Oral Answers to Questions

Michael Fabricant Excerpts

Monday 10th December 2018 Commons Chamber

[James Brokenshire]

I commend the work of the charity in the hon. Gentleman’s constituency. We have a £5 million fund open to all local authorities to ensure that more accommodation is now available for these winter months.

[Michael Fabricant (Lichfield) (Con)]

Lichfield, Tamworth and Burton Councils are members of two local enterprise partnerships—the Greater Birmingham and Solihull LEP and the Staffordshire LEP. Why is my right hon. Friend the Secretary of State trying to abandon localism and force them to join just the Staffordshire LEP?

[Jake Berry]

Our LEP review is about putting our LEPs on a permanent footing as we leave the European Union. Abolishing overlaps is about creating accountability for all LEPs and is part of a wider suite of reforms ensuring that LEP boards reflect the diverse communities they represent by asking them to have at least 50% of their boards made up of local businesswomen.

Oral Answers to Questions

Michael Fabricant Excerpts

Monday 23rd July 2018 Commons Chamber

[James Brokenshire]

The hon. Gentleman will welcome the £420,000 committed to Nottingham through the rough sleeping initiative, which underlines the practical steps we are taking, including the £30 million that has been committed. We will bring forward further proposals through the rough sleeping strategy. He is right that this is an important issue: this Government take it seriously, and I take it seriously personally. That is why my first visit as Secretary of State was to a rough sleeping charity to see the work it is doing. We will be coming forward with more work.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend’s immediate predecessor was very familiar with the work being undertaken by the Mayor of the West Midlands to eliminate rough sleeping and homelessness. Will my right hon. Friend pick up the reins and visit Andy Street to see what the west midlands is doing on that?

[James Brokenshire]

That first visit that I referred to was to the west midlands, where I met Andy Street to see some of the very good practical work taking place in Birmingham, and I commend that work. Equally, I commend some of the work we are doing around the west midlands through the Housing First pilots.

Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 Draft Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2018

Michael Fabricant Excerpts

Tuesday 12th June 2018 General Committees

[Mrs Wheeler]

It is a pleasure to serve under your chairmanship, Mr Gray. The regulations were laid before the House on Thursday 3 May 2018. I will refer to them as the approval regulations and the requirements regulations respectively. The private rented sector is an important part of our housing market. It has doubled in size over the last decade, and letting agents now hold approximately £2.7 billion in client funds. The client money held by agents includes rent money and money provided by landlords for the purpose of making property repairs. At the moment, however, there is no legal requirement for agents to obtain client money protection. Tenant and landlord money is therefore at risk if an agent goes bankrupt or if client funds are misappropriated. The main letting agent representatives, ARLA Propertymark and the National Approved Letting Scheme—NALS—support making this protection mandatory. Indeed, it is estimated that around 60% of agents already hold such protection.

[Michael Fabricant (Lichfield) (Con)]

I am curious to understand the context. Can my hon. Friend give any indication of the approximate rate of failures and money lost? Basically, how big a problem is it?

[Mrs Wheeler]

I thank my hon. Friend for his interesting question. I will come to it in the rest of my speech.

Making client money protection mandatory will ensure that every tenant and landlord has the financial protection they need. It will bring the property agent sector into line with others where client money is held, such as the legal profession and travel operators.

Before I set out the detail of the regulations, I want to establish the legislative context. The Housing and Planning Act 2016 provided powers for the introduction of client money protection requirements. Following Royal Assent, the Government invited Baroness Hayter and Lord Palmer of Childs Hill to chair a client money protection working group. The working group reported in March 2017, and its recommendation to make client money protection mandatory was accepted by the Government. The Government consulted on implementing mandatory client money protection in November 2017, and there was broad support for our proposals.

I will now introduce the two sets of regulations. The first set—the approval regulations—establishes the procedure for Government to approve privately run client money protection schemes. The second set—the requirements regulations—requires agents in the private rented sector to belong to one of those approved schemes if they handle client money. These two sets of regulations, which together provide the framework for client money protection, are the subject matter for debate before the House today.

I turn first to the approval regulations, which require any client money protection scheme to be approved by the Secretary of State in order to operate. This is to ensure that all schemes meet minimum standards and offer sufficient financial protection. The Government do not intend to create their own scheme at this time. That would be unnecessary, given the number of schemes in the market already. However, the regulations allow the Government to do so in future, so that any protection can be maintained in the unlikely event that the market ceases to offer provision.

In order to obtain approval, client money protection schemes must meet certain conditions, including those that are designed to ensure that landlords and tenants can easily obtain compensation. The scheme administrator must ensure that it has procedures in place so that valid claims are paid as soon as reasonably practicable—I love that word. It cannot make deductions from those claims. The scheme administrator must also hold a level of insurance cover that is appropriate given the amount of client money held by its members. Schemes must put in place arrangements so that in the event of the scheme closing, their members would be notified and transferred to an alternative scheme.

The approval regulations also establish minimum standards that must be set in scheme rules. They include requirements for members to hold money in a separate client account; to have written, transparent procedures for handling client money; and to maintain adequate records.

--- Later in debate ---

[John Healey]

It is a pleasure to serve under your chairmanship, Mr Gray, and to have the Minister back in her place on the Front Bench.

If the hon. Member for Lichfield and the Minister look at the consultation document on client money protection schemes, they will see that the total funds held by what the draft regulations call “regulated property agents” are estimated to be around £2.7 billion at any one time. The consultation document states that only around 60% of those agents are members of voluntary schemes, and that suggests that around £700 million or £800 million is held by agents that are not part of a scheme. That helps to underline the case for the draft regulations.

[Michael Fabricant]

I am grateful to the right hon. Gentleman for his helpful comments. No doubt we will hear from the Minister about this, but does the right hon. Gentleman have any indication of how many actual failures there have been? Yes, that money is unprotected, but where are the examples—there must be some—of money not being passed on?

[John Healey]

If the hon. Gentleman reads Lords Hansard from 17 March 2016, he will see that my colleague Baroness Hayter of Kentish Town, who led for Labour on the Housing and Planning Bill—as the Minister mentioned, that contains the parental provisions for the draft regulations—in pressing the case for a compulsory scheme rather than the existing voluntary scheme, cited several examples of property agents pocketing money, from landlords as well as renters, and going missing. Baroness Hayter cited six or seven obvious, recent cases, but there is a track record of hundreds of such cases in recent years, which underlines the case for the draft regulations. I encourage him to look at that debate, although the Minister may well give him other examples.

I was diverted before I had started. The Minister has introduced two draft regulations, so will she confirm which four housing regulations she will repeal? It is important for the Committee, before it approves the draft regulations, to understand the consequences for provisions or protections in other fields. If she cannot do that, will she confirm whether the Government’s policy of two out, one in for regulations, which has been their policy for several years, is still in place or whether it has been dumped?

As the Minister said, the draft regulations derive from the Housing and Planning Act 2016, which was given Royal Assent in May 2016. I happen to have led from the Front Bench the opposition, inside and outside Parliament, to that Bill. The draft regulations are, in many ways, a ghost from the past. This debate reminds me of many of the debates we had during the long proceedings on that long Bill. I am reminded, too, of the 19 defeats the Government suffered on it—double the total number of defeats on all the Bills in the previous Session. Of course, that does not count the concessions that the Government made during proceedings on the Bill, which led us to withdraw amendments that we might otherwise have pressed to votes that we might well have won.

That is the background to the draft regulations. Pressed by Labour, both in the Public Bill Committee in this place and in Committee and on Report in the other place, the Government were prepared to talk and to consider this issue further, so, although it very well might have done, it did not register as defeat No. 20.

Windrush

Michael Fabricant Excerpts

Monday 30th April 2018 Commons Chamber

[Mr Speaker]

While it is always a pleasure to listen to the mellifluous tones of the hon. and learned Lady, who is a distinguished practitioner at the Scottish Bar, I hope I can be permitted gently to point out that she has nearly doubled her time allocation.

[Michael Fabricant (Lichfield) (Con)]

She gets paid by the minute.

[Mr Speaker]

She does not get paid by the minute. [Laughter.] I remember one very distinguished lawyer in this place in the last Parliament who I rather fancy had been paid by the word.

Draft Combined Authorities (Borrowing) Regulations 2018

Michael Fabricant Excerpts

Monday 23rd April 2018 General Committees

[Jake Berry]

I have a bottle of fizzy water on ice, ready for the outcome of the election of the Mayor in South Yorkshire—I hope it is a Conservative. If by some chance a Labour Mayor is elected, he will not be affected by these regulations. These regulations, if approved today, are the secondary step that Parliament will take to agree the additional borrowing powers if—and only if—they agree the debt cap with the Treasury.

[Michael Fabricant (Lichfield) (Con)]

The Minister rightly mentioned Andy Street, the Mayor of the West Midlands, who I know will welcome these powers. I have no background in local government whatsoever, so I would like to know this: how will the interest rates for the borrowing be determined, and from whom will the combined authorities borrow? Will they borrow from the Treasury or from commercial organisations? What supervision will there be on the rates of interest?

[Jake Berry]

I was beginning to worry about my hon. Friend, because he did not jump up to intervene the moment I mentioned Andy Street. The Mayors are free to borrow the money, if it is under the borrowing cap, from anyone they choose. My guess is that they are most likely to borrow from the Public Loan Works Board, which at the moment has an interest rate of 1.91% for a five-year loan. My hon. Friend will understand that the rate changes over time—the Bank of England is rightly independent of Government and will set future rates. The borrowing powers are subject to an overall borrowing cap, to be agreed with the Treasury, for either two or three years, or perhaps for longer in future, and they are covered in the same way as every local authority is now by the prudential borrowing regulations. Not only will they have to remain within their borrowing cap, but they will have to comply with the prudential borrowing regime, if the Committee accepts these regulations.

Oral Answers to Questions

Michael Fabricant Excerpts

Monday 12th March 2018 Commons Chamber

[Sajid Javid]

The hon. Lady is absolutely right to raise this issue, which comes up in Manchester and many other parts of the country. She is right to point to the cross-departmental work that is required, including with the Department for Work and Pensions and others, such as the Ministry of Justice, given the number of offenders who sometimes end up on the streets. The work is being co-ordinated, and the taskforce that the Prime Minister has created is helping to achieve just that.

[Michael Fabricant (Lichfield) (Con)]

Does my right hon. Friend agree with Catherine Street of the Memorial University of Newfoundland that the causes of homelessness and sleeping on the streets are very many and complex, and that this is not just down to a lack of housing? Will my right hon. Friend take the opportunity to go to the west midlands to visit Mayor Andy Street to see the work and initiatives that he is undertaking to prevent the problem?

[Sajid Javid]

My hon. Friend mentions two Streets; I agree with him on both. Catherine Street is absolutely right about the complex causes of homelessness, particularly rough sleeping. Andy Street, the Mayor of the west midlands, has really led the way on this, including with the Housing First project.

--- Later in debate ---

[Mr Speaker]

I have no wish to be unkind to the hon. Lady, but let me put it this way: we have had a dose from Bath, and by long-standing convention, a Member is not called twice on substantive questions. If the hon. Lady seeks to catch my eye during topical questions, she may be successful. I admire her persistence, but I hope she will understand that that is the way we operate.

[Michael Fabricant (Lichfield) (Con)]

She is greedy.

[Mr Speaker]

No, no. The hon. Lady is not greedy; she is just keen.