Mr Clive Betts
MP for Sheffield South East · Labour · United Kingdom
“I wholeheartedly welcome the Foreign Secretary’s statement, both its content and its tone. I would like to ask about his discussions with our colleagues and allies in other countries who are looking to implement similar sanctions.”
“I offer two congratulations: first, to my right hon. Friend and constituency neighbour, the First Secretary, on her well-deserved promotion—I am sure she will do an excellent job. Secondly, I congratulate her and the Prime Minister for their real commitment to devolution, which I have wanted to see for an awfully long time.”
“I apologise for the fact that—as I have explained to you, Madam Deputy Speaker—I will have to leave straight after my question to chair Westminster Hall. I thank my right hon. Friend for doing this very challenging piece of work. I think that the theme of fairness, for the people who need benefits and for taxpayers, is right.”
“On the other hand, so many constituents with really serious conditions get turned down for PIP, and can get it only if they struggle through the appeal system, sometimes without any help at all. So the system is not fair to anyone at present.”
“When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that.”
“I will dive very deeply into the question, Madam Deputy Speaker. The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting.”
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“Three weeks ago, I went on a parliamentary visit to the Netherlands and had a tour of the port of Rotterdam. That one port alone is recruiting over 100 new vets to carry out the necessary regulatory checks in the light of a no-deal Brexit. Does that not demonstrate the scale of the cost of a no-deal Brexit and the likely delays from the checks that will be necessary?”
“Order. There are slightly more speakers than we had anticipated, so I will introduce a time limit of three minutes to try to get everyone in. We may have a squeeze at the end if people do not follow that.”
“The hon. Gentleman can have an extra minute, because the Front-Bench spokespeople have agreed to take only five minutes, so hon. Members have four minutes each.”
“Slightly unusually, if an hon. Member takes an intervention, I will not add on time, because that would push somebody else out at the end and they would not be able to speak.”
“We now come to the contributions from the Front Benches. Please do not exceed the guideline of six minutes, as that allows a minute for the mover to wind up.”
“I appreciate what the Minister has done on this issue in many respects, but does he not understand that while prescription will not necessarily stop the protests, it will make it clear to the protestors that it is no use bullying the schools and the heads into trying to change the policy because the requirement lies elsewhere? He says that the parents do not have a veto on this, but if a school sits down and consults with parents, and those parents who want to stop same-sex education being taught know that the head has the ultimate decision, then there is enormous pressure on that head, and parents will believe that they have a veto regardless of whether they do or do not?”
“There are lots of Acts of Parliament and lots of regulations, so what we in the Committee have suggested is very simple. Let us recognise the changes that need to happen, but let us also recognise that there will be enormous long-term benefit for everyone if we have a wider review of all the legislation on leaseholds. We should give the Law Commission the funds to do that, but again the Government have really backed off the proposal. I ask the Minister at least to agree to that today, because it is a very simple suggestion that could have enormous long-term benefits.”
“We look forward to that review because there are a lot of things it will have to look at. There are many other issues. I cannot go into them all in detail, but there is a very long list of recommendations and responses from the Government. The Government are positively trying to look at the issues around redress, but I ask them please to get on with the housing court. Having a housing court would mean that people who had problems with their housing, whether as tenants, leaseholders or in other circumstances, knew where to go for a simple and effective form of redress. We welcome the Government’s commitment to this in principle, but that principle has been sitting there for a long time and we need some action on it. In the end, the Government are right to say that this is a really complicated area of law.”
“We also recognise the Government’s commitment in most cases to ban the freeholder collecting from leaseholders the costs of going to a tribunal when the freeholder loses. That is an important step. It is frankly outrageous that someone can win a case in a tribunal and then find that they are paying the price of winning through extra lease and service charges. The Government are being a bit mealy mouthed on forfeiture, even though it is completely wrong and unjustifiable. It might not happen very often, but the threat of forfeiture forces many leaseholders not to challenge and to back off, so we need action there as well. An important issue that is often forgotten about is sinking funds. They can be very large, and they are currently unregulated. The Government have suggested that Lord Best’s review should look at the issue.”
“We called for greater clarity on communal areas on freehold estates in terms of who was responsible when the council and the developer did the initial planning agreement, and the Government supported action there. Enfranchisement is a big issue. We know that the Government agree with our recommendation for a clearer and simpler system. Again, the Government are waiting for the Law Commission, but we hope that their commitment in principle will soon produce action. We also recognise the Government’s commitment to change the current system: there is only first refusal for flat owners in terms of the sale of freehold; in future that will apply to houses as well, which is a step in the right direction.”
“The Government want to see standardised forms for service charges. We received lots of evidence that service charges just came out of the blue; it was not possible to explain what they were or justify the amounts—in some cases it was not even possible to find the service being charged for. So that needs to be addressed. Lord Best’s review is looking at that and we hope that the Government act quickly when it is published. We said that, where a freehold was bought, some of the freehold agreements themselves kept service charges and permission fees embedded in them. We could see no justification for that and the Government agreed with our position.”
“On permission fees and retrospective action, the Government said, “Look for the CMA report.” We understand that that report will be about not just mis-selling, but whether the conditions so far imposed are unfair in consumer law. We will want to have a look at that when it comes out. We hope the Government will act quickly on that report and the report being done in parallel by Lord Best, the review of property agents, which will look at permission fees as well. Some of those fees are scandalous: £3,500 to put a conservatory in, before starting with the cost of the conservatory; £68 for a doorbell; £100 to answer an inquiry. These are outrageous fees. They are not justifiable. They are unfair and scandalous, and action needs to be taken on them. We have clearer statements from the Government on some areas and we should recognise that.”
“We took detailed advice and evidence on this. Again, the Government’s response seems to be, “Well, voluntary deals are being done with various developers about this.” Frankly, we are concerned about the level of trust the Government are placing in the same industry that created the onerous leases in the first place. The Government do not go far enough. Often the links to the retail prices index can lead to high figures. Often deals do not apply to the resale of property and of course they do not cover permission charges or any of the arrangements that have been arrived at. So we certainly want to go a lot further than that.”
“Nevertheless, we also recognise the suffering of leaseholders at present that does need to be addressed. On the positive side, we called for the Competition and Markets Authority to conduct an inquiry into mis-selling. I met Lord Andrew Tyrie. He is committed to the inquiry that he has announced. He wants to do something. He recognises the problem and we look forward to that. I hoped the Government would have said, “Yes, we want the inquiry and we want to implement what it finds.” Instead we are in a, “We look forward to the inquiry, but are not quite sure what we are going to do with it when we get it” situation. We have also called—these are important issues—for onerous ground rents and onerous permission charges to be dealt with retrospectively. They both need addressing. We could do it in the human rights legislation.”
“We also called for a ban on inducements for purchasers to use particular solicitors. The Government have not gone that far; they have talked about better redress, greater transparency and asking the regulators to be more proactive. We do not think that goes far enough. We also called for any permission fees that are in the original lease to be no higher than the administrative costs of those fees. The Government have said that that is a matter for Lord Best’s review of the regulation of property agents. We hoped that the Government would say that they were looking forward to implementing recommendations from the review, but they have not gone that far either. On existing leaseholders, we still have more progress to make. We recognise the complications of this.”
“In the case of future leaseholds, there should be a peppercorn rent; the Government’s original proposal was a £10 charge. We have asked for clear standardisation for leaseholders when they buy their properties. The Government have accepted the recommendation in respect of new purchases, but not for resales. We may need to return to that issue, because it is important. We have not made as much progress on commonhold. We were positive about its future, suggesting that it should become the primary form of tenure; the Government called for it to be a “viable alternative”. We know that there is work to be done on the legal position relating to commonhold and the availability of mortgages, but the Government ought to be a bit more enthusiastic than perhaps they have been so far.”
“Ours is a comprehensive report with a great many recommendations. I shall list some but not all of them, because there are so many. I pay tribute to the work of the all-party parliamentary group on leasehold and commonhold reform, many of whose members are present today and who did an awful lot of work, to all my colleagues on the Committee—this is a unanimous report, although it contains controversial and far-reaching recommendations—and to the Leasehold Knowledge Partnership and the National Leasehold Campaign, which have done a great deal of work to put this issue into the public domain. In their response, the Government are generally positive about new properties, but probably less committed to certain recommendations for existing leaseholders. They have agreed to a ban on leasehold on new houses, which is certainly needed.”
“We heard about some other really bad examples: for instance, people in flats were being faced with unexplainable and unjustifiable service charges, and, of course, excessive commission fees as well. In the worst cases, people have been left trapped in unsellable and unmortgageable homes. The Committee concluded that “too often leaseholders…have been treated by developers, freeholders and managing agents, not as homeowners or customers, but as a source of steady profit.” That is simply unacceptable. We also concluded that there was no link at all between the ground rents that were paid and the service that was delivered to the leaseholders. We were completely unconvinced that, in most circumstances, “professional freeholders provide a significantly higher level of service than that which could be provided by leaseholders themselves”.”
“Member for Perth and North Perthshire (Pete Wishart) will read about this tomorrow in Hansard . The Committee uncovered a scandalous situation—or, rather, scandalous situations, because they varied in many respects. Developers often sell their properties, funded by the Help to Buy scheme, and give purchasers inducements to use a solicitor of the developer’s choice who does not explain to the purchaser the full impact of the purchase, does not give the full information about ground rents or permission fees, and sometimes does not even make clear the difference between leasehold and freehold. Purchasers are promised that “it will be all right, because you can buy your freehold following a given period and for a given sum”, only to find when they try to do it that the freehold has been sold on to a third party.”
“We received more than 700 submissions in initial evidence, and during our evidence sessions many leaseholders got in touch with us saying “Me too! I am in exactly the position that is being explained to you by the witnesses.” We have now received the Government’s response. While we are pleased by their support for some of our recommendations, we feel that more could be done for existing leaseholders, and I shall say more about that in due course. Might I intrude on the previous debate, Mr Speaker, and refer to the issue of devolution? Yes, in England we are interested in it. Indeed, the Select Committee announced today its intention of holding an inquiry into devolution in England, which I think is a positive development. [Interruption.] I am sure that the hon.”
“I beg to move, That this House takes note of the Twelfth Report of the Housing, Communities and Local Government Committee, HC 1468, on Leasehold Reform and the Government’s response, CP 99; welcomes the Competition and Markets Authority investigation into the extent of any mis-selling and onerous leasehold terms; believes there is no reason why the majority of multi-occupancy residential buildings could not be held in commonhold; calls on the Government to remove the incentives for developers to build new leasehold properties; and further calls on the Government to bring forward legislative proposals to amend onerous permission fees and ground rents in existing leases. In March, the Housing, Communities and Local Government Committee published its 12th report following a six-month inquiry into leasehold reform.”
“If anything goes back to the feudal age, that is it, and ending it would be a clear symbol that we will have real action in this area. Question put and agreed to. Resolved , That this House takes note of the Twelfth Report of the Housing, Communities and Local Government Committee, HC 1468, on Leasehold Reform and the Government’s response, CP 99; welcomes the Competition and Markets Authority investigation into the extent of any mis-selling and onerous leasehold terms; believes there is no reason why the majority of multi-occupancy residential buildings could not be held in commonhold; calls on the Government to remove the incentives for developers to build new leasehold properties; and further calls on the Government to bring forward legislative proposals to amend onerous permission fees and ground rents in existing leases.”
“Although we look forward to the reports from the Competition and Markets Authority, the Law Commission and Lord Best’s review, a number of very key matters need addressing. It would be helpful if, eventually, the Government got round to saying, “Yes, we are going to do them.” There is a need to end onerous ground rents not just by voluntary agreement but legally. There is a need to end onerous permission fees not just on new properties, but on existing properties. We want the introduction of a clearer and simpler enforcement enfranchisement regime; action to achieve clarity and transparency in service charges and the process of buying leasehold properties; improvements and promotion of commonhold as the primary means of tenure for flats; and, finally, for heaven’s sake, an end of forfeiture.”
“I am not sure about that, Mr Speaker. Certainly, I thank all Members who have made their contributions today and particularly those—I think it was all of them—who have expressed support for the Select Committee’s report. I will pass those kind words back to all members of the Committee, particularly to our excellent Committee specialist, Nick Taylor, who has done so much work for the Committee on this issue. The Minister said that we would get answers. I do not think that any of the answers went beyond what the Government have already said. I think that the clear message to the Government today is that what commitments they have made so far do not go far enough. There needs to be further action.”
“I am not sure the hon. Lady will be quite so happy when she hears what I have to say about the matter. Again, this is typical of the Lib Dems, is it not? We see collective memory loss about what happened between 2010 and 2015, and them now washing their hands. Does she accept that the biggest cuts in real terms per year in adult social care happened between 2010 and 2015, and she and her colleagues in the Lib Dems bear equal responsibility for that?”
“I think there is a very big additional bill coming down the road, and when we see the estimates for the Department in one or two years’ time, they may well be very different.”
“If it is as dangerous, it is going to have to come off, as the Minister for Housing has already said. If it has to come off, the Government will have to find the same money as they are doing for ACM cladding. If we add the ACM cladding budget of up to £1 billion to another £1 billion for other types of cladding, we are at over £2 billion. That does not even deal with the issue of materials that are not in those categories but are not of limited combustibility. Under the changes the Government have made, they are insisting that those materials will not go on new buildings, yet they are saying that materials not safe to go on new buildings can still be left on existing buildings and that they will not help to remove them.”
“Those are big issues, and the Select Committee will shortly do an inquiry into social house building and how we can ensure that the homes needed are actually built. That will be interesting. Finally, I will mention the other big issue that we have to mention today: cladding on not just high-rise buildings, but high-risk buildings. The Government have so far put aside £400 million to take ACM cladding off social housing and £200 million for doing so in the private sector. I have to say that the social housing figure is not likely to be enough, and the private sector figure certainly will not be enough. More money will have to be found to get that cladding off and make those homes safe. The Government are now doing a review of 1,600 more properties with non-ACM cladding that may be just as dangerous.”
“Although the rent increase in the next round will be the consumer prices index plus 1%, that will not be sufficient to build back the loss that has already occurred. At some point, the Government will have to consider greater freedom for councils and housing associations to raise rents to fund new building in the future. Apparently, about 70% of the costs for building new homes will come from existing rents in the housing stock; the rest will come either from grants from Homes England or from receipts, although apparently receipts and grants cannot be used for the same home. The Government may also want to have a look at that—and, again, address the issue of why more right-to-buy receipts cannot go to councils to support house building in future.”
“We have a really ambitious council in Sheffield, including Councillor Paul Wood, the new cabinet member, and Councillor Sophie Wilson, who is down today to celebrate 100 years of council housing. Both want to build council houses, but the issue is not just the borrowing but the revenue to support the borrowing. That also matters. The revenue comes from rents. One of the most damaging things the Government did was to restrict rent increases on local authority and housing association homes in the last spending review. Sheffield City Council estimates that that took a startling £800 million out of its long-term business plan—money that would have gone into supporting new house building and important maintenance of existing homes. That figure is staggering.”
“I turn to the issue of housing, which represents the other part of the money spent directly by the Department. Everyone wants to see us meet the ambitious target of building 300,000 new homes in this country. My personal view is that that cannot be delivered unless about half are provided by the public sector—councils and housing associations; historically, the private sector has never consistently gone above 150,000. If we are going to do that, it is not enough to say that we have lifted the housing revenue account cap and councils can start to build. I hope that they can, but Laraine Manley, director of place at Sheffield City Council, has spelt out the situation there.”
“Can this all be brought together and made sense of? I have not yet mentioned the shared prosperity fund, which is somewhere out there, to be considered at some point. All those things give massive uncertainty to councils and councillors providing important services to the people who matter at the end of the day. Councillors are uncertain and so are the communities out there about what they are going to get as a result of the changes. As the LGA and the Institute for Fiscal Studies have said, what is really worrying is the prospect that 90 councils will simply run out of money during the next spending review unless more is provided. Council treasurers are saying that; that is the situation. Councils have done terribly well, but they cannot carry on using reserves as they are having to now.”
“As Gary Porter said the other day at the Local Government Association conference, local government is in a state of complete uncertainty—it has no idea at all what is going to happen from next year. Are we going to have a spending review for four years or for one year, because the four-year one will be postponed? If we have the one-year review, we cannot do the fair funding review because there will not be enough time for it to work through. What is happening with the 75% business rate retention? Can that be done at the same time as all the other changes or will that be too much for local authorities to absorb? The Minister accepted at the Housing, Communities and Local Government Committee evidence session the other day that the business rate retention scheme is probably the most complicated part of a very complicated system.”
“That is a real worry, and we should all take account of it. In the end, councils can only do their best. They have done marvellously well with efficiency savings: we are now making real cuts to real services that are affecting real people. Yes, council tax has been put up in many cases, but that is a regressive tax. On business rates, in the end local authorities have virtually no discretion at all anyway. There is massive uncertainty now. We may possibly have the four-year spending review—nobody is quite sure whether it will happen; I do not really think the Minister even is. The other day, the Chief Secretary to the Treasury seemed to indicate that it was not going to happen.”
“The pressures on social care, both for adults and children, continue to rise. The Government’s response to our report on children’s services is out today, and I think they have accepted a lot of the problems that exist. There will be a lot more work to do on this. As care has taken a bigger slice of a smaller cake, all the other important services such as parks—which we have done a report on—highways and buses, libraries, environmental services and refuse collection are getting cut even more, by between 30% and 60%. I am really worried, as I have said before, that we are seeing a hollowing out of local democracy where, in the end, councils just become the messenger boys and girls doing what the Chancellor and the Secretary of State want on a very narrow range of statutory services.”
“That is really quite a dramatic statement to make. In other words, Government do not have a clue what local government should be spending. That is not a direct comment about the Minister on the Front Bench or his colleague; it is a comment about Governments over the years. There has not been oversight of local government or an assessment of what it needs. All we get is, every so often, a divvying up of the money that is available between different councils, or the new burdens rule where something new is added and a council will get a bit more to pay for it—a bit more out of the system. The figures are there. We have seen a 50% cut in Government grant to local councils since 2010, the biggest local government cuts to any service—not denied, I think, by Ministers—and a 30% cut in spending power.”
“I thank the Library and the National Audit Office for the briefings we have had, as usual. Laraine Manley, the director of place at Sheffield City Council, has given me some information about housing as well. The Housing, Communities and Local Government Committee has produced a number of reports over the years covering many of these areas. The whole remit of the Committee is unique in Government in that while the Ministry has limited budgets of its own to deal with certain specific issues, it has oversight of local government as a whole, including spending by other Government Departments. The Ministry is supposed to act as a glue that brings all that together. However, there are concerns, as highlighted by Amyas Morse when he commented that there are no evidence-based efforts in Government to reconcile the funding to local needs.”
“My hon. Friend is making an interesting point about Total Place and how we should approach things, and we had some evidence on that in our recent Select Committee inquiry into local government funding. Does he accept however, that in order to hold that all together we need some local accountability, so we ought to be looking at how we devolve some of those powers to local government, and with it a better system of funding, as my hon. Friend has rightly said?”
“I have quite a lot of sympathy with my hon. Friend’s point about the Help to Buy scheme, particularly with regard to the NAO report. Does he agree that, whatever different views there might be, the Government should at least do an evaluation of the Help to Buy scheme before they embark on a further phase of it?”
“I take a different point of view. When public health was the responsibility of the NHS, the money was kept within the NHS budget, and increased each year in line with NHS funding. Since the transfer to local government, the funds have been cut substantially in real terms. Let us return public health funding to a level at which local government will really deliver.”
“On the shared prosperity fund, a recent report by the Housing, Communities and Local Government Committee called for consultations to begin before the end of April. The Government response simply stated that “the Government will consult widely on the Fund and final decisions are due to be made following the Spending Review”, and that “the Government continues to review our approach to consulting on the Fund accordingly.” That is not very definite. At some point, we will also need to ask the Minister what, if there were no spending review—which there probably will not be, or at least not a four-year one—that would do to consultations on sorting out the shared prosperity fund.”
“That is why the Government need to start consulting about how those projects will be funded.”
“That consultation would be an extremely good start. That is an important point, which needed to be made. Another important issue we need further clarity on sometimes gets overlooked: we will no longer be a member of the European Investment Bank, which has provided funding for many important infrastructure projects. Again, the Government say that they want to explore options for future relationships with the EIB and for the arrangements to be put in place for local authority funding of future infrastructure projects. Why can those discussions with local authorities not begin now? Why do we have to wait? That is a simple ask. It may seem a long way away, but local authorities that are looking to start long-term infrastructure projects in 2021 need to start planning now.”
“The Government response to the Committee’s report includes no real explanation but simply states that they “will consult widely” on the shared prosperity fund and that “final decisions” will be made “following the Spending Review”, as I quoted earlier. Why can the consultation not begin now? It is not sufficient for the Government to say that they are reviewing their approach on consulting. Why have we only got that far? It is in no way sufficient. Ministers should tell us what is holding the consultation up. We know that the Department has a big tray of things to do—the social care Green Paper, the social housing Green Paper, fracking, and the devolution framework which we have not yet seen—so Ministers are obviously busy thinking about doing things in the future, but why can we not get on and at least start to do something?”
“I understand that the Chancellor may not want to commit to an absolute total of money until after the spending review, or what passes for it—I am sure that the Minister, when he responds, will update us on whether we are to have a spending review—but why can we not have a consultation on the fund details? What is holding the Government up? The Government have known about this for a long time, and they promised a consultation before the end of last year. A simple matter of at least talking to local government about how the fund will be distributed and what the criteria will be would be a start. People might then have some understanding and a conviction that the fund would happen. Why can that not be done? Why do we have to wait until later?”
“I will refer to the Select Committee report which looked at a number of issues to do with local government and Brexit. I have a particular constituency interest as well, as highlighted by my hon. Friend the Member for Sheffield Central (Paul Blomfield), with the advanced manufacturing park and research centre, which has done so much reinvigorate and stimulate high-tech engineering and steel in the Sheffield city region. Yes, that is down to the University of Sheffield, Professor Keith Ridgway and my former colleague Richard Caborn, but it would not have happened without EU funding. We need to be conscious of that. The Select Committee report was clear. It said to the Government that we need to get on and to consult now about the shared prosperity fund, what it should look like and how the money might be distributed.”
“I am sure the Minister agrees that this is about not just Government actions but the impact of those actions. Will he confirm that, despite what the Government have done, or think they have done, since 2010, the difference in gross value added between the south-east and the north has not changed?”
“I am sure the Secretary of State will accept that local government has had a 30% cut in spending since 2010 and also that councils have done incredibly well through efficiency savings and other measures to mitigate the worst impact of the cuts, but has he now seen the report by PwC for the County Councils Network saying that by 2025 there will be an £8 billion funding gap for councils? Does he accept that efficiency savings are not going to bridge that gap and that what we need now is an end to austerity and a major increase in funding for councils from the Government? Will he go to the Treasury and argue for that to happen?”
“The Government have provided some funding for the removal of aluminium composite material cladding, and they are testing non-ACM cladding on hundreds of buildings. The Minister for Housing has accepted that, if that cladding proves to be as dangerous as ACM cladding, it will have to be taken off. In that case, will the Government also agree to provide funding for the removal of non-ACM cladding?”
“The Minister just made an important point about the fact that revaluations are there to ensure fairness in the system. On that basis, does not council tax completely fail the test? If the Minister really wanted to go down in history, would it not be more appropriate to have a non-domestic rating and council tax valuation Bill?”