legislation.gov.uk. That could have happened on an instrument that we did not all essentially agree on, which could have caused us significantly more problems as a Committee. Perhaps the Minister can take that point back and suggest that sending people around the houses is not very helpful. If we are going to add an explanatory notes, they should at least explain or help in some way, rather than hinder.

The 2015 regulations, which the changes before us will helpfully improve—I think that is a good thing—were previously reported by the Joint Committee on Statutory Instruments for

“doubtful vires, defective drafting and unexpectedly limited use of powers.”

I cannot think of too many instances where the Joint Committee has a go at Ministers for

“unexpectedly limited use of powers.”

I imagine that that must be a first. However, is the Minister now satisfied that the problems highlighted by the Joint Committee at that time have been fully remedied by these regulations, or does he think that there is still work to be done to deal with the criticisms that the Joint Committee made in 2015? These things have taken a long time, particularly given the serious consequences of not having smoke and carbon monoxide alarms. The Minister himself referred to the mercifully small but none the less significant number of people who are killed but who may had been saved had there been smoke or carbon monoxide alarms, and in that sense, time is of the essence.

Having made those points, I am happy to endorse the Labour party’s support for the regulations, but I would like to know whether more work is planned.

Merseyside: Funding of Local Authorities

Maria Eagle Excerpts

Tuesday 8th February 2022 Westminster Hall

[Maria Eagle (Garston and Halewood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on her contribution and on obtaining the debate.

My constituency covers two of the local authorities involved on Merseyside—Liverpool City Council and Knowsley borough council. I want to say a little bit about Knowsley. This small authority has been disproportionately hit by the austerity and the brutal cuts that my hon. Friend referred to in her introductory speech. It has lost more than half its funding—that is, over £100 million. Years of austerity cuts have resulted in an average loss of £485 per person, compared with the average countrywide loss of £188 per person, yet Knowsley borough council represents the second most deprived borough in the nation. It was ranked the fifth worst when the Lib Dem-Tory coalition began to impose austerity, and it is now ranked the second worst, so it has not been improving over that period; its situation has worsened. It has the lowest score in the city region for deprivation affecting children, and the second lowest for deprivation affecting older people. More than 10,000 households are in fuel poverty—15% of the total—with many of them living in the Harewood part of my constituency. They are now facing a cost of living crisis as well as having to deal with the austerity cuts that my hon. Friend has set out.

Inflation is at its highest level for 30 years, and energy bills are about to rocket by 54%. Food prices are rising faster than general retail prices. Wages are stagnating and falling in real terms, with tax increases to national insurance and council tax stealth increases to come in April. The cut in universal credit has impacted on many people in Knowsley, with many now having to choose between heating and eating—that is the choice facing them. When they turn to the council, the amount of support that can be given after 12 years of brutal cuts is much lower than it used to be, and it is much harder for the council to provide the kind of support that it used to provide. It is the same in Liverpool, where the capacity for local people to get support from the council has been severely curtailed because of the impact of the cuts over that period.

If the concept of levelling up means anything, surely it means improving the lives of people in places such as Knowsley in order to level them up to the better standards of living in other parts of the country. One might have expected, therefore, that Knowsley would receive some of the Government’s levelling-up funding, but it has not. Despite making bids for the funding that the Government keep saying is available, it has not received any. The council was unsuccessful in its bid for an allocation from the levelling-up fund, and neither has Knowsley benefitted from any of the other levelling-up schemes through which the Government have been dispensing largesse.

The Government said that funding would be allocated to level up places such as Knowsley, but Knowsley has not been given any such funding. Instead, it has been given to other places that are perhaps not as high as Knowsley on the indices of multiple deprivation. This is not good enough. I hope the Minister will come up with a better way to make sure that people in Knowsley can get the respect and levelling-up funding that they deserve, because it has not happened so far.

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[Neil O'Brien]

I am up against the clock, as the hon. Lady knows.

As we announced on Monday, the local government finance settlement for the next year makes an additional £3.7 billion available to councils in England; that includes funding for adult social care reform. This is an increase in local authority funding of more than 4.5% in real terms compared with the previous year, and we expect core spending power—the measure of resources available to local authorities to fund service delivery—to rise from £50.4 billion in 2021-22 to £54.1 billion in 2022-23, which I am just about to come to. I emphasise that the Government are providing around £1.6 billion in additional grant in the next year through the settlement, and through additional funding for things such as the supporting families programme and cyber-resilience. What that means for Merseyside is that core spending power will increase for all authorities in the region by at least 7.7%, compared with last year.

[Maria Eagle]

Will the Minister give way on that point?

[Neil O'Brien]

I have made it clear that I will not give way.

Leasehold Reform (Ground Rent) Bill [ Lords ] (First sitting)

Maria Eagle Excerpts

Committee stage
Tuesday 7th December 2021 Public Bill Committees

[Eddie Hughes]

I thank the hon. Member for his support and for that question. My understanding is that the process through which leases will be regulated as part of the Bill would afford the opportunity for clarification of the informal leases to which he refers.

[Maria Eagle (Garston and Halewood) (Lab)]

rose—

[The Chair]

Order. Mr Amesbury, are you still speaking, or have you finished speaking?

--- Later in debate ---

[The Chair]

So the Minister has the Floor and has given way to the hon. Lady.

[Maria Eagle]

I am grateful to you, Mr Hollobone. It is a pleasure to serve under your chairmanship. It is early in the morning, and therefore perfectly possible that I was wrong about my hon. Friend’s intention. Can the Minister clarify that the main intent of these provisions is to prevent those who perhaps used to be able to charge ground rent on new leases but who, following the enactment of the Bill, will only be able to charge a peppercorn if they wish to collect it, having a not very realistic, false way of getting around the Bill by deemed surrender and then reissue? Is that the main intent of these provisions? Obviously, if he had thought about this kind of trick being played when the Bill was originally drafted, he would have included something in that drafting, but it is always good to think again about the way in which people may seek to get around provisions. Have I got it right? Is that the main intent of these provisions?

[Eddie Hughes]

I can completely confirm that that is absolutely the main intent.

Amendment 1 agreed to.

Amendment made: 2, in clause 1, page 1, line 16, at end insert—

“(5) Where there is a deemed surrender and regrant by virtue of the variation of a lease which is—

(a) a regulated lease, or

(b) a lease granted before the relevant commencement day,

subsection (1) applies as if paragraph (b) were omitted.”.—(Eddie Hughes.)

This amendment provides that where there is a deemed surrender and regrant of a regulated lease or a pre-commencement lease, the new lease may be a regulated lease even if it is not granted for a premium.

Clause 1, as amended, agreed to.

Clause 2

Excepted leases

Question proposed, That the clause stand part of the Bill.

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[Eddie Hughes]

You are very kind, Mr Hollobone. Clause 2 will be of significant interest as it sets out those leases not regulated by the Bill. We have taken care to tightly define these, as we are aware that any loopholes might lead to abuse of the system and a monetary ground rent being charged where we had not intended it. I will consider each of the exceptions in turn.

First, subsections (1) to (3) detail how business leases will be excepted. It is important that a commercial lease that contains a dwelling, such as for a shop or other business, can continue to operate as now, and that landlords of such buildings are not disadvantaged. Businesses are also likely to prefer to pay some form of rent rather than a premium for the use of the property. However, we also need to protect residential leaseholders from any argument by a landlord that a ground rent is payable because of the possibility of a business use. For that reason, subsection (1)(a) states that the lease must expressly permit the premises under the lease to be used for business purposes without further consent from the landlord.

In our response to the technical consultation on ground rent, published in June 2019, we committed that mixed-use leases would not be subject to a peppercorn rent. The example given was a flat above a shop, where these are both on the same lease. In such instances, it would be important that a commercial rent can continue to be paid, to reflect the business use of part of the building. However, we wish to ensure that the Bill does not result in a plethora of mixed-use leases that are to all intents dwellings but where the tenant pays a monetary ground rent. For this reason, subsection (1)(b) requires that, for such leases, the use of the premises as a dwelling must significantly contribute to the business purposes.

The Bill also includes provision to make sure that both parties intend and are aware of this business-use component of the lease. Subsection (1)(c) achieves this by requiring that the landlord and tenant exchange written notices at or before the lease is granted confirming the intention to use and continue to use the premises for the business purposes set out in the lease. The form of this notice will be prescribed in forthcoming regulations. Subsection (3) defines business as including a trade, profession or employment, but not a home business as under the Landlord and Tenant Act 1954.

Statutory lease extensions for flats are already required to be at a peppercorn rent, so we have excepted them from the requirements of the Bill in order to avoid duplication. We will come to so-called voluntary lease extensions for flats when we consider clause 6. Statutory lease extensions for houses are required by legislation to be for 50 years for payment of no premium, but for a modern ground rent, which is typically higher than a peppercorn. Were the Bill to require that rent to be only a peppercorn, we would deprive the landlord of income for the granting of the lease extension. For that reason, those extensions are exempted from the Bill. However, we intend to return to the wider question of enfranchisement in future legislation. Our changes to the enfranchisement valuation process, including abolishing marriage value and prescribing rates, will result in substantial savings for some leaseholders, particularly those with less than 80 years left on their lease. The length of a statutory lease extension will increase to 990 years, from 90 years for flats and 50 years for houses.

I will turn now to community housing leases and other specialist products that we do not want to compromise. Community housing schemes promote the supply of new housing to meet local need where residents contribute towards the cost of shared community services. The use of ground rent in those cases is very different from ground rent for long residential leases where no clear service is provided in return. As we have done throughout clause 2, we have taken care to tightly define community housing leases to ensure that that exception applies only where intended. It covers long leases where the landlord is a community land trust, or the lease is a dwelling in a building that is controlled or managed by a co-operative society. We expect that to cover all deserving dwellings. We have also made provision, should it be needed, to add further conditions to those definitions in order to close a loophole should one be identified in future.

The clause also exempts certain financial products in cases where a form of rent is needed for the product to operate as intended. Subsection (9) defines them as regulated home reversion plans and homes bought using a rent to buy arrangement. It is important that those specialist financial products can continue, maximising choice for homeowners over how they finance their property purchase.

[Maria Eagle]

I think that many people who get involved in rent to buy perhaps do not understand that they may be excluded from that provision. I notice that the Minister is securing for himself some capacity to make regulations in future in relation to those particular types of leases. Could he give the Committee an indication of what kinds of regulations he anticipates will be made under the power that the Bill will grant him in respect of those particular kinds of rent to buy leases?

[Eddie Hughes]

I am embarrassed to say that I cannot, and the reason is that we do not know what the loopholes might be. We have a clever bunch of people who seek to avoid legislation. It will be helpful for the Government to be able to make such changes as might be necessary depending on the inventiveness of the people we deal with in future.

[Maria Eagle]

I am grateful to the Minister; it is remarkably honest of him to say that he does not know. One does not always hear that from Ministers, but am I getting the sense that the intent is to ensure that there is not some kind of workaround to the regulations and to the law, and that the intention is to protect those who have taken out rent to buy plans from oppressive provisions by landlords to charge some kind of ground rent, which the Bill is seeking to get rid of generally?

[Eddie Hughes]

On the intent, there are some financial products that we have exempted because the structure of their operation is dependent on the continuation of rent payments, but the opportunity is to make regulation in the future should people, for example, pretend to be something they are not, or try to do so. If we have the opportunity to close that down, I think that will be the intention. I feel that the hon. Lady could be building a case for future interventions—we will see. I think she is gathering evidence.

Subsection (9)(a) is clear that in order to benefit from this exemption, home reversion plan products must be regulated by the Financial Conduct Authority. Subsection (10) defines a rent to buy arrangement, ensuring that arrangements such as Sharia mortgages are able to continue. It is important that the Bill enables legitimate activities that require payment of a rent to continue, which clause 2 does in a carefully considered way that has been informed by detailed consultation. The clause is drafted to enable such activities but with tight definitions, ensuring that the clause is not used by landlords to charge a ground rent by the back door.

--- Later in debate ---

[Eddie Hughes]

Clause 3 prohibits a landlord from requiring a leaseholder to make a payment of a prohibited rent. Subsection (2) defines that as making a request that the leaseholder make the payment, and/or having received a payment of prohibited rent, failing to return it within 28 days. To ensure that landlords are held accountable for their actions, we have made a conscious decision to include current and former landlords in the Bill. That will ensure that our enforcement measures, which are detailed later in the Bill, can be used in circumstances where a landlord has sold their interest in the property.

Having focused on landlords, I now turn to those we are seeking to protect. I am sure that the Committee will agree that the protective reach of the Bill should extend beyond current leaseholders who remain leaseholders when the wrongful payment is identified. A leaseholder who has sold the lease, for example, should none the less be able to seek redress if they subsequently realise that their former lease contained a prohibited rent. That is why subsection (3) ensures that the protections afforded to leaseholders also apply to previous leaseholders, a person acting on behalf of a leaseholder, and a leaseholder’s guarantor.

Clause 3 is the foundation for restricting unjustifiable rents for future regulated leases.

[Maria Eagle]

What limitations will there be on the provisions? Are we talking about the limitation in contract law? How long would a former landlord be under obligation to repay a prohibited payment that he had required, and how long would the former tenant be able to recover it? It is unusual to see a provision stating that

“references to a landlord include a person who has ceased to be a landlord”,

but there is usually some limitation to the liability. Does the Minister have an answer for that?

[Eddie Hughes]

I am worried that my candid responses to questions are going to get me in trouble, but the honest answer is that I do not know what the limitation is. I will write to the hon. Lady to let her know.

[Maria Eagle]

I am grateful.

[Eddie Hughes]

I strongly suspect, however, that the very clever team behind me will provide the answer, and that I will be able to inform the hon. Lady during discussions on a subsequent clause.

--- Later in debate ---

[Eddie Hughes]

The Bill will help to ensure that new long leases granted subsequent to the Bill’s coming into force are set at a peppercorn rate—so, with no financial value associated with them.

[Maria Eagle]

Does the Minister accept that none the less the Bill, welcome as it is, does not help existing tenants who have already signed leases for which ground rent is payable?

[Eddie Hughes]

The hon. Lady is quite right. The intended purpose of the Bill, very tightly drafted as it is, is to ensure that we draw a line in the sand by ensuring that new leases in the future have a peppercorn rate. I commend the clause to the Committee.

--- Later in debate ---

[Mike Amesbury]

I thank the Minister for his brief explanation. As my hon. Friend the Member for Garston and Halewood quite elaborately argued, this Bill is not about the many; it is just about the new. There are 1.5 million people who will still be in this system, many of whom write to us asking for us to advocate for them in this place. It is a particular issue in the north and north-west, and Wales. This Bill will do nothing for those people. In addition there is a plethora of complexities associated with the Bill—service charges, interesting management fees and so on—which we have spoken about at considerable length. So, while the Bill is welcome, it is narrow in scope and certainly does not deal with the situation here and now.

[Maria Eagle]

I very much welcome the intent of the Bill, which is to replace the standard charging of ground rent of real monetary value to leaseholders with a peppercorn rent. I welcome that very much; it is an entirely good and proper reform. Anybody who has had to deal with land law over the years—whether as a lawyer, or just as an MP trying to advise constituents—knows just how complicated it is to change these ancient and difficult land law provisions, which go back to feudal times in many ways and which very much have case law behind them. As we can see from this simple Bill alone, significant provisions have to be added to do the simplest things. I have every sympathy with the Minister, who has a record of trying to grapple with the complexities of English land law since he was Back Bencher. It is by no means easy.

I welcome, generally, clause 4, which reduces to a mere peppercorn the ground rent that is chargeable for new leaseholders. That is entirely to be welcomed. However, I want to set out to the Minister the difficulties that many of my constituents have. Thousands of them have in the last few years bought leasehold houses. This is particularly an issue in the north-west. As my hon. Friend the Member for Weaver Vale rightly said, there has arisen a penchant for selling newly built, often detached houses as leasehold properties. That has, and can only have been to enable the freehold—the reversionary interest—to be turned into a financial product that, over years, often decades, provides a stream of income for whoever retains the reversionary interest, who is often not the original developer or builder of the properties. It is sold on in financial markets to those who are interested in long-term investments providing a stream of income.

Many of my constituents, trapped in such leases, had no idea when they bought the houses that that would be the case, and that they would owe obligations for decades to whoever held the reversionary interest. They had absolutely no idea that the person who held the reversionary interest could change, and that it would be traded on financial markets and bought by people who wanted to exploit to the maximum the provision for income generation over years. The Bill, unfortunately, does not help any of my constituents who are stuck in such provision.

I am entirely in favour of changing that provision by means of the Bill, which I welcome, but there is an argument to say that the Bill actually makes things startlingly worse for those already trapped in such leasehold provisions that have ground rent and sometimes accelerated ground rent. It makes starker the fact that it is anomalous. I have many constituents on a number of estates across my constituency of Garston and Halewood who are finding it difficult to sell their properties. They have suddenly realised that they do not own a house, as they thought they did, but that they are renting it.

I am extremely anxious that the Minister does not rest on his laurels, having got this complicated piece of simple legislation through the House and on to the statute book, but that he realises that there is so much more to do to assist those who are stuck—particularly in my constituency and in the north-west—in newly built houses that they now find they do not really own. They are being financially exploited by remote owners of a reversionary interest that will endure for perhaps 99 or 999 years.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend agree that the Bill, by doing the right thing for new houses, will actually make the situation even worse for those who are in existing houses, because potential entrants into the housing market will choose to buy a new leasehold house that is covered by these provisions, rather than a house that her constituent may wish to sell that is under the existing provision?

[Maria Eagle]

That is the very concern that I have. It not only shines a light on the dilemma and the problems of current leaseholders, who will not be covered by these provisions, but sets theirs up as an anomalous set of arrangements. Until the Minister comes back with legislation to change more thoroughly what has happened in existing cases, which I know will be difficult, these people will be in a more difficult position than they currently are. Not only will they have the ongoing financial burden of the exploitative provisions that have grown up, particularly in the north-west of England, but they will find themselves left behind. The danger is that the Minister may have to move on to other legislation of concern in his Department, and may find that doing something for existing leaseholders is very difficult in land law terms. I know it is difficult to change existing leases by statute.

[Mike Amesbury]

On Second Reading, my right hon. Friend the Member for Alyn and Deeside (Mark Tami) highlighted the issue that could arise where, within a single development, on one side of the road would be properties built in its first phase, under the current arrangements, and on the other side of the road properties built in the next phase, under the new arrangements. It is simply inequitable. When people come to market, which property will they purchase? The Minister is familiar with these issues, and my hon. Friend the Member for Garston and Halewood is right that they need tackling, despite the difficulty.

[Maria Eagle]

I have every sympathy with that point because I know of examples in my constituency. In the past few years, as these egregious excesses were coming to light and before legislation could be drafted, the Government have tried to impress upon developers that they should not do this kind of thing, and there have been voluntary arrangements. House builders have made voluntary arrangements, sometimes midway through the completion of a phased development, such that some buyers of properties built in the early phases of a development have had to pay ground rent, or accelerating ground rent, service charges and some of the other things that have not been dealt with in this legislation, but in later phases that has not been the case; so there is a difference between properties—even those built to the same design in different phases of one development.

One could say that caveat emptor is the basis of land law in England. It is indeed: “Let the buyer beware.” However, I have a lot of sympathy with constituents of mine who were rushed into buying a property so that they could access Help to Buy, who were first-time buyers, who had not done a degree in English land law before they sought to become homeowners—which, let us face it, is most people—and who relied upon the advice they were given. I have many criticisms of the legal profession and the solicitors—even conveyancers—who advised some of my constituents, because it seems to me that there has been a potential failing, in some cases, there.

In any case, the Minister has come to this, wanting to do something about it—indeed he has drawn a line in the sand, as he said—but he must not forget those individuals that, in drawing the line, he has not helped, and who may in fact find their predicament more starkly highlighted, and may find it more difficult to move on and sell the property that they now have than they would have done without this legislation.

[Margaret Greenwood (Wirral West) (Lab)]

My hon. Friend is making excellent points. Does she agree that there is a real human cost to this? I know of people living in my constituency who have properties elsewhere in the country, predominantly in the south, who decided to move back to Wirral because that is where they are from, only to discover that they are struggling to sell their properties. Quite often such moves are to look after an elderly family member or for similar reasons, so time is of the essence. Does she agree that we have to remember the human cost?

[Maria Eagle]

I very much agree with my hon. Friend. I have come across many instances myself. Perhaps a young couple, just starting out in life and on the housing ladder, wanting to be able to trade up in time when they start their family, suddenly find that they cannot because their home—their leasehold home—is of pariah status and they find it difficult to persuade somebody else to buy it. I worry that this legislation, welcome though it is—it is a good step: I emphasise that to the Minister—shines a starker light on the predicament that these people are in. It is therefore incumbent upon the Minister and the Government, who have been talking about this issue for a number of years—I am trying to be kind, Mr Hollobone—to come back swiftly with effective and challenging legislation that will do something for the people who are already stuck in this mess.

What we cannot do is say, “Oh, it’s all too difficult.” It is difficult, but as lawmakers, we are here to solve these problems. I will give every support to the Minister if he can come back, ignoring the lawyers who tell him that it is all too terribly difficult and nothing can possibly be done that would not tear up our entire English land law system of trading land. Something can and must be done. He will have my support if he comes back with much fuller legislation to deal with the existing problems of those who are already caught in this situation. Peppercorns are great. Perhaps we can have retrospective peppercornery.

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[Eddie Hughes]

The hon. Member for Garston and Halewood referred to my previous interest in this subject as a Back-Bench MP. It is an incredible privilege to have championed changes in this area and now to be the Minister responsible for it. I can assure her that my enthusiasm for greater reform is not diminished in any way by my having the opportunity to, at least, begin the legislative process now.

I have a huge degree of sympathy with the cases that have been raised by hon. Members on both sides of the room. It is incumbent upon us, as a Government, to ensure that we do not rest on our laurels, but continue to push and be bold with legislation in the future. Certainly, that has been the case with regard to things that have been said by our previous and current Secretaries of State. The current Secretary of State is determined to be bold and ambitious in all things for which he has responsibility, and I would like to think that we will have further discussions about this subject early in the new year.

[Maria Eagle]

I am glad to hear it. Does the Minister expect more legislation in this Session?

[Eddie Hughes]

It is above my pay grade to make those sorts of decisions, but I will be working very closely—

[Maria Eagle]

Go on.

[Eddie Hughes]

Perhaps one day they will make me Secretary of State and I will be able to make those decisions myself, Mr Hollobone—don’t laugh. As I said, it is our intention to come forward with proposals, so we will be talking again in the new year and discussing this in detail.

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[Eddie Hughes]

I can say nothing other than that I completely agree with my hon. Friend’s comments.

[Maria Eagle]

rose—

[Eddie Hughes]

I will give way, but I think we need to make progress.

[Maria Eagle]

We have to have proper scrutiny. There has been a general hope expressed by the hon. Members for Penrith and The Border and for Cities of London and Westminster that this legislation, rather than highlighting the difficulties existing leaseholders have and putting them in a more difficult position, may promote better behaviour towards existing leaseholders from those who are in a position to exploit them. We hope that that will be the case. Do the Government collect any figures that they might publish to enable us to see whether there is the positive impact hoped for by Conservative Members? Does the Minister have any figures that show that is the case—or are we just crossing our fingers and hoping?

[Eddie Hughes]

The figures are already publicly available.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Permitted rent: shared ownership leases

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[Mike Amesbury]

The evidence out there grows by the week. There is a genuine fear that landlords, freeholders and developers will look for other opportunities in response to the legislation. We already see those service charges up and down the country. I know it is a particular issue in London and the south-east, but every city across the country has seen some interesting non-transparent service charges—that includes estates and houses.

[Maria Eagle]

Does my hon. Friend agree that it is important that the Committee prevents the inclusion of loopholes in the Bill that could be widened by clever lawyers and then exploited by developers and those with a financial interest in keeping things as they are? His proposals are trying to prevent loopholes from being left in this admirable but small piece of legislation.

[Mike Amesbury]

I concur. That is exactly my point. I know that a similar amendment was tabled in the other place, as the Minister will be aware. We certainly need reassurance. There are lots of good intentions from the Minister and his Department with regard to this legislation, but we need to look at every opportunity to close those loopholes. I would like to have further discussions as the Bill continues its parliamentary journey—it is a conversation we need to continue. However, in that spirit, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Eddie Hughes]

Earlier, we considered amendments 1 and 2, which relate to disapplying the premium requirement for a lease where there is deemed surrender and regrant. This set of amendments is also connected to the deemed surrender and regrant process, but more specifically, they clarify the matter raised by Lord Etherton with regard to a lease variation.

As currently drafted, it was not clear, where there was a pre-commencement lease where a demise was changed, whether such leases would be captured by clause 6. It was raised in the other place that, if not, any existing ground rent in those leases would be reduced to a peppercorn. We recognise that that might make some landlords reluctant to agree to such changes, thereby disadvantaging their leaseholders, which is not the Bill’s intention. The amendments make clear that the demise of a lease can be changed and the resulting surrender and regrant will not reduce the ground rent on the balance of the term of the pre-commencement lease to a peppercorn.

Any extension to the term of the pre-commencement lease will be required to be a peppercorn, in the same way as for voluntary lease extension. By clarifying that ground rent in pre-commencement leases can continue in this way, the amendment ensures that freeholders need not withhold consent for a lease variation unnecessarily. It also ensures that there is a consistent approach towards existing leaseholders throughout the Bill. As with amendments 1 and 2, the amendments are designed to avoid unintended consequences.

[Maria Eagle]

I just want a little clarity from the Minister about the circumstances in which this extensive clause would apply. Is the amendment seeking to exclude just the issue of a voluntary lease variation? One might argue, quite plausibly, that any kind of leasehold is entirely voluntary, because the parties to the lease voluntarily sign it—caveat emptor and all that. One can say that any signature of a lease is voluntary in that sense.

--- Later in debate ---

[Mike Amesbury]

I thank the Minister for his explanation. If we look at the evidence provided by the National Leasehold Campaign and the Leasehold Knowledge Partnership, and take our mind back to the Select Committee call for evidence, I think in 2018, which I know he had a keen interest in at the time, there was a real concern about access to tribunals. Decisions seemed to be weighted against leaseholders. On the worry about access to, and supported provided to, tribunals, what reassurance can he give that the situation can improve as a result of the changing legal landscape?

[Maria Eagle]

I wish to ask the Minister a question. I apologise to him; obviously we have not yet reached the debate on the commencement provisions, but he might be able to enlighten us on the Government’s intention. Clearly, it is entirely welcome that clause 7 would simply replace the unfair term in the lease that asks for real money for ground rent rather than the peppercorn, which the legislation is intended to outlaw, but the commencement provisions are not totally clear about when that provision will be commenced.

My understanding is that there will be a regulation-making power for the Government to bring into force the Act on the day that they wish to do so. My concern about not being clearer about when clause 7 comes into force is that there may be a gap between when the Bill is passed and when the clause is commenced by the Government, because they will have to make a regulation to do so. Does that leave a space for unscrupulous landlords to continue to have unfair contract terms in their leases after Royal Assent but before the commencement of the legislation?

I wonder whether the Minister could assuage concerns by making it clear that it is the Government’s intention not to have a big gap between Royal Assent and commencement such that a loophole could be created in which clause 7 has not yet been commenced, preventing unscrupulous characters who may want to induce potential tenants into leases with contract terms that would be outlawed by the Bill from doing so. A simple commitment from him that there will be no such gap would satisfy me entirely.

[Eddie Hughes]

We are here to help. Lord Greenhalgh has already said in the other place that that gap would be no more than six months.

[Maria Eagle]

That is quite a long time.

[Eddie Hughes]

Given the pace at which legislation moves, that feels to me quite quick. With regard to the concerns of the hon. Member for Weaver Vale about the tribunal, I guess time will tell. We will need to monitor the situation closely, to ensure that people have access to tribunals. We are expecting the number of cases covered by this legislation to be relatively small. Given that the Government have signalled their intent, we have already seen reactions in the market, but I would look forward to working closely with the hon. Member, should concerns arise in future, in order for us to address them collectively.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Duty to inform the tenant

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Eddie Hughes]

Mr Hollobone, I apologise sincerely for that small confusion on my part.

Clause 8 imposes on landlords a duty to inform whereby they are required to inform an existing leaseholder of the changes introduced by the Act, but only if those provisions in the Act have not yet come into force. This amendment was passed in the other place, and I support the principles behind the Lords amendment. It is vital that there is transparency in the leasehold system. However, there are doubts as to whether the amendment is the most effective means of achieving that objective. As drafted, it places a duty on all landlords. The amendment does not specify how—

[Maria Eagle]

Does the Minister mean the clause? I cannot see an amendment to clause 8.

[The Chair]

Order. What we are debating now is that clause 8 stand part of the Bill. No amendment has been moved to clause 8. We are debating whether clause 8, as inserted by the noble Lords, stays part of the Bill.

--- Later in debate ---

[Mike Amesbury]

I thank the Minister for his explanation. He referred to the fact that I and a considerable number of other Members spoke about this matter on Second Reading and have done so throughout the campaign to reform the feudal leasehold system. I cannot quite understand the objection to the clause, given that the lack of transparency has been a major factor in the leasehold landscape—we have referred to the CMA investigation and mis-selling by solicitors. The clause would help to improve the landscape and improve the situation for leaseholders. It makes perfect sense to include provisions on transparency of information in the Bill that the Government are arguing for and which we are scrutinising and challenging. We support clause stand part.

[Maria Eagle]

I have some concerns about the Minister’s suggestion that we should not keep clause 8 in the legislation, partly because of the exchange that we just had on clause 7. I expressed a little sedentary shock that six months may pass between Royal Assent and the commencement of clause 7. A lot of leases can be signed in six months, which I consider an extended period, and clauses that will become prohibited may not be at the time.

Leases are difficult enough to read as a layperson without having to be aware that the law has been changed to prohibit a particular clause and that a rent set out in a lease should be replaced with a peppercorn rent. One would have to follow Hansard reports of Bill Committees carefully, as well as the commencement of legislation, to have an understanding that there was a prohibited clause in a lease that one had just signed. Even then, one must understand the legal language in leases, which is not the easiest thing for lay people, perhaps first-time buyers. It is extremely useful to have a provision such as clause 8 in the legislation to make it clear that there is an obligation on landlords to inform tenants of this interim period of time.

If the Minister had said in our debate on clause 7 that the delay was going to be a week or two weeks, then perhaps I would not have risen to support this clause, but we are talking about six months. Many leases have clauses that are to become prohibited later on, but the tenant who signed them may not understand that. We wish that were not the case but there are some landlords out there who wish to induce people to sign leases with charges attached that are shortly to become unlawful. Perhaps then there will be some money paid over, and it is more difficult to get that back than not to pay it in the first place.

Given that there is likely to be a period of up to six months between Royal Assent and commencement of the legislation, clause 8 is a valuable provision to keep in the Bill. I cannot understand why the Minister wants it removed. I would be happy if he were to tell me that commencement of the legislation would take place within a week or two of Royal Assent. I would not then be so concerned about this gap. I am concerned that we are creating or allowing too many loopholes that enable our constituents who are signing new leases to fall into traps that those who wish them to sign leases want to induce them into. The fewer loopholes, the better. Clause 8 is an important provision to leave in the Bill and I would vote for it to stand part of the Bill.

[Eddie Hughes]

Clearly, six months is the limit that we have set. I am sure that people will be working assiduously to try to ensure that that period is minimised. The suggestion that the hon. Member for Garston and Halewood made—that she would be reassured to hear that it would be a week—is nigh on impossible. We will continue to work hard to limit that period. During that time, we will communicate regularly with professional bodies to ensure that all solicitors are informed of and understand the changes that are coming.

--- Later in debate ---

[Mike Amesbury]

My only concern is the obvious one about resources. I refer to my declaration in the Register of Members’ Financial Interests, as I am a vice-president of the Local Government Association. Over the last 11 years, resources have been somewhat depleted as a result of austerity and Government cuts. Although there is the control and skill capacity locally to be the foot soldier for enforcement, it is a matter of having the people and resources to carry that out and implement it.

I notice that on the Bill’s journey in the other place, a reference was made to future local government settlements. The last 11 years have not been good if we use them as an example of potential resources. I would be interested in the Minister’s reply on that important and vital matter.

[Maria Eagle]

It is good to see that there is some provision about enforcement because there is often a gap in legislation, so the law is made and practical enforcement is not set out. I find it quite an interesting approach to enforcement to say that local trading standards or weights and measures authorities in England and Wales “must enforce” in their own area the standard statutory obligation of such an authority but

“may enforce…elsewhere in England and Wales.”

I may be wrong, but that seems a fairly novel approach to enforcement. I am not saying it is bad, but I would like the Minister to set out in a little more detail why the clause is worded in this manner and whether there are any precedents in respect of other enforcement arrangements that have been drawn on to set out the provision.

Subsection (2) says:

“A district council that is not a local weights and measures authority may enforce section 3 in England (both inside and outside the council’s district).”

We have the prospect of roving entrepreneurial weights and measures departments perhaps thinking that they can go and levy fines of up to £30,000 for a breach somewhere else entirely. I think I have read somewhere that they get to keep the proceeds, so this is quite an interesting tax farming idea—perhaps going back to old England, whereby the collector is given a percentage of the takings. Like my hon. Friend the Member for Weaver Vale, I was going to ask what provision the Government will make to enable a local authority’s trading standards department to search out such breaches. Perhaps they intend to enable trading standards from elsewhere in the country to come galloping in.

[Ian Byrne (Liverpool, West Derby) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. On the point raised by my hon. Friends the Members for Garston and Halewood and for Weaver Vale, Liverpool has lost £465 million of funding since 2010, and another £34 million of savage cuts are mooted for the upcoming budget. How does the Minister expect a council such as Liverpool City Council to finance a trading standards team that can actually carry out what the Bill proposes under what we are experiencing through austerity?

[Maria Eagle]

I agree with my hon. Friend about the savage reduction in available resource that the Government have visited on Liverpool. I am interested to hear from the Minister about the intention of this formulation and whether he anticipates that trading standards from out of area will be galloping around the country doing enforcement work in the manner that the clause lays out, because it is not something that I have seen before in legislation. I may be wrong, but it is not something that I can recall seeing.

[Mike Amesbury]

Perhaps there will be a VIP fast lane for the new hit squad that goes across the country.

[Maria Eagle]

I will be interested to see whether there is any kind of entrepreneurialism undertaken by trading standards around the country, but I would like to hear what the Minister has to say.

[Nickie Aiken]

I thank the Government for including effective enforcement in the Bill. There is no way that the Bill will work, and landlords will not be held to account, unless there is proper enforcement. Having been the cabinet member for public protection at Westminster City Council, which trading standards came under, I know at first hand the brilliant work that trading standards officers do day in, day out in Westminster and across the country. I would really appreciate it if the Minister could give assurances that trading standards teams across the country will have the funding to carry out the extra workload. I certainly think it is important that we ensure they can do so, because we do not want to be giving leaseholders any false hope, and I certainly welcome the ability for local authorities to keep the proceeds of any fines that they may be able to extract from a landlord.

Leasehold Reform (Ground Rent) Bill [Lords] (Second sitting)

Maria Eagle Excerpts

Committee stage
Tuesday 7th December 2021 Public Bill Committees

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to welcome you to your place, Ms Elliott. I welcome the Minister’s and the Government’s response to some of the debates on the Bill in the other place about the maximum level of fine. Given that a number of landlords and freeholders have deep pockets, it will act as a more effective deterrent.

On multiple breaches, I am making an assumption that an element of sense will be applied, so that someone with multiple breaches would be looking at the maximum fine. I know that that will be a judgment call for the enforcement authorities and trading standards, which will be well resourced—we have had the assurance from the Minister today.

The clause picks up on several earlier points made on both sides of the Committee. It is essential that people are informed from the outset of the duties that will be not only implied but overt as a result of the Bill. Residents and leaseholders will be particularly keen to ensure that where they have been wrongly charged and levied—essentially, ground rent should never have happened in the first place—they will be able to retrieve that quickly. I welcome the clauses but there are still a number of questions for the Minister.

[Maria Eagle (Garston and Halewood) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Elliott. I have a couple of points for the Minister. There are extensive provisions on the recovery of prohibited rent, which I generally welcome. I notice that on page 14 of the explanatory notes, under the heading “Financial implications of the Bill”, it says:

“An Impact Assessment has been prepared for the Bill and covers the implications on private sector bodies and home purchasers… The Impact Assessment illustrates a de minimis impact of less than £5m.”

It then says that there is an assumption

“that the number of enforcement cases will be very small.”

One would hope that that would be the case, because one would hope that landlords will not seek to charge and benefit from ground rent in the interim between the Bill coming in and peppercorn becoming payable, when it becomes commenced, by putting provisions into new leases that charge ground rent. One hopes that that is a correct interpretation. The explanatory notes then say:

“Over and above the use of the proceeds arising from the enforcement action, a further amount of expenditure will be required to provide additional capacity within the National Trading Standards function to support local weights and measures authorities. Leasehold law is a complex area, and it is felt that a central support function will aid the effective introduction of the provisions of this Bill. The cost estimate of this support function is £29,000 per annum”,

which is very precise. It is sort of a round figure, but it is quite a small sum. I wonder whether the Minister could explain the assumptions underlying the explanatory notes.

--- Later in debate ---

[Mike Amesbury]

With regard to the excess that could be generated, and terms of the clause and the amendments, there could be a transfer to the Welsh Secretary. Does the Minister envisage that happening in reality, given the situation that many local authority trading standards have faced over the past 11 years? That point has been echoed across the Committee today. Could the Minister elaborate on the discussions that he has had with the Welsh Government, because there are elements of a tidying up exercise here? The Minister said that he had further discussions of other mechanisms that would help trading standards effectively conduct and resource their enforcement role. What are those mechanisms and sources of other potential income?

[Maria Eagle]

I have a couple of probing questions. There is no doubt that it is good to see some enforcement provisions. Given the range of penalties from £500 to £30,000 and given that trading standards have to effectively obtain their costs from the proceeds when undertaking the enforcement activity, is the Minister concerned that that might offer an incentive to trading standards—the enforcement authority—to pitch their fine or notice at a higher level than perhaps might otherwise be the case? Does he agree that going through this administrative fining arrangements, with all the appeals that we see in the schedule, would probably not be worth it for an enforcement authority if it were only going to get £500 at the end of the day, given the difficulty of understanding all the nuance of landlord and tenant law and leases? Is it therefore much more likely that there will not be much enforcement activity?

One of the other concerns for such an officer and an enforcement authority, might be that if there is an appeal to the administrative tribunal by the landlord against the amount being levied by way of penalty, that might be reduced from what the authority originally set out to cover its costs, say, to a much lower figure, closer to £500, which would perhaps most certainly not cover its costs. Is there an incentive in part for the enforcement authority to pitch the fine high, but any tribunal that considers an appeal may cut the fine to such a level that the enforcement authority might not be able to obtain its costs back from the proceeds? Perhaps, therefore, the overall impact will be that the enforcement authority thinks better of engaging in enforcement if it does not have resources it can guarantee will be used to do that. I would be interested to know what the Minister and his Department have considered in respect of the incentives built into the system in the Bill.

--- Later in debate ---

[Maria Eagle]

Will the Minister give way?

[Eddie Hughes]

I think it would be helpful if I conclude my contribution, and then the hon. Lady can come back in. [Interruption.] Well, it might be helpful if the hon. Lady let me respond to the points she made first. As I said, if the fine is set at a level that is appropriate to the crime, that might be in excess of what is necessary in order to cover the costs incurred by the authority. In that case, as it is not meant to generate revenue, the money would go back to the Secretary of State or the Welsh Minister, as appropriate.

The natural equilibrium of things will be reached by ensuring that the money generated covers the costs of administering the programme. If it does not, the Government will need to be mindful of that. As I have said, we are in conversation with the Local Government Association and we will see how that progresses. The hon. Lady is wise to raise that point. We do not want to see anything that disincentivises authorities from prosecutions because they do not think their costs will be covered. That is a really important point, and we will need to be mindful of it.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Amendment made: 9, in schedule 1, page 19, line 16, leave out from “paid” to end of line 17 and insert—

“(a) where the penalty was imposed in relation to a lease of premises in England, to the Secretary of State, and

(b) where the penalty was imposed in relation to a lease of premises in Wales, to the Welsh Ministers.”—(Eddie Hughes.)

This amendment provides that penalty proceeds not used by the enforcement authority to meet enforcement costs must be paid to the Secretary of State, if the penalty was imposed in relation to premises in England, and the Welsh Ministers, if the penalty was imposed in relation to premises in Wales.

Schedule 1, as amended, agreed to.

Clause 14

Recovery of prohibited rent by tenant

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Eddie Hughes]

I think it simply represents the fact that, in reality, we will ensure that we pursue these things more quickly. We should not be in a position where the two are of equal level. I understand the hon. Lady’s point and will consider this further as the Bill progresses.

[Maria Eagle]

The difference between these clauses and the previous clauses we discussed is that the organisation that will in the first instance decide the size of the fine is the tribunal, rather than the enforcement authority—I think I am right about that—because the tenant will make an application to the tribunal for a fine to be levied and to get back the money they have wrongly paid. Do the Government intend to give some guidance to the tribunal as to how to set that fine? There is quite a wide range; it is between £500 and £30,000. Does the Minister expect that the tribunal, in making such a determination, will follow the same kind of guidance as the enforcement authority would follow were it initially setting the level of fine? Has he given any thought to consistency between the two ways of getting to a fine in this instance—whether through the tribunal or the enforcement authority?

[Eddie Hughes]

It would absolutely be our intention, through guidance or otherwise, to ensure consistency across both approaches.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Clauses 15 and 16 ordered to stand part of the Bill.

Clause 17

Assistance

Question proposed, That the clause stand part of the Bill.

[Mike Amesbury]

The clause seems fairly proactive, essentially hand-holding through the process, which in one dimension is most welcome. However, I still question the incentives for people to go down the enforcement authority route—trading standards—rather than the tribunal route for cost recovery. I am curious.

[Maria Eagle]

I have a similar concern to my hon. Friend’s. The clause states that, “An enforcement authority may,” not “must”, which means that it may not. It may decide that it does not wish to. If it were to take enforcement action itself, it can retain the proceeds of any enforcement that occurs, but there is no indication that the costs of assisting a tenant, which may be just as an extensive as if it were to carry out the enforcement action itself, are recoverable in any way. Does that not suggest that the relevant enforcement authority may choose not to?

--- Later in debate ---

[Eddie Hughes]

Clause 20 makes two amendments to the Housing Act 1985. Specifically, they amend part V of the Act on the right to buy. The purpose of the amendments is the same: they update the 1985 Act to ensure that requirements in it relating to ground rent are aligned with the provisions in the Bill.

Clause 21 gives the Secretary of State the power to make provision that is consequential on the Bill through regulations, including provisions amending an Act of Parliament. We do not take such a power lightly, and in drafting this legislation we have sought to identify and make all necessary consequential amendments on the face of the Bill. The changes to the Housing Act 1985 in clause 20 are a good example of this.

However, long residential leasehold is a complex and interdependent area of law. Therefore, we consider it prudent to take the power in clause 21 to ensure that, should any further interdependencies be identified at a later date, these can be addressed appropriately. There are various precedents for such provisions, including section 92 of the Immigration Act 2016, section 213 of the Housing and Planning Act 2016 and section 42 of the Neighbourhood Planning Act 2017.

The Delegated Powers and Regulatory Reform Committee considered the powers in the Bill, including this one, and noted that there was nothing in the Bill that it would wish to draw to the attention of the House.

[Maria Eagle]

Clause 21(2) states that

“the provision that may be made by regulations under subsection (1) includes provision amending an Act (including an Act passed in the same session as this).”

Can the Minister tell the Committee why that is? What Act being passed in this Session could possibly need to be amended as a consequence? Is there another Bill that has provisions about such things? Why is that part in parentheses included?

[Eddie Hughes]

My understanding is that consideration has been given and we do not think there is anything, but we need to be prepared should the circumstance arise. That is my understanding of the requirement.

[Eddie Hughes]

As I said in my speech, the law is complex and there are interdependencies between various Acts. The provision makes sure that there is nothing that we have missed in terms of another piece of legislation that would be relevant and would have an impact; it gives us the opportunity to make an amendment appropriately. That is my understanding.

[Maria Eagle]

I am sorry to press the Minister on this, but clause 21 says,

“including an Act passed in the same session as this”.

What other Bill or Act in this Session could possibly have a provision that may need amending as a consequence of the Department overlooking something? This is complex housing law. What other Bill that is being passed through Parliament in this Session has complex housing law in it?

[Eddie Hughes]

I can only say again that we do not know the answer to that, otherwise we would obviously have made the necessary amendment at this point.

[Maria Eagle]

This is ridiculous.

[Eddie Hughes]

I appreciate that the hon. Lady is not happy with the answer, but unfortunately that is the circumstance.

Clause 22 makes provision relating to regulations under the Bill. Subsection (1) is a standard provision that enables consequential, supplementary, incidental, transitional, saving or differential provision to be made, if necessary, in connection with the exercise of powers under the Bill. As is usual, subsection (2) provides that regulations under the Bill must be made as a statutory instrument. Subsections (3) to (4) relate to the procedure for making regulations under the Bill. Regulations under the Bill will follow the negative procedure, unless they make provision under clause 20 amending an Act. As we have discussed, for provisions under clause 20, the affirmative procedure will be followed, requiring active approval from both this House and the other place.

--- Later in debate ---

[Dr Hudson]

I take on board that comment, but a key theme for leaseholders is having more of a sense of belonging, ownership and ability to make decisions such as whether to keep a pet. I realise that this is a tightly worded Bill, but can the Minister say whether we will consider that issue in future?

[Maria Eagle]

I have every sympathy with the hon. Gentleman’s plea that homeowners—leaseholders think they are homeowners, but they do not own everything—should have the right to do things such as own pets. The Minister will tell me if I am wrong, but I think that the regulations and consequential amendments that we are discussing relate only to the power to deal with landlords seeking to continue ground rent, other than peppercorn rent, in the interim period between Royal Assent to the Bill and when the regulations are brought in to commence it properly, which we understand might be in six months’ time.

Talking about these provisions is a bit like dancing on the head of a pin. I know I have been contributing significantly to that, but they apply in a very narrow range of circumstances that relate to landlords who seek to continue to charge ground rent, or put clauses into leases that come into existence after Royal Assent but before the commencement of the provision seeking to get ground rent payments from their leaseholders-to-be. We are dealing here with a very narrow range of circumstances in what one hopes would be a very short period. The Minister has suggested a period of six months until commencement. I suppose that if a landlord were then to continue to try to have leases with provision for ground rent that was other than peppercorn, these provisions could apply in those circumstances. We are talking about badly behaved landlords after the commencement of the legislation that keeps ground rent as peppercorn. Can the Minister confirm that the regulations that we are talking about do not relate to anything other than that?

Budget Resolutions

Maria Eagle Excerpts

Monday 1st November 2021 Commons Chamber

[Michael Gove]

The right hon. Lady is right to point out that the Sure Start programme was always intended to help those who were most in need, but it was also intended to provide a universal offer. Inevitably, during the difficult period that we had after the 2008 financial crash, we had to make sure that we targeted resources accordingly, but after a period of retrenchment, we are now entering a period of renewal and reform. The family hubs are targeted not just at those who have children in the first 1,000 days of their life, which reflects superbly on the work of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); they are there to ensure that we have a comprehensive nought-to-19 offer. They go further than Sure Start children’s centres originally did—that is no criticism of Sure Start children’s centres—providing services that they did not.

[Maria Eagle (Garston and Halewood) (Lab)]

Will the Secretary of State give way?

[Michael Gove]

I will make a bit of progress and then try to take more interventions, if that is okay.

It is also important to recognise that the Budget statement saw a significant increase in public spending overall. It is the case that no Government can be judged purely by how much they spend. How that money is spent is critical. Additional public spending without reform and without a focus on value for money is money wasted. But I do not think that anyone across the House can deny that, with reform and with a focus on value for money, additional public spending, appropriately targeted, can help to transform public services for the better. In this Budget statement, £150 billion more will be spent over the spending review period. That is a 3.8% growth, in real terms, and in the Department for which I am responsible there is a 4.7% increase. Alongside that, there are the biggest increases in capital investment from any Government for 50 years; the biggest block grants ever given, since the dawn of devolution, to the Governments in Scotland, Wales and Northern Ireland; and an increase of 6.6% in the national living wage, which takes it to £9.50 an hour. All Governments can face criticism and all Chancellors can be attacked, but I do not think it credible for anyone in this House to say that the package that the Chancellor unveiled last week is any way not equal to the challenges that we face.

The question for Opposition Members, including those on the Front Bench, is what they would do differently. If they argue that we should spend even more, where would they spend it? Which budgets would they prioritise? If they were to spend more, which budgets would they deprioritise? What would they cut to fund the additional spending? If they would not cut, would they borrow more? If so, how much more? With what impact on our credibility in international markets, on interest rates and on our capacity to fund our debt and deficit? Let us bear in mind that debt is falling and the deficit is being reduced as a result of the Chancellor’s shrewd approach.

If the Opposition were to borrow more, would they tax more? If so, whom would they tax? What credibility can they have on tax when we introduced a specific one-off increase to fund the national health service and social care—and the Labour party voted against it?

Those are all questions that Opposition Front Benchers want to avoid. To what lengths have they gone to avoid it? Well, earlier today I spent a few seconds on Twitter, not tweeting, but studying that social platform. In particular, I studied the tweets of my opposite number, the hon. Member for Croydon North (Steve Reed), who has been tweeting promiscuously and vociferously over the weekend—but what has he been tweeting promiscuously and vociferously about? Has he been tweeting about the spending review? Has he been putting forward alternative plans for local government, alternative propositions on levelling up, a new plan for housing or perhaps a new proposition on communities?

No. The hon. Member has only one tweet about the spending review. In contrast, he has tweeted five times as often about Crystal Palace football club. We are all, I think, in awe of Patrick Vieira’s success in ensuring that Crystal Palace could beat Manchester City 2-0 at the weekend, but however historic and unprecedented that victory is, I think we all have a right to ask whether, if Labour is silent on the spending review—if it has nothing to say by way of criticism or alternative—that is perhaps an indication of the success of the Chancellor in framing a Budget and a spending review right for this country.

--- Later in debate ---

[Michael Gove]

The IFS is often—but not always—right.

[Maria Eagle]

Knowsley, which is one of the boroughs that my constituency covers, has gone from being the fifth most deprived local authority in 2010 to being the second most deprived now. One would have expected a Budget such as this, about levelling up, to focus particularly on giving necessary resources to Knowsley, but despite being a priority 1 area it has been overlooked for the levelling-up fund, having previously been overlooked for the future high streets fund and the towns fund. What does Knowsley have to do, now that it is the second most deprived area, to get some money from the Government so it can try to level up? [Interruption.]

[Michael Gove]

The hon. Lady has made an important point. There are specific and long-standing issues in Knowsley and other parts of Merseyside that we need to address as part of levelling up. However, I think she does herself down slightly, because I understand that thanks to her advocacy in her constituency two levelling-up bids succeeded, and although they do not affect Knowsley, they do affect Liverpool. Some £20 million has gone towards helping Liverpool City Council with regeneration, and £37 million has gone towards recovery. Those sums are not insignificant.

Nevertheless, I take the hon. Lady’s point about Knowsley. I think it important to remind her, and indeed the House, that the £1.7 billion in the levelling-up fund which was allocated by my right hon. Friend the Chancellor is just one third of the total sum allocated over the course of the spending review, and I look forward to working with her and with other colleagues to make sure that the remaining funds can be allocated effectively.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

The Chancellor has promised us a post-covid “age of optimism” and claims that the Budget will deliver it by levelling up the life chances and prospects of those in the north, like my constituents, who have been clobbered disproportionately since 2010 by Tory austerity and cuts that have adversely affected their chances to improve their lives and prospects. I wish the reality met that promise, but Ministers in this Government increasingly seem to promise the opposite of what they then actually do.

According to the Office for Budget Responsibility, the Government’s choice to pursue a very hard Brexit is on track to cut long-term GDP by 4%, and the covid pandemic will cut the size of our economy by another 2%. That is a 6% permanent cut in the size of our economy. That means less money to deal with the big problems that we face as a nation over the next 10 years —in particular the zero-carbon transition and adapting to the information revolution to create the economy of the future, while tackling inequality and improving living standards for all.

The Tory years have seen much slower growth in incomes than was the case prior to the Conservative election in 2010. Income growth is one of the ways in which families judge their wellbeing and decide how optimistic they feel about the future. The OBR has forecast that real wages will fall next year with consumer prices index inflation of 4% and expected wages growth at 3.9%—so much for the end of the public sector pay freeze. Workers will feel cheated if the end of the pay freeze still results in real wages falling. They will not feel like they have had a pay rise or that they are living in an age of optimism. In fact, real wages have risen by a meagre 2.4% in total since the 2008 financial crisis, according to the Resolution Foundation. The OBR expects only a 1.5% increase a year, which is pretty low, and much less than the 2.5% a year increase that was the norm before this Government came into office.

As well as stagnating wages, the Chancellor is delivering huge increases in tax, although he said little about that in his speech, preferring instead to give a homily to his worried Back Benchers, some of whom we have heard from today, about how much he aspires to cut tax. That is another example of Ministers doing the opposite of what they say. He is in fact putting up taxes to their highest level since 1950, when the Attlee Government were rebuilding Britain after the war. So, we have slow growth in incomes and huge increases in tax at the same time as rising inflation caused by big increases in household bills for energy, food and fuel. The Resolution Foundation has calculated that the average household will be £3,000 a year worse off. That is not likely to engender optimism from my constituents.

What are we getting by way of levelling up? Well, in the Knowsley part of my constituency, the answer is not a lot. Improving educational opportunity is one of the best ways of levelling up. Young people in Knowsley already have to leave the borough to study A-levels. The Chancellor promised that, at the end of this spending-review period, he will put per pupil funding back to the levels they were at in 2010—before his party came into office. That is 11 wasted years, and three more to come before we are back to where we were without the damage having been mended—back to where we were in 2010! That is not a triumphant achievement.

In Knowsley, my constituents are seeing a cut equivalent to £485 per person, against an English average of £188 per person, with none of Knowsley Council’s bids for the Government’s levelling-up funds having been successful—this is in the second most deprived borough in the country. That is not what I call levelling up.

Post Office Update

Maria Eagle Excerpts

Wednesday 19th May 2021 Commons Chamber

[Paul Scully]

My hon. Friend is absolutely right. Sir Wyn will look at both those things—he will look at those alarm bells—because that is so important to learn those lessons. We cannot learn them any other way, so he is right to do that. Clearly, with this being a computer software issue over two decades, Sir Wyn is getting the technical advice that he needs, and he will always have that support from us. We will make sure that he gets whatever he is asking for in terms of technical support.

[Maria Eagle (Garston and Halewood) (Lab) [V]]

Serious concerns have been expressed about the conduct of many of the private prosecutions that led up to the 900 or so wrongful convictions of innocent sub-postmasters, including some of my constituents, so why have the Government declined to accept the Justice Committee’s recommendation to introduce a binding and enforceable code of standards for private prosecutors and an inspection regime that would have identified these abuses at a much earlier stage? Will the Minister now accept that recommendation?

[Paul Scully]

The private prosecutions themselves, and the use of private prosecutions, are not within the scope of the inquiry, but clearly the way that the Post Office investigated this absolutely is. The Post Office has not used a private prosecution since, I think, 2013 and has pledged not to use them, but we will always look into the systems of prosecutions. As I said in my last statement, there are clearly wider lessons to be learned for the justice system in general.

Affordable and Safe Housing for All

Maria Eagle Excerpts

Tuesday 18th May 2021 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

I want to address whether the Government’s proposals help many of the leaseholders in Garston and Halewood in any meaningful way. Liverpool City Council is currently monitoring 149 high-rise residential blocks across the city because of fire safety issues relating to cladding, and the Liverpool Cladiators, among others, are campaigning to have the horrendously costly fire risk remediation done to their homes without the blameless leaseholders having to pay. That is one problem.

In addition, many ordinary families in my constituency who bought new build leasehold houses on estates in good faith are being financially exploited by unscrupulous freeholders who see them only as cash cows. All those people—most of them young families—are trying to get on in life in aspiring to own their own homes. That is an admirable thing that we should be encouraging, but instead, they have found themselves in a living nightmare of escalating costs and financial exploitation that they knew nothing about when they signed up to home ownership. Indeed, some of them were actively misled.

In spite of the warm words, the legislation announced by the Government leaves many of these people in the same trap, with no guarantee of relief, and in some cases only very partial relief. The Building Safety Bill does nothing to help those who live in buildings under seven storeys. As my hon. Friend the Member for Sheffield South East (Mr Betts) set out, it does not pay the costs of non-cladding remediation needed to ensure fire safety. It does nothing to stop freeholders passing on the ruinous costs to their leaseholders or to ameliorate the soaring insurance costs passed on in service charges. In Liverpool, insurance costs increased this year by between 300% and 1,400%—costs that will be passed on. Before this legislation, leaseholders were facing unpayable, ruinous costs in the tens of thousands of pounds each, literally trapped in fire-trap buildings, in homes that are unmortgageable and unsellable, with no way out. After this Bill is enacted, with its regulator, its new homes ombudsman and its new framework to provide national oversight of construction products, they will still be in exactly the same position.

What about the many hundreds of my constituents who have bought new build leasehold houses and find themselves being financially exploited? They are having to pay escalating service charges, ground rent and fees because the freeholds have been sold on as an income-producing financial asset, thus ensuring that agents squeeze every last penny out of them, while providing as little as possible—usually nothing—in return. The Leasehold Reform (Ground Rent) Bill does nothing at all to help existing leaseholders, and the Government appear content to allow these people, who bought their homes in good faith, to be left with no redress under its provisions. My constituents in existing leases will have all the same expensive problems after the enactment of this legislation that they had before it and no way of improving things. Even if they purchase the freehold, exploitative covenants are placed in the contract for sale. Wholesale leasehold reform is needed, but this Bill does nothing about that.

Despite two Bills in the Queen’s Speech that promise solutions to these intractable problems faced by leaseholders, leaseholders will not be given the legislative help that they need and that their predicaments demand. They will still face the prospect of having to pay thousands of pounds and put up with very large, exploitative costs into the far future. They will be left with unmortgageable and unsellable homes, massive, unaffordable bills and no real help from this Government. Rhetoric won’t cut it, Minister—you have to help these people properly.

Liverpool City Council

Maria Eagle Excerpts

Wednesday 24th March 2021 Commons Chamber

[Mr Deputy Speaker]

You are keeping me on my toes, Wera. Well done.

[Maria Eagle (Garston and Halewood) (Lab) [V]]

I am shocked by the findings that the Secretary of State has outlined to the House today and I assure him that I will read the report extremely carefully once it is published. Does he agree that the priority now must be to protect Liverpool council tax payers’ money and the services the people of Liverpool rely on? Does he also agree that it is in the public interest to put in place effective procedures for obtaining best value in all that the council does going forward? Given that the council is to pay the costs of the interventions, as he has set out, is there an opportunity, if swift improvement is made, for the intervention to be shorter than the three years he has set out today?

[Robert Jenrick]

I am grateful, once again, for the constructive way in which the hon. Lady has approached this issue, like her fellow Liverpool MPs today. The intervention I am proposing is for a maximum of three years, so she is correct to say that there is no need for the commissioners, if they are put in place, to be there for that full term if progress is made faster than that. They will report to me on a six-monthly basis. We can review the matter on each of those occasions, and I will keep the hon. Lady and her colleagues fully informed of my decisions on each occasion. She is absolutely right to say that our sole interest here is the people of Liverpool, the taxpayers of Liverpool, and ensuring that their public services are delivered properly, their money is safeguarded and the city is one in which people feel complete confidence to invest, do business and work with the city council. I hope that, together, that is exactly what we can achieve.

Unsafe Cladding: Protecting Tenants and Leaseholders

Maria Eagle Excerpts

Monday 1st February 2021 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab) [V]]

Three and a half years ago, 72 people lost their lives in the horrors of Grenfell Tower, and many hundreds more survivors were injured and traumatised. We must never forget them.

The aftermath of that terrible event revealed the country-wide scandal of developers ignoring building safety and creating homes that are firetraps. The Government have not collected reliable figures, but the Opposition have estimated that 450,000 people are still living in blocks known to have unsafe cladding. This is not just about ACM cladding, but other dangerous cladding, as well as flammable insulation, cavity walls without fire breakers, flammable timber balconies, inadequate fire doors—the list goes on as the costs go up. Repairs are conservatively estimated at £18 billion, which puts the £1.6 billion promised by the Government into its proper perspective. Some of the defects to be remedied do not fall within the Government’s promise of support. What the Government are offering is too little, too late, and the money has not yet been handed over to leaseholders. They need help, and they need it now.

The discovery of the cladding scandal has been followed by Government dither and delay when it comes to helping leaseholders, many of whom feel they have simply been abandoned to their fate, and whose bills are going up now. None of them is to blame for this scandal, yet they are already footing escalating bills that they cannot afford. They are ordinary people simply trying to get a home of their own, or flat owners seeking to let out a flat, suddenly finding themselves in a nightmare of unaffordable costs with no way out. They live in unsafe, unmortgageable, unsellable flats, with escalating insurance costs and skyrocketing service charges to fund expensive waking watch patrols, and they are liable to pay for all the remediation. If a consumer bought a faulty kettle, they would be entitled to get their money back, but there is no consumer protection for leaseholders, just a bigger bill. It is not good enough.

The Government must prioritise helping leaseholders with these unaffordable costs as soon as possible. The developers and rule dodgers who installed this dangerous cladding and flammable insulation—who ignored fire regulations in their development—should pay, not the blameless leaseholders. It is not as if some of these people do not have the money. Last July, the Chancellor of the Exchequer provided a £4 billion tax cut to the housing and development sector by cutting stamp duty. The Help to Buy scheme has given a huge cash boost to them, so much so that developers between them have made £15 billion in profit since the Grenfell fire, so the Government must take action to extract the costs of remediation from those who perpetrated this outrage and must not make the blameless pay. I commend and support the motion today.

Council Tax: Government’s Proposed Increase

Maria Eagle Excerpts

Monday 25th January 2021 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab) [V]]

We have the worst recession of any major economy. The virus is still not under control. Many thousands of my constituents in Liverpool and Knowsley have lost their jobs, have lost income and are facing wage freezes, while those on universal credit are about to lose the £1,000 uplift that has been keeping the wolf from the door. The self-employed are excluded from any help at all, and many are now wondering how they are going to feed their children. Indeed, many people are already relying in increasing numbers on food banks.

Now is not the time for the Government to force councils to hit these people with a 5% council tax hike to balance budgets. That will hit the poorest hardest. Liverpool has had to make cuts of over £420 million in the last nine years, as it has lost 63% of its Government grant. Knowsley has lost over 50% of its grant and has had to make over £100 million in cuts. These are two of the councils worst hit by Lib Dem and Tory cuts since 2010. If Liverpool had faced a cut at the average level over those years, it would still have an extra £123 million to enable it to avoid increasing council tax.

Over three quarters of housing stock in Liverpool is in council tax bands A and B, so it raises less money—only £1.5 million for every 1% increase. The poorest areas are hit hardest. When the Government mandate council tax increases as the main way of increasing the income of councils—they have increasingly done that—it hits poorer people harder and the poorest areas hardest. Those being expected to meet this extra financial burden, such as council tax payers in Liverpool and Knowsley, are the least able to do so.

A quarter of all UK households went into the covid crisis with less than £100 in the bank. Some 3.6 million people nationally are trapped in insecure work, and their finances are not resilient. In Liverpool, council tax support is provided to about a third of all council tax payers, costing £30 million a year, yet one in four of those receiving that help are actually in work. Telling the council that it must hit those people hard again is not a fair way of doing things. Many councils will have to consider making major cuts to services next year—the exact same services everybody will be depending on to help the recovery. The jobs that are lost will be those of the very people who have worked so hard and put their lives at risk to deliver key public services during the ravages of covid.

The Government must provide a solution to local government finance that takes into account the already entrenched disadvantage in constituencies such as mine, and they must seek to address it, rather than just assuming that those with the least can pay the most and attacking Labour councils for spending more. Those councils cannot easily raise more money from council tax, because they have low band properties, and people just cannot afford to pay. That will not work. It is a recipe for further poverty. The Government have to change their view.