Natascha Engel
Main Page: Natascha Engel (Labour - North East Derbyshire)
Peter Aldous
I certainly take that on board.
The Mobile Homes Act was the biggest shake-up in the park homes sector for 30 years, and it will take a few years to settle down and be implemented fully, properly and effectively. The feedback I have received is that the legislation is providing local authorities with the means of working with park home owners to bring rogue site owners to account, ensure that parks are properly managed and run, and ultimately to drive those bad apples out of the sector.
There remains much work to be done to make the new sale process work better. On good, well-run sites, in the past home owners have relied on responsible site owners—the good apples—to do much of the work for them when it came to selling their homes. Now that site owners have been removed from the sale process there is a vacuum to fill, and I am afraid that the legal, conveyancing and estate agency professions are not coming forward quickly enough to fill that void. That problem needs to be addressed now.
Natascha Engel (North East Derbyshire) (Lab)
The hon. Gentleman mentions estate agents. A 10% charge is taken by the site owner, but residents also pay estate agent fees, so that is one injustice. This measure is not being done in haste; as he said, this has been 30 years in the making. His Bill was important because it dealt with the most serious injustices, but it left out the 10% commission because it was so complicated and contentious. Why is the hon. Gentleman fighting against a review? We are asking to look at all aspects of the 10% commission, specifically in a review. Why is he so hesitant to have such a review and consider those aspects?
Peter Aldous
I am not opposed to a review, as I will say when summing up my remarks, but it is about the timing of that review and the way it takes place. I understand —I would be grateful if the Minister confirmed this when he sums up the debate—that the Department intends to carry out a comprehensive review of the sector in 2016, three years after the Mobile Homes Act received Royal Assent. One of the main tasks in that review will be to assess whether the fit and proper persons test should be applied to those seeking to manage parks, and I suggest that at the same time the whole sector should be reviewed, including the commission rate. I believe that is the right way to consider this matter, not on its own ahead of that comprehensive review.
Those are my findings on this situation, and as I said, we must seek to maintain an equilibrium and ensure that responsible site owners get a fair return. When introducing the Bill it was important to maintain understanding and consensus on all sides, but I fear that we are perhaps in danger of losing that consensus. That is the basis on which I hope we can proceed.
Natascha Engel (North East Derbyshire) (Lab)
I add my thanks to those of other hon. Members to the many campaigners who have gone before us in the previous three decades—at least—who have sought justice for people who live on park home sites. I thank Lord Graham of Edmonton, who has done so much work on park homes over many years. The right hon. Member for Mid Dorset and North Poole (Annette Brooke) has led the charge for many years and I thank her for her work. We have got to know her heroic constituent Sonia McColl extremely well. She has become the park home owners’ agony aunt, answering e-mails and phone calls into the night, dealing with some very distressed individuals. She also set up the Park Home Owners Justice Campaign. She has done magnificent work.
I thank my predecessor, Harry Barnes, who led the campaign in the 18 years he was in the House before me. Many of the people who live in North East Derbyshire’s park home sites would like to thank him. Most of all, I thank all the tireless campaigners in the eight park home sites in North East Derbyshire. Hundreds of people live in the park home sites in Riverdale, Millfield, Brookfield, Ponderosa, Sunningdale, Poplar Drive, Grasscroft and Bramley.
The 2011 census showed that something like 160,000 people lived in 84,000 park homes in about 2,000 UK sites. Those figures might be out of date, but more people and not fewer live in park homes. Most park home sites have a rule that people must be 50 or over to live there. Therefore, by their nature, they are places where people go when they have sold up in order to live off the money they have released from their homes. They are on low incomes, and they tend to be elderly and vulnerable. They live in isolated areas, because the sites are on the edges of communities. As the right hon. Member for Mid Dorset and North Poole said, many of them are very frightened.
Stephen Barclay
I concur with that. Is not a further problem that those people cannot possibly have an idea what the charge will be, because, by its very nature, it will be decided in future? They will not know what the sale price is, and therefore even an informed consumer cannot consent to it.
Natascha Engel
That is a key element, and the Park Home Owners Justice Campaign group has made exactly that point. How can the charge be such a fundamental part of the necessary profits of site owners—it is necessary according to the site owners—if they cannot say when the profits will come? I will go into more detail on that.
Hon. Members are enormously grateful to the hon. Member for Waveney (Peter Aldous) for promoting as a private Member’s Bill what became the Mobile Homes Act 2013. It has and will make a huge difference. The Act is bedding down. He is very lucky to have so many good apples as site owners in his constituency. All the bad ones have come to mine. As a result of the Act and other legislation, the intimidation has stepped up a level. As campaigning MPs, we need to ensure the involvement of the local authorities.
I do not recognise the picture the hon. Gentleman paints. I understand the importance of consensus, and as hon. Members have said, we do not want to deny park home site owners a good living. They have a very good living at the moment. All we are fighting for is justice. The 10% commission is a fundamental injustice in the sector and I will go into detail to explain why.
The 10% commission is a flat fee. It was initially intended as a maximum commission, but it is a flat fee of 10% no matter the value of the home, how long somebody has lived there, and what improvements people have made to their homes. The homes in my constituency are absolutely beautiful. There is a reason why the report mentioned by the hon. Member for Waveney is called “Living the Dream”. It is absolutely idyllic living on a park home site with like-minded people. It is quiet and beautiful and on the edge of beautiful countryside. It should be absolute heaven in retirement, but improvements are paid for and done at great cost to the people who live there, not to the site owners themselves.
The biggest reason the site owners give, as the hon. Member for Waveney said, is profit margin. With the profit margin, 70% comes from pitch fees and 30%, as the right hon. Member for Mid Dorset and North Poole mentioned, is from income that is not secured—residents do not know when it is coming. They are told that it is an essential revenue stream for the maintenance of park home sites. I can hear almost every single one of the 600 residents in North East Derbyshire sighing and saying, “If only”. On the sites we go around, there are loose cables and tree roots growing into water pipes that are not being repaired. Massive costs are incurred where there are leakages. As we all know, utility bills are collected on the whole of the site—there is one bundled-up price. Therefore, if the site owner does nothing about the burst pipes, it is the residents who pay.
Stephen Lloyd (Eastbourne) (LD)
Does the hon. Lady agree that there are numerous examples—certainly on pitches in my constituency and probably on those in the constituencies of other hon. Members—of site landlords simply refusing to act? They are challenged; something is pointed out to them but they simply do nothing.
Natascha Engel
Yes, and I go back to the point about the type of residents. There are some brilliant campaigners, but all of them are very elderly. What can they do if a site owner is never to be seen, especially when there is work to be done and something has to happen? They are either left to do it themselves—a lot of people are just not able to do it themselves—or they have to live with the fact that there are lots of dangerous things lying around and things are just not sorted out.
We hope that enforcement on the part of the local authority can now happen, but it is very difficult to do in practice if a park home site owner is reluctant to do anything because it costs them money and bites into their profits.
Peter Aldous
The image that the hon. Lady is portraying is the view I have of the one bad park home site in my constituency. Does she not agree that the Mobile Homes Act 2013 provides the means to address the problem?
Natascha Engel
We hope it will address the problem. One of the really big issues previously was that there was nobody to enforce the licence unless it was a matter for the police, in which case it was a criminal matter and out of everybody’s hands anyway. We hope it will be a very important change, but certainly in North East Derbyshire the legislation needs to settle down. The 10% flat rate seems enormously unfair when site owners are saying it is absolutely essential for the maintenance of the park and no work is ever done. On the contrary, residents are doing all the work and having to pay out for everything.
Bob Stewart
This is the first I have learned of the problem. I have listened to the debate and I am absolutely appalled. The 10% fee sounds like daylight robbery. It is fair to charge a rent for a pitch; it is grossly unfair to charge 10% for nothing. It is robbery.
Natascha Engel
Absolutely; in fact Rick and Bill, from one of the park home sites in North East Derbyshire, made a T-shirt with “Daylight Robbery” on it, which is selling like hot cakes. It is a funny point, but about something serious. This is daylight robbery from people who cannot afford it. That is the really awful aspect. It is exactly as the hon. Gentleman describes: it feels such a terrible injustice that people pay out and get absolutely nothing in return.
I have mentioned this before in a debate, but it is also interesting to remember that when park home sites first started, the type of people who owned them had a social conscience. Part of the reason why utilities are bought in bulk now is that the site owners used to do that and then pass on the savings to the residents. Now the absolute reverse is true, certainly in many of the sites in my constituency, where although utilities are bought in bulk, everything is completely un-transparent. No one can see what they have used or how much money is being charged, and the site owners tend to add a little administration fee, on top of the pitch fees, on which a lot of them are making a disgusting amount of profit. That really should not be allowed, and it is also something that should be taken into the calculations.
As we have said before, what we are asking for is very reasonable: a review of just one thing that was not included in the private Member’s Bill of the hon. Member for Waveney. That would also be an opportunity for those who disagree with us to make their case. The most interesting thing in the speech by the right hon. Member for Mid Dorset and North Poole was the fact that the evidence relied on, certainly in the consultation for the private Member’s Bill and under the Labour Government, is from previous research that has never really been updated. As the sector is now much more organised, the people taking part in consultations are ever increasing in number and, thanks to Sonia McColl, have a proper focal point. I therefore urge the Minister and the shadow Minister—the Minister in what I hope will be an incoming Labour Government—to commit to having a review, simply in recognition of the fact that there is a problem. It is not a problem for the site owners, but it is for those who live on the sites.
Transparency and clarity are enormously important. Under the last Labour Government, a regulation was proposed to make any changes clearer and to require site owners to make it clear to those buying park homes that they would face not only pitch fees and utilities bills but the 10% charge at the end their time. That should have been a requirement, but unfortunately it was never implemented. It is all there in the Department; perhaps that regulation needs to be brushed down, so that we can have a look at it before the general election.
As I have said, we do not want to deny site owners a living; it is just that, certainly from anecdotal evidence and the kinds of cars they drive, we can make quite a safe assumption that the profits they are making, on the backs of vulnerable people, are extremely high. Therefore, it is reasonable for us to have another look at this extortionate commission of 10%. The right hon. Member for Mid Dorset and North Poole mentioned this, but it would also be a good idea for the review to look at minimum maintenance standards on site, so that if people are paying 10%, the site owner has to commit in return to maintenance up to a certain standard and within a certain timeframe. That would go some way to addressing the injustice that people feel. We could look at that in the review, and there would then at least be a proper justification for the site owners to take that 10%. At the moment, it is daylight robbery; people are getting nothing in return for it.
It was interesting to hear about park home sites that were council-owned. Bramley Park site in my constituency used to be council-owned and is now in private ownership. It does not charge the minimum 10%. The same owner charges the 10% at another park site in the constituency, but he seems to manage perfectly well without charging it on the former council-owned site. Perhaps we could look further into that in the review and assess the profit consequences to a park home site owner if the 10% commission were to be abolished.
Some people think of these mobile homes as caravans, but they are not mobile; they are entirely static. As mentioned earlier, there is one set of rules for people who live in bricks-and-mortar homes, and a different set of rules for these static caravans. Yet these are people’s homes; it is where they live. It is where many of them will live for the rest of their lives. Some have quite a high value. Some of these homes go for between £150,000 and £200,000—often reflecting how beautiful they are. We are not talking about peanuts.
Annette Brooke
When the commission first began to be charged, we were talking about home prices of between £10,000 and £20,000, yet now we are up into the realms of £250,000 for a new park home, and even trading prices can be at least £150,000. These are very large sums of money, yet we do not know exactly what the commission is used for.
Natascha Engel
That is an important intervention. One of my constituents has written:
“Under the new rules a Site owner has no dealings with the sale of properties, not even to notify the provider of essential services…Water, electricity etc. We do that. All he has to do is get his secretary to delete one name and enter another. A huge commission for a two minute job.”
I think that rather makes the hon. Lady’s point.
The review should look at another problem about which residents have written to me. On one park, an elderly resident had gone into a care home before she sold her home. We need to note that none of my constituents were happy for me to use their names. They wanted to remain anonymous because they are absolutely terrified of the consequences that might follow from their site owners. I would like the Minister to listen to this letter, as it reveals a really serious problem. It states:
“In respect of the new Mobile Homes Act 2013 particularly on the sale of homes, it appears that problems are occurring on properties that are for sale and empty due to either the home owners moving to another property or into a nursing home. Although the ground rent is continuing to be paid, our site owner is claiming that if the property is empty then the home owner is breaking the law within the implied term which states that the home must be kept in a sound state of repair and must be the sole residence of the occupier. It appears that our site owner then sends a solicitors letter to that effect to the seller and also sends out surveyors to check the exterior of the property who obviously find many major defaults and state the property is not worth anything! This then means that any prospective purchaser cannot purchase the property because it is in the hands of the site owners solicitors pending court action!”
That was not the first time I had heard about that problem, which relates to the wider context of the 10% commission issue. We really must have a proper and careful look at this. One positive consequence of setting up an independent review is that many such examples, which I have become aware of only recently, would be brought to our attention. Many of these real injustices, which simply would not be tolerated for homes of bricks and mortar, could be highlighted. That would be most useful.
I hope that when the Minister and the shadow Minister wind up the debate, they will commit to setting up a review and will ensure that the review is independent. We would very much like to help out with the review, but what is most important is for it to be independent of not just site owners, but any other pressure groups. We must ensure that its findings are regarded by everyone as fair and justified. It is high time that we updated what is, by now, quite ancient research.
Notwithstanding what was said by the hon. Member for Waveney, I think that time is of the essence. One of the tragic aspects of this issue is that many people have died since I started the campaign: they have died waiting. Many of those who are alive are elderly, and time is clearly of the essence for them. This is an injustice that needs to be dealt with sooner rather than later.
It is unfortunate that many of the changes for which we have been lobbying have got lost between general elections. I should dearly love to see a review set up now, with a definite timeline and involving cross-Bench consensus, so that we can ensure that something happens, and happens very quickly. I should be very grateful if the Front Benchers would be specific about whether there will be a review, how independent such a review will be, and, above all, what the timeline will be.
Natascha Engel
The Minister says that a majority of sites are well managed. What evidence does he have that it is not a minority that are well managed and a majority that are mismanaged?
Brandon Lewis
Actually, what I said was that the majority of site operators need the commission to maintain their sites. On the question of whether they are poorly managed and maintained, I said that some operators are not investing in them. That is exactly what the 2013 Act—the rules and laws that came into force on 1 April 2014—deals with.
The independent report carefully evaluated the economic structure of the industry and concluded that commission was an important income strand that could not be abolished or reduced without relief. Nevertheless, the previous Government consulted on what the appropriate maximum rate should be. Although home owners favoured a reduction in or abolition of the commission rate, very few thought it should be linked, as the right hon. Member for Leeds Central has outlined, to a reduction or an increase in their pitch fees. Understandably, and as the right hon. Gentleman also said, those who generally saw their park home as their home for life wanted to retain the existing system, while other site owners wanted no change at all. The then Government’s preferred option at that time was to have a 7.5% commission on existing agreements and to abolish it on new ones, but to have unregulated pitch fee increases, for which consultees showed little support. The consultation was therefore inconclusive. It looked at options in relation to the payment but, as we all now know, it was not about reducing or abolishing commission. The then Government therefore decided that no case had been made to change the status quo.
In the spring of 2012, the issue of commission was looked at again by the Communities and Local Government Committee. It held an inquiry into the sector, and published its finding in June 2012. Its report, which identified widespread malpractice in the sector, led the Government to support the Bill introduced by my hon. Friend the Member for Waveney. We agreed with the Select Committee’s finding that there should be no change to commission. That was our view in 2012, and it remains our view today, but I will return to the issue of the review in a moment.