Barry Gardiner
MP for Brent West · Labour · United Kingdom
“Sir Desmond, imagine that the top brains in the country’s security and intelligence community produced a report that told you how to save the world. You would want to see it, right? Well, the report we are discussing is not about how to save the world; it is about what happens if we do not.”
“The nuclear threat will rise as clashes between nuclear powers become more frequent. Those are the cold assessments of the Joint Intelligence Committee. The Government were right to think that those assessments might scare people—they scare me—but they were wrong to think that they could hide them from the public.”
“The Minister will know that the grant structure on which UKRI is based gives out grants for a maximum of three to five years. Very few are for five years—most are for three years or under—yet the sort of long-term scientific development that my hon.”
“My hon. Friend is making a superb case for the importance of funding for her deep earth facility. I had the privilege of going to the National Oceanography Centre’s deep oceans facility, and the innovative science there on carbon sequestration is superb.”
“The Prime Minister has spoken powerfully about the devolution of power and giving back control. Will he therefore ensure that the proposals for commonhold and leasehold reform, for which 5 million leaseholders in this country are waiting with bated breath, do give that power and control back to those people, through the right to enfranchi…”
“We know how much land there is in the UK, and we know the extent of our inland waters and seas, so we can know how much we have to do to protect them, as we are required to do by target 3 of the global biodiversity framework.”
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“Fine. In that case, let me speak to new clause 41, which “precludes a landlord from operating as an appointed representative under the licence of broker, where the landlord has no such licence themselves.” The whole point of this new clause, which goes to that issue of fiduciary duty and agency, is that at the moment, landlords can operate under the licence of a broker to provide brokerage services. If we were to take away that capacity from them by passing new clause 41, we would then have circumscribed the way in which a landlord would be able to game the system, because they would not be able to operate under the protections that the Financial Services and Markets Act 2000 affords them, operating under somebody’s licence when they themselves do not have those qualifications.”
“I am grateful to the Minister for the way in which he is engaging with the issue and for the points he has made. Given that it would be possible to relay the insurance contract electronically, will it be possible for secondary legislation to stipulate that any additional layers of complexity would be outwith the permitted costs? The Minister will see that I keep coming back to that theme, because unfortunately landlords add additional layers of complexity. We need to be sure that, where it is possible to do something simply, it is not permissible to recover the cost of doing it not simply, if I can put it that way.”
“The Minister said that all the costs of the broker will have to be disclosed, which is absolutely right. However, where the landlord is operating under the provisions of the Financial Services and Markets Act 2000, he or she would be indistinguishable from that brokerage company and, therefore, the leaseholder will not be able to ascertain what was done by the broker and what was done by the landlord operating under the licence of the broker. What will be revealed is simply “the brokerage.” Unless we can unravel that, we will never get to the issue of kickbacks. As we saw with the Canary Riverside case before Christmas, those kickbacks can be frighteningly large—£1.6 million for one block. The disaggregation of what is the landlord qua broker and what is the broker qua broker is really important.”
“There is good news and bad news, Mr Efford. The good news is that I am content to withdraw amendments 135, 137, 154, 155, 136, 156, 157 and 138, but I wish to press amendments 151, 152, 153 and 157 to a vote. Question put , That the amendment be made.”
“I rise to support amendment 1. My hon. Friend the Member for Greenwich and Woolwich made an excellent speech in favour of it, and he is right to distinguish between this clause, dealing with enfranchisement, and later clauses on which we will look at the issues from the point of view of right to manage. Given the amount of reference to the Secretary of State in the Bill and that so much is left to him to decide afterwards, it is reasonable to ask the Minister why that has not been applied to this clause—otherwise, it looks as if the Government have considered the matter and ruled out any change in this area, which, as my hon. Friend suggests, is reasonable.”
“Does my hon. Friend agree that this will probably affect the little people a lot more than the big, because of the likelihood of achieving 50% commercial within a leasehold block? Many of our town and city centres have buildings with commercial below and very few flats above. Therefore, it is much more likely that it will be a group of people—yes, a small group—living in that situation, rather than in the Shard, coming to us complaining.”
“Is my hon. Friend as surprised as I was to find that a 133-page Bill has a 102-page amendment paper? As he says, this came late. It is not just Opposition Members who mind; it is hon. Members of all parties who want to adequately scrutinise the Bill. It makes life very difficult to go through detailed amendments, often amending previous legislation—therefore, we have to get that legislation and see what the impact of the changes is—and it impedes the work of Parliament in that respect. The Minister should explain why many of these amendments were tabled so late in the day.”
“I beg to move amendment 127, in clause 6, page 9, line 42, at end insert— “(3A) Any lease granted to the freeholder under paragraph 7A must contain a provision that any sub-lease created by the freeholder under their leaseback must contain a provision requiring the sub-lessee to contribute to the service charges reasonably incurred by the managing agent directly or indirectly appointed by the nominee purchaser. (3B) The provision mentioned in subsection (3A) is implied into all pre-existing subordinate leases to a leaseback granted to a freeholder under paragraph 7A.””
“The moneys that need to be collected for the new landlord’s service charge do not come directly to them. The whole point of the clause is to minimise those problems. There should be a condition in the leaseback to make it clear that any sub-lease that the former landlord gives, or retains, must contain a provision to say that the service charge is payable to the new landlord. Otherwise, we have a very torturous process in which those sums, which are required for the servicing of the building, may be delayed by a former landlord who feels aggrieved that he has lost control.”
“It is helpful to the Committee that we had the evidence session, because Liam Spender, the lawyer from Velitor Law, spoke directly about this matter. We welcome leaseback because it is an important part of enabling tenants in commercial, or partly commercial, buildings to enfranchise. However, imagine that a person has just newly enfranchised, and some of the residents in that block have not participated in the enfranchisement process. It has been quite an acrimonious job debating and arguing with the landlord to get the enfranchisement to happen, but they finally have it. However, the landlord, or the former landlord, may not be happy about it. His capacity, now as the tenant, to cause problems is enhanced by the existing lease that those who have not enfranchised have with him.”
“I am grateful to the Minister for his remarks. It is clear that the Government do not feel that the amendment is necessary and that there will not be a problem with the newly enfranchised freeholder being able to obtain the service charge from all the leaseholders. If that is the case, I will be happy to withdraw the amendment. I would, however, like the Minister to set out in writing to me and the Committee precisely why he believes that there is not a problem. If we still disagree, we can then bring the amendment back on Report and discuss it further. It would be really helpful to be clear about why the Government are confident that problems will not arise. We have made legislation on the basis of optimism before, and unfortunately our experience is that freeholders can often be quite vindictive.”
“On that basis, I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 6 ordered to stand part of the Bill. Clause 7 Longer lease extensions Question proposed, That the clause stand part of the Bill.”
“It did not even exist 25 years ago. What people used to do 25 years ago, when the ground rent was payable, was write a cheque to the freeholder, and the freeholder would bin it. Then, three weeks later, the freeholder would send a lawyer’s letter to the tenant, saying that because they had not paid their ground rent on time, they were now being charged £625 for their legal fees in having to chase it, including the £25 ground rent. That is a bad practice that has evolved and the Government need to clamp down on it and get it sorted.”
“I am glad that co-operation is breaking out across the aisle. It seems that this change is one of the really big issues of the Bill. Looking through the Bill, yes, there was disappointment that it does not go far enough and there is no commonhold, but this is a real change. It is something that Members on both sides of the Committee have welcomed, and we heard evidence from our witnesses about just how important it is. It is strange, therefore, that we do not now see the meat of it in the Bill. I will not go so far as to say that it is more than strange, as my hon. Friend the Member for Greenwich and Woolwich suggested, but we do need it. This provision will liberate a whole group of people who fear what we call the ground rent grazers. They are the ones—the freeholders—who have created a rentier structure over the past 15 years.”
“I am conscious that we are talking about the transfer of value as if it were neutral, but leaseholders have been telling us for a long time that this value has been unjustly acquired from them in the first place. The Government seek simply to remediate the position that the law has got itself into. When we consider this, we must understand the injustice that has been perpetrated on people who live in leasehold houses, and have been paying ground rents that have been racked up in an unconscionable way for far too long.”
“Does the hon. Gentleman suspect that the reason why my hon. Friend the Member for Greenwich and Woolwich allowed such a grouping is that we hope that after the next general election, Parliament will be presented with a new Bill that does away with this nonsense altogether?”
“Hearts of Oak case, where marriage value had been introduced against the will of Parliament. The point is this. If someone is the leaseholder, the person who owns that lease to the home, it is much more important to them than to anybody else in the world that they get the freehold together with it. That is the other vase; that is the saucer that goes with the cup. To them, that is important and it has a value that it does not have for the rest of the world. That is why they are constrained, and that is the constraint that Parliament has repeatedly tried to free people from, because they are not simply a willing seller in a free market with a willing buyer in a free market. This person, as the leaseholder, is a buyer under special measures.”
“The hon. Member’s colleague, the hon. Member for Redditch, made a pertinent intervention in relation to ground rent, but I wanted to try to address what philosophical issues he is having with marriage value. Marriage value is an additional element of value created by the combination of two or more assets or interests where the combined value is more than the sum of the separate values. That is why the cup and saucer and the vase analogies are apposite. He seems to me to be seeking to say, “Well, if this exists, if people are actually paying this, it’s real; it’s not a fiction.” Let me set out my understanding of what the Government are trying to do and, indeed, what Parliament has tried to do on many occasions, going back to 1967, after we passed the legislation to right what had happened in the Custins v.”
“I am happy to be guided by you, Dame Caroline. I think I have made the point and I hope that the hon. Member for North East Bedfordshire will be able to take it on board, because it does go to what I think he would recognise from a free market point of view as the essence of why this is important.”
“Can my hon. Friend clarify whether the proposals in his amendments 4 and 5 would cover my own amendment 128, which deals with the exactly parallel situation in which each side bears its own costs, but in relation to leasebacks?”
“Friend the Member for Greenwich and Woolwich, or, indeed, by me, but I urge him to think again and actually see what that might cost in practice—he can get his officials to look at that—for a large development where, we must remember, only 50% of the residential element may have enfranchised, meaning that 50% may not have; they will be leasebacks. The whole of the commercial element, which could be up to 50% of the development, will also be leasebacks, which will be individuated. The cost of an individual review by a landlord of every single one of those lease contracts will make it impossible for the 50% residential interest to enfranchise. It goes against the grain of the Bill. I urge the Minister to look at that again and come back at a later stage with his own amendments.”
“These are new ways in which landlords will be able to increase the costs of enfranchisement, because they will engage a series of lawyers to review separately every single one of the contracts of the non-enfranchising leaseholders and, indeed, all the individual elements of the commercial premises that they are being forced to take the leaseback off. Those costs will be absolutely enormous, because they will do it on an individual basis. The hon. Member for Redditch spoke eloquently about her cynicism, and I am afraid that it is not cynicism: it is reality. It is an understanding of what is happening in the commercial world out there. The Minister really needs to look at this again. I understand that he has a commitment not to accept the amendments put forward by my hon.”
“Here was me thinking I was going to be helpful to the Minister with my amendment 128, that I was going with the grain of the Bill—its whole point. He was so eloquent, and said that it is absolutely right that each party should bear its own costs, and I was thinking, “Great, we’ve got one here. They’re going to support us”, and then he said that he could not accept the amendment. I urge the Minister to consider it again. I am trying to take out that whole proposed new section 89D, because it is a new class of cost—this whole idea of a leaseback.”
“There is a word in the clause that the Minister should pay very specific attention to. Line 29 of proposed new section 89D states that “‘non-litigation costs’ means costs that are or could be incurred by a freeholder”— I stress “could”. If the Minister is minded to look at this again, he should ask his officials to do some calculations about what the costs could be. I recognise the figures and have no wish to detain the Committee by pressing this to a vote. I am happy to support my hon. Friend in pressing amendment 4 to a vote, but if the Minister can give me an assurance that he will ask his officials to do that homework, I will not press the amendment.”
“We already know that to stand a 50% chance of keeping below the 1.5° threshold, 90% of the world’s coal reserves and 60% of oil and gas reserves would have to stay in the ground.”
“No wonder the former executive director of BP said last year that the Government’s decision to expand North sea drilling is “not going to make any difference” to Britain’s energy security. If the Government’s ambition is to minimise gas imports, there is a very simple solution—insulate homes. The best way to cut imports is to reduce domestic fossil fuel consumption by building renewables and insulating homes. This would have the additional benefit of reducing people’s energy bills and tackling fuel poverty. By channelling investment into oil and gas, the Government are heading precisely in the wrong direction. I do not deny that there is a role for existing oil and gas, but it is in the journey to a clean energy economy. What there is not a role for is the production of new oil and gas.”
“The problem is that it also slows the rate of investment in a just transition that will unleash the power of wind, solar, tidal and energy efficiency. The North sea is a declining basin. Its reserves are predominantly oil, not gas. Between now and 2050, new licences are expected to provide just 103 days of gas, which is four days of gas on average each year. The Government know that once oil and gas is licensed, it belongs to the companies that hold the licence. As the Government recently admitted to my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), 80% of UK oil reserves are sent abroad by these companies and sold on the international market to the highest bidder.”
“When 6 million people live in fuel poverty and when 4,700 people died last winter as a result of living in cold, damp homes, this Bill falls well below what our constituents deserve. As the world’s hottest year on record was concluding, nearly 200 countries agreed at COP28 to transition away from fossil fuels. The contrast between the promise made in Dubai and what the Government seek to do today could not be more profound, nor more depressing. By inviting Parliament to enable annual licensing rounds for offshore oil and gas extraction, the Government are failing to understand that to transition away from fossil fuels, we have to stop producing them. The Government argue, “But it is still a declining field.” “This simply slows the rate of decline,” they say.”
“The Government say it will safeguard our domestic energy supplies and boost investment; it will not. They say it will enhance our energy security and reduce our dependence on imports from overseas; it will not. The truth is that it is a political distraction that will reduce investment in and delay our transition to the clean energy that is the only sustainable and secure future both for our country and for the global community. This Bill is not a credible plan to fix Britain’s broken energy system; it is a sad attempt to sew division and polarise our politics. It shows that the Government have given up governing and are out of step with the British people’s priorities.”
“I refer to my entry in the Register of Members’ Financial Interests. Mr Deputy Speaker, I know you were not around at the time, but you will know that the stone age did not end because of a lack of stone, and the oil age will not end because of a lack of oil. It will end because decent people of all political persuasions, such as the former right hon. Member for Kingswood, are farsighted enough to recognise and brave enough to stand up against the vested interests that would consign our children and the natural world to a costly, disruptive and, frankly, terrifying future. He was right to say that history will judge harshly those who continue down the reckless fossil fuel path that this Bill represents. This Bill is founded upon a lie—in fact, several lies.”
“The largest operator, Harbour Energy, has ruled out such clean investment altogether, yet last year the five oil super-majors—BP, Shell, Chevron, ExxonMobil and TotalEnergies—rewarded their investors with record payouts of more than £79 billion, so we know the money is there to do it.”
“I am well aware of that—of course I am—but the hon. Member will have heard the discussion that took place earlier about global leadership. He will know that other countries around the world are not declining at the required rate, and leadership is about taking a lead. The logic of drilling for more when the world has already more than it can safely burn is that of the myopic salesman, not the visionary politician, or to use the Prime Minister’s words, it is the logic of the zealot. The Government’s actions are already making the UK a less attractive place for green investment. Three quarters of all North sea oil and gas operators currently invest nothing at all in UK renewables.”
“The Minister is asking whether I will give way. The right hon. Member has long confused the scoring of party political points with the ability to debate an issue to arrive at the truth and get decent policies out the other end. However, if he has changed the habit of a lifetime, I will happily give way to him.”
“I recognise the work that Harbour Energy is doing and I also recognise the work that the Government have done in trying to attract more investment into green energy and renewables, and I welcome that work. I want us to have a cross-party consensus around getting to net zero. The trouble is that—and the Minister knows this to be true—he and many people on his side, including the Prime Minister, have tried to make this a wedge issue, a political issue to divide people. I think he really does need to step up to the plate. If he wants cross-party consensus, he has to try to build it, not score cheap political points.”
“This Bill does nothing to mitigate them. It does nothing to support the billions of people across the world who live on the frontlines of climate breakdown. It ignores the plight of millions of bill payers who find themselves priced out of our broken energy system. And it ignores the workers who power our country. This Bill endangers our natural world and future generations. I cannot support it; I will consign it to the same vote of no-confidence that I predict awaits this Government later on this year.”
“When that is no longer credible, pretend that the concern is exaggerated. And when that is no longer credible, reframe the issue as one of personal choice. Government is about establishing a framework of regulation for the public good; it is not about facilitating the freedom of those who would undermine the public good. That is why this Bill is bad for democracy. That is why this Bill is bad for our global standing as a country that has previously been regarded as a leader on this issue. That leadership is now passing to others who are responding positively to the pledge in Dubai to transition away from fossil fuels by joining the Beyond Oil and Gas Alliance. The floods that we are seeing devastate communities and lives around the country are but a foretaste of the terrifying impacts of climate change beyond 1.5°.”
“But what I find most depressing about this Bill is not its arrogance or its ignorance, it is the way it seeks to break with the cross-party consensus for the sake of creating a party political dividing line in advance of a general election. That dividing line pretends that the rational, informed scientific view is held only by what the Prime Minister calls climate zealots and it tries to establish the recalcitrant fossil fuel lobby that is endangering all we hold dear across the globe as the reasonable middle ground. It is not. As the United Nations Secretary-General António Guterres said: “the truly dangerous radicals are the countries that are increasing the production of fossil fuels.” The fossil fuel lobby is behaving like the tobacco lobby did when all of the medical evidence was against it. First, deny the science outright.”
“The Government appear to believe that they know better than the International Energy Agency, the United Nations Secretary-General, the Intergovernmental Panel on Climate Change and hundreds of the world’s leading scientists, all of whom are clear that new oil and gas licences jeopardise further the goal of 1.5°C. This Parliament’s own independent adviser, the Climate Change Committee, confirmed to Parliament only last year that the expansion of fossil fuel production is not in line with net zero and that the oil and gas field that is required in the UK as we make that journey to net zero does not require the development of any new fields.”
“Over one third of the 900 locations in the latest licensing round overlapped with marine protected areas, yet this directly contradicts the commitment the UK made at the convention on biological diversity conference COP15 in Montreal where we promised to protect 30% of UK waters for nature by 2030. The Rosebank field that was recently licensed sees a pipeline run through the Faroe-Shetland marine protected area, which threatens ocean life. If a major oil spill from Rosebank were to happen, 20 MPAs could be seriously impacted. This Bill is an attack on nature both by its indirect impact through increasing emissions and its direct impact on the marine environment.”
“A further 100,000 individuals are supported through the supply chain and are waiting for a signal from Government so that they can seize the opportunities of the clean energy revolution. This Bill offers them nothing. It seems to override the already weak non-binding climate compatibility checkpoint. The production emissions reduction target set out in the North sea transition deal is already weak, setting a cut of only 50% by 2030. This Bill seems to weaken it even further. It includes no reference to how annual licensing will be judged against the NSTD targets for production emissions let alone emissions from combustion. Critically, the Bill ignores the wider environmental consequences of the development of new fields and puts marine habitats at risk.”
“But pretending that employment in oil and gas can last forever fails to properly prepare those workers and their families for the inevitable transition that the world is making. Despite sustained support for the North sea basin over the past 14 years and despite 400 new drilling licences being issued across five separate licensing runs, the fact is that more than 200,000 jobs in the oil and gas industry and its wider supply network have been lost. Today 30,000 hard-working people are directly employed in the industry. Those workers and the local economies they uphold need a coherent plan to move past fossil fuel production towards clean energy. The trouble is the Government have not developed one.”
“The hon. Lady is absolutely correct, and I listened to her attempt to intervene on the hon. Member for Stoke-on-Trent Central (Jo Gideon). We need to build a cross-party consensus and this shows how it can be achieved: there are concerned Members on the Government Benches who want to do the right thing, and we all know that sometimes the Whips make sure that they do not, but if we really build this consensus, we can get to the right place. Another lie at the heart of this Bill is to say it will protect British jobs. It will not. Over the years there have been hundreds of thousands of jobs in the oil and gas sector and its supply chain. They have kept our lights on and our industry moving for decades just as the coalminers did before them.”
“The problem for shared owners is that if they—I will not speak to the specific technicalities of this—fall behind with payments, they are liable to possession with no reimbursement of the equity they have invested in their property. This is because they sit more as a tenant than as a homeowner. I would certainly like to see that addressed.”
“Q Ms Phillips, shared owners, under the Renters (Reform) Bill passing through Parliament, will get forfeiture: an improvement on mandatory grounds of possession for which relief cannot be sought in the court. Do you support, in this Bill, the right to abolish forfeiture? At the moment, I believe a shared owner has less security of tenure than a private leaseholder. Perhaps you could explain what, for example, a housing association that owns the other part of a shared ownership apartment can do to someone in circumstances where there is a dispute over a service charge and non-payment? Sue Phillips: One of the things I would want from this Bill is for shared owners to have all the rights that other leaseholders have. Of course, as your question flags up, they face problems over and beyond the problems faced by leaseholders.”
“Q It really is an equity trap, isn’t it? Sue Phillips: It is. Housing associations will say that they will do their utmost to prevent this scenario playing out, and that numbers are low. While that may be true, I do not think it is an argument against shared owners having the same protections in law as other leaseholders.”
“Q If the Bill were to introduce a provision that forfeiture were abolished, so that with a debt of, say, £5,000 or £10,000, you could not lose the entire value that you have in the property as a leaseholder, should that right similarly apply to shared ownership leaseholders? Sue Phillips: Shared owners should have the same right as other leaseholders and they should not be liable to lose their investment in their home due to a relatively small debt—absolutely. I would add that it is a hugely important issue, but it is probably an issue that affects a fairly small minority of people at the moment and that there are other issues arising from this reform process that affect a great many more shared owners or all shared owners. It is an important issue, but I would not like for it to take up a disproportionate amount of time in this session.”
“Q Okay. As shared owners, you pay service charges as well as rent and you are disadvantaged if there is poor maintenance of your buildings. Do you agree that shared owners should be allowed to claim the right to manage, as confirmed in the recent Canary Gateway case? Sue Phillips: My expertise does not lie so much with right-to-manage claims; what I would reiterate is that they should have the same rights as any other leaseholder. What is more important—what is specific to shared owners—is that they are liable for 100% of the costs of repair and maintenance, and I think there are two separate issues within that. One is the issue relating to the model. In previous sessions—”
“In evidence submitted to the Levelling Up, Housing and Communities Committee inquiry into shared ownership, one of the themes that has come out of the published responses from shared owners is that people do not seem to be aware at the point of sale of their liabilities in this respect. Therefore, if we cannot tackle that 100% liability in this Bill, given time constraints, at the very least regulators should pay more attention to the nature of marketing and whether it is fair, transparent and compliant with consumer protection regulations. You asked me earlier for a quick fix. I certainly have a quick fix around transparency and it is that the relevant regulators should look more closely at transparency about the model as it stands, up until we have meaningful reform of the areas that are problematic.”
“Sorry, I couldn’t hear what you said there. Sue Phillips: Sorry. One is to do with the model and one is to do with the transparency around the model. On the model itself, in the previous sessions on Tuesday people talked about the unfairness of generating income streams from leaseholders after the profit made on the sale of the initial share, and I think that the 100% liability for service charges that shared owners have falls within those kinds of questions. It should certainly be looked at to see whether it is proportionate for shared owners to pay 100% of charges. Again, there is a great deal more that I could say, but I am aware of the limits on time. The second issue is transparency.”
“The least we can do is ensure that lease extension is available not only to future buyers, but current shared owners, who have been left with a lease that does not actually give this right. Can they afford to take up the right? They should have a right to lease extension, but that right should be made affordable. If you are sitting there with a 50, 60 or 70-year lease, even if you have got that right to statutory lease extension, it might not be affordable to take up that right. So there is a basketful of issues to look at here, and I encourage collaboration with other regulators and with the Levelling Up, Housing and Communities Committee to resolve those other issues.”