House of Commons
Tuesday 20 December 2016
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
As we wish each other a merry Christmas, the whole House will also this morning remember the people of Berlin as they face up to yesterday’s horrific suspected terrorist attack. Germany and its capital Berlin have been beacons of freedom and tolerance in modern times, and all our thoughts and prayers are with them today.
Evidence from all over the world suggests that higher standards of care for patients relate directly to the quality of clinical leadership, which was why last month I announced a number of measures to increase the number of doctors and nurses in leadership roles in the NHS.
I thank my right hon. Friend for his response. Clinicians in Telford have been showing real leadership by rejecting a proposal to close a brand new women and children’s unit, and elements of our emergency services. The quango responsible for this idea has spent £3 million and taken three years to come up with the proposal, which has been rejected by local people and clinicians. Will my right hon. Friend meet me and my local colleagues to bring an end to this farce, and to ensure that we do not continue in limbo any longer?
I recognise the extent of my hon. Friend’s campaigning on this issue in Telford, and that she expresses the concerns of many of her constituents. As she knows, service changes must be driven locally and must have the support of local GP commissioners. She will also know that the actual situation, very frustratingly, has not led to consensus between clinicians in different parts of Telford and Shropshire. I agree that the process has taken much too long, and I am more than happy to meet her and to try to bring this situation to a close as quickly as possible.
In a year when the Health Secretary has spent quite a lot of time knocking clinicians, it is good to hear him speak so positively about them. After four years in the job, what responsibility does he accept for the lack of suitably qualified individuals—not just clinicians—who are prepared to take on the top jobs in the NHS on a permanent basis?
I will tell the hon. Lady what I take responsibility for: more doctors, more nurses and more funding than ever before in the history of the NHS. We know that the highest standards are often achieved when there is strong clinical leadership. Only 54% of managers in this country are clinicians, compared with 74% in Canada and 94% in Sweden. That is why it is right that we do everything we can to encourage more clinicians into leadership roles.
Does the Secretary of State agree that the clinical leadership involved in the Getting It Right First Time initiative is important, not only because it will save £1.5 billion, which could be put back into patient care, but because patients will be in less pain and will end up having fewer revision operations, and some will even survive treatment that they would not otherwise have survived?
My hon. Friend is absolutely right. I thank him for bringing Professor Tim Briggs to see me to explain just how superb this programme is. Infection rates for orthopaedic surgery vary between one in 20 patients in some trusts to one in 500 in others. Getting this right can transform care for patients and save money at the same time.
I associate myself with the Secretary of State’s comments about Berlin, my one-time home.
Does the Secretary of State accept that we have the best clinical leaders anywhere in the world? The challenge facing the NHS is not one of clinical leadership, or the dedication or skill of staff, but one of chronic underfunding by this Conservative Government.
We do indeed have superb clinical leaders, such as Marianne Griffiths at Worthing, which was recently given an outstanding rating. We also have superb non-clinical leaders, such as David Dalton at Salford Royal. I would gently say to the right hon. Gentleman that if he is worried about funding, why did he stand in the election on a platform that would have seen the NHS have £1.3 billion less this year?
Will the Secretary of State ensure that clinical leaders are able to apply important techniques from other disciplines, such as lean production, which can drive up productivity?
My hon. Friend is absolutely right. Clinical leadership is important, but so is openness to the skills of other industries—particularly engineering skills, with which he is very familiar—that can help us to get processes right so that we improve care and safety for patients.
Does the Secretary of State agree that if the board of Doncaster and Bassetlaw Hospitals NHS Foundation Trust agrees to establish a teaching hospital today, that will enable the trust to train its doctors of tomorrow so that they are more able to move into clinical leadership roles as quickly as possible?
I thank the right hon. Lady for her question and welcome Doncaster hospital’s aspirations and ambitions. Any final decision will obviously be a matter for the NHS and Health Education England, but it is very encouraging that it is reaching for the stars in this way. Yes, we do need to train more doctors, and I hope that the hospital can make a good contribution.
The constituency of the hon. Member for Bassetlaw (John Mann) was just mentioned and he came in on cue. Unfortunately, he was not within the curtilage of the Chamber at the material time. No doubt we will hear from him at a later date, to which we look forward with eager anticipation.
Evidence-based medicine is about using high-quality research to guide clinical practice and to achieve optimal results for all patients. The National Institute for Health and Care Excellence plays an important role in supporting evidence-based medicine by translating research into authoritative guidance for healthcare professionals on best practice.
Is the Minister aware that the author of “Evidence-based Medicine” in 1992, Professor David Sackett, said that it is
“about integrating individual clinical experience and the best external evidence, not just internal evidence”?
Is she further aware that in respect of the interpretation of evidence-based medicine, I have reported the so-called Good Thinking Society to the Charity Commission for the abuse of its charitable status through its use of legal threats to force the Department and health providers to change the law on healthcare?
NICE obviously considers complementary and alternative medicines when developing its guidance, where there is evidence, and it has been able to recommend some therapies, such as acupuncture for tension headaches and a range of complementary medicines for multiple sclerosis. We expect healthcare professionals to take that guidance into account when designing local services, but they must use their best understanding when treating the individual patients in front of them.
The evidence is very clear that eating more sugar increases the risk of diabetes. Apart from introducing the sugar tax, what further evidence-based research can be used by the Government to reduce the risk of diabetes?
The right hon. Gentleman is a great proponent of tackling the risk of diabetes. He knows that the Government take tackling and preventing diabetes extremely seriously. That is why we have introduced the world’s first national diabetes prevention programme, which we have piloted and are rolling out across the country. It includes not only education programmes but testing, and we are making sure that we use the evidence from the programme to bring about improvement and that we are rolling it out effectively.
We are all in favour of evidence-based medicine. We are also in favour of decent resources for the national health service but, in the case of Huddersfield and Calderdale hospitals, what we want is good, high-quality management, rather than GPs being promoted to a managerial position that they cannot handle.
In relation to evidence-based medicine.
The hon. Gentleman is a great advocate of evidence-based medicine and I am pleased to hear about his support for it. He will be pleased that the national leadership programme is one of the evidence-based programmes that we are rolling out to improve the leadership of the NHS across the country.
The UK is already a global leader in the fight against AMR. This Government’s leadership has secured a UN declaration on AMR and a commitment from the G20 to drive the development of new antimicrobials. We will continue to deliver international programmes to tackle AMR, including the Fleming fund and the Global AMR innovation fund, which represent more than £300 million of investment over the next five years.
One of the 10 key recommendations of the O’Neill review was to improve the data and surveillance underlying antimicrobial resistance. What plans does the Minister have to routinely test all NHS patients for antibiotic resistance?
My hon. Friend is absolutely right that it is essential that we improve diagnostics if we are to tackle this national threat. A routine part of the clinical management of patients showing symptoms of infections is to take a blood sample. When an infection is identified, those samples are indeed tested for resistance. Part of our AMR strategy is to improve diagnostics and to fund innovation in this area.
Will the Government commit themselves to ensuring that their strategy will include discouraging the use of intensive farming, given its overuse of antibiotics which contributes to antimicrobial-resistant problems?
I agree that we must focus on that as well, but we are currently focusing on reducing the need for antibiotics by minimising disease risk in animals through good animal husbandry and on-farm biosecurity. At present, antibiotics provide the only effective means of treatment for a number of animal diseases, and are therefore essential to ensuring the health and welfare of animals. However, we are also working on the matter in an international context with the World Organisation for Animal Health, and we will continue to drive forward the agenda.
What measures are the Government introducing to support the uptake of point-of-care C-reactive protein testing throughout the United Kingdom, given that it is a proven and cost-effective means of reducing levels of inappropriate antibiotic prescribing in primary care?
As my hon. Friend says, we must focus on innovation and better diagnostic tests, particularly bedside tests. The Government are actively reviewing evidence of the benefits of CRP tests. Pilot studies in the United Kingdom are contributing to that, and will be evaluated so that we can see how best to build on what can be shown to be working well.
I am grateful for that immediate promotion from the hon. Gentleman.
We have made considerable progress in establishing the building blocks of our domestic AMR strategy, including better data, guidance for primary care, and a strengthening of the framework for antimicrobial stewardship, which involves introducing incentives for the NHS to improve the prescribing of antibiotics. That has led, in the last quarter, to the first reduction in such prescribing, which I think we can take as an encouraging sign.
One of the 10 recommendations of the O’Neill review on antimicrobial resistance was for a massive global public awareness campaign. Given that 700,000 people die each year as a result of AMR, and given the review’s estimate that that figure will rise to 10 million a year by 2050, what assurances can the Minister give that she is behind that awareness campaign?
The hon. Lady is right to identify the scale of the challenge, which is why we have put AMR on our national risk register, and she is also right to point out that no one country can tackle AMR alone. The United Kingdom has played a global leadership role. We co-sponsored the World Health Organisation’s 2015 global health plan and created the £265 million Fleming fund so that we could specifically help poor countries to tackle drug resistance, and we will continue to play that global leadership role.
The O’Neill report was published some six months ago and included recommendations for national Governments. What practical progress have the Government made so far?
On 19 September we published our comprehensive response to the report, which describes a range of actions that we will take on each of Lord O’Neill’s recommendations. The most practical progress that I can report is the fact that the prescribing of antibiotics has fallen for the first time since records began. I think that we can all be proud of that progress.
Leaving the EU: NHS Workforce
There are currently 127,000 staff from the EU doing a vital job for patients in the NHS and social care system. In this year of Brexit, we salute their excellent work and remain confident that we will be able to negotiate for them to continue it in the future.
There are more than 50,000 EU nationals working as nurses and doctors throughout the United Kingdom, along with 80,000 in the social care sector. The NHS already faces extensive rota gaps owing to a shortage of senior and junior doctors. Will the Secretary of State join our First Minister in demanding an unequivocal guarantee that EU nationals who are already living here will have the right to remain?
That is exactly what we intend to achieve through negotiations, but we must remember the British citizens, including people from Scotland, who are living in the EU and whose rights we also wish to protect. That is why the Prime Minister has made a big point of saying that she wishes to negotiate the issue at an early stage in order to give certainty to those people.
We are not going to leave the EU for two and a half years, but I want the Secretary of State to grip GP services in Lincolnshire now and to start training more doctors. The Pottergate surgery in Gainsborough is closing, potentially throwing hundreds of people out without a GP, and there is a shortage of 80 GPs against a target of 915 in Lincolnshire, and only six out of 30 training places were taken up recently. Will the Secretary of State now grip the GP services in Lincolnshire for the sake of our people?
Order. The hon. Gentleman has rather cheekily brushed aside the part of the question that does not suit his purposes. Only to focus on half a question is very cheeky; we will allow him to get away with it on this one occasion only.
I hope that I can reassure my hon. Friend about this because the reality is that we increased the number of GPs by 5% in the previous Parliament, and in this Parliament we are planning an increase of another 5,000, which will be the biggest increase in GPs in the history of the NHS, and will go along with considerable extra resources.
I will focus on the half of the question that the hon. Member for Gainsborough (Sir Edward Leigh) missed out. The other day I had a meeting with some constituents who told me that they were so pleased that we were leaving the European Union because it meant that the extra £350 million could be used to reopen the A&E department at Bishop Auckland. Has the Secretary of State found that £350 million yet?
The hon. Lady might have noticed that I personally did not talk very much about that £350 million. Whatever resources we have post-Brexit will have to be set in the overall economic context, but of course the great thing is that, post-Brexit, that will be a decision for this Parliament.
Many members of the NHS workforce across Bedford and Kempston come from the EU, but many others come from Caribbean countries, the Philippines, India and many countries in Africa. Will my right hon. Friend make sure that, in the future, people from those countries are given equal access to work in our NHS as that for EU nationals?
The benefit of Brexit will be that we can take precisely such decisions in this Parliament, because we will get back control of our borders. I am grateful to my hon. Friend for mentioning the very important work done by people from outside the EU in the NHS. Because I happened to meet the Philippines ambassador last week, I want to pay credit particularly to the Filipino workers in the NHS and the social care system, who do a fantastic job.
May I start by extending my party’s sympathies to the victims of the Berlin attack?
Much of what we have heard today is about keeping those who are already here, but BMA Scotland has said that insecurity is stopping EU nationals from taking up posts that really need to be filled. This is an urgent problem, so does the Secretary of State agree that it is time to create some certainty for EU nationals and to avoid a self-made workforce crisis?
I absolutely agree with the hon. Gentleman, which is why it is extremely frustrating that the current signals from the EU are that it is unwilling to bring forward negotiations about the status of EU nationals here, and indeed that of British nationals in the EU. No one from either side of the Brexit debate has ever said that there will be no immigration post-Brexit; they have simply said that we will control that immigration ourselves through this House and through decisions made by the British people at general elections.
On behalf of the official Opposition, may I echo the words of the Secretary of State in relation to the tragic events in Berlin and send our condolences to the people there?
The Institute for Employment Studies has today warned that Brexit could make nursing shortages even worse. That follows The Times reporting that
“applications for nursing, midwifery and allied health courses were down by about 20%”
and that in some institutions applications had halved. The decision to scrap nurse bursaries is having the consequences that every expert predicted it would. With the uncertainty of Brexit looming over our workforce, now is not the time to be taking a massive gamble with our nurses so, in the light of the evidence, will the Secretary of State now agree to scrap that disastrous policy?
I simply say to the hon. Gentleman that the purpose of that policy was to allow us to train more nurses; in fact, we will be training 40,000 more nurses during this Parliament. We have more than 11,000 more nurses in our NHS wards, and at Countess of Chester hospital—the hon. Gentleman’s own hospital—there are 172 more nurses than in 2010.
Hospitals in Special Measures
We want the NHS to offer the safest, highest quality care anywhere in the world, so we are now tackling unacceptable performance. That is in contrast to the Labour party, which ignored failures for so long. Since introducing the rigorous special measures inspection regime, 31 provider trusts have gone into Care Quality Commission special measures, of which 15 have been turned around as a result of significant quality improvements. I congratulate again the staff of Sherwood Forest, Wye Valley, Norfolk, and Suffolk trusts, all of which have come out of special measures in recent months.
Medway Maritime Hospital has made significant improvements since it was put into special measures: mortality rates and length of patient stay are down; leadership is excellent; and there has been extensive investment in the A&E. Does the Minister agree that it is the right time for the hospital to come out of special measures? Will he join me in paying tribute to the excellent work of the hospital’s staff?
I congratulate my hon. Friend on his role in championing Medway Maritime Hospital, which I visited earlier this autumn. The CQC is in the process of re-inspecting Medway and will publish its findings in the new year. I congratulate the trust on its improvements thus far that were highlighted by my hon. Friend, which include reducing its average length of stay on admission wards from 11 days to only 3 days.
A recent damning report on maternity care from the Pennine Acute Hospitals NHS Trust care referred to appalling neglect that lead to the avoidable deaths of mothers and babies. The trust has implemented an improvement plan, but plans for maternity services under the Making It Better scheme were based on a predicted birth rate of 3,500 a year, and the reality is that the trust deals with 10,000 deliveries a year. What action will the Minister take to address that situation?
I am grateful to the hon. Lady for raising some of the issues at the Pennine trust. We are well aware that it needs improvement, which is why we have buddied it up with the outstanding Salford Royal NHS Foundation Trust next door. The Salford trust is led by Sir David Dalton and the Secretary of State referred to it earlier. I will take up the matter raised by the hon. Lady directly with Sir David.
NHS England has a range of initiatives for waste and medicine cost reduction. We estimate that there is a prize of up £150 million a year to be realised across the system on waste. Community pharmacies have a significant role to play in that, partly through their existing duty to review prescriptions when repeat dispensing and partly through the separately commissioned medicine use reviews.
The Minister is absolutely right to say that community pharmacies have an important role to play. On 17 October, he told the House:
“We do not believe that any community pharmacies will necessarily close as a result of these cuts.”—[Official Report, 17 October 2016; Vol. 615, c. 597.]
However, the impact assessment published by his Department just two days later described a possible scenario in which 1,000 pharmacies close. Will the Minister confirm that nobody in Britain will have to travel further to get to a chemist as a result of his cuts?
The impact assessment set out an upper range, which we do not believe represents an accurate reflection of what will happen. The facts of the matter are that we need our community pharmacy network to move towards services and away from dispensing. Paying every community pharmacy in the country, or 91% of them, £25,000 just for having an establishment does not achieve—[Interruption.]
Order. The hon. Member for West Ham (Lyn Brown) should not chunter from a sedentary position in an attempt to hector the Minister, who should glide seamlessly above the attempted provocation. Minister, continue.
The Minister has finished.
He has finished his answer. Very well; I call Alistair Burt.
To ensure not only that unnecessary costs are reduced, but that the best community pharmacy services are provided, will the Minister do all that he can to make sure that clinical commissioning groups engage as effectively as possible with pharmacies? Preferably, that would be by getting more people on CCG boards to ensure that the crucial connection between the provision of health services and pharmacy is absolutely at the heart of what we do.
My right hon. Friend is right; CCGs are variable in the extent to which they commission pharmacy services. However, we have set out the minor ailments scheme, it will be rolled out nationally by April 2018 and we expect every CCG to take a part in it.
As chair of the all-party group on pharmacy, I have seen many examples of drugs that have been prescribed and not used, as I am sure we all have. Should we not renegotiate the national contract, which currently pays community pharmacies more than 90% of their income through prescribing? Surely we can do things differently.
The right hon. Gentleman rightly says that we must change the contract to move away from 90% of the income coming from dispensing. Far more must come from services, which are separately commissioned by CCGs and others. The Murray review, which he will be aware of from his work on the all-party group, sets out a road map for that, and NHS England is determined to implement it.
May I pay tribute to the excellent work of pharmacies in my constituency? Last night, “Look East” demonstrated the pressure that urgent care centres in the east are under because of extra patient footfall. Will the Minister give me an undertaking that he will put in place guidelines to CCGs to encourage them to work much more closely with pharmacies to reduce that footfall?
My hon. Friend raises an important point, and he is right to say that we must move the community pharmacy network away from just dispensing and into services, which will include minor ailments and repeat prescriptions. I will be encouraging CCGs to do that.
Community pharmacies, which were developed in Scotland 10 years ago, are there for minor ailment, chronic medication and public health services. Although the Minister has expressed admiration for the Scottish system, does he not recognise the need to work with the pharmacy profession to develop the full potential within community services?
I have mentioned on previous occasions that Scotland has, in some respects, gone further and faster than we have in England so far on community pharmacies. The £300 million that we have set aside in the integration fund for the rest of this Parliament is going to be used to do just the things that the hon. Gentleman has mentioned, in terms of minor ailments and repeat prescriptions. We are determined to make that happen.
Over the festive period, in every town and city in the UK, community pharmacies will be open to dispense emergency prescriptions, and to provide specialist services and professional advice. Does the Minister appreciate that service, which not only helps the public, but takes pressure off other parts of the NHS? Will he join me in thanking community pharmacies and their staff for the work they do? Will he commit to reconsider budget cuts that will lead to a reduction of this valuable service, and instead meet the Royal Pharmaceutical Society and the National Pharmacy Association to discuss extending the role of community pharmacies, to deliver savings for the NHS?
I have met the royal college of pharmacies on a number of occasions, and indeed it has worked with us on the Murray review, which is an essential road map that sets out how we are going to move the community pharmacy network away from a remuneration model based just on dispensing and on to services as well. I agree with the hon. Lady that the 11,000 community pharmacies across the country all provide excellent services, and we expect that to continue.
NHS Services: Winter
Last year, the number of excess winter deaths was 45% lower than in the previous year, and contingency planning for this winter is well under way, with £400 million allocated to local health systems for winter preparedness.
This time last year, St Helens CCG told me it needed to postpone elective operations and referrals in order to get through winter. Six months later, it was £12.5 million in deficit and proposing to cancel all non-urgent surgery indefinitely. What the Health Secretary is proposing does not make the problems go away—it stores them up. When will the Government give local trusts and clinicians the funding they require? Stop passing the buck and start passing the bucks!
With the greatest respect, I do not think it is passing the buck to put £1.3 billion more into the NHS this year than the hon. Gentleman was proposing at the last election. A lot of actions are being taken in Cheshire and Merseyside; a local accident and emergency delivery board was set up, which is doing very important work, and the emergency care improvement programme is working very well at his local trust.
There is great pressure on emergency services throughout Staffordshire at the moment. There would be even more without the accident and emergency centres in Stafford and Burton, yet the sustainability and transformation plan proposes to reduce one of them, so there will only be two left in the county. Will the Secretary of State speak to the authors of the STP to make it clear that this is totally unacceptable given the current situation?
No one fights harder and more eloquently than my hon. Friend for the needs of the people of Stafford. I always look with concern at proposals to change emergency services given the huge pressures that exist, so I shall happily look at the plan as he suggests.
All I would do is urge the hon. Gentleman to listen to what the Prime Minister said at this Dispatch Box last week. She said that we recognise the short-term pressures—indeed, the Communities Secretary came up with a package of £900 million extra over the next couple of years—but that we also need a long-term sustainable solution, on which the Government are working hard.
Does my right hon. Friend agree that one of the pressures of winter that needs improving is inappropriate admissions to A&E? Does he accept that the proposals by the Essex success regime to ensure that the three hospitals concerned will retain their A&E departments but that there will be a specialist centre for cardiothoracic care and for burns and plastic surgery care are the right way forward to improve and enhance the care for those suffering from accidents and emergencies?
My right hon. Friend understands these matters extremely well from his time as a very distinguished Health Minister. He is absolutely right; the truth is that we want widespread availability of A&Es but we do not serve patients best by offering identical services everywhere. That is why in the past three or four years one of the things we are most proud of is the setting up of a national network of 26 trauma centres, which has had a dramatic impact on mortality rates for the most serious cases.
I have just been advised by a very sagacious source that in supplementary questions and answers to this question some reference to winter is desirable.
I associate myself with the Secretary of State’s remarks about Berlin. I wish everyone in the House a merry Christmas and I extend my best wishes for a very peaceful and joyful Christmas and new year to all NHS staff, especially those working over Christmas.
Pressures on the NHS this winter are such and the underfunding is so severe that hospitals have been ordered to close operating theatres for elective surgery over Christmas. Is this what the Secretary of State means by a seven-day NHS?
Let me wish the shadow Health Secretary a merry Christmas and say that despite his rhetoric I see that Santa has been quite generous to him. His local trust in Leicester has 254 more nurses and 306 more doctors than in 2010. Next year, we will have a new £43 million emergency floor at the Leicester royal infirmary. We need to ensure that there is sufficient bed capacity in our hospitals over winter—that is a very important part of winter planning—but we are also doing 5,000 more elective operations every day than when Labour was in office.
I am delighted that the Secretary of State has done his research on Leicester, but is closing operating theatres for a month this Christmas not, in reality, a short-term fix? The truth is that when the pause ends and hospitals fill up again above the 85% occupancy recommendations, patients will be left with a simple choice: get stuck on a waiting list while hospitals try to reduce occupancy rates to safe levels, or risk going into a hospital when it is at full capacity and potentially unsafe and be exposed to higher infection risks. Which option would the Secretary of State choose?
May I gently urge the hon. Gentleman to be careful with his rhetoric? We are not closing operating theatres for a month over Christmas. We need to be very careful what we say in this place, because people outside are listening. The answer is to ensure that we increase capacity in the NHS, and that is why we have 11,000 more doctors and 11,000 more hospital nurses than we had six years ago. We are training 15,000 more doctors every year from 2018-19 to ensure that we can avoid these problems in the future.
NHS: Financial Recovery
The NHS is a national, not an international, service. This Government were the first to introduce tough measures to clamp down on visitors accessing free NHS care, including introducing the immigration health surcharge. The steps we have taken have meant that income raised from visitors and migrants has risen threefold in three years, from £97 million in 2013-14 to £289 million in 2015-16.
I thank the Minister for that answer, but does he agree that recovering more money from chargeable patients requires a culture change among NHS staff? Does he therefore share my dismay that the leader of the doctors union dismisses the need even to address this issue, while calling for additional investment in our NHS?
I agree with my hon. Friend that we need increased awareness and appropriate participation by all NHS staff in achieving this policy, but I also agree with one thing that Dr Mark Porter said—that sick and vulnerable patients must not be put off seeking necessary treatment, as this may be bad for their health and for that of the public in general. This has always been a clear feature of our policy, so to be clear, this policy does not withhold immediately necessary or urgent treatment, but it makes sure that the NHS is fairly reimbursed by those who are not entitled to free care.
As the Minister will know, the Public Accounts Committee has looked in detail at this issue, and we were rather shocked to discover that the Government themselves are woeful at collecting money from EU citizens who use our hospitals and for whom the Government are then responsible for getting the money from their home Government. When will the Government get their act together to make sure that this money comes into our NHS?
I am always grateful for advice from the Public Accounts Committee, which looks into areas where the Government can recover moneys to which they are entitled. There was an article in today’s Times which referred to outstanding sums, and we are taking steps to try to increase recovery rates in the years ahead.
Sustainability and Transformation Plan: South-west London
The sustainability and transformation plan for south-west London sets out how the area will implement the NHS’s five year forward view. The local NHS is looking to strengthen primary care and ensure closer working across NHS bodies, with more sustainable acute services, developing centres of expertise to ensure high-quality service, as well as closer co-ordination with social care providers.
The Epsom and St Helier Trust is a high-performing trust, hitting A&E and cancer treatment referral targets. It is confident that it can deliver sustainable and transformed care services, but will struggle to do so in St Helier hospital, built in the 1930s. The trust has previously secured a commitment from two Governments that funding would be available. Will the Minister give the same undertaking and confirm that once the STP process is complete, funding will be available to the trust to enable it to continue delivering excellent sustainable services from a new hospital?
I am aware of the right hon. Gentleman’s campaign on this matter. It would be wrong for me to pre-empt the work that is being done in reviewing both the STP process and the policy priorities of NHS England. Once those plans have been put forward to Ministers, we will be able to consider which we can prioritise.
The STP for south-west London includes mental health crisis needs, but there is a current crisis of lack of in-patient facilities for mental health patients. Will the Minister look into extra immediate funding to increase the number of in-patient mental health beds?
As my hon. Friend is well aware, given her experience in this area, mental health is a priority of the Government and of the STP process. I will take away what she says in relation to in-patient beds.
It is too early to speculate on the renewal of this contract, but it will ultimately be for NHS England to determine the selection criteria for the future procurement of services provided by it. My focus right now is on raising the quality of the existing contract, and I have been clear that the standard of Capita’s work under the contract has not been acceptable and it must improve. I continue to meet regularly with Capita and NHS England as they work to improve the performance of the service.
I thank the Minister for that response. Several GP practices in my constituency have reported serious delays in the transfer of medical records. In some cases the records have gone missing altogether, with serious implications for patient safety. I would like a clear response from the Minister about the assurances she can give to my constituents that the Government—not just NHS England, but the Government—take seriously the safe delivery of their confidential medical records.
I take this issue extremely seriously, which is why I am personally meeting NHS England and Capita fortnightly and ensuring that detailed rectification plans are in place for each service delivery programme. The improvements should happen between January and April next year. I shall be happy to write to the hon. Lady in more detail if she would like to be able to reassure her GPs, optometrists and dentists on those issues.
Order. This question is about England, rather than Scotland or Wales.
Will the Minister advise GP practices in my constituency, who have been massively inconvenienced by the chaos of the Capita contract, that full compensation will be available for the inconvenience they have been put through?
At the moment, NHS England and Capita are focusing very hard on improving service delivery, which I think must be the top priority, but we are also looking into exactly what inconvenience and costs GPs have suffered, along with dentists and optometrists, and that will be considered and discussed with GPs.
Royal Wolverhampton NHS Trust: Delayed Discharges
Directly comparable figures are not available, but it is clear that in the past two years there has been a substantial increase in delayed discharge figures attributable to social care at the trust, which this year were among the worst currently being recorded across the NHS.
Sadly, those figures are no surprise, despite the well-managed New Cross hospital, because central Government have cut Wolverhampton City Council’s total income by almost 50% in the past six years. The primary care vertical integration pilot in Wolverhampton is a redesign of services so that a single organisation—the hospital trust—deals with patients from initial contact to ongoing management and end-of-life care. What steps is the Department of Health taking to support vertical integration as one potential way to improve care and lessen hospital admissions and delayed discharges?
The hon. Gentleman is right that budgets are part of the issue, which is why last week’s announcement about increased funding is important. However, funding alone does not explain the delayed transfers in Wolverhampton, which are five times worse than those of Telford, which is just down the road; twice as bad as Sandwell, which is very close; and, indeed, 30 times worse than the best performing councils, such as Newcastle, Knowsley and St Helens. With regard to his specific point about the vertically integrated pilot, this is a very exciting project and I commend the people of Wolverhampton for doing it. It is based on a model from Spain that has produced big results. We are watching it carefully and will support it as required.
In developing the childhood obesity plan, we considered the latest research and evidence on promotions and advertising, including Public Health England’s evidence package “Sugar reduction: the evidence for action”. We have made no secret of the fact that we considered a range of policies before finally settling on those set out in the childhood obesity plan. The plan includes the soft drinks industry levy and taking 20% of sugar out of certain products. We concluded that our plan is the right approach to secure the future health of our children.
I associate myself with the Secretary of State’s words of sympathy for the people of Berlin, and I also add my thoughts for the people of Aleppo, Yemen, Gaza, Mosul and all the forgotten conflicts of the world.
Public health experts have dismissed the Government’s obesity strategy as a weak approach and a wasted opportunity. The Government say that they are committed to evidence-based policy making, but they have failed to acknowledge that relying on voluntary food action without tackling cost and availability is inherently flawed. Will the Minister commit the Government to getting a grip and bringing forward a ban or restrictions on advertising and price-cutting promotions on junk food?
I am happy to reassure the hon. Lady that current restrictions on advertising in the UK are already among the toughest in the world. For example, there is a total ban on the advertising of less healthy food during children’s television programmes. Those have been shown to be very effective. However, we also welcome action that has been taken by forward-thinking retailers on promotions elsewhere. In particular, Sainsbury’s has committed to removing multi-buy promotions across its full range of branded and own-brand soft drinks, confectionery, biscuits and crisps, removing more than 50% of its multi-buy promotions from its grocery business while lowering regular prices for products. It should be congratulated on leading the way.
We now feel considerably better informed.
Advertising agencies and industry bodies can play a key role in ensuring that adverts are appropriate. Will the Minister continue working with the industry to tackle child obesity?
Certain supermarkets persist in placing less healthy foods on promotion near the entrances to their stores, where they are unavoidable. Does the Minister agree that it is not just at checkouts that healthy options should be promoted, and that retailers should exercise more responsibility?
I absolutely agree that putting healthier options near checkouts and helping people to make healthier choices are part of retailers’ responsibilities. What has been notable in my discussions with retailers is that the penny is starting to drop that this is the direction of travel and what the public want, and I think we are going to start seeing a real sea change in the way retailers are advertising.
Let us hear the sound of Shipley— Mr Philip Davies.
May I urge the Minister not to go down this ridiculous nanny-state route—which one would not expect from a Conservative Government—of setting up an unhealthy food police to go round telling people what they should be eating and what they should not be eating? No food eaten as part of a balanced diet is in itself particularly unhealthy. If the Government are so concerned about families that are just about managing, why on earth would they even contemplate increasing costs for working families?
My hon. Friend flatters me by saying he thinks I am a nanny—it is really quite a disturbing thought. However, what we have here is an obesity plan that balances the need to cut the sugar in young people’s diets, as a way to make sure they get a healthy diet, and individual choice, which we know is absolutely a Conservative ideal.
As we enter the challenging winter period, I want, on behalf of the whole country, to thank the 2.7 million people working in the health and care system—particularly those giving up all or part of their own Christmas day to look after patients. We are in their debt, and we wish them a merry Christmas, whenever they get the chance to celebrate it with their families.
Bolton A&E is employing new measures to cope with the staggering demand on its service. What are the Government doing to educate people that A&E is for serious and life-threatening conditions only, so that staff and resources can go where they are needed most?
That is an excellent question. We are doing a number of things. First, we have the Stay Well this Winter campaign, which has a lot of advice to go out to his constituents and all our constituents about how to avoid things that can lead to their having to go to A&E. However, we also urge the public to remember that accident and emergency departments are for precisely that.
There was no new money from the Government for social care in the local government settlement—just a recycling of money from the new homes bonus to social care, and that is for 2017-18 only. Fifty-seven councils will actually lose funding owing to this recycling. Salford, which was recently praised by the Prime Minister for its integration of social care, will lose £2.3 million due to this inept settlement. Is it not time for the Secretary of State to accept that social care is in crisis and that his Government cannot just dump the issue of funding it on councils and council tax payers?
I do listen carefully to what the hon. Lady says, because she has campaigned long and hard for social care. However, with respect, I would say to her that she is ignoring one simple fact: there is more money going into social care now than would have been the case if we had followed her advice at the last election. What the Communities Secretary announced was £900 million of additional help over the next two years.
The Government’s plans for funding social care look inept because they have tied care funding, which is related to need, to council tax and to deductions from the new homes bonus. Last week’s settlement was a pathetic attempt to deal with a funding gap of £2 billion for social care by recycling £240 million within budgets. The chief executive of the British Red Cross has described the social care crisis as
“a humanitarian crisis that needs urgent action.”
When is the Secretary of State going to take that crisis seriously?
The hon. Lady talks about council tax, but she does not call out Labour councils like Hillingdon, Hounslow, Merton and Stoke which complain about pressures in the social care system and then refuse to introduce the social care precept that could make a difference to their residents. We are taking the situation seriously. More was done this week and more will be done in future.
I thank my hon. Friend for that question and commend him for his work as a pharmacy champion. The Murray review was indeed published last week, and NHS England will respond to it in detail early in the new year. It is a very important document because it sets out in some detail how we intend to transform the community pharmacy network into a service-based profession along the lines that my hon. Friend likes.
I am aware of the case that the hon. Lady refers to. In the week of the incident, the London ambulance service received 40,433 emergency calls—an 8% increase on the previous week. We are trying to do something about this. We have recruited 2,200 more paramedics since 2010 and increased the number of paramedic training places by 60% in this year alone. The London ambulance service has recruited 107 more paramedics since September 2015 to help with this increased demand.
I pay tribute to my hon. Friend for her dogged campaigning on this issue, on which she is a true champion. I have not had a chance to read the report in detail, but I have seen a number of its recommendations and we are taking action on some of them, including the publication of the chief medical officer’s low risk guidelines and Public Health England’s One You campaign, which runs over Christmas and the new year. We are embedding alcohol measures into the NHS health check and we have introduced a national CQUIN—Commissioning for Quality and Innovation—because evidence shows that intervention by a health professional is the most effective way of disrupting problem drinking.
First, I absolutely commend the hon. Gentleman for standing with his constituents and championing individual cases. I will happily look into the proposed changes and how they will affect people like Zac. I assure the hon. Gentleman that when we make these changes it is to improve the services of people and his constituents; that is why we are making them.
Alex Chalk. Where is the fella?
Despite some of the obvious challenges in the healthcare service, this is a wonderful time of year when hundreds of thousands of people choose to quit smoking by putting down their cancer stick and picking up an electronic vaping device. Does the Minister share my concern, however, that we must be very cautious in any implementation of the EU tobacco products directive so that it does not act as a barrier to people quitting smoking and taking up vaping?
The Government are very clear that vaping is significantly less harmful than continuing to smoke. Under the current regulatory regime, huge numbers of smokers are successfully using these innovative products as an effective quitting tool. We have already committed to reviewing the TPD and we will fully explore the opportunities that Brexit may provide, but until exit negotiations are concluded we remain a full member of the EU.
I absolutely cannot confirm that. The tendering process has not even begun. Therefore, we are not considering any form of company, private or otherwise.
The Health Committee has just published its interim report on preventing suicide. I thank all those who gave evidence to our inquiry and all members of the Department of Health advisory group. We support the strategy, but the clear message that we heard was that implementation needs to be strengthened. Will the Secretary of State meet me to discuss our report’s recommendations, and will he join me in thanking members of the Samaritans and other voluntary groups around the country who will be working tirelessly over Christmas, as they do every day, to support those in crisis?
My hon. Friend speaks wisely. Christmas can be a very lonely time for a number of people, so we all commend the work of voluntary organisations that do so well. I would be delighted to meet her.
More than a third of my male constituents live until they are over 80, and yet next door in Windsor and Maidenhead the same is true of well over half of the residents. In the 10 years before 2010, that gap narrowed. What is the Secretary of State doing to narrow the gap in future?
The best thing we can do to narrow the gap is make sure that we continue to invest properly in the NHS and social care system, and make good progress on public health, which often has the biggest effect on health inequalities. That is why it is good news that we have record low smoking rates.
With acute hospital bed blocking at a record high, do Ministers agree that it is a great pity that so very few of the 40 sustainability and transformation plans now in the public domain deal directly with step-down care and, in particular, with community hospitals?
As my hon. Friend has confirmed, 44 areas are working on their STPs, all of which are charged with looking at improving integration between hospitals and social care in order to improve discharge. In order for STPs to be taken forward, they have to address that issue.
Recent figures from the Royal College of Psychiatrists show that children and adolescent mental health services are still underfunded in many parts of the country—particularly worrying for me is the fact that Bristol seems to be the 13th lowest in the country. What are Ministers doing to ensure that children across England and the rest of the UK get the health services that they need?
The hon. Lady is right to highlight this issue and I agree with her. I am not happy with the service that we provide through CAMHS at the moment. It is a big area of focus for the Government. We are putting a lot of investment in, but there is lots more to be done.
My constituency has been waiting some time for the go-ahead for a new critical treatment hospital providing 24/7 care for the sickest patients, which is very much in line with Government policy. The hospital’s chief executive, Mary Edwards, retires this month after 21 years of exceptional service. Will the Secretary of State give her a retirement present and help me to secure a decision from NHS England?
I join my right hon. Friend in congratulating her chief executive on her commitment to the NHS. As I said in answer to a previous question about the STP for my right hon. Friend’s area, the issue is being reviewed at the moment by NHS England, and I am afraid that I am not in a position to give her any advance notice of the outcome.
The Secretary of State will be aware of the horrifying case of Fiona Hollings, a 19-year-old with anorexia who for the past four months has been nearly 400 miles away from home, in a bed in Glasgow. Her family have travelled 8,000 miles in that time to see her. The Government commit to ending this horrific practice by 2020, but do families really have to put up with it until then? How would he feel if it was his child?
We are taking action and I agree with the right hon. Gentleman that what has happened in that case is completely unacceptable. We are currently commissioning a record number of in-patient mental health beds, and it is a very big priority for us to eliminate the problem entirely by the end of the Parliament.
My constituent Marie Bingham administers a drug at home using pre-filled syringes, but she is unable to dispose of the used needles, partly because they are in 2.5 litre sharps tubs rather than 1 litre sharps tubs. It is a ludicrous situation. Is the Minister aware of the problem, and are there any steps he can take to deal with it?
As my hon. Friend says, pharmacies are commissioned, on such occasions, to dispose of these needles. I was not aware of the particular issue about the 2.5 litre tubs that seems to exist in Rugby. I will investigate that and revert to him.
TB rates are currently higher in bits of Ealing than in Rwanda. Could the Government better the bilateral innovation fund to which they have committed with China and go for the O’Neill report recommendation to work towards a truly global fund, in conjunction with other nations, to fight antimicrobial resistance?
As I have already answered, we are a world leader on AMR. We have not only the bilateral fund with China but the £265 million Fleming fund, through which we will deliver bilateral national action plans with a number of developing nations. We are committed to going further than that through the global action plan with the UN.
A fortnight ago, I visited the pharmacy at the Corby urgent care centre to thank the dedicated staff for all that they do all year round, and to have a flu jab as part of the ongoing campaign. Does the Minister agree that exactly that sort of proactive working is crucial in trying to tackle winter pressures?
I do agree with my hon. Friend. I am particularly pleased that this year, the pharmacy network has done more flu jabs so far than in the entire period last year. I had my flu jab, and it is holding up well.
It is always useful to have a bit of additional information. We are greatly indebted to the Minister.
In the east midlands, the average ambulance arrival time for life-threatening cases has almost doubled in the last three years, and Nottingham’s A&E waiting times are the worst in a decade. Will Ministers apologise to my constituents, including hard-working NHS staff, for their failure to fund health and social care adequately?
I would like to add my tribute to the work of ambulance staff up and down the country, particularly over the busy Christmas period ahead. As I have already said today, we have increased funding for ambulance services. We have increased the number of paramedics, both in training and employed. Earlier this month we announced that we had increased the payments to paramedics to move them from band 5 to band 6, to help to retain and recruit more staff.
Order. We are short of time, but I am in a generous mood. We can manage only one more, so 46 years, six months and two days after his first election to the House, I call Mr Dennis Skinner.
He is a mine of information, isn’t he? He would like to contribute, really.
Does the Secretary of State not think that it is a scandal to be shutting Bolsover hospital, with 16 valuable beds that will go for ever, at a time when people are lined up on trolleys in nearly every hospital in Britain? Why does the Secretary of State not give Bolsover a Christmas present and announce that Bolsover hospital will be saved? Come on!
I add my congratulations to those of the Speaker on the hon. Gentleman’s long service, which has included campaigning for Bolsover hospital. I simply say to him that we will look very carefully at all proposals to change the services offered. I think community hospitals have an important role in the future of the NHS, but the services they provide will change as more people want to be treated at home.
Sky: 21st Century Fox Takeover Bid
(Urgent Question): To ask the Secretary of State for Culture, Media and Sport to make a statement on the timetable of, and the approach of the Government to, 21st Century Fox’s bid to take over Sky now that the bid has been agreed, and whether the Government plan to refer the bid to the competition authorities.
As hon. and right hon. Members know, Sky plc announced on Friday 9 December that it had received an approach from 21st Century Fox Inc. to acquire the 61% of shares in Sky plc that it does not already own. The Minister for Digital and Culture, my right hon. Friend the Member for West Suffolk (Matt Hancock), made a statement on 12 December about the proposed bid and the process that would need to be followed. I recognise that this is an issue of significant interest to the public and that it has raised a lot of interest in Parliament, as well as being a significant issue for the parties concerned. It is very important I make it clear that the role I will play in this process is a quasi-judicial one. As the Secretary of State, I am able to intervene in certain media mergers on public interest grounds, as set out in the Enterprise Act 2002. Government guidance on the operation of the public interest merger provisions under the Act gives an indication of how the intervention regime will operate in practice and of the approach I will aim to take. The most important concern for me is that the integrity of the process is upheld. The guidance makes it clear that I will aim to take an initial decision on whether to intervene on public interest grounds within 10 working days of formal notification of the merger to the relevant competition authority.
No such formal notification has yet been made. Unless and until a formal notification is made to the relevant competition authority, I will not be taking any decisions in relation to the bid. It is for the parties formally to notify the relevant competition authorities. It is at that point that I will need to consider whether any of the public interests specified in the legislation merit an intervention. My decision on whether or not to intervene will be a quasi-judicial one, and it is important that I am able to act independently and that the process is scrupulously fair and impartial. Given that, it would be inappropriate for me to comment further on this proposed bid at this point if the integrity of the process is to be protected and everyone’s interests are to be treated fairly.
What I can say is that I understand the significant public and parliamentary interest in this matter, and I do not for a minute underestimate it. This is also clearly a significant issue for the parties to the bid. It is therefore crucial that the integrity of the process is protected. I will not be making any further comment on the process or the merits of the bid today, but I can confirm that this matter is being treated with the utmost seriousness and that, should the parties formally notify the bid to the relevant competition authorities, I will act in line with the relevant legislation, the guidance and the quasi-judicial principles.
I thank the Secretary of State for her reply. The urgency of the House considering this matter today is that we are going into recess until 9 January, and the bid may be notified to the Government at any time.
It is very important that the House understands the reality that in even launching this bid for 100% of Sky, the Murdochs are seeking to turn the judgment of this House, the regulator and indeed the country on its head. In 2011, this House unanimously urged the withdrawal of the bid for Sky by Rupert Murdoch. In 2012, Ofcom published a damning assessment of James Murdoch’s behaviour in the running of News International. That report stopped short of declaring Sky as unfit and improper to hold a licence only on the basis that the Murdochs were a minority—not 100%—owner of Sky, and that James Murdoch was no longer playing an executive role at Sky.
Today James Murdoch is back, as chairman of Sky and chief executive of 21st Century Fox. This bid shows the Murdochs have learned nothing and think they can get away with anything. If it was wrong for the Murdochs to own 100% of Sky in 2011 and 2012, it is wrong today. We have seen the convictions of their senior employees for phone hacking and perverting the course of justice, and of police and public officials for taking payments from News International employees. We are still yet to have part 2 of Leveson, which was supposed—I am quoting its terms of reference—to examine the
“corporate governance and management failures at News International”.
Why? Because this Government are seeking to ditch part 2 of Leveson. We all said across this House in 2011 that never again would we allow the Murdochs to wield unfettered power, yet here we are all over again.
May I ask the Secretary of State: first, has she read the Ofcom report of 2012 into James Murdoch, and will she tell us what she thought of its contents; secondly, will she tell us how this bid can even be considered to be in the realm of reality when part 2 of Leveson, specifically tasked with looking at the failures of News International, has not taken place; and thirdly, will she hear the message loud and clear that if the House were to return on 9 January to find the waving through of this bid, that would be totally and utterly unacceptable and fly in the face of the expressed will of the House and the country? Will she assure us today that this will not happen?
On the steps of Downing Street, the Prime Minister said she would stand up to the powerful. If ever there was a chance to prove it, it is today.
I do not for one second underestimate the huge public and parliamentary interest in this proposed merger, nor the importance of the issue to the parties concerned. But I must ensure, given my quasi-judicial role, that I protect the integrity of the process and ensure that, as and when a formal notification is given—if it is—it is properly considered. I will be making no further comments on the merits of the bid at this stage.
Will my right hon. Friend bear in mind that, contrary to the assertion of the right hon. Member for Doncaster North (Edward Miliband) in The Guardian, Sky’s share of the television news market is actually 5%, not 20%? Although there may well be a case for asking the regulator to look at this bid, does she recognise that it represents a £12 billion investment into a British company, and is a vote of confidence that Britain will remain a centre of international broadcasting after it leaves the European Union?
My right hon. Friend has significant interest in this area, having been an exceptionally good predecessor for me, but will, I know, understand the position I am in and that I cannot comment.
We have seen this bid before. I know that Christmas is a time for TV repeats, but this one was not a hit the first time round and is no more popular now. More than 135,000 people have already signed an online petition calling for the bid to be referred to Ofcom. The reasons for their concern are the same as those that caused the previous bid to be abandoned in 2011. Does the Secretary of State agree that it would be outrageous if the bid were pushed through over the Christmas holidays when Parliament is not sitting? Is she not even slightly embarrassed that on the one hand she is currently consulting to shelve part 2 of the Leveson inquiry, which would look at unlawful or improper conduct and management failings in parts of the Murdoch empire, and on the other is being asked to rule on whether that empire should be expanded?
Last week, the Minister for Digital and Culture told the House categorically that the Prime Minister had not discussed the bid at her recent New York meeting with Rupert Murdoch. Will the Secretary of State repeat that assurance? How does she know? Will she tell us what was discussed, because after all, Leveson recommended that those meetings be minuted?
Yesterday Rupert Murdoch wrote to The Guardian to say:
“I have made it a principle all my life never to ask for anything from any prime minister.”
Let us just pause to take that in for a moment. Members will recall John Major’s testimony to the Leveson inquiry, in which he recalled Rupert Murdoch asking him to change his party’s policy on Europe and warning that if the Conservatives would not change their European policies,
“his papers could not and would not support the Conservative Government.”
Does the Secretary of State believe Rupert Murdoch or the former Conservative Prime Minister, and what implication does the contradiction between them have for the application of the fit and proper person test?
I repeat that I cannot comment on the merits of the bid. I can say that, as and when a formal notification is made, there will be 10 days for me to make a decision as to whether to refer the proposed merger.
The hon. Gentleman talked about the Leveson process. I remind him that we have opened an open public consultation on that, which I hope he has responded to—I am sure he has. At the end of the consultation I will look at the responses as a separate matter.
The hon. Gentleman asked specifically about the meeting the Prime Minister held in September. She had a pre-arranged meeting with Wall Street Journal editors. Mr Murdoch dropped in to that meeting. I assure the hon. Gentleman that the proposed takeover was not discussed.
I am not entirely sure that a company controlled by Rupert Murdoch trying to buy another company largely controlled by Rupert Murdoch is of the great public interest that the Secretary of State seems to think it is. This is really all about the Labour party not liking Rupert Murdoch. If Richard Branson was in the same situation Opposition Members would not be saying a word about it. So may I ask the Secretary of State to ignore the siren voices on the Opposition Benches and not treat it with the great importance with which they think it should be treated? After all, the BBC controls huge amounts of TV news and national and local radio news, and we do not hear a peep out of the Opposition about that.
I know that my hon. Friend has strong views on these matters. I just repeat that I will not be making any comments on the merits or otherwise of the bid.
When these matters were last discussed, the Minister of State said that the plurality rules were clearly set out and the Secretary of State would follow them very carefully if she was required to make a determination. Now that the bid has been agreed—although no formal notification has been given—can the Secretary of State throw some light on the process? Does the separation of the Murdoch print and broadcast interests change the Government’s view of plurality since the last bid? How much weight will the Secretary of State give to that separation when considering whether a public interest intervention notice should be issued?
No formal notification has been made. At this stage I will be making no comment on the merits or otherwise of the bid.
May I note a hereditary interest in relation to the forces of the great Rupert Murdoch and commend my right hon. Friend for her proper even-handedness in dealing with this matter and her correct responses. May I also note that we have seen the true voice of socialist envy that, thanks to Rupert Murdoch, who risked his whole business on it in about 1990, Sky has provided incredible choice to millions of people. It is amazingly popular. Instead of decrying this wonderful achievement, we should be proud that it happened in Britain and that this huge investment is potentially coming into our nation. I hope that my right hon. Friend will bear that in mind and will not fall tempted by the siren voices of socialist ingrates.
I note my hon. Friend’s comments, but I repeat that I will not be making any comments on the merits or otherwise of the bid.
The Secretary of State is quite properly saying that she will not comment on the decision itself, but that does not mean that she cannot answer some of the questions that are being put to her today, and she should not hide behind that. So I ask her again: has she read the 2012 Ofcom report on the conduct of James Murdoch—yes or no?
I am sorry to disappoint the hon. Lady, but I will not be making any comments on the process, its merits or otherwise.
The Minister is at pains to tell us what she cannot do, and we respect that of course, but can she give us an assurance that she will use her office to ensure that there is a proper plurality of ownership of the media in this country, and that the views of this House, which have been clearly and frequently expressed, will also be respected at the end of this process?
I fully appreciate the level of interest in the matter. I am sure that the House will continue to debate these issues, and it is absolutely right that it should do so. It is equally important, as the right hon. Gentleman says, that I discharge my functions in line with the legislation and in accordance with my quasi-judicial role.
Is it not likely that Mr Murdoch had a point when he said—he was quoted earlier by my hon. Friend the Member for West Bromwich East (Mr Watson) from the Front Bench—that he had never asked
“for anything from any prime minister”?
Why should he? A Tory Government know what he wants and usually give it to him without any difficulty whatever.
It would not be appropriate for me to comment on the relationships that Prime Ministers of all parties over the years have had with members of the press.
The Secretary of State has made it very clear that she does not feel able to comment on the content of this decision because it is a quasi-judicial decision, but does she share my anxiety that the timing is all in the hands of Murdoch? She has a responsibility to respond within 10 days. It might not be an accident that he has chosen not to notify the bid at the moment, in order to ensure that Parliament cannot take a decision before she has to. What is she going to do about that, now or in future?
At the moment there is no decision to take. This is a decision that will be taken by me as the Secretary of State. I reassure the right hon. Lady that I will not be taking a break over Christmas, whether there is a formal notification or otherwise.
The hon. Member for North East Somerset (Mr Rees-Mogg) could not have struck a more wrong note with his remarks. No one on the Opposition Benches feels any envy for the Dowler family or any of the other victims of phone hacking. The Secretary of State cannot tell us what she is going to do, but the findings of Leveson part 2 may be relevant to the fit and proper person test. When she came to the House and announced that she intended to consult on it rather than just go ahead straightforwardly, did she have any inkling that this takeover bid was going to be made?
The first I knew about the takeover bid was at the same time as everyone else in the House, when it was announced in the press.
Given the concerns that have been raised about the timing, and the fact that it could well be that the Secretary of State will have to fulfil her quasi-judicial role during the recess, if she could not answer questions about what she has previously read today, will she ensure that when she does take a decision, on which she will be questioned in the House, she will be able to answer that she did read all of that relevant material? On understanding the parliamentary and public interest, does she accept that most of it goes to those points that are in the public interest grounds in the legislation?
I can assure the hon. Gentleman that I will fulfil my role exactly in line with the legislation and I will of course be answerable to Parliament in the decisions that I take.
I know that it is pointless to ask the Culture Secretary to give a view on the bid, but may I express to her the clear views about the bid of more than 100 constituents who have emailed me in recent days? Will she undertake to come back to the House on 9 January to give us an update?
I hear the hon. Lady’s comments about her constituents’ concerns. I will of course update the House as and when there is anything to say on the matter.
When the original bid was abandoned in 2011, the former Prime Minister said that it was the right thing to do for the country. Does the Secretary of State disagree with him and think that the time is now right? If not, will she please refer it to Ofcom?
My apologies, but I cannot answer that question at this stage. I have a quasi-judicial role in this process; I know that the hon. Lady has a legal background and will understand that. I simply cannot make comments at this stage.
I know that this question will not be answered, but I am asking it just the same. A substantial number of my constituents have contacted me in the past week about the bid, and they are all of the same opinion—that Mr Murdoch has too much influence over our media. Many would like to see his bid referred to Ofcom for that very reason. However, does the Minister agree that at the very least, any takeover should be delayed until the Leveson part 2 inquiry takes place?
I apologise again, but I cannot make comments on the merits of the bid or the process.
With reference to the question asked by my hon. Friend the Member for Neath (Christina Rees) about the former Prime Minister David Cameron’s comment that the withdrawal of the decision was the right one, what assessment has the Secretary of State made about what might have changed between then and now?
I will be making no comments on any assessments that I have made at any time. I will be going through a full process in line with the legislation. I need to ensure the integrity of that process for all concerned.
We are all concerned that next year the leader of the free world will be a blunt-brained snake oil salesman who was elected by a prostituted press to whom truth is secondary and sometimes entirely irrelevant. Will the Secretary of State bear in mind the very strong views that we need to maintain in this country those qualities of balance and fairness that we have imposed on the BBC by statute? Will she bear in mind the grave danger of a prostituted press?
I do not think anyone is in doubt about the hon. Gentleman’s views.
We are about yours.
We are grateful to the hon. Gentleman for his sedentary chunter.
Does the Secretary of State agree that allowing the takeover might put pressure on, or take away, the diversity of our press? Is it the Government’s or the Secretary of State’s intention to ensure that we have a free press, not controlled by one person or one company?
I have a very specific role, which is set out in legislation. I will fulfil that role with the utmost integrity.
My constituents have also contacted me with their concerns about the bid, in particular the threat to the valued diversity of our press. Will the Secretary of State commit to addressing this point when she comes back to the House in the first week after the recess? Will she also confirm that if she has not yet read the 2012 Ofcom report on the conduct of James Murdoch she will have done so by the time we come back, and refer to its conclusions in her response?
I can assure the House that I will update the House as and when decisions are taken. I do understand that there is the utmost interest in this matter, but I have a quasi-judicial role and I cannot make any further comment at this stage.
Points of Order
On a point of order, Mr Speaker. In response to a recent parliamentary question on the staffing levels of the Child Poverty Unit, the Minister for Employment said:
“responsibility for child poverty policy and analysis transferred to the Department for Work and Pensions.”
Given the significance of the decision to abolish the Child Poverty Unit, may I seek your guidance, Mr Speaker, on whether it would not have been more appropriate to have made a written ministerial statement, at the very least, informing the House of that decision?
The means by which a Minister seeks to clarify a matter that is the subject of parliamentary interest is for that Minister. Sometimes a Minister will sense that the salience of the issue or the inquisitorial appetite of the House is such that a statement, rather than simply an answer to a written parliamentary question, might be judicious, but that is a judgment for him or her to make, not the Chair.
On the closure of the Child Poverty Unit, I note that the hon. Gentleman has a Westminster Hall debate on that matter this very afternoon. It would be surprising, to say the least, if he did not raise and ventilate fully his concern, on this and related matters, on that occasion.
On a point of order, Mr Speaker.
The hon. Lady is so illustrious that I am going to save her up.
On a point of order, Mr Speaker. You are probably aware that one of my hobby horses is the Government’s sneaking out of written statements rather than coming to the House. On 8 December, the Home Office announced the extension of asylum accommodation contracts. The Minister for Immigration wrote that the Government were
“committed to ensuring that destitute asylum seekers are accommodated in safe, secure and suitable accommodation”.
The Scottish Refugee Council was advised yesterday that there have been changes to the sharing criteria in that contract, which include: allowing siblings of the same sex to room-share until the age of 20, no longer 16; allowing siblings of the opposite sex to room-share until the age of 16, no longer 10; allowing willing mothers to return to shared accommodation; and allowing children up to the age of 16 to share with their parents.
Order. May I very gently say to the hon. Gentleman that I do not think the House requires the full details of the statement that he is clearly very keen to share with us? The matter to which he alludes is certainly important, but it did not require rehearsal in the Chamber today. That is why it is not being aired today in the way that, for example, another matter has been aired very fully.
I say to the hon. Gentleman that various vehicles are open to him to pursue the issue. Knowing him as I do, I feel certain that he possesses the ingenuity to use one or other of those vehicles. I shall be looking with great interest to see how he does so, after he has had a brief break over the Christmas period.
On a point of order, Mr Speaker. Many of us who have been Ministers know only too well that quasi-judicial processes have to be very carefully handled in this Chamber, but I wonder whether you could assist us. We had a statement from the Secretary of State on the Sky bid, but she refused to answer a range of other questions, such as whether she had read a 2012 Ofcom report that is published and in the public domain. Surely she refused to answer that question not because she was in a quasi-judicial process, but simply because she did not want to tell us whether she had read it or not.
I would not want to impute any particular motive to any Member of the House, including the Secretary of State. What I would say to the hon. Lady is that I understand her irritation—I was going to say “frustration”—on this matter. The Secretary of State has interpreted her responsibility, in the way she described to the House, very narrowly, which she is entitled to do. Colleagues on either side of the argument can make their own assessments of how the Secretary of State responded to the various inquiries put to her. I feel sure that significant numbers of Members will want to return to this matter in the new year.
House of Lords (Exclusion of Hereditary Peers)
Presentation and First Reading (Standing Order No. 57)
Mr David Hanson presented a Bill to amend the House of Lords Act 1999 to remove the by-election system for the election of hereditary peers; to provide for the exclusion of hereditary peers from the House of Lords over time; and for connected purposes.
Bill read the First time; to be read the Second time Friday 24 March, and to be printed (Bill 116).
Motion for leave to bring in a Bill (Standing Order No. 23)
We now come to the ten-minute rule motion. I say that with a degree of interest, because it means that the hon. Gentleman has up to 10 minutes only in which to articulate his case. I feel sure he will do so with an eloquence worthy of Demosthenes.
I beg to move,
That leave be given to bring in a Bill to establish a Rail Ombudsman to scrutinise performance and complaints and represent the interests of passengers; to make provision for the Ombudsman to levy fines on train operating companies for late running and cancellation of trains and about the use of such fines; and for connected purposes.
How on earth I will be able to do all that in 10 minutes, given the shambles of Govia Thameslink Railway, is a wonder. The GTR franchise, which covers Southern Rail, is not working. Notwithstanding the current problems with industrial action, incompetent management and Department for Transport failings, which have been aired all too frequently in this House, the system for pursuing complaints and achieving financial or other redress is simply not fit for purpose.
My Bill would apply to the whole UK rail network. While not intended as a silver bullet to resolve the problems of Southern, it would go some way to disincentivising complacency over consistent failure to operate a decent service when some form of normality returns to our rail service—oh for those happy days of some form of normality in the Southern region! The truth is that when things go wrong on the railways, train operating companies can actually benefit.
There are two types of compensation payments at present. The first is the so-called schedule 8 payment from Network Rail to the train operators, when something goes wrong with the infrastructure—points failures, for example, or the notorious signal box fire at Penge in Reggie Perrin’s day. It is designed to compensate train operators for the impact of poor performance on their revenue and helps to reduce the risk premium factored into franchise bids.
Extraordinarily, the train companies are not required to pass on the compensation they receive in this way to the passengers who actually suffer the inconvenience and loss. It has been estimated that some 60% of rail compensation comes in this form. The Social Market Foundation calculated last year that the train operators raised £107 million from Network Rail for delays, while passengers received just £26 million of that, meaning that the train-operating companies profited by some £81 million.
The second form of compensation is that directly paid out by the train operators to the passenger when they are liable for delays and cancellations caused by staffing problems, rolling stock breakdown and so forth. The problem is that it depends specifically on passengers lodging a claim, which can be very bureaucratic and is often rejected on technicalities. The take-up rate for claims is very low. While recent events on Southern have changed that a fair bit, it comes from a low base. In 2014, the Office of Rail and Road calculated that only 11% of passengers always or usually claim compensation. Subsequently, that has increased to around 35%, but it is still a minority. So passengers do not claim, and the train operators such as GTR benefit. On strike days, when salaries and energy costs are less, they are able to profiteer as well.
GTR’s turnover is around £1.3 billion, over £1 billion of which comes from the central Government to run the train service. Yet in an answer to a parliamentary question earlier this year, the then rail Minister stated that just £2 million has been levied against GTR in respect of cancellation and short formation performance benchmarks, while some £2.2 million was paid out to passengers under the passenger’s charter and delay repay compensation. That is a total of just 0.4% of turnover, which is hardly an incentive—and that is before netting off the payments to GTR from Network Rail. Added to that, all train operators have different schemes and methods of compensating, and there is no industry benchmark. That is hardly an incentive to run an efficient service. There must be a better way of doing it.
Given that 47 million passenger journeys were cancelled or significantly late last year, this is a big problem that affects many regular travellers—our constituents. We need a much more effective awareness programme, alerting frustrated passengers to what their rights actually are. There is certainly no sign of that from the train operators themselves. The current problem is that the passenger can like it or lump it. The complaints procedure largely relies on the good will of the train-operating company beyond the minimum delay repay obligations, if it accepts the application at all. As the consumer champion Which? has put it,
“The current complaint handling landscape in the rail sector is inadequate. There are major gaps in the provision of alternative dispute resolution…with no effective route for redress and escalation of complaints if a train company does not resolve a complaint. Transport Focus, which handles some complaints informally, has no ability to impose binding decisions, no power to resolve complaint appeals, and is not an appropriate body to deliver alternative dispute resolution. Which? believes the Government should establish a transport ombudsman”.
That is what I am proposing.
Frankly, it is extraordinary that there is currently no ombudsman system for rail complaints. That could and should have been introduced when the Consumer Rights Act 2015 was extended to rail companies, giving passengers the same legal protection they receive when paying for any other service or goods, improving their ability to obtain redress beyond the current delay thresholds and receiving that redress specifically in cash rather than travel vouchers.
What will my Bill do, Mr Speaker? I know you are desperate to know. First, it will overhaul the compensation scheme, creating a much tougher financial impact on train operating companies and a fairer and easier way of compensating passengers, with a more reliable reflection of the inconvenience and costs they have suffered. Every time a train is late beyond an agreed threshold, is cancelled altogether in advance or at short notice, or overruns a station, a penalty fine will be paid into a central pot independent of the train operator and before affected passengers have to claim. Passengers would then be able to claim directly from that pot, but in a much more centrified way.
Last week, I met a company that has devised the technology through which regular passengers can download an app, track arrival at stations, automatically lodge a compensation claim where appropriate and then get compensation paid directly into a bank account without any paperwork having to be lodged. The app goes live in January. By automating an unwieldy claims process, it will also reduce administration charges for the train operators. The Office of Rail and Road super-complaint response report gave a range of estimates for the manual processing of claims: between £1.80 and £39 per claim, which is extraordinary. I know that the Minister has promised automated refunds to a payment card, but that is still some years away and is fraught with verification problems, whereas this technology is available now.
Secondly, the penalty pot will be used to help fund a new beefed-up rail ombudsman, which I shall come on to in a few moments. Thirdly, any remaining funds will be used to offset fare rises, thereby giving a further payback to inconvenienced and hassled passengers. Although the new scheme is no silver bullet alone, it would recalibrate the balance of power back to aggrieved passengers, incentivise the train operator to stop running a shoddy service and instil a sense of urgency in operators to get problems sorted out.
The second part of my Bill will establish a new rail ombudsman with real teeth and proper statutory powers. This is based on practical proposals discussed with Ombudsman Services, which have now been endorsed by the consumer watchdog Which?. Yesterday, it said:
“The Government must introduce a new ombudsman that all train companies have to sign up to so that passenger complaints are properly heard and resolved.”
Which? supports my Bill.
The rail ombudsman would be based on the energy ombudsman model, which is already in operation and could be adapted for the rail sector to deal with both the train-operating companies and Network Rail, helping to clarify responsibility for passenger problems in any given instance. The introduction of a rail ombudsman would help level the playing field between passengers and rail operators by establishing a strong independent second tier of redress. A rail ombudsman would not only greatly enhance the level of redress available to passengers, but help to improve confidence in the rail sector—something that is currently sorely lacking in the Southern region in particular.
The rail ombudsman would take up and resolve individual complaints and direct compensation, while overseeing the operation and thresholds to the penalty pot that I have described. It would lead to the awarding of compensation based on realistic levels of actual loss suffered by passengers. Typically under Direct Repay 15, passengers can currently claim just 25% of the cost of single fares. Of course the Minister recently announced one-month compensation for long-suffering passengers, but a one-month refund on a season ticket does not go far when people have to pay to stay in London or for a taxi back late at night from Three Bridges to the Sussex coast when they find themselves stranded.
The ombudsman would collect and analyse data to identify frequent and common problems of individual operators and be able to direct them to make remedies or suffer forfeits. The rail ombudsman would identify longer-term problems within the sector as a whole, and work with the Government to recommend action to mitigate any impact before it causes further detriment to passengers.
As I said at the outset, these proposals alone do not represent an immediate solution to the mess that the GTR franchise is in at the moment. I believe, however, that they represent a practical way forward to change the dynamics within the rail industry when something goes wrong and our train-travelling constituents lose out first, last and most. Above all, I appreciate that most of our constituents are primarily concerned with being able to use a reliable rail service that gets them to work, school, college, hospital appointments and home again at roughly the times that they anticipated.
Compensation for an unreliable service is secondary. Our constituents may not be terribly interested in apportioning blame for current problems; they just need a service that works when they need it to work. I do not think those two things are mutually exclusive, and I believe that the measures in my Bill are long overdue and will help to achieve both objectives. I commend it to the House.
Question put and agreed to.
That Tim Loughton, Sir Nicholas Soames, Sir Peter Bottomley, Ms Harriet Harman, Maria Caulfield, Nusrat Ghani, Peter Kyle, Huw Merriman, Chris Philp, Henry Smith, Caroline Ansell and Caroline Lucas present the Bill.
Tim Loughton accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 March 2017, and to be printed (Bill 117).
Leasehold and Commonhold Reform
I beg to move,
That this House has considered leasehold and commonhold reform.
I am grateful to the Backbench Business Committee for accepting the bid for the debate from the all-party parliamentary group on leasehold reform. I co-chair the group with the hon. Member for Worthing West (Sir Peter Bottomley), who I am happy to see is present. More than 50 Members of both Houses have joined the APPG since our inaugural meeting, which took place only a short time ago. I want to record the group’s thanks to Martin Boyd of the Leasehold Knowledge Partnership and Sebastian O’Kelly of the Campaign Against Retirement Leasehold Exploitation—Carlex—who act as our secretariat and advisers.
This debate is overdue. The front page of a library briefing makes the fundamental point. It states:
“Despite a good deal of legislative activity in this area, dissatisfaction remains.”
I am sure that, were this not the last day before the Christmas recess, many more Members would be present, because the issue affects millions of homeowners. Under the heading “The extent of leasehold ownership”, the briefing states:
“DCLG published a technical paper…in August 2014…to produce a new estimate of 4.1 million leasehold dwellings in England in 2012-13…The Leasehold Knowledge Partnership …estimated that there were around 5.37 million leasehold properties…at the end of 2013.”
On commonhold, the briefing states:
“Commonhold tenure is viewed as offering several advantages over the leasehold system. It does not remove the obligation on residents to contribute to management/maintenance and major works, but it is argued to be a more transparent system.”
Describing the advantages, it states:
“Commonhold will address the problem of lessees being beholden to an absentee landlord who cannot be bothered to carry out building maintenance and management, or who is more interested in trying to make a profit at their expense.”
I shall say much more about that later. The briefing continues:
“Commonhold will also remove the problem of leasehold property being a wasting asset. Commonholders will each have a perpetual interest, effectively akin to a freehold, in their individual unit. Standardised commonhold constitutional documents should be of general benefit.”
In my constituency, as in many, there is a mix of leaseholders: those who have bought former council properties under right-to-buy legislation—perhaps second, third or even fourth purchasers—and/or those who have either bought new properties built in east London as part of its regeneration, or bought into converted warehouses and the like which have been transformed into homes. The constituency contains the second highest number of leasehold properties in England, after Cities of London and Westminster.
Common issues affecting both types of property, new private sector and former public sector, include the length of leases, service charges, insurance fees, refurbishment costs, recognition rights, ground rents and dispute resolution procedures. I shall deal with all those briefly, but I shall not cover event fees, forfeiture or retirement homes, because I am much less familiar with those problems and I know that other Members intend to raise them.
The length of leases varies from 99 to 999 years. Many people who buy their homes under leasehold believe that they are purchasing their property, but they are not; they are leasing it. Because some ground rents double every 10 years, mortgages can be more difficult to secure later in the lease for resale. As for service charges, in the former public sector there have been improvements in recent years, with more transparency of costs and detail to show reasonableness of charges. Previously, constituents of mine have been charged for lifts in blocks with no lifts, and for garden upkeep in places with no gardens. Despite the improvements, however, there are still anomalies. The HomeOwners Alliance writes:
“Many new build freehold houses…on new housing estates are being sold by developers subject to a requirement for the owners to pay maintenance/service charge for common areas on the estate…freeholders in this situation (unlike leaseholders) are unable to bring claims to the Property Tribunal if they feel these charges are unreasonable.”
My wife and I own such a freehold property.
Also in the private sector, I have tried to help residents on two large sites in my constituency, Canary Riverside and West India Quay. Both are controlled by a gentleman—well, I would rather say a person—called John Christodoulou, under the Yianis group. LKP has been very involved in assisting the residents. Both sites have tried to work constructively with the landlord’s managing agents over many years, but have suffered from very poor management. Both had not had accounts for years, regardless of what the legislation may say is required. Only when the Canary Riverside site took its latest action through the tribunal process, to replace the landlord’s agent through fault, did the accounts emerge, and what they showed was a far from pretty picture. In the decision, the tribunal was highly critical of many aspects of the landlord’s management, including the fact that it had not had a professional planned maintenance programme and then, having obtained one, had failed to implement it.
Since the court’s appointment of a new manager, which began in October this year, the landlord’s solicitor, a Mr David Marsden of Trowers & Hamlins, appears to have bombarded the court-appointed manager with a huge number of emails: 22 in October, 29 in November, and 37 so far this month. It strikes me as very important that when the landlord’s management is removed through fault, as happened in this case, the tribunal should act to protect the court-appointed manager from what appears to be little short of harassment. The residents at Canary Riverside wrote to me yesterday, saying:
“In addition to bombarding our Tribunal-appointed Manager with emails, the Manager is being ground down by the continuous litigation being brought by the landlord in an attempt to undermine the FTT’s”—
“decision and frustrate the new management.
There is a real risk that Canary riverside lessees could find themselves in a worse position than if we had never taken the Section 24 action: i.e., back under the management of a landlord who knows the law does not protect lessees in large mixed-use developments.
The FTT-appointed Manager is increasingly finding himself in an untenable position, forced to spend more time dealing with the landlord’s demands and injunctions than resolving the estate management issues he was appointed to remedy.
Section 24 appears only to work if the landlord agrees, even if a decision is unequivocally in lessees’ favour.
Christodoulou is currently seeking a Judicial Review in an attempt to undo the FTT’s decision (having had three appeals fail at the FTT and Upper Tribunal).
He is also taking every opportunity to apply to the High Court to chip away at the Manager’s powers. On Friday he obtained an injunction that effectively granted him and his staff unfettered access to the Canary Riverside estate. An estate he no longer manages.
The lessees at Canary Riverside spent over two years securing the FTT’s decision—at a considerable cost, both financially and in respect of the time and energy needed to pursue legal action. It has been a huge endeavour.
But it seems the…hearing was just the beginning of our legal battle. The landlord’s fees were £335,000 for the FTT hearing. Since then there have been three appeals, a Judicial Review pending, and several High Court injunction hearings. Legal fees could easily top £500,000, and our (billionaire) landlord knows that the more legal resources he throws at winning, the more likely he is to win.
and I say this to the Minister—
“is not fit for purpose, and we”—
“will end up over £500,000 poorer”—
half a million pounds worse off—
“and with nowhere else to turn.
None of this impacts the value of Christodoulou’s investment—the only people damaged by poor estate management and high service charges is the lessees.”
I should welcome the Minister’s comments on that.
Over at West India Quay, Christmas eve will mark a new and dismal milestone: the sixth year of accounts will become overdue. The residents have had none since 2010, and more than £10 million of their cash is unaccounted for. In its 14 years of occupation, their building has never been subject to a planned preventive maintenance report. I ask the Minister, “How can that be allowed?” In fact, it can be allowed because there is no enforcement action for the residents to try to ensure that the property managing agents and owners do something about it.
Those are two examples of the problems faced by residents who are up against powerful, uncaring and unscrupulous landlords.
In 2012, the consumer organisation Which? estimated that £700 million was being overcharged in service charges each year. That was when everyone thought that there were between 2 million and 2.5 million leasehold homes. Given the size of the sector as we now know it to be, that suggests that £1.4 billion may be being overcharged each year. That cannot be right either.
Freeholders in one block in my constituency were asked for £78,000 to insure a building containing about 32 flats. Several of them worked in the sector, and they were sure that £15,000 would have been a more appropriate charge. They settled for £22,000 after negotiation.
Refurbishment costs mostly affect former council blocks, and leaseholders are almost at the mercy of councils or housing associations. Trying to secure detailed bills or tenders, guarantees on completion of work being undertaken and assurances of the quality of the work being undertaken has proved very difficult and unreasonable, especially from public sector organisations. Fortunately, this is changing, but progress is very slow.
Recognition rights is a source of much consternation in both the private and the public sectors. I have one group of residents in Campbell Road who won the first-tier tribunal for recognition of their residents association, but their social landlord, Tower Hamlets Homes, is appealing against the ruling. There is an inbuilt sense of reverse snobbery and prejudice against leaseholders among some in the social housing sector.
There is recognition resistance in the private sector, too. One of my first such cases, nearly 20 years ago, was from residents in the Cascades block, the first high-rise private residential block on the Isle of Dogs in docklands. The freeholder was harassing them in an attempt to frustrate their efforts to set up a residents association to represent them on service and maintenance charges.
On dispute resolution procedures, I have mentioned the problems at Canary Riverside and West India Quay, but the costs of high-powered barristers defending freeholders at tribunal is now a disgrace. The procedures were originally supposed to be relatively informal. That has totally changed. A constituent of my hon. Friend the Member for Wolverhampton South West (Rob Marris), Paddy McHugh, has written to me saying:
“Any lessee who files a case at tribunal can expect to face a Barrister acting for the landlord. The costs in issue can outweigh paying for legal representation while a landlord is usually free to put his legal costs onto the service charge even against lessees not party to the case, whether or not the landlord is the respondent.”
This surely cannot be right either. Where is the justice in a system that favours billionaires protecting their profits over ordinary working people trying to protect their homes?
Ground rents have been the subject of a number of articles in the press and media reports recently.
I congratulate the hon. Gentleman on securing a debate on this important topic, which was raised with me by the Charter Quay residents association in Kingston—and since he raises the point, I should say that I am a barrister, although thankfully not in the landlord and tenant sector. Does he agree that many people entering these leaseholds are entirely unaware that the landlords have the power to make huge increases in ground rents, and if this practice is deemed acceptable, at the very least tenants going into these agreements should have very clear information about what the landlords can do, and what their rights are as tenants and how they can challenge the landlord?
I am grateful to the hon. Gentleman for raising that point. As has been evident at a number of meetings that the hon. Member for Worthing West and I have had with legal and property experts and individual constituents from across the country, many people do not recognise the significance of this issue, including many lawyers. People are keen to get their hands on their first home or their new property and therefore will take the advice of lawyers who may not be fully conversant with the implications in this regard.
There is, to an extent, some relatively good news. After the outcry in a number of media reports, several of the large developers have announced that their policy of doubling ground rents every 10 years, which is the equivalent of 7% interest rates in perpetuity, is untenable and they are returning to the retail prices index. I am sure that the hon. Member for Worthing West, who is my hon. Friend for the purposes of this debate, will be raising that more extensively later. This is a success that the campaigning charities, residents associations and others have had. A number of the developers are backtracking, but that is not happening right across the piece. The question to the Minister is how we protect everybody from the rogues who will not do the right thing and prevent them from being subject to this abuse.
I am grateful that the hon. Gentleman has brought this subject up. My calculation is that if a £250,000 house has a £250 ground rent that doubles every 10 years, over 60 years the successive leaseholders will have paid £157,500. For that still to be 1% of the value, the house will have to be worth £80 million; that is in the first 60 years of a lease.
The hon. Gentleman emphasises the absurdity of this situation and the abuse. It is a big issue, as he knows; he has been campaigning on it and the all-party group will continue to campaign on it. We have had a modicum of success so far. I think there is an opportunity to drive this issue into reverse and deal with this charge, which should have been peppercorn or tokenistic, but which is now a much more difficult issue for purchasers. There is an opportunity to take it back into the realms of where it should have been or to abolish it altogether.
The aims of the all-party group are relatively simple: to reduce the opportunities for exploitation; to alleviate the distress and hardship of leaseholders, particularly the elderly; to do away with the high costs of the property tribunal; to examine incidences of lease forfeiture; to examine the value of retirement leasehold properties; to unearth and publicise scandalous behaviour of professionals involved in the leasehold sector; to examine insurance commissions and matters where leaseholders pay but are not party to the contract; and to ensure that the right-to-manage legislation acts as intended.
We have had a number of successes so far, including the growth of the all-party group. It has been well attended, with many professionals at the round tables organised by LKP and us, helped by Miss Katherine O’Riordan from the hon. Gentleman’s office, to make sure that the meetings are successful. We have had significant media interest, and interest from Ministers and shadow Ministers; I am pleased both the Minister for Housing and Planning and his shadow Minister are in their places today. We look forward to hearing what they have to say on these issues. We have had interest, too, from senior civil servants at the Department for Communities and Local Government, which we are grateful for because it demonstrates that both Government and Opposition are taking this matter seriously. There is a recognition that everything is not quite well here and things need to be examined. We also have today’s debate in which to raise the issue.
Some matters are easier to resolve than others, and some will require legislation, but it is not all bad news. The industry is also trying to clean up the sector, with the Association of Residential Management Agents, led by Dr Nigel Glen, introducing ARMA-Q, its code of practice for property management companies, and the appointment of a regulator for the sector to oversee and assist in dispute resolution procedures. Many decent professional organisations have joined, and even a number outside ARMA are decent companies too, but sadly there are still too many bullies, cowboys and crooks in the sector. For the Government to feel comfortable with the legislation as it stands is unacceptable. We need not only better regulation, better protection and advice, but legislation. Millions of citizens are looking to their politicians of whichever party to remedy their distress.
In conclusion, I return to my original comment from the Library:
“Despite a good deal of legislative activity in this area, dissatisfaction remains.”
This problem goes back to the ’90s. Governments of both main parties have tried to resolve it and have been unsuccessful, so in some senses it is not a party political issue. But until a Government recognise the unfairness, the robbery and the dissatisfaction, many good people are condemned to suffer. Politically, for me this is a vote winner for whichever party pledges action, and all parties should.
The hon. Member for Poplar and Limehouse (Jim Fitzpatrick)—my hon. Friend—referred to things going wrong on purpose, and things sometimes going wrong by mistake.
To avoid something going wrong by mistake, I ask the Government, and particularly the Ministry of Justice, to abandon the opportunity of winning a forfeiture order on a residential home over a smallish debt. By all means, in extremis, an asset might have to be ordered to be sold, but the surplus value should certainly go to the leaseholder and should not be forfeited to the freeholder.
One of the worst cases is that of Plantation Wharf in Battersea. Two elderly people applied to challenge management costs of about £9,000. The leasehold valuation tribunal—the lower property tribunal—agreed with them in large part and struck off about £7,000. There were then applications for costs. One of the leaseholders had read on the Government website that the cost of going to the leasehold valuation tribunal was £500 and therefore assumed that there was nothing in the cost application. By inattention, he ended up bouncing between various courts and owing over £70,000. A forfeiture order was granted, with even the mortgage lender not realising that its part of the asset would be forfeited as well.
When the insurance company that provided the mortgage woke up at the last moment—at the prompting of the Leasehold Knowledge Partnership, to which I pay tribute—the debt was settled and the man was able to go off to his new home with the bulk of his equity. He should never have been forced to pay anything, because if someone wins £5,000 out of £7,000, for example, or £7,000 out of £9,000, that should be regarded as a win, not a score draw. At it happens, the freeholder in that case was not an avaricious crook, but people who were more used to commercial dealings and thought that everyone was professionally advised and could afford to pay costs.
I have a challenge to everybody in the field: do not assume that other people are as clever, wily or crooked as you are. Whether this was criminal or not is not for me to judge, but one crook is Martin Paine—pain with an e on the end—who has taken “lease” beyond sleaze, almost by adding a letter at the beginning, and into an art form. He owns a number of short leases, and anyone who wants to sell them has to get an extension. My understanding is that he offers legally valid, informal extensions. Under a formal extension, the ground rent reverts to virtually nothing.
Martin Paine’s informal leases contain a provision that doubles the ground rent every 10 years or so, but that is written into the lease in such a way that even experienced solicitors fail to find the wording or to connect the clauses together. A person, who may be a first-time buyer of a low-value flat, may then discover that they are asked for enormously high ground rents, and they are enormously high because Martin Paine has written the provision back to the first granting of the lease, not from the time of the extension. A flat might therefore be worth £150,000, but the leaseholder will be asked for thousands of pounds a year in ground rent, with the prospect of that going up. When the leaseholder complains, Mr Paine’s practice, as I understand it, is to say, “Sue your solicitor.” I therefore recommend that providers of indemnity insurance for solicitors get together, which I think they can do without being a cartel, and ask, “What pattern of claims have we had from those we insure?” to see whether this crookedness can be stopped.
Martin Paine will then occasionally buy back the flat at a low price and remarket it with the same terms. To do that once could be regarded as incompetence; to do it twice on the same property is deserving of the word “crooked.” Every single auctioneer should do what we had to recommend to one respectable auction house: look at the leases. It turned out, of course, that Martin Paine had not actually supplied the lease to the auctioneers early on—it was withdrawn.
We should not have to rely on the chance action of a campaigning charity such as LKP or Carlex—the Campaign Against Retirement Leasehold Exploitation—or a passing Member of Parliament, to get things put right.
I ought to declare an interest in that I own the lease on a flat in a freehold building in Worthing. We had a good landlord and a good managing agent, which has now been succeeded by another good managing agent. The freeholder decided that he was going to retire and suggested to the six leaseholders that we might like to buy the freehold from him—and we did. We have not had any problems at any point. Together, we are a good association, and we had our most recent meeting on Friday. However, that is not the experience of all others.
I come now to one of the latest manifestations of things going wrong. Over the past 20 years, some house builders have returned to selling houses on leasehold terms. I have it by communication from one house builder that the price it can get for selling a house leasehold is within 1% of selling it freehold. What is the reason for selling it leasehold? Some argue that the tradition in the north-west is different—it should not be—and some say that if someone can get away with something, others will copy. There are now examples in north London of builders producing roughly the same kind of home on either side of the street, with some freehold and some leasehold.
If a leasehold contains a provision that doubles the ground rent every 10 years, the example that I provided earlier on applies. I might have got the maths wrong because I was doing this late at night, but it is wrong to argue that an ordinary home that started at £250,000 needs to be worth £80 million in 60 years’ time to justify a ground rent that doubles every 10 years—by the rule of 72, we know that that means that it is going up by over 7% a year. I ask the corporate responsibility experts who occasionally go to the annual general meetings of quoted companies to start raising that with the house builders. I would also like the Home Builders Federation to talk about how the practice is justifiable. Its representatives might say that it is just a commercial deal by some of its members and nothing to do with them, but I say that it is to do with them.
I see that the hon. Member for Brentford and Isleworth (Ruth Cadbury) is in the Chamber. The people who established and ran Cadbury were the sort of people who did not need Members of Parliament to remind them of how to behave; they knew in their bones, their blood and their heart that people should be treated properly.
I own some shares in Persimmon and some in Taylor Wimpey, and I might buy some shares in other builders. If necessary, I shall go to their AGMs, giving notice in advance, to ask what they will do to unwind the problems that they created in the past. Taylor Wimpey says that it was unaware of what was going on before it came together, because it is an amalgamation of many businesses, but it knows now. The problem comes with putting things right.
If a building firm—I am not focusing on Taylor Wimpey, because I think it has realised that there are issues to investigate—sells the freeholds, it prevents itself from being able to treat its leaseholders properly.
Many leaseholders buy a flat through solicitors who work for the seller, and those solicitors will probably have attendance notes and perhaps some letters that point out the provisions of the ground rent. That may or may not be the case. What I doubt—I asked one solicitor, but have not yet received the evidence—is whether the attendance note and the letters point out that if someone were to buy their freehold in the first three years, they might be able to get it very cheaply, perhaps at a multiple of 10 times the ground rent, but that if they wait and the first freeholder sells to another, the new freeholder may say, “Actually, because interest rates have gone down, the value of the ground rent has gone up, and you have to buy it at the new multiple of the value of the ground rent.” Why do the Government not just agree a straightforward graph to show what the purchase price for a freehold ought to be at various stages?
I interrupt myself now to say that I was going speak for a long section on hedonic regression and Sloane Stanley Estate v. Mundy. As part of that case, Wellcome Trust interests managed to persuade an upper property tribunal of two people to make a change in the valuation of short leases, which probably lifted the apparent cost of extending leases by about 40%.
It is good for the Wellcome Trust to get good publicity for saying that it will give £1 billion to good causes—mostly medical research—this year. I do not mind its chief investment person being paid £3 million if they have lifted the capital value of the assets by 18% in the last year.
If £1 billion of those assets involves the estate that was bought from the Henry Smith Charity, which was established to help children and others with its income, and if the Wellcome Trust bought that estate because it managed to persuade people, without a public interest representative present, that the cost of enfranchisement or extension should go up so enormously, something is seriously wrong. It will take people in government and their advisers to work out what that is.
If there is an appeal against that Mundy case, I hope that the Government will associate themselves with it and try to make sure that, on the hedonic regression, the calculations go back to before the Leasehold Reform, Housing and Urban Development Act 1993, because after that Act the values were affected by what it said. I think that James Wyatt and Parthenia Valuation are more likely to be right. I hope that the appeal succeeds, and that the Government will make sure that if it does not, the decision in the Mundy case will be reversed by statute.
I return to the issue of smaller leaseholders. If I were a small leaseholder applying either for an extension or to buy my freehold, I would find that the freeholder’s costs has could be put back on to the leaseholders, as was pointed out by my hon. Friend the Member for Poplar and Limehouse. But what about the costs to me? I have to go to surveyors and lawyers. I am new to this and I am dealing with freeholders who do this multiple times a week or a year. They are very experienced and they are often very rich.
Perhaps the Government could bring in simple graphs to cover most cases where people could ask, “Where do I stand on the graph? What is the length of the lease? What are the terms?” The Government could say, “By the way, there is going to be a cap on ground rents, so you can’t go monetising those and making the leaseholder buy them out on some prospective multiple just because the bank reference rate is very low and the apparent cost of buying them out becomes very high.”
I apologise for interrupting as the hon. Gentleman is making a good point. When the dispute resolution procedure was originally designed, was it not supposed to create a relatively informal arrangement whereby residents could go to a tribunal to argue their case? That has been completely distorted by some of these unscrupulous freeholder landlords bringing in high-powered barristers and then charging their fees to the residents, whether they win or lose.
I agree completely. Moreover, that reminds me that the Government have had a review of LEASE—the leasehold advisory service—and I fear that the decision for it to try to make itself sustaining within the next four years is wrong. LEASE is chaired by Roger Southam, and he and his wife know quite a bit about leasehold property. His predecessor was Deep Sagar, during whose time LEASE would hold fundraising conferences where it would take the surplus, and the people who paid to come would listen to experts explaining how they could gain extra income from leaseholders. For example, someone might have stood up there and said, “Do you know, the freeholder gets the managing agent to arrange the insurance, it is paid for by the leaseholders and the commission can stick with the freeholder end?” My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) may address the issue of insurance later. So if the commission happened to be 40% or 50%, a leaseholder would be paying twice as much as they should.
What happens when the leaseholders want to get together? Again, that will be a point of law for the Government to consider. I do not think that anyone expects the Minister to be able to answer all the points raised today, but we will want to see early in the new year a proposed programme of action, which can then develop into reducing the abuse and improving the happiness.
I commend the hon. Gentleman and my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) for all their work on this incredibly important subject. Given all the complexity that the hon. Gentleman is describing, and the scope for manipulation and exploitation, is anything resembling the current pattern of leasehold tenure actually just not fit for purpose? Do we not need to move to a system that has either freehold vested in resident-controlled management companies, or a form of commonhold that works properly?
I am grateful to the right hon. Gentleman for that.
We are talking about a number of issues that do not always come together. The first is that commonhold was recommended by the Law Commission 20 or 30 years ago, and Parliament and government thought they have made legal provision for it to come in, but it does not work. We understand that by 2009, within seven years of the Commonhold and Leasehold Reform Act 2002, officials in the Ministry of Justice and perhaps Ministers, too, knew it was not working. Some who are not very knowledgeable say that it cannot work. Others who have been outside the country know that no other country—no other significant country, as far as I know—has kept the system that we developed 100 or 200 years ago.
Besides the flat in Worthing, I have a home around the corner from here. It was built in about the 1720s and it had a 99-year lease, on the basis that in that time it would either fall down or burn down; people were not expecting houses to go on lasting forever. I pay tribute to George Thomas, now Lord Tonypandy, who, in his firebrand days, campaigned to get leasehold reform and rent Acts in place so that the people in south Wales could be saved from bad landlords and freeholders.
I have in my hand the record of the debate on 8 March 1991, when Dudley Fishburn, then the MP for Kensington, paid tribute to his predecessor, Brandon Rhys Williams, who was one of the early people to start campaigning on leasehold. In a remarkable contribution, Terry Lewis, the then MP for Worsley, made reference to a number of the abuses that existed then. This was a non-party issue then, as it is now. Nearly all the scandals that Dudley Fishburn was talking about apply now, especially to the shorter-term leases.
Commonhold works, perhaps under different titles, in parts of Australia, particularly in New South Wales, with strata holdings. People from there have come before our all-party group and our forums to talk about this. The problems we have are not found in Canada, New Zealand or South Africa, or in France and Germany. Let us consider what happens when we give people interest in the maintenance of their flats. At the moment, if someone has a leasehold and improves their property, the value goes eventually to the freeholder. If they can get rid of the freeholder, not only is the abuse stopped, but people are encouraged to invest in things that matter to them. I strongly recommend that 1991 debate to hon. Members, and I was going to go through it at greater length.
What I will do is talk about some of the abuses. Benjamin Mire, a well-known surveyor and leasehold property manager, was going to be removed by the Ministry of Justice as a person not fit for judicial office, but by the time the Judicial Conduct Investigations Office had concluded its investigations, he had retired or resigned days before he would have been dismissed. Had he not done this, the full report would have come out into the open, but as he jumped before he was pushed it did not. He is not fit for judicial office and he is not fit to go on being a registered member of the Royal Institution of Chartered Surveyors. The problem is that his clever lawyers, and perhaps a display of not enormous competence by RICS, have left the details of the charges against him by RICS not fully out in the open. There were 35 cases where he or his company, Trust Property Management, were appearing at the property tribunal. There were failings by almost everyone involved.
The problem with the tribunal is that it does not have the power to fine for repeat offences. If it did, Mr Benjamin Mire would have been fined significantly. Everyone is entitled to a fair hearing, but let me give an example of a finding in one case where the trust acted as a property manager. It was stated:
“The landlords have had scant regard to the law and the RICS Management Code in respect of the costs of the proposed interior decorations.”
How can a self-regulation system that does not consider such court findings as warranting even an admonition retain the confidence of the general public? The Government have argued for years that there is no need for statutory regulation, but can anyone name a group that supports that position? Even the main managing agents trade body, the Association of Residential Managing Agents—ARMA—has been asking the Government to regulate the sector.
Leasehold is the only part of the housing market where an unregulated person can hold huge amounts of leaseholder funds and yet has no obligation to act in the leaseholder’s interests. Let me remind the House of something: when the freeholder appoints a managing agent, who does the managing agent work for? It is the freeholder.
I ask Ministers please to establish a legal position so that the leaseholder has an interest in everything that happens either with their money or in the block where they own the lease.
In the CBRE report—the most recent I have seen is from 2013—there are references to “soft income”. We still have too many examples of landlords, sometimes those who even own their own agents, skimming on huge insurance commissions. That was reported by the Financial Conduct Authority as recently as two years ago, when it said—this backs up what I said earlier—that it was not uncommon to charge commissions of more than 40%. The worst situations are those in which the landlords’ own managing agents provide contracts through companies they own, which can result in poor services and high costs. My hon. Friend the Member for Plymouth, Sutton and Devonport might remind the House later of whether there was such a link between the freeholder and the managing agent in Plymouth.
I cannot distinguish between one Tchenguiz brother and the other, or between them and the Tchenguiz trusts, so I will talk about Tchenguiz interests and those who know can pick up on whether they are involved or affected. There are two points on which I criticise them. One was when they controlled Peverel, property managing agents who owned a business called Cirrus—as in the cloud. When some of the company’s large number of freehold blocks were said to have needed the call system replaced, there was a competition between the very big firm, Cirrus, and two little minnows. So, if we think that 99.9% was Cirrus and 0.1% was those two little minnows, there was collusive tendering. Sadly, the economic crime unit of the police, the Financial Conduct Authority and the Serious Fraud Office did not manage to get together at the same time to work out how to deal with this rip-off of millions of pounds from leaseholders.
When Peverel/Cirrus discovered that the game was up, they declared that they had been involved in collusive cartel bidding. We know from the Virgin-BA case that the first to declare that they have been involved in a cartel is penalty free. The fact is that the size of Cirrus compared with the size of the minnows made that an absurd judgment. If the police, the fraud office and the FCA had been together, they would have stopped it, but they did not, so those involved got off scot-free.
The other Tchenguiz interest was in Charter Quay in Richmond upon Thames—
In Kingston. The numbers might be wrong, but they are illustrative. Imagine the Tchenguiz interest buying the freehold of Charter Quay for £750,000 and then, in the same year, writing the value up to £2 million, £3 million or £4 million, before borrowing, say, £2 million against it. When the leaseholders eventually get together, they discover on the accounts that the Tchenguiz interest—or someone—has been running an office phone through the lift phone in the block of flats to get a good deal from the telephone providers.
The leaseholders then get control of management and apply for the freehold, only for the freehold block to be estimated not at £750,000, and not £2 million, £3 million or £4 million, but at just under £1 million. It came down to about a third of the valuation that the new owners had put on it. In that case, I think, there was a settlement before the thing was finally determined by the court, but the figures are there.
The freehold went from £750,000 to £900,000, having gone to £2 million, £3 million or £4 million in between. I ask the professional regulators for the bankers involved in the loan, the surveyors who went along with the valuation and the accountants who did the accounts to ask how they explain this. I think that there was professional incompetence or collusion, and that is not what professionals are supposed to do. I hope that it is not happening again now.
I thank my hon. Friend for giving way and for mentioning Charter Quay in my constituency, as well as the fantastic campaigning work done by the residents association to overturn a situation caused by the skulduggery of the Tchenguiz operation. I should point out that I have a property that I rent out—not in Charter Quay or anywhere in the constituency. Does my hon. Friend agree that a lot of people living in leasehold properties are older people who have downsized and can ill afford the additional and inflated costs and expenses associated with such properties?
My hon. Friend is absolutely right.
If a leaseholder wants to exercise their rights under the law or to stop being abused because someone is trying to assert rights that they do not have, they have to know 22 Acts of Parliament, regulations and codes. Tribunals, whether in property or employment, ought not to allow some clever QC to come along and say that there is one thing that they have not been aware of that means that the rest of the case falls away; they should ask whether most of the case has been established, in which case the precise details of law—so long as what the tribunal decides is not unlawful—should carry through. The presumption should be that if there is trickery—legal or economic—or unfair pressure, the small person’s voice should come out on top.
Even during the publicity over the past two or three days, people who have spoken up about the abuse they have experienced because of the ground rent scandal have received lawyer’s letters on behalf of other lawyers saying, “You shouldn’t be saying that.” What is this place supposed to be like if we cannot hear our constituents say what their experiences are? I asked those lawyers to respond to me by 10.30 today, so perhaps the email has come in while I have been speaking, but I think that people ought to start asking whether these are sensible letters to be sending. We should be saying that part of being a lawyer is trying to make sure that everyone has their voice heard properly.
Lord Faulks said on behalf of the coalition Government in 2014 that he did not plan to review the commonhold/leasehold format. I think he should—not him, it is not personal, but the Government certainly should. It ought to be possible with the help of good lawyers. Guy Fetherstonhaugh QC, who presented a paper that is in the notes of the all-party group, has given good advice on how that could happen. I give strong commendation to Philip Rainey QC, who addressed our meeting last week and gave various proposals for what could work and could do so quite fast. That does not solve all problems easily, but it makes most difficult problems become easier and makes easy ones go away.
It is tempting to go on for rather longer than the House would wish, but I have one recommendation. Going back to LEASE, the advisory service, I do not think that it has ever had a leasehold representative as a member of its board. If we are to have six members on the board, I would have at least two with leaseholder interests—one who is a leaseholder and one who is part of the campaigning groups and charities that try to help to represent leaseholders. I would certainly ask those who appoint the chairman of LEASE to consult broadly—not just with people like me—about the experience, ability, talents and attitude we want the chairman to have to give guidance to Anthony Essien, the chief executive, against whom I make no critical comment as he has always been responsive, helpful and straight. If the appointment of a new chairman is coming up, I ask the Government to consult as there is some expertise around and in every other field I have known people get consulted if there is a serious basis for that.
I turn briefly now, if I may, to park homes. In my constituency and the constituencies beside it, Bognor Regis and Littlehampton and Arundel and South Downs, some park homes have recently been developed in a way I would regard as a shocking example of misused legal knowledge. The person involves takes a park home, says that it is a holiday home, and that it is not, and tries to fit it between the two, charging enormously high rents. I ought perhaps to apply for an Adjournment debate on the case I have. The Minister should invite Members to send in constituency cases of park home problems and people using the law in ways that are not justified. I encourage the experts in Arun District Council, who have been doing the best they can, to send in their cases to the Minister, because I think action could quite easily be taken there.
I am about to take the chairmanship of the all-party parliamentary group on park homes, so my hon. Friend’s comments immediately interest me. The problem is not just the rent that unscrupulous people charge. It is usually elderly people who live in park homes and they are charged a fortune for utilities. They pay double the rate for electricity, water, sewerage and so on.
I am grateful to my hon. Friend. If he will sign me up as a member, I would be happy to join the group. I will ask Arun to send the information to him.
I had not realised how much work I had been drawn into on this topic. I looked at the files this morning and they are enormous, most of the material generated by people more expert than I am. I came into it because some elderly, frail, poor leaseholders were being abused. Because that intervention worked, I was more drawn in. I would prefer to have spoken in the later debate about other cases of injustice that affect individuals, but the leasehold/commonhold area is so big and, as we explained to the Backbench Business Committee last week when it kindly heard the application by the hon. Member for Poplar and Limehouse, there are issues of structure of government.
The motion suggests that leasehold and commonhold issues have been considered. They have not been properly considered as a whole since 1991 and they need a great deal more attention. I have been involved in a number of campaigns in my parliamentary life. Not one has brought in so many cases from other people’s constituencies, so this debate will help to raise awareness among other Members of Parliament. I thank the House for listening to me at greater length than I would normally speak.
Given that there are 5 million to 6 million leaseholders in the country, far more than public estimates, the Office for National Statistics should be able to work out the trends and numbers as national statistics and clarify the situation so that we can see what good is being done and what more good needs to be done, and so that we can also find a way of making the property tribunals work at the lowest possible cost with the smallest number of cases.
I strongly recommend to my hon. Friend the Minister discussing whether he can get graphs which show what the cost of extending or purchasing freeholds should be, which will eliminate a lot of the work for the good professionals and abolish all the opportunities for the bad professionals, the bad freeholders and the crooked managing agents to go on treading over poor people who ought to have the chance to live in their homes at peace.
What we are discussing today is nothing short of a national scandal. It is the payment protection insurance of the house building industry. Every now and again a sharp practice comes to light which is totally unconscionable and of which every reasonable person would say, “We cannot allow this to continue. Parliament must act.” This is one such occasion.
I congratulate my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) and the hon. Member for Worthing West (Sir Peter Bottomley) on securing this important debate and on their excellent contributions today. They should also be commended for their work on the all-party parliamentary group and for shining a light on a situation that is a national disgrace. As we have heard, there is a huge range of issues underneath the misleadingly simple title “leasehold”, and I hope that today’s debate will bring about progress in resolving some of the huge injustices that I, too, propose to speak about. I echo the tribute paid to the Leasehold Knowledge Partnership for the excellent professional assistance that it has provided to us and to the many homeowners affected by the issues discussed today.
Thousands of people around the country who bought new homes in good faith are the victims of what can only be described as a racket by some of the country’s best-known developers, who between them have received millions of pounds from taxpayers to provide affordable homes and have also been the recipients of generous subsidies as a result of policies such as the Help to Buy scheme. As we know, the practice that has developed is to sell new homes on a long-term lease, with a misleadingly low ground rent and buy-out price. This practice has become common in my constituency over the past few years and, contrary to what is asserted by some developers, it is not a tradition in my constituency. It now seems to be part of the business model of a great many developers. It is a clever way of selling more units, by dropping the asking price a little to reflect the fact the property is leasehold, but failing to make it clear that in the long run the homeowner will pay far, far more than they would have done if the property had been freehold.
Does the hon. Gentleman agree that when ground rent or other charges double, it would be usual to expect double the service? As this is not the case, it goes against natural justice.
I thank the hon. Gentleman for his intervention. I know that his constituency is affected by the issue. I have yet to see any evidence that higher ground rents result in any kind of service, particularly for the properties that I am talking about. Obviously, leasehold flats are a slightly different matter. I remember when it was common, if there was a leasehold, for the rent to be described as a peppercorn rent. The implication was that that was nothing other than a symbolic exchange.
A service charge or maintenance charge is one thing; the ground produces nothing. I meant to pay tribute to Bob Bessell of Retirement Security who, when asked at the all-party meeting what the ground rent was for, said that it does not produce anything of value so he goes for only a peppercorn. It seems to me that if he can say that openly, others should as well.
I thank the hon. Gentleman for his intervention. He is spot-on. The notional figures that we are used to seeing as ground or peppercorn rents ought to come back. We have seen a drip-feed of figures coming in, relatively modest to start with—more than a peppercorn, but still modest—and the ratcheting up of those figures in some leases is my main concern today.
When people buy their home, they like to know who they are buying it from, but leaseholds are often sold on to third parties who can then vary the agreed terms of the leasehold, at which point—this is a scandal—developers claim that it is no longer anything to do with them. This is an issue affecting my constituency. I have been contacted by a number of constituents affected by it. One, Beverley O’Malley, bought a Taylor Wimpey property. That company provided her with a letter at the point of sale stating that she would have first refusal to buy the leasehold at 15 times the ground rent, plus £199 for legal costs. That lease has been sold on without any option to purchase at this time, and she has now been informed that the letter provided by Taylor Wimpey is not worth the paper it is written on.
Another constituent of mine bought her property from Bellway in 2010 with a lease of 150 years and a ground rent of £125 per annum. In July 2015 a quote of £3,750 to purchase the freehold was provided, which equated to 30 times the ground rent. However, in March 2016, when attempting to purchase the freehold, my constituent was informed that the lease had been sold to a company called Adriatic, with Homeground acting as the management company, although quite what it is managing remains to be seen. Following this transfer, my constituent received a new quote to purchase the freehold at £12,750. That is more than 100 times the ground rent. No explanation was provided as to why the price had gone up so much, but counter-offers for purchasing the freehold were made by my constituent’s solicitors, which resulted in a revised quote of £6,750.
The quadrupling of the buy-out price for the ground rent, then the halving of it after negotiations started, as well as information given to me that the prices quoted can vary significantly for almost identical properties, suggests that the buy-out costs are calculated on nothing more than what the investors think they can get away with. The same constituent recently obtained planning permission to extend her home, but was told that she needed to obtain consent from Homeground in order to proceed, for which she was charged a fee of £333. However, following payment of that amount, an additional £2,440 was requested for the same purpose. This amounts to nothing less than racketeering and it should be stamped out.
Possibly the most alarming case that I have heard is that of my constituent Lindsay Lloyd, who bought a Taylor Wimpey property in 2009 on a long-term lease. She was reassured that such leases were common practice and that she would be able to purchase the freehold in future for £2,600. She received that advice from solicitors who were recommended to her by Taylor Wimpey, and she felt under some pressure to appoint them. She was advised that the lease did not impose an unduly onerous or prejudicial burden.
I wonder whether whoever was advising Ms Lloyd had even read the lease. I have, and it states that the ground rent will double every 10 years, so next year, for example, it will rise from £175 to £350 a year, which is a big increase. I can accept that £350 a year for ground rent does not sound too bad, but in 50 years’ time it will be over £11,000, in 100 years’ time it will be over £350,000, and in 200 years’ time—I hope the houses last that long—it will be a staggering £367 million a year. Nobody expects to be around in 200 years’ time, but anyone who wants to buy the house will think twice once they realise that they would be agreeing to a contract that commits them to an annual payment of millions of pounds. What that means in practice, of course, is that nobody would purchase the property, so where does that leave existing owners? I really want to hear about that from the Minister today.
The solicitor’s advice is a critical part of this. If the solicitor does not tell the first purchaser that this is a penal clause, what advice would they give to a prospective buyer six years later, who would be facing a doubling of the ground rent in four years’ time? It seems to me that the advice ought to be the same, but I bet it would not be.
As a former practising solicitor—not in this area, I hasten to add—I think it is fair to say that some solicitors are now probably more alive to the traps that can be found in leases. I have looked at my constituent’s lease, and to say that it is not set out very clearly would be an understatement, but it still should have been picked up on.
Following what my hon. Friend the Member for Worthing West (Sir Peter Bottomley) has just said, surely it is the responsibility of a solicitor helping someone to buy a house to point these things out, because they are professionally qualified and they should know very well what is happening. I cannot understand why that does not happen.
I think that individual solicitors have to answer for what they have done. From my knowledge of the profession, I think that over the years we have seen a much more streamlined process for advising people on their purchases and sales and lots of standard documentation, which I think is why some of these things have been allowed to happen. I suppose the real question is this: why would a developer want to put such an onerous clause in a sales document, knowing that if word of it got out people would think very carefully about whether they wanted to buy the property? As we know, they are selling these leases on to third parties, so actually there is no benefit to them. That is the heart of it. I do not think that the legal profession comes out of this with any great plaudits, but clearly the fault for having the clauses in the first place lies with the developers, and I have yet to hear any reasonable explanation for why they are there in the first place.
My constituents feel that they have been duped by Taylor Wimpey. The reservation form that they signed stated that the ground rent was £175 a year, and there was no mention of it doubling every 10 years. I understand that Taylor Wimpey has now decided not to sell any new properties on a leasehold basis, which is good news—
Any new houses.
Yes, any new houses. But that does not help my constituents, who believe that they have been comprehensively stitched up. That is why this place has to take action.
At the moment there is no way out of this for my constituent. She recently inquired about purchasing the lease and discovered that it has been sold to a company called E&J Estates, which is now quoting her a price of £32,000 to purchase it. No wonder it quoted a price over 10 times what she had originally been offered, given what it could rake in over the years. However, having already made significant commitments to purchase the property in the first place, my constituent was simply unable to stump up such a significant amount.
As disappointing as the response from E&J Estates was, it was a struggle even to get a response from it at all. It initially refused to speak to my constituent about her circumstances, stating that it had a “long-term interest in the property.” Well, so does she: it is her home. And it is a home that has been saddled with an obligation so onerous, so outrageous, that nobody with an ounce of decency in their body would not say that this place had better do something about it.
It is not enough to say that leasehold valuation tribunals are there to resolve these issues, because these companies are going out of their way to obstruct and delay the process. I do not know whether anybody here has taken the time to read one of the tribunals’ decisions, but I suspect that very few people would feel comfortable going into one of them without a lawyer, and probably also a surveyor. Certainly the freeholders seem to do that, and from what I have seen they also put the cost of their representation back on to the homeowners as well, rubbing salt into an already very expensive wound.
Although I have named Bellway and Taylor Wimpey, the practice of selling new builds on a leasehold basis appears to be commonplace across the majority of new build estates in my constituency. I should make it clear that the examples I have given of how my constituents are adversely affected do not apply to every developer selling leasehold properties, although every developer I have contacted has indicated that they intend to sell on their interest in the leasehold at some point. That really is where things go wrong, because once they sell them on, the new owners have no interest in anything other than extracting the maximum amount of profit from their asset.
Of course I accept that some properties by their nature lend themselves to being leasehold, but that does not apply to the vast majority of the properties being built in my constituency, which are detached or semi-detached family homes. There really is no reason for those properties to be sold as leasehold. It is a cynical business decision, which will in the long run damage the reputation of those involved.
It is also disappointing that the newest development in my constituency, currently being constructed by Redrow Homes, is also being sold on a leasehold basis. Redrow tells me that this fact is made known to purchasers before they reserve their property, although I note that on its website the promotion of that particular development makes no mention of it. What is particularly disappointing is that Redrow, despite my asking twice why it feels the need to sell large detached family homes on a leasehold basis, offers no justification whatsoever.
It is quite clear that this situation needs to be addressed. I have several questions for the Minister. My first is very simple: are the Government happy with this state of affairs? If not, will he set out today, or in the very near future, exactly what he will do to stop these scandalous practices? Does he agree that developers should be prohibited from recommending a particular solicitor to purchasers because of the clear potential for a conflict of interest and the clear failure, as we have seen here, to provide the best advice?
Will the Government consider legislating to prevent ground rents being doubled every 10 years? Will they intervene to give some hope to those now saddled with the eye-watering commitments that nobody—not the developers, not the lawyers and not the Government—warned them about? Will the Minister consider withdrawing and recouping taxpayer subsidies to any development found to be ripping off householders in this way? Will the Government ensure that there is greater transparency at every stage of the process, with purchasers receiving clear information about the arrangements they are entering into?
Finally, I would like to pass on the following message to anyone listening today. If you are looking to buy a new home built by Taylor Wimpey, Bellway or any other developer, look very carefully at the terms that are offered and ensure that you receive independent legal advice. My message to the developers themselves is to act transparently and offer leasehold only where it is strictly necessary.
My interest in this important topic stems from two long-running cases in my constituency. They relate to two right-to-manage properties housing mainly elderly and retired residents: Elim Court and Regent Court. My hon. Friend the Member for Worthing West (Sir Peter Bottomley), who is also interested in the matter, has given me an enormous amount of advice, for which I am grateful. I also want to thank Rebecca Cattermole and Martin Boyd for all their help in preparing me for today’s debate; I have no doubt they will mark me out of 10 when I have concluded.
I should declare an interest. I still have an interest in a company I set up, which gives property developers advice on how to manage public consultation. I also own a leasehold in my constituency, and I am delighted to say that the other leaseholders and I own the management company. I think we manage the whole thing very well indeed.
I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) and my hon. Friend the Member for Worthing West on securing this incredibly important debate. I also thank them for their stewardship of the all-party parliamentary group on leasehold and commonhold reform.
The Elim Court case has attracted national attention to right-to-manage law. Elim Court’s RTM company, which was established for this purpose, made an application to acquire the right to manage a block of flats at Elim Terrace in Plymouth under part 2 of the Commonhold and Leasehold Reform Act 2002. The Act created a no-fault right to manage, under which, on satisfaction of some preconditions, a qualifying majority of tenants of a building containing leasehold flats can establish an RTM company to take over management of the building from their landlord. The no-fault part of the Act meant they did not have to show fault in the way the building was managed.
Elim’s landlord declined to participate in the RTM process and opposed it through the Leasehold Valuation Tribunal—now more commonly known as the first-tier tribunal—which accepted his arguments on a technicality. On appeal, the decision was upheld, and the case thrown out. My constituents in Elim Court have been battling for years for the right to manage their property. The legal system that was put in place in 2002, while welcome, is in desperate need of vast improvement.
This really is the tip of the iceberg. Since its inception in 2002, the right to manage has proved popular with leaseholders who want to take control of badly managed blocks. However, it is an over-complicated scheme, riven with pitfalls and technicalities that are difficult to overcome without sound legal advice. I have been told that gaping holes have emerged in the 2002 legislation that need to be addressed urgently due to the increase in RTM applications and to landlords refusing to release their tight grasp on highly lucrative management arrangements, while finding every possible loophole to thwart applications by leaseholders and residents. That is an abhorrent way to treat anyone, let alone the retired and the elderly.
A further issue that Elim Court and Regent Court have encountered is the high costs involved in tribunals and appeals, which have, indeed, become something of a cash cow for lawyers. The fact that RTM is so plagued by loopholes means that the no-fault basis on which leaseholders can obtain the right to manage is proving costly. Currently, Elim Court is awaiting a hearing at the Court of Appeal—as I explained earlier, the process has been highly expensive. If the residents were to walk away now, they would be set to lose between £25,000 and £30,000—a very large amount.
Through my hon. Friend, may I suggest that the Law Officers look to see whether they can take over the case and carry it forward at public expense? If this is a question of justice and law, it is about time Justice Ministers got involved.
I thoroughly agree, and I thank my hon. Friend for giving such clear advice, as he generally does.
I would now like to go into further detail about the Regent Court case. In 2012, during severe storms in Plymouth, the roof blew off the building. No insurance claim was paid, leaving the leaseholder with a staggering £114,000 bill. The insurance company, AXA, claimed that the condition of the roof previously would have voided the policy, prompting the landlord to seek to recover £140,000 from the leaseholders—more than the bill for the roof repairs.
After much investigation, the ombudsman has only just reached its wholly unsatisfactory decision, declining to investigate whether there was a fault in the claims-handling process, because the insurance company had asked it not to. It remains unclear whether the landlord withdrew the claim or it was withdrawn because it was disputed. What I have learned recently is that the loss adjuster’s report may have missed key information that would have meant that the claim should have been paid out to the leaseholders.
The case illustrates that leaseholders have few rights if the insurance company and the freeholder do not want a matter investigated. Again, elderly residents are being treated in this way. Regent Court is a particularly shocking case, as the landlord has not had an interest in managing the building since the second half of 2013, when the leaseholders took control via their RTM company.
The House is following this case keenly. Is my hon. Friend telling the House that the freeholder had the responsibility to make sure the roof was maintained, but did not, and that he had the responsibility to deal with the insurance, but it was apparently not valid or he was not going to claim on it? The leaseholder therefore failed doubly—in terms of the cost of the roof and the cost of the insurance.
That is exactly the position, and it certainly needs to be looked at.
The ombudsman’s decision highlights the fact that millions of leaseholders face the same position across the country. Some landlords also happen to own an insurance broker, as we heard earlier, creating loopholes and conflicts of interest across the board. The Financial Conduct Authority is fully aware that leasehold building insurance is a problem and has reported that high commissions—up to 40%—have been paid on insurance. In 2014, the Competition and Markets Authority investigated leasehold property management, and one of its specific recommendations was that the FCA should look into the matter.
I would like to see a more flexible, more transparent and less complicated system for RTM, insurance issues and service charges for leasehold properties. The current system has been picked apart by lawyers, and the original Act is not fit for purpose. I urge the Government to relook at leasehold and commonhold reform and to sit up and realise that possibly millions of people across the country face very real blockades, when all they want to do is manage their own property—a right this Parliament gave them almost 15 years ago.
To conclude, it seems almost unfathomable that we expect pensioners to cope with some of our most complex legislation. If we in Parliament do not understand the process, and officials do not understand the process, why on earth should we expect these elderly consumers to? It may be too late for the residents of Elim Court and Regent Court, although I am keen to pursue those issues, but we owe it to future leaseholders to ensure that they are not swindled out of hundreds of thousands of pounds by greedy landlords and cowboy insurance companies.
Before I start, Madam Deputy Speaker, I would like, on behalf of the Opposition Front Bench, to wish you, your staff and all the staff of the House all the very best for Christmas and a very happy new year.
I congratulate my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) and the hon. Member for Worthing West (Sir Peter Bottomley) on securing this important debate, and thank them for their work with the all-party parliamentary group on leasehold reform. I thank the Leasehold Knowledge Partnership and the House of Commons Library for the work they have done in supporting me and other Members in preparing for this debate.
The majority of people in this country aspire to own their own home, and for those lucky enough already to own a home or to be able to buy, a leasehold property often suits their needs better than a freehold house. Long leaseholders are in a landlord-tenant relationship with the freeholder. The rights and obligations of the two parties are governed by the terms of the lease agreement, which is supplemented by statutory provision. When it works, leasehold is fine—the hon. Members for Plymouth, Sutton and Devonport (Oliver Colvile) and for Worthing West spoke of their personal experiences—because there are transparent charges, well-itemised and properly justified service charges, appropriate resale values, and so on.
Homeowners want and deserve security and safety, but this debate shows that for far too many, their dreams of home ownership have turned into a nightmare. When one has worked hard to save up to buy a home, and budgeted to pay for servicing any loan and other costs that one reasonably expects, one should expect security and then to be able to plan for one’s future.
Probably all MPs represent leaseholders of one category or another. As we have heard, many MPs have examples from their casework of issues that have been brought to this debate. Too often,
“leasehold property sells buyers short at every step.”
Those are not my words; they were in an excellent article in a paper I do not usually read—the Daily Mail—in September 2015. Leaseholders are finding problems they had not expected when they bought their home. I think that “duped” was the word used by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders). These are some of the examples that we have heard about: managing agents imposing arbitrary and multiple charges; lack of transparency of service charges that are way overpriced; estate owners such as those mentioned by my hon. Friend the Member for Poplar and Limehouse having no right to a tribunal on charges; unexplained and unforeseen increases year on year—sadly, in my experience in Brentford, housing associations are sometimes among the worst culprits; and the cost of extending leases when they drop below the 70-year, or even 60-year, period. I was pleased to learn a bit more about hedonic regression from the hon. Member for Worthing West; I thank him for that.
We have heard about exorbitant charges for capital works on common parts, with little advice on how to pay. Too often, sadly, local authority landlords are some of the worst culprits in this regard.
I apologise to the House for being unable to be here for the start of the debate. May I offer my hon. Friend another example that demonstrates why the leasehold system needs reform? The residents of Platinum House, owned by Luke and Brian Comer, in my constituency have sought to secure the right to manage, yet the owners have used a whole series of tricks to delay the exercise of that right. Does she think that is a further example of the need for reform?
I thank my hon. Friend for that excellent additional example where the right to manage has been proved not to be as simple and straightforward as it should be. Too many people who want to manage their property collectively with their neighbours are finding it too difficult and costly with too many hurdles.
We have seen many complicated hurdles put in the way of leaseholders exercising their right to manage or the right to enfranchise. Dispute resolution procedures are complicated and costly. Lessees are having to pay the landlord’s legal costs. Resale charges are up to 20%, which then suppresses resale values. I ought to declare an interest in that this happens particularly in the retirement sector, and my mother has just bought a flat in a retirement community. There are the questionable tie-ups between freeholders and managing agents, and the solicitors they recommend, as mentioned by my hon. Friend the Member for Ellesmere Port and Neston. There is the scandal of lease forfeiture, again brought to the debate by the hon. Member for Worthing West. New homes on their own plots are being sold by volume housebuilders on 999-year leases when they could be freeholdings. Despite advice given to many first-time buyers in these instances, I must say that no, 999-year leases and freeholds are not one and the same thing.
Another illustration of this issue comes from a CBRE report of 2013 saying that some people who are developing property with leaseholds are now selling the freehold in advance so that they escape the responsibility of offering it to the leaseholders after two years.
That is yet another example of poor practice—and that would be a generous term.
We have heard about the difficulties of people who buy park homes. They often do that because they cannot afford bricks and mortar, and park homes look, on the surface, to be an affordable option. We have heard about the charges on owner-occupiers for the “privilege” of modifying their own home, even if they have planning permission. We have heard about buyers who want to purchase the freehold finding it incredibly difficult to do so; some big-name volume housebuilders such as Taylor Wimpey and Bellway have been mentioned. The hon. Member for Kingston and Surbiton (James Berry) raised that matter.
Finally, and perhaps most shocking of all, there is the scandal of what I call the ground rent scam whereby a new asset class has been created as ground rents rise and rise, and properties are being treated as a marketable commodity over the heads of the owner-occupiers. Several hon. Members have mentioned this shocking situation. My hon. Friend the Member for Ellesmere Port and Neston described this national scandal as the PPI of the housebuilding industry.
I am looking forward to the Minister’s response. Before he thinks of saying that the examples brought here today from Members across the House are exceptions that prove the rule, I want to say that they are all too common. The APPG is a new group that has a large membership. A recent survey by LEASE, the Government’s agent, showed that 53% of leaseholders regret their purchase. If there are 4 million leaseholders in this country, and that is probably an underestimate, then 53% of 4 million represents an awful lot of people. Legislation has been changed to benefit far fewer than 2 million people.
Before the Minister thinks of talking about weighing up the relevant benefits to different parties as an excuse to delay radical change and review, I have to ask him whether it is right that people can buy and sell freehold interests and ground rents as a lucrative tradeable asset. The Leasehold Knowledge Partnership suggests that developers alone are now earning an additional £300 million to £500 million a year from ground rent reversionary sales of their head leases and freeholds—and that does not include the buyers and sellers of ground rent funds, such as Ground Rents Income Fund plc, whose website I visited earlier today. This asset class is one of the highest-performing investments for canny investors. I think that following this debate we know why.
Yet hard-working people—those who are doing the right thing by investing their hard-earned cash into buying a home—are being ripped off left, right and centre. The Government must act urgently to stop this gross exploitation of hard-working homeowners who are finding that they cannot sell their homes. In fact, the Government must do more than that. The Labour Government introduced commonhold in the Commonhold and Leasehold Reform Act 2002. My right hon. Friend the Member for Wentworth and Dearne (John Healey), who is here, was a key player in that. Commonhold works in the rest of the world—for example, in Ireland and in most of our ex-colonies—and it could work in the UK. Labour introduced the Act, but we accept that it is unfinished business. The Government should review it, consider amending it, and implement the necessary changes.
We call on the Government immediately to stop the scandal of exploding ground rents, which is the biggest legitimate scam in Britain. They should review how commonhold works and make it work, and also end leasehold tenure. We strongly argue that we need to update, consolidate and simplify all the legislation, not just add another Bill and yet more complexity. The Government should consider revising the law on replacing leasehold forfeiture, as the Law Commission has recommended. We ask the Government to consider proper regulation of managing agents and to simplify the right to manage, so that residents are able jointly to take control of the block in which they live.
We need to make it much easier for any individual leaseholder to have access to the contact details of every other leaseholder, not just tenants, so that they can apply for their rights. At the moment, for all sorts of bad reasons, they are blocked from being able to do that. I hope that the Government hear what the hon. Lady is saying and that they will work out practical ways to make things easy.
The Government need to look at that detailed and critical issue. We look forward to not just an acknowledgement of the issues, but a solid commitment from the Minister to look at them. To date, the Government have shown no sense of urgency, just half-hearted promises to end the problem.
Reform of leasehold law is “unfinished business”, in the words of my right hon. Friend the Member for Wentworth and Dearne. There are too many loopholes in too many pieces of legislation, and the balance of power remains with the freeholder and their agents.
A Labour Government would give leaseholders security against rip-off ground rents and end the routine use of leasehold ownership in new developments. Will this Government do that? Labour will cap ground rent charges and set out a plan to end their routine use. We need a clear commitment from the Government. We all owe that to the millions of leaseholders in this country, for now and for the future.
I congratulate my hon. Friend the Member for Worthing West (Sir Peter Bottomley) and the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing this really important debate. I also thank the Backbench Business Committee for granting their request. Both hon. Members have shown over the years a real dedication to leasehold reform, and I appreciate their advocacy not only for their constituents, but for prospective and existing leaseholders across the country.
As we have heard, there are more than 4 million leasehold homes in England. That figure represents an important and significant proportion of the housing market. It is also a growing proportion of the housing market: 43% of all new build registrations in England and Wales in 2016 were leasehold.
I apologise for intervening on the Minister so early in his speech; we look forward to hearing what he has to say. May I remind him that it was campaigning by LKP and others that got the DCLG to review the figure and change it from 2.1 million to 4.1 million? The hon. Member for Worthing West (Sir Peter Bottomley) has already called for a statistical review, because LKP thinks that the figure is closer to 5.5 million and might even be higher. The number to which the Minister refers, which is a significant part of the housing market, may be even bigger.
The hon. Gentleman makes his point forcefully. Whatever the actual figure—clearly, the work that was done resulted in the increase to which he refers—I think we can all agree that it is a significant part of the housing market, particularly in Greater London, which he and I have the privilege of representing.
Leasehold legislation has been amended on many occasions over the past 50 years to improve leaseholder rights, including the right to extend their lease, appoint a new manager, challenge unreasonable service charges and purchase the freehold. All of that legislation has helped, but it clearly has not solved the problem, which is probably a lesson for all of us. Why has it not solved the problem? I think that we can point to two clear things. First, the legislation is seen by many as complex, as a number of hon. Members have said, and that can cause problems for leaseholders and freeholders alike. Secondly—the hon. Member for Brentford and Isleworth (Ruth Cadbury), who spoke on behalf of the Opposition, referred to this—the 2016 national leasehold survey showed that 57% of leaseholders either somewhat or strongly agree with the statement:
“I regret buying a leasehold property”.
That is a pretty sobering statistic.
We should accept at the outset that, whatever changes we make to the law, and whatever system we have for managing properties where a number of people have an interest in the land, some tension is inevitable. Even in those countries that have a commonhold system, some people in a particular block of flats might be keen for further improvements to be made, while others, who might be more financially challenged, might be more nervous about their service charge bills.
The hon. Lady said that she was concerned that I was going to respond by saying that the concerns that we have heard are just exceptions that do not represent the real problem. I assure her that the leasehold survey shows that they are not exceptions and that there is a widespread problem that needs to be addressed. I was asked directly whether I felt comfortable with the current situation. I assure hon. Members that I most certainly do not feel comfortable with the level of concern right across the country. Indeed, I am very keen to explore how we can promote greater transparency and fairness, and to work with all interested parties to improve leaseholders’ experience of home ownership.
This is a timely debate because it has highlighted concerns that others have raised, including the Law Commission as part of its consultation on the 13th programme of law reform. We are working closely with the commission and will use the examples raised today in our discussions with it.
I want to consider the issue of houses being sold as leasehold, which my hon. Friend the Member for Worthing West and the hon. Member for Ellesmere Port and Neston (Justin Madders) have mentioned. Leasehold has been a part of the housing market in this country for decades, even centuries. In the right circumstances, with the right safeguards, it can serve both leaseholders and freeholders well. As we have heard today, however, that is often not the case.
Analysis by LKP suggests that nearly 9,000 houses were built and sold last year as leasehold. Some have no shared services or estate management functions. In fact, they seem to exist only to create a reliable income stream from the ground rent, permissions to alter the property, and selling on the freehold at some point in the future. Developers can maximise their return by selling the freehold interest to the leaseholder at a higher value after they have moved in, or by selling it to a third party without informing the leaseholder. That is a critical point: if a freeholder wishes to sell a leasehold flat, the leaseholder has the right of first refusal, but that right does not extend to those in leasehold houses.
Those practices are not illegal, but it seems to me, and to the Secretary of State, to be one of those cases where there is a gulf between the letter of the law and our sense of what is right. Some of the cases that we have seen in the media and heard about today have highlighted some truly appalling behaviour. The Secretary of State and I have been looking closely at the issues raised in recent weeks and we are both absolutely determined to stamp out unfair, unjust and unacceptable abuse of the leasehold system.
A number of references have been made to Taylor Wimpey’s announcement that it will address some of our concerns about its use of leasehold. I am keen to hear more about what it plans to do, not just to stop such practices in the future, but to help homeowners who are currently stuck with ground rents rising much faster than inflation. The hon. Member for Ellesmere Port and Neston made that point powerfully. The leaseholder does not have to be very far into the lease in order to be stuck with that problem, which relates not necessarily to their actual payments at that point in time, but to their ability either to extend the lease or to sell the property to someone else.
It is welcome that this practice is not going to continue, but my constituents are anxious to know what the Government can do to deal with the onerous conditions that exist in leases already.
I do not have an answer for the hon. Gentleman today, but I assure him that the Secretary of State and I are looking into this issue. We are very clear that it is not just a matter of stopping this practice; we must also address the situation of hard-working people who believe that they have bought their home, but who may find themselves unable to sell that home further down the line. I give the hon. Gentleman the clear assurance that we are looking at the issue.
May I ask the Minister to consult his officials and others on whether there is scope for declaring such a condition to be an unfair term and having it written out?
There are a number of different ways in which the issue can be addressed. It is a difficult issue, because although the clear mood in the House is that the practice is unfair, it none the less interacts with the property rights of the freeholder, and those rights have some protection under the European convention on human rights. We need to think about the right way to address the problem. I will certainly reflect on the suggestion that my hon. Friend has made, and other suggestions have been made during the debate.
We should not be under any illusions. The problem does not just concern one company; a number of our larger developers are involved in it. They would do well to remember that they are building homes for people to live in, not investment vehicles for financial institutions. Except in a very few exceptional circumstances, I cannot think of any good reason for houses to be built on a leasehold basis. If the industry does not put a stop to the practice and help existing homeowners, we will look to see what Government can do.
Historically, ground rents were set at around one thousandth of the lease value, sometimes increasing every 25 or 33 years. They existed only to create a contract between the freeholder and the leaseholder. However, in recent years, ground rent levels for new leases have increased, as has the frequency of increases. Research by Direct Line suggested that the average ground rent is now £371 for new builds and £327 for older properties.
My immediate concern is the level and frequency of increases in ground rents. We have heard today about one developer selling a lease with a ground rent starting at just under £300 in 2011 and doubling each decade for 50 years, so that by 2061 the annual cost will reach almost £9,500. The purchaser was not made aware of the escalation by their solicitor, who was recommended by the developer. The purchaser is now unable to sell the property, and the cost of extending the lease or buying the freehold is prohibitive.
Of course, there is a degree of caveat emptor when we buy a new house, but we all know that our housing market is a seller’s market at the moment and the advantage lies firmly with the developer. Just because they can sell desperate people something does not mean that they should be doing so. Institutional and other investors increasingly see ground rents as an alternative to equities and bonds, but leaseholders see no return or value in ground rents, especially when they can rise to onerous levels. Obviously, Members on both sides of the House welcome institutional investment into our housing market, but I would much rather institutional investors put their money into productive projects instead of just hoovering up ground rents because they are seen as a safe bet. Both this House and the Government want to hear more from the developers about what they are going to do to put the situation right.
I turn briefly to commonhold, although Members will probably be aware that the Ministry of Justice is the lead Department for this matter. Commonhold was intended to be a voluntary alternative to long leasehold ownership. As we heard from the hon. Member for Brentford and Isleworth, it was introduced by the last Labour Government in 2002 with good intentions, but it has had very limited take-up. There are several explanations as to why. Developers have not favoured the model, and leaseholders have found it a complicated process. Commonhold can be created only where all the owners of the land in question agree to its creation, so it is for developers to decide whether to build commonhold, or for everyone with a shared interest in an existing block to agree to convert to commonhold and to agree their commonhold community statement.
I know that several Members have pressed strongly for commonhold and continue to do so, arguing that it is a better alternative to leasehold arrangements. Commonhold is one way forward in considering improvements for leaseholders, but we also need to look at what we can do to change the existing system. There have been calls for responsibility for commonhold to be transferred from the Ministry of Justice to my Department. That would require a machinery of government change, and it has been agreed with Ministers that we will have a look at that in the new year.
I hope I have made it clear that the Government accept that there is a lot to do in this area. If the House will forgive me, I would like to say a few words about the things we have already done to improve matters and to ensure that there is easy access to remedies when things go wrong. In the Housing and Planning Act 2016, we introduced two important measures to help leaseholders to exercise their rights and to ensure that they are not ripped off by unscrupulous landlords. Members will probably be familiar with the Landlord and Tenant Act 1985, which allows a tenants association made up of “qualifying tenants” to seek statutory recognition. Such recognition provides the tenants association with additional rights over and above those enjoyed by individual leaseholders, including, crucially, the right to be consulted about the appointment of managing agents, to be notified of works proposed by the landlord and to receive copies of estimates.
I am grateful to the Minister for pointing out the right to be consulted under the Housing and Planning Act 2016. Does that extend to the right to have a veto?
The 2016 Act does not give a right to veto, but it gives improved powers to residents associations. Groups have had some difficulties in exercising those powers. If the hon. Lady will give me a second, I will try to explain what we seek to achieve.
Section 130 of the 2016 Act will make a big difference to residents associations, which are finding it difficult to obtain the number of members needed to help them to apply for statutory recognition and the additional rights that that brings. It will do so by requiring a landlord to supply to the secretary of a residents association information that would allow contact to be made with absent leaseholders for the purposes of increasing the association’s membership and therefore its likelihood of achieving recognition.
Another important aspect of the Housing and Planning Act 2016, concerns a landlord’s recovery of litigation costs from leaseholders as administrative charges, which the hon. Member for Poplar and Limehouse raised. He gave a pretty horrific example from his constituency of how that is being abused in a particular case. At present, where a lease allows a landlord to recover the costs of legal proceedings through the service charge, a court or tribunal can decide to restrict the amount that can be recovered in that way. Courts or tribunals do not have similar powers where recovery of the costs of proceedings as an administration charge is permitted by the lease.
The hon. Gentleman is nodding; that is the situation in the case that he mentioned. That can lead to unfairness, because the leaseholder will have no choice but to pay the costs of proceedings as an administration charge, regardless of the proceedings. That discourages leaseholders from exercising their rights to challenge the amount of a service charge, particularly as the landlord’s costs in the proceedings could well exceed the amount that is being disputed. The commencement planned early in the new year of section 131 of the Housing and Planning Act will enable the tribunal or court to consider, on application by the leaseholder, whether it is reasonable for a landlord to recover all or part of those costs.
The complicated nature of leasehold can make it challenging for people to ensure that they follow the correct legal procedures. To help leaseholders to navigate through the system, the Government provide access to free, independent legal advice and information through the leasehold advisory service, or LEASE, as it is known. My hon. Friend the Member for Worthing West referred to it in his speech. Last year, Government provided LEASE with more than £1 million of funding, and 850,000 people across the country benefited from free advice.
May I, through the Minister, thank LEASE for all the work that it does to help my constituents, and for always being willing to attend residents’ meetings to give advice when people feel all at sea about this complicated area?
I am very grateful to the hon. Lady for her intervention. It is good that people are paying tribute to LEASE for the important work that it does, and which I know is very much valued by people right across the country.
I want to reassure the House that the Government remain committed to ensuring leaseholders have the best professional advice available to them. Given its increasingly important role, I want to make sure that LEASE is properly equipped to offer help to everybody who needs it. Particularly in the light of the comments made by my hon. Friend the Member for Worthing West, we will look again at how it works, its funding model and its membership.
In conclusion, this well-informed debate has raised important issues affecting millions of people in this country. We take all the issues raised very seriously, as I hope has been indicated by the tone of my speech. We have a strong interest in making sure that the system works as effectively as possible, and we are looking at suggestions for alternative systems, but this issue clearly needs attention. The motion states that the House “has considered” this issue, and I want to reassure my hon. Friend that it will be considered by the Government and that we will come back in the new year with proposals on how to tackle it.
This has been an important debate. We have had fewer contributions than we expected when we put in a bid for this space at the Backbench Business Committee, but it is reassuring that so many colleagues have come into the Chamber to listen to the Minister’s winding-up speech. They recognise that this is an important issue, and they therefore wanted to hear what he had to say. Perhaps that will reassure him about his popularity: he did not realise it was quite as widespread as it is.
The hon. Member for Worthing West (Sir Peter Bottomley) comprehensively exposed the abuses and he named names. He said this goes “beyond sleaze”. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) said this is the PPI scandal of the property sector. The hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) talked about the unfairness in the system. The shadow Minister, my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), quoted the Daily Mail. She said it is not her usual read, but even the Daily Mail gets some things right occasionally, which is reassuring. She gave many examples of poor, shoddy and criminal practices, and on behalf of the official Opposition she made several commitments on leasehold and commonhold. We heard interventions from the hon. Members for Kingston and Surbiton (James Berry) and for Bolton West (Chris Green), and my hon. Friend the Member for Harrow West (Mr Thomas), who gave examples of problems in their constituencies. I thank the Minister for his response, including his declaration that he is uncomfortable with the current situation. He said that there is “a gulf between the letter of the law and…what is right”.
He indicated that he will look at this issue in the new year and do something about it, and we welcome the promises he has made on behalf of himself and of the Secretary of State.
The all-party group will continue to campaign on this issue. We look forward to engaging with the Minister and his civil servants, as we have during the past year. We intend to engage with the Government not only to examine and address the abuses and anomalies in the system, but to put the position straight. On behalf of the all-party group, the hon. Member for Worthing West and I wish you, Madam Deputy Speaker, and all colleagues, as well as all the staff of the House, a very happy Christmas and a decent break. We look forward to 2017, when leasehold and commonhold will be back on the agenda.
Thank you, and may I return the compliment of the hon. Gentleman and the House by wishing everybody a very happy Christmas and a good new year?
Question put and agreed to.
That this House has considered leasehold and commonhold reform.
I beg to move,
That this House has considered matters to be raised before the forthcoming adjournment.
I rise to speak on behalf of the Backbench Business Committee. Unaccountably, I must apologise for the Chair of the Committee, the hon. Member for Gateshead (Ian Mearns), who is unable to be with us this afternoon; he is no doubt very active in his constituency, regaling his constituents with festive wishes.
The theme of my introduction is thinking about those who are less fortunate than we are. First and foremost, I want to place on the record what I believe is the view of the whole House in expressing our horror and revulsion at the events at the Berlin Christmas market. Our thoughts are not only with those who are fighting for their lives, but with the relatives of those who have sadly lost their lives. It just shows what can happen and the horrors that can ensue at a simple Christmas market where law-abiding people are going about their business. We do not yet know who was responsible or what their motives were. However, our sympathies are with the relatives of those who have lost their lives and equally with those who have been severely injured.
Secondly, let us express our thoughts, as a whole House, for the people of Aleppo, who are in a parlous condition at the hands of a brutal dictator, and a brutal army that is basically eliminating anyone and everyone that stands in its way. I trust that there will be a resolution of this terrible conflict in the new year, and that people will be able to return to their homes in peace and harmony.
Thirdly, this is the first Christmas that Jo Cox’s family will experience without her. Members on both sides of the House have been touched by the brutal murder of a colleague who was just doing her job on behalf of her constituents. The best thing we can all do—even if we are not used to downloading tracks—is to download her single and help to make it the No. 1 for Christmas. That would be a fitting tribute for a late colleague whom we all mourn.
I want to move on to another set of people who are far less fortunate than we are—the homeless and rough sleepers. Madam Deputy Speaker, you will know all too well that my Homelessness Reduction Bill is making its way through Parliament. I am delighted to say that it has all-party support. It had an unopposed Second Reading on 28 October, and we have pursued the Bill in Committee, where I am pleased to say that we are more than halfway through its 13 clauses. I am told that it is the longest ever private Member’s Bill, and it will probably end up as the most expensive for the Government to fund.
Equally, the Bill is very important. The number of people who are homeless in this country is a disgrace, and the number of people who will sleep rough tonight is a disgrace. We owe it to them to make sure that we deliver a radical solution. First and foremost, that is about increasing the supply of housing so that people can have a decent roof over their head, but it is also about transforming local authorities to make sure that they look at the reasons why people are homeless and provide help and assistance at first hand.
I want to thank some of the people involved. I place on the record my thanks to Crisis, St Mungo’s and Shelter for all the work they do to assist people who are homeless at this time of year. I also thank them for giving me tremendous support in producing the Bill, together with the National Landlords Association, which has also given me exceptional assistance.
Given that it is Christmas and that the hon. Gentleman has raised the subject of housing, will he take this opportunity to join me in praising Harrow Council for beginning to build council houses—for the first time in 28 years, there will be new council homes in Harrow—which is surely a key part of tackling the housing crisis that affects both our constituencies?
I thank the hon. Gentleman, who is my constituency neighbour, for raising that issue. It is important that affordable housing is developed right across London and right across the country. To me, the form of tenure does not matter too much; what matters most is that housing is provided for people at a price they can afford. It is good to see Harrow Council doing something right under Labour control. That is very rare—I have a whole catalogue of its errors. But in the spirit of Christmas, let us thank the council.
May I also place on the record my concern and that of more than 216 Members of Parliament about the plight of Equitable Life policyholders? It is a long-running scandal. Although the Government have now closed the compensation scheme to new applicants, the issue is far from over. The Government rightly provided £1.5 billion in compensation to people who suffered from the scam, but the former Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne), made it clear that the total sum owed to those people—as a result of saving their money, as was their right, for a reasonable retirement—was £4.3 billion. More than 1 million people have received only 22% of the compensation they are due. A great deal of money still needs to be found to compensate those applicants. That is without dealing with the most frail and vulnerable—those with pre-’92 trapped annuities, who deserve help on compassionate grounds. I am glad that the new Economic Secretary has agreed to meet a cross-party delegation in the new year to discuss the next steps.
The Equitable Life policyholders are getting older. It matters that we get this sorted.
I thank my hon. Friend for raising that issue. Quite clearly, in the not too distant future large numbers of those affected will want to use their pension for the comfortable life they thought they were saving for and have literally been robbed of.
This year, we have resuscitated the all-party parliamentary group on Romania. I particularly want to raise the plight of Alexander Adamescu, a journalist from Romania —originally from Germany—who is resident in the UK and is under threat from a European arrest warrant for raising issues that are slightly controversial in Romania but in this country would not be an issue. That raises specific concerns about the relationship between Britain and Romania, and about how the European arrest warrant is used.
I also want to raise the plight of 1.5 million people displaced in Azerbaijan from the disputed region of Nagorno-Karabakh. The conflict there has been going on for far too long. It is a forgotten conflict, and unfortunately the position with Armenia, Russia and allies has not helped the overall situation. This summer, the all-party parliamentary group on Azerbaijan went to see one of the camps that has been set up for those people. They are suffering very greatly through no fault of their own. It is time that human rights and shared values were restored to that part of the world.
There is unfinished business in Parliament on two other issues that I will raise briefly. First, we have now gone a year since the expiry of the tobacco control plan that the Government implemented. We have been waiting a year for the new plan. We have been promised on frequent occasions that it would be published soon. On today’s Order Paper I see no progress on it, and I do not think the issue was aired at Health questions. It is obviously important that the Government publish the new tobacco control plan early in the new year, with far-reaching targets, so that we can set out our stall to make sure that the United Kingdom becomes a smoke-free country. It is important that the plan is set out, because without it we run the risk of going backwards on all the wonderful things that have been achieved over the past five years.
Equally, on behalf of the all-party parliamentary group for British Hindus I want to raise the fact that the Government have promised on several occasions to publish the consultation document on ridding ourselves of the unnecessary, ill-thought-out and divisive caste legislation. That consultation was promised by the end of the year. Today is the last day this year that we will meet in Parliament, and there has been no notification to Parliament about the publication of that consultation document. I trust that we will see the document before the end of the year, but Parliament should see it and it should be announced in Parliament before it is released to the public.
May I pay tribute to the hon. Gentleman for all his work on behalf of the Hindu community, not just in Harrow but throughout the country? He and I compete as to the number of British Hindus in our constituencies, although I probably just beat him in Leicester. Does he agree that it is important that we have a debate on that document once it is published? It is not sufficient just to publish and rush it through the House. A proper debate involving the diaspora would be very helpful.
I thank the right hon. Gentleman for that point. I have asked at the last two Women and Equalities questions for the publication of the consultation and asked at business questions for a statement to the House. We could have that debate and Members from all parties and with all interests could register their point of view. Sadly, that has yet to be the case. It is important that we have the debate before the consultation starts, so that it can frame the consultation rather than ending up responding to the document.
I will raise a couple more issues of significance before I conclude my opening speech. The first is the problems that I am sure Members in all parts of the House are experiencing with regard to the issuing of visas for weddings, religious ceremonies and educational or other particular purposes. Visas are being rejected on grounds that I consider spurious. That causes immense difficulties for people coming for religious functions, weddings and in particular funerals, where things are done at the last minute. Applications from India, Pakistan, Iran and Sri Lanka seem to be singled out in an unfair manner and are not treated properly.
I will continue to work in the new year for a two-year visitor visa to be issued for Indian citizens in the same way as the Government agreed for Chinese citizens. I have nothing against Chinese people wanting to visit—that is wonderful—but huge numbers of Indians want to come here and visit too, and I see no reason why they should suffer unfair discrimination when so many relatives are here and people want to visit and to use this country appropriately.
Local transport services are suffering. This may be a theme of other speeches in this debate. We are looking forward to Harrow-on-the-Hill station in the constituency of my honourable neighbour the Member for Harrow West (Mr Thomas) being made step-free. I am looking forward to Stanmore station becoming step-free in the same timeframe. I trust that the solution that has been identified will go forward and will be appropriate.
The one local health issue that I want to raise is that we are seeing the rebuilding of the Royal National Orthopaedic hospital in my constituency. That is not before time. I and my predecessors have struggled to achieve that and I am delighted that it is finally happening and that we will see the development of a first-rate national hospital that suits the brilliant work that the doctors and nurses do.
I could raise a range of other issues, but I know that a huge number of colleagues are keen to update the House on what they think matters before we rise for the Adjournment. I look forward to the response of my good friend the Deputy Leader of the House to the debate in time-honoured fashion. I have no doubt that it will be appropriately challenging for him, but I know that he will respond and that colleagues will have suitable matters to raise.
Mr Deputy Speaker, I wish you, the Speaker, your fellow Deputy Speakers, the whole House, our colleagues, the staff and the people who keep us safe a very merry Christmas and a happy new year that I trust will be peaceful, prosperous and healthy. On behalf of the Backbench Business Committee, I open the debate and look forward to the speeches of hon. Members on both sides of the House.