Leasehold and Commonhold Reform

George Howarth Excerpts

Wednesday 2nd October 2019 Westminster Hall

[The Minister for Housing (Ms Esther McVey)]

I congratulate my hon. Friend the Member for Worthing West (Sir Peter Bottomley) on securing today’s debate on the progress of leasehold and commonhold reform. He is a determined and formidable campaigner. I am also grateful to the Opposition Members who, with my hon. Friend, have been making solid progress on this important matter. With more than 4 million leasehold properties in the UK, we need to ensure that the system is working correctly, and that where it is not—where we see unfairness and exploitation—the market is held to account and changed.

[Sir George Howarth (Knowsley) (Lab)]

During a recent Backbench Business Committee debate on the Floor of the House, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and others raised the problem of people who had bought new properties in the north-west with leasehold arrangements that, to be frank, are a rip-off. At that point, the body language of the Minister—great champion of free enterprise that she is—conveyed her recognition that we had a case. Will she agree to meet a small delegation to discuss what can be done? The developers involved, in particular Redrow in my constituency, are completely unwilling to discuss the rights and decencies due to our residents.

[Ms McVey]

I will indeed meet the right hon. Gentleman and a delegation of fellow MPs. I did not realise he was such a good reader of body language, but he is quite right. The cases raised are not right, the system is not working right and those who agree with the market can see that it is not working right for the market either. Such cases should not be happening.

Let me be clear: the Government are committed to improving consumer fairness for leaseholders, and we have a programme of work under way to make sure that changes are made. Some of that work has already happened, including setting out how the ban on leasehold for new homes will work and stating our intention to reduce to zero ground rents on new leases, if we have them at all.

British House Building Industry

George Howarth Excerpts

Thursday 5th September 2019 Commons Chamber

[Sir George Howarth (Knowsley) (Lab)]

It is a pleasure to follow the hon. Member for South Norfolk (Mr Bacon), who made a typically thoughtful and interesting contribution to the debate on housing.

I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her survey of the state of the market and some of the negative aspects of it that we need to address. Anybody who reads her speech in Hansard tomorrow or at some later point will consider some of the companies that she named to be a roll call of disrepute.

On that theme, I wrote to the chief executive of Redrow, the developer, about a leasehold scandal following conversations with concerned residents of Summerhill Park in my constituency. Summerhill Park has over 455 houses and 70 flats. There is a two-tier system of ground rents in operation. Residents who purchased their properties early on in the development pay ground rents of £150 a year, while those who purchased homes in the later phases pay £250 a year. My constituents want to be enfranchised. They want to purchase their freeholds and are willing to pay a fair price. They believe—and I agree with them—that a fair price would be 10 times the annual ground rent, which they think is fair and reasonable and are willing to pay. Redrow, however, is asking for 26 times the annual ground rent, which I think, frankly, is unfair and unreasonable.

In the light of the Government’s reform proposals and the Law Commission’s ongoing work on leasehold reform, I approached Redrow to arrange a meeting to discuss the residents’ ideas further. Redrow contended in its response that the lease agreements are fair and transparent, which my constituents strongly disagree with, as do I. Its business model is considered by many—including, as I am sure the Minister will confirm, the Government—both unreasonable and unjustifiable. The offer of giving residents the opportunity to purchase the freehold at a fixed price of 26 times the annual ground rent is not, in my view—and, I hope, in the Government’s view—reasonable or fair.

In response to my letter, Redrow said:

“it would be inappropriate to move away from the practice that has been adopted over the last two years, with all Redrow households, including those [who] have already acquired their freehold at Summerhill Park.”

I wrote back to say that I did not agree and I would still like a meeting. Surprise, surprise, Redrow said, “There is little point in a meeting.” All Members of this House have a reasonable expectation that if they request a meeting with an organisation or company in the private or public sector to discuss an issue that is of concern in their constituency, they will get that meeting. Redrow arrogantly—not to me, but to the people I represent—declined to hold such a meeting. I deplore that, as I hope others do.

It is unjustified and unfair, and I fail to see how pressing on with that policy is either reasonable or acceptable. Redrow is doing this simply because it can and because it can continue to make money out of the residents I represent in this House. The leasehold scandal has caused a great deal of distress for homebuyers across England, particularly in the north-west, with many homebuyers trapped in their current properties, some unable to afford to purchase their freehold and others even unable to sell their property. Redrow is not unique in this. Other developers are just as involved in this scandal.

[Mike Amesbury (Weaver Vale) (Lab)]

I have a situation in the Winnington part of my constituency of Weaver Vale, where resident Emily Martin and many others are caught in this leasehold trap. In terms of the next phase, people have benefited from the reforms that we in this place have campaigned for, and the properties then become unsellable.

[Sir George Howarth]

That adds to the unfairness of it. Redrow is not unique in this, and all these companies need to look at themselves, the business model they are adopting and the ethics involved.

I will conclude by asking the Minister three questions. First, may I invite her to join me in condemning Redrow and the other companies that are still involved in this practice? Does she agree that the freehold purchase cost of 10 times the ground rent is fair and reasonable, whereas 26 times is sheer daylight robbery? Finally, does she agree that it is desperately important that we have legislation to curtail the naked greed of those developers engaged in this disreputable practice?

--- Later in debate ---

[The Minister for Housing (Ms Esther McVey)]

I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for bringing the debate to the Floor of the House and I thank everyone who has contributed to it.

There has been much agreement across the Floor on what we would like to happen, and, more importantly, what we do not like the look of and is not the way forward. None of us can agree with the exorbitant pay packets that some people have received. We are also all agreed that—in the hon. Lady’s words—the market is not working. That is right: it is not. We might have different ways of resolving that problem, but we would say that, if there are not enough houses in the market, it is not working. Various implementation schemes should operate for a short period, until we have ensured that there are more houses in the market, and that is what we are doing.

It has been a scandal how fewer houses have been built decade after decade, but we are turning that around. Let us look at some of the figures. We have delivered more than 1.3 million new homes since 2010, including more than 430,000 affordable homes. In the most recent year, we have delivered more than 220,000 additional homes, the highest level in all but one of the last 31 years. The latest indicators show that we are on track to meet our 2015 manifesto commitment to add 1 million more homes by 2020.

Those who have talked about homelessness will be heartened to learn that, for the first time since 2010, the annual rough sleeping statistics have shown a decrease in the number of those sleeping rough. That reflects the Government’s substantial investment and support over the last few years. But what we want to see is the right houses being built; choice in who is building them; and an SME market, not just a market of the top four or five in the building sector. We as a Conservative Government want to bring back the SMEs; 30% were lost during the financial crash and never came back. We want those businesses back and, more importantly, as my hon. Friend the Member for South Norfolk (Mr Bacon) said, we want there to be the right to build: we want to be able to make sure there are not just a few companies, building thousands of homes, because there could be thousands of individuals making their own homes. That is what we are about: choice and opportunity as we go forward.

We have said we would deliver 300,000 homes by the mid-2020s. That is my ambition and the ambition of the Conservative party. How will we go about it? I have said that we have been delivering more each year, but we want to bring together a centre of excellence for construction and engineering in the north of the country. We want to have a global leader for construction and engineering, bringing forth those technological solutions we have been talking about such as modern methods of construction and environmental innovations in the housing market.

However, let me pick up on some of the things we do not want that many Members talked about. I want to work with the right hon. Member for Knowsley (Sir George Howarth), the hon. Members for Ellesmere Port and Neston (Justin Madders) and for Brentford and Isleworth (Ruth Cadbury) and my hon. Friend the Member for Northampton South (Andrew Lewer). We do not want to see the misuse of leaseholds and the exorbitant costs people are paying. We have brought a consultation forward. We are going to stop the misuse and the bad practices in that field, and we can work on that together from both sides of the House, because we should not have that and we do not want it, and we have already started on that course to make sure it does not happen.

[Sir George Howarth]

I am grateful for that response. Will the right hon. Lady therefore join me in condemning companies such as Redrow for being unwilling to even discuss what residents want?

[Ms McVey]

Companies and businesses should work towards what their purchasers and customers want. Therefore, they should be listening if they want to be the best company they can possibly be. Equally, we are listening as Members of Parliament. We have all shone a light on that bad practice and we will be taking that issue forward.

We are also looking at what housing associations are doing. My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) has brought forward what is happening with Sanctuary Housing. We have a Green Paper setting out the principles that will underpin a new fairer deal for social housing residents: safe and decent homes, swift and effective resolution of disputes, empowering residents and ensuring their voices are heard.

Although we talk about the industry, we really want to support the people who are living in those houses; we are talking about homes, safety and security. We do not want people in temporary accommodation. We do not want people to be homeless; we want them in permanent accommodation, and that can only be brought about by fixing the market and making sure we build more homes, which is what we are doing.

Leasehold Reform

George Howarth Excerpts

Thursday 11th July 2019 Commons Chamber

[Sir George Howarth (Knowsley) (Lab)]

Given that it is Wimbledon week, it is nice to see you in the umpire’s chair, Mr Speaker. It is a great pleasure to follow the hon. Member for Harrow East (Bob Blackman), who made a good case that I fully support. I should also compliment my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, who, as ever, displayed a detailed and thorough knowledge of the subject.

According to the House of Commons Library, 27% of all new house sales in the north-west in 2018 were on a leasehold basis. In my constituency, about 1,320 have been sold on that basis in the recent past—261 in the past year alone. As we have heard, the current arrangements allow landowners to retain a level of ongoing management and the ability to secure income. For leaseholders, there is a range of problems, most of which we have already heard about, including with transparency on what they are charged for, disproportionate service charges and freeholds being sold on to a third-party.

Let me give a couple of examples from my constituency to show how the current situation has affected real people. Helen Spree is the owner of a Redrow property in my constituency for which she pays a ground rent. She is limited by a restrictive contract that dictates what she can and cannot do with her home. She is concerned that the freehold will be moved to a third party which, as we have already heard, happens frequently, without any notice or consultation. To purchase the freehold, it will cost her 26 times the current annual leasehold payment. That amounts to around £7,000. In addition, she would be required to pay Redrow’s legal fees, as well as her own, if she wanted to purchase it. By any standard, that is outrageous.

Another constituent of mine, from Earle Avenue, does not want to be named. He bought his property as the second owner—he was not the first person to buy it—in 2014, and planned, not unreasonably, to install a conservatory. He was told by a neighbour that Bellway would charge £350 for the privilege. When he approached the freeholder’s representative, he was informed that that £350 had gone up to £2,600. All he wants to do is build a conservatory, and he has to pay the freeholder £2,600 to do so. In addition to that, he would have to pay administration charges. Four months after he moved in, Bellway sold the freehold on his house to an investor; he found out only when he received a letter telling him so. He is restricted in respect of retaining his mortgage with his existing mortgage company, because under the terms of his lease he is required to inform the freeholder if he wants to change providers, and pay an additional £108 charge to the freeholder for doing so.

I have one further example that I will not go into at any length. A constituent of mine called Mr Eric Barry lives in a flat in Briton Court in my constituency. He is currently being charged £1,692 a year in service charges. There is a long list of things that the company, Moreland Estate Management, is supposed to do for that money, but Mr Barry contests whether it bothers to do it, or does it with the required frequency. It is an outrage. The worst thing about it is that he took the matter up with me a year ago, and I wrote to the estate management company, Moreland Estate Management, but I have still to receive a reply from them to a letter that I wrote on behalf of a constituent.

We have heard in great detail what a scandal all this is; it is about time it was sorted out.

--- Later in debate ---

[Mrs Wheeler]

I will not give way, as I have a lot to get through and I believe I have some answers for people.

On the leasehold house ban, I am pleased with the profound impact our original announcement and the work of campaigners have had on the market. When we made the announcement in 2017, 11% of new build houses in England were sold as leasehold, whereas today the figure stands at 2%—I repeat that it has reduced to that level. Despite that progress, we will still legislate to ensure that in the future—save for in the most exceptional circumstances—all new houses will be sold on a freehold basis. Developers will no longer be able to use leases on houses for their own financial gain, a practice that had become the norm in some regions of the country and, as we appreciate, particularly in the north-west. These reforms will remove the incentives for developers and freeholders to use leasehold to make unjustified profits at the expense of leaseholders, and we will be pressing ahead as soon as parliamentary time allows.

On the matter of where ground rents are so high that it—

[Sir George Howarth]

On a point of order, Mr Speaker. The Minister has just said that she would want to press ahead as soon as parliamentary time allows. I wonder whether you could confirm that the one thing this Parliament is not short of is time.

[Mr Speaker]

If it were for the Chair to decide, I would happily allocate time to all sorts of worthy purposes, but, sadly, the powers of the Speaker do not extend that far. If the right hon. Gentleman is bidding to increase my power, far be it for me to say no.

Fire Safety and Sprinkler Systems

George Howarth Excerpts

Tuesday 12th March 2019 Westminster Hall

[Sir David Amess (Southend West) (Con)]

I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing the debate. He has been a magnificent voice leading on fire safety issues in Parliament. If his voice had been listened to over the years, we would not be in the powerless state that we are at the moment.

I congratulate and thank all the members of the all-party parliamentary fire safety and rescue group. It is a wonderful group and we speak with one voice: we want sprinklers to be installed on a mandatory basis in certain buildings. If we had been listened to at the outset, there would not have been the Lakanal disaster and there would not have been the Grenfell disaster. I am in absolute despair: Ministers come and go, and yet the advice remains constant from officials and others. That advice is absolutely wrong. It has cost lives.

The debate is pertinent because changes to building regulations approved document B guidance are currently being considered following the Grenfell Tower disaster. That was nearly two years ago, but I am sure it only seems like yesterday to the hon. Member for Kensington (Emma Dent Coad).

[Mr George Howarth (Knowsley) (Lab)]

I endorse everything that the hon. Gentleman says about the work of the APPG. Is the difference between us and the Government not that we have been willing to listen to expert opinion, and to take that into account when deciding the appropriate way forward? Surely, this is the time to listen to expert opinion.

[Sir David Amess]

The right hon. Gentleman is absolutely right. We have the privilege of not just one, not just two, but three former fire Ministers here today. It is about time that the present Government listened to their expertise on the subject. I cannot think of any meeting where the APPG has not had an item on the agenda about automatic fire sprinkler protection.

We should never have got to the position of the Grenfell Tower fire tragedy, especially after the warnings and recommendations of the coroner at the Lakanal House fire inquest in 2013, and the rule 43 letter to the Secretary of State. We have all the correspondence about what the APPG was trying to do at the time.

All Governments of all colours have failed us. On 4 July 2017, the Minister for Policing and the Fire Service, my right hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), said that

“we may have to confront an awkward truth. That over many years and perhaps against the backdrop of, as data shows, a reduced risk in terms of fire, in terms of number of incidents and deaths, that maybe as a system some complacency has crept in.”

Well, I think that is what Dame Judith Hackitt feels about the situation, and we will just have to see how that pans out. Claims of complacency could never be aimed at the APPG.

In 2012, the Building Research Establishment updated its 2006 research into the cost-benefit analysis of installing residential fire sprinklers and concluded that sprinklers are cost-effective for most blocks of purpose-built flats, all residential care homes, including those with single bedrooms, and traditional bedsit-type houses in multiple occupation, where there are at least six bedsit units per building and the costs are shared. The APPG has consistently asked why the Government have not reflected those changes in its guidance in approved document B. The intransigence is absolutely unacceptable.

I say again: the advice has been totally wrong. The APPG, the Royal Institute of British Architects, the London Fire Brigade, the Fire Protection Association, the National Fire Chiefs Council, the Fire Sector Federation, the Association of British Insurers and many others cannot all be wrong on this issue, but the advisers are still giving the wrong advice.

In March 2013, the Southwark coroner issued a rule 43 letter to the Secretary of State for the then Department of Communities and Local Government following the Lakanal House inquest, which stated:

“Evidence adduced at the inquests indicated that retro fitting of sprinkler systems in high rise residential buildings might now be possible at lower cost than had previously been thought to have been the case, and with modest disruption to residents. It is recommended that your Department encourage providers of housing in high rise residential buildings containing multiple domestic premises to consider the retro fitting of sprinkler systems.”

The response from DCLG was lamentable. It said that

“any fire safety measures which might need to be implemented or installed in any particular building will need to be determined primarily by a careful assessment of the life-risk to the residents and others in the building.”

We know that. The word used in the letter is “encourage”.

At the Lakanal House coroner’s inquests in March 2013, the London Fire Brigade commissioner was asked by the barrister assisting the coroner whether, if sprinklers had been installed, the lives would have been saved. The commissioner replied with an unequivocal yes. That is what happened at the inquiry. What happened at Grenfell is an absolute disgrace.

The National Fire Chiefs Council commissioned a research study by Optimal Research collecting data on five years of real fires that had occurred in the UK where sprinklers had been installed. Its findings, published last year, showed that, on 99.5% of occasions in all buildings and in 100% of occasions in flats, fires were avoided when sprinklers were installed. Sprinklers are not a panacea; they are only one of a package of measures. I am sure the Minister may make some remarks along those lines, but sprinklers can be used to make properties safe from fire.

Let me close by giving an estimated progress report on the retrofitting of automatic fire sprinkler protection in residential tower blocks. I am advised by organisations that manufacture automatic fire sprinkler systems that an estimated 1,000 towers have commenced or committed to installing sprinklers in existing tower blocks as a consequence of the Grenfell Tower fire tragedy. Already, Wales and Scotland are much further ahead in regulating for automatic fire sprinklers in their built environment. I say to my hon. Friend the Minister, who is a good and wise man: this nonsense can no longer go on and we will not accept it. We want action on this, and we want sprinklers to be installed retrospectively, particularly in all new school buildings.

Antisemitism in Modern Society

George Howarth Excerpts

Wednesday 20th February 2019 Commons Chamber

[Barry Gardiner]

I cannot agree with my hon. Friend on that point because it is for the national executive to take that decision—

[Mr George Howarth (Knowsley) (Lab)]

Would my hon. Friend, who invoked the national executive committee of the party, of which I am a member, like to give way?

[Mr Speaker]

If the hon. Gentleman wants to take the intervention, we will then hear the content of it. Does he wish to do so?

[Barry Gardiner]

I will, of course, take, as I said before, one final intervention.

[Mr Howarth]

I am grateful to my hon. Friend. As a member of the Labour party’s NEC, may just say three things? First, we have been far too slow to deal with some appalling cases of antisemitism. Secondly, I do not know whether it has been formally announced yet, but Lord Falconer has offered his services to look at how we can deal more effectively with such cases that are brought to the attention of the party. Thirdly, on a purely personal view, I agree with the comment made a few moments ago by my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) that, frankly, there is no place for any of these people in the Labour party. Sending them on courses is not good enough; they need to be kicked out.

[Barry Gardiner]

I am grateful to my right hon. Friend and I am glad he has been able to talk about the progress that the NEC is making. I believe that more progress will be coming in terms of education, but it has not been formalised at this stage.

It is important to recognise that the antisemitic views harboured by those people, a small minority within Labour, do not exist in a vacuum. No political party should fool itself that it is immune from this poison, and it would be wrong and dangerous to underestimate the scale of the problem across society at large. A few weeks ago, on Holocaust Memorial Day, a survey revealed that 5% of British adults do not believe the holocaust took place and one in 12 believe that its scale has been exaggerated. Clearly, something has gone deeply wrong with our education and our collective memory. The holocaust was the worst crime of the 20th century, in which 6 million Jewish people were murdered. Every single person in Britain should know that. I thank the Holocaust Educational Trust and Holocaust Memorial Day Trust for the work they do to ensure that this atrocity is never forgotten and never repeated.

Rough Sleeping

George Howarth Excerpts

Thursday 7th February 2019 Westminster Hall

[Mr George Howarth (Knowsley) (Lab)]

My hon. Friend touches on something vital: we must deal not just with the phenomenon of homelessness and rough sleeping but with its causes. We need to make more effort on employment, the benefits system, young people coming out of care, people leaving the armed services without the necessary support and, yes, drug and alcohol problems. All those issues—including mental health problems, by the way—need to be addressed if we are really going to get on top of this problem.

[Neil Coyle]

My right hon. Friend is spot on. It is a sad truth that we know who these people are. We know which people are more likely to become homeless or sleep rough. They are an identifiable group. They are care leavers, women fleeing domestic violence, ex-forces people and people with mental health problems. We know who they are. We also know from experience—the scrapping of the Supporting People programme had direct consequences in this policy area—that there is no silver bullet. I do not think anyone suggests that there is, but we know who is more likely to become homeless, and we know how we can support them to avoid that.

--- Later in debate ---

[Will Quince]

I thank the hon. Gentleman for that intervention. There are many reasons for what he refers to. The Government could tomorrow invest tens of millions of pounds—well, it would be more than tens of millions—in more temporary accommodation, and that would get more people off the streets, but it would not address the underlying problem, which is that we need long-term, permanent, secure accommodation for people up and down our country.

I come back to the fundamental point about social housing. I want us to get back to building in the region of 100,000 social houses a year. The Office for Budget Responsibility has estimated that in 2018-19 the total housing benefit bill is likely to hit an incredible £23.4 billion —£23.4 billion—and it is only going in one direction; it is only increasing. That means that we are spending more than £20 billion a year to mitigate the effects of a housing shortage brought about by successive Governments, without finding a long-term solution to the problem. Arguably, what is worse is that, because of the lack of social housing, those who need homes are being housed in the private rented sector, so taxpayers’ money is being transferred into the pockets of private landlords, which in turn only increases demand in the private rented sector and drives up rents for everyone else. I suggest that investing in social homes is a far more efficient use of public money. Once built, those social homes would be public assets that would appreciate in value.

[Mr Howarth]

I am grateful to the hon. Gentleman for his generosity in giving way. Does he agree with me on this point? The Government recently announced that they would make direct payments to private landlords to avoid escalating rent arrears. Would it not be sensible to make the same offer to social landlords?

[Will Quince]

I will have to look to the hon. Member for Bermondsey and Old Southwark, because I believe that that is a recommendation that the all-party parliamentary group has made. It is one of those changes that would be a positive step.

The other reason why a large and ambitious programme of social housing would be a good thing is that it would provide—this is why there is a strong Conservative case for doing it—an immediate financial return through the reduced housing benefit bill. It would also alleviate hugely the pressure on the private rented sector and ultimately, I believe, lead to cheaper rents.

I will conclude because I am conscious that many hon. Members wish to speak in the debate. Although I hugely support the Government’s aim and ambition, I want us to be far more ambitious, and, through the all-party parliamentary group, we will continue to push the Government to be more ambitious. I said earlier that homelessness is a little like an illness. I want us to invest fully and properly in the treatment and cure, and that does mean significant resource. So I say to the Minister: please set out an ambitious strategy to tackle the root causes, and the whole House—I believe that this would be cross-party—will support you in making the case to the Treasury. It would lead not only to a financial benefit but to a huge social benefit. One family homeless or one person sleeping rough on our streets is one too many. Let this be the Government who put in place the long-term strategy to end homelessness, and Minister, we will all be behind you.

Local Government Funding Settlement

George Howarth Excerpts

Thursday 13th December 2018 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

I welcome the announcement of an increase in core spending power, but I estimate that it will be worth about £2.5 million in Knowsley. Set against that, however, the Secretary of State will be aware that Knowsley, with some of the highest need in the country, has also shamefully had the biggest cut in support from central Government, at £100 million. Is the Secretary of State not ashamed that need is now almost irrelevant to the allocation of local government funding?

[James Brokenshire]

I simply do not accept the core issue behind the right hon. Gentleman’s comments. Indeed, we are undertaking the fair funding review, which will allow further reflection on and recognition of some of the pressures that are felt between councils. Knowsley will see an increase of £2.8 million between 2018-19 and 2019-20, which will mean core spending power per dwelling of £2,282.

Budget Resolutions

George Howarth Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

It is a pleasure to follow the hon. Member for Aldershot (Leo Docherty). I think it would be fair to describe his speech as a bit of a mixed grill, but perhaps I should move on.

In a Westminster Hall debate on Tuesday, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Richmond (Yorks) (Rishi Sunak), talked about local government cuts since 2010. He said that they had been mitigated by what he referred to as “core spending power”, which had gone up by 2% this year and over previous years. He went on to say:

“The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous.”—[Official Report, 30 October 2018; Vol. 648, c. 332WH.]

Note that he said not just “erroneous”, but “totally erroneous”. I want to spend a moment looking at the veracity of that statement. He must know that the Government’s grant cuts since 2010 have hit those councils with the greatest need the hardest. Knowsley’s cut to “core spending power”, as he puts it, amounts to £485 per person, compared with the average for England as a whole of £188.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

Knowsley is one of the most poorly resourced areas in the country. Indeed, it suffers from one of the highest levels of income deprivation. Does my right hon. Friend agree that the impact on the streets is dangerous and sickening?

[Mr Howarth]

I very much agree, and if I have time, I will come on to say more about that.

This is not just about what I or those in local government are saying about why the Under-Secretary’s comments were—I was going to use the word “misleading”—an example of sophistry. Independent analysis from the University of Cambridge says that there are

“significant inequalities in cuts to council services across the country, with deprived areas in the north of England and London seeing the biggest drops in local authority spending since 2010.”

As councils all point out, that is because—again I quote from the study—

“These local authorities tend to be more reliant on central government, with lower property values and fewer additional funding sources, as well as less ability to generate revenue through taxes.”

It would not be permissible for me to say too much more about the effect of what the Minister said, but the truth is that it was not a proper portrayal of what is taking place, and his analysis of the grant system was plain wrong.

In the time that remains, let me say a few words about the consequences of this situation in the Liverpool city region, starting with Knowsley. The impact for the people in Knowsley, which has been the hardest hit of all local authorities anywhere, is that we have had our grant cut by £100 million since 2010. Children’s social care needs are rising faster than the resources for dealing with them, with a £3 million gap currently projected, and the increases announced last week barely scratch the surface of that gap. The same applies to adult care, for which demand is growing, yet the resources are just not there to meet it.

Since 2010 in the Merseyside police force area, we have lost 1,000 police officers. As the chief constable said, the service is reaching breaking point—it is a chief constable saying that. There has been a 14% rise in crime over the last 12 months. Similarly, 50% of the grant for fire and rescue services has been taken away since 2010. The number of firefighters has fallen from 927 to 580. Fire deaths are up by 10%.

The worst aspect of these cuts in services, as the Minister was unwilling to concede on Tuesday, is that the people who can least bear the brunt of them are among some of the poorest in the country. Frankly, what the Government have done to public services in the Budget is shameful.

Local Government Funding: Merseyside

George Howarth Excerpts

Tuesday 30th October 2018 Westminster Hall

[Mr George Howarth (Knowsley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I, too, congratulate my hon. Friend the Member for Garston and Halewood (Maria Eagle) on the typically thorough way in which she introduced this important subject. I will confine my remarks to the effects of the cuts in grant to Knowsley specifically, but before I do, I echo what my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) and other hon. Friends have said about the impact of cuts on policing and on fire and rescue services.

As my hon. Friend the Member for Garston and Halewood indicated, Knowsley Council is the council in the country hardest hit by funding cuts, which amount to £100 million less to spend on vital local services. To bring that down to a human scale, that equates to a cut of £485 in grant support for every person in the borough, compared with a national figure of £188. To bring that down to an even more human scale, Windsor and Maidenhead Council has had a £49 cut in grant per head and Wokingham Borough Council has had a £43 cut in grant per head. I began to wonder whether something in the grant formula was weighted towards local authorities that begin with the letter w, but if that had been the case, it would have applied to the Wirral too. As my hon. Friend the Member for Wallasey (Ms Eagle) eloquently described, however, it does not.

Knowsley Council has told me that its biggest challenges are funding children’s social care, which my hon. Friends have mentioned; the need for a permanent funding solution for adult care; and the impact of moving the cost of funding services provision on to council tax payers. Funding social care is not just a problem for Knowsley. In the north-west as a whole, the number of looked-after children has increased by 12% since 2003. In Knowsley, the additional pressures on the budget for children’s social care are expected to exceed £3 million as a result of a combination of increased costs for all placements, even higher increased costs for specialised placements and the scarcity of suitable residential placements.

The Government’s response, however, has been wholly inadequate and falls well short of providing the funding and certainty needed to keep up with growing demands. The Minister will say that there was an announcement in the Budget yesterday. We have not seen how that will be distributed, and we do not know what it will mean for any given local authority, but if the total sum mentioned is distributed evenly, it will hardly make a dent in the difficulties that areas such as Knowsley are experiencing.

Some additional funding for adult social care has been announced in the past few years, but it does not reflect the resources needed to offer adequate and sustainable services and, moreover, it was a one-off. In March 2017, £9 million of additional resources was announced from the better care fund to help to fund increasing demand and rising costs. So far, however, the Government have not confirmed whether that support will continue beyond 2019-20. Can the Minister commit to continuing that funding? If he cannot, the council’s budget will inevitably mean that services suffer still further. Moving the cost of service provision on to local council tax payers is, frankly, nothing short of disgraceful. The move away from a grant distribution formula that provided a weighted recognition of the needs of an area is entirely regressive in how poorer, more deprived areas such as Knowsley end up as the biggest losers. How can that be fair?

The Government argue that need should be replaced by a funding system that rewards councils based on the level of economic growth and prosperity. Knowsley has some important and successful local companies such as QVC in my constituency and Jaguar Land Rover in the constituency of my hon. Friend the Member for Garston and Halewood, but their success and that of other companies locally, though important and welcome, can have only a limited impact on the revenue generated for Knowsley Council and falls short of the area’s needs.

We have already seen the effect on services. Anything that is not a statutory requirement has inevitably had to bear the brunt of the cuts. As we have seen elsewhere, we are at the point at which local councils cannot meet even those statutory requirements. As need is increasingly sidelined, that trend will sadly continue. The grim conclusion has to be that unless the Government acknowledge the need for a fair funding system that properly reflects local need and deprivation, areas such as Knowsley face a bleak future in which the consequences of the Government’s austerity programme are visited on the communities least able to bear them.

--- Later in debate ---

[Rishi Sunak]

I totally reject the suggestion of hiding. It would be ridiculous to look at any local authority’s financial resources without considering the various ways in which such an authority funds itself. I am delighted that the hon. Lady is focused on keeping council tax low. Indeed, the Government have ensured that council tax today is lower in real terms, across the country, than it was in 2010. We have heard various suggestions from Labour Members about doubling council tax, which is something I assume the hon. Lady, being on the side of hard-working taxpayers like us, would reject.

The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous. For example, when the adult social care precept was introduced, it was understood that different areas would raise different amounts from it, which is why in the incremental billions of pounds that the Government have injected into the social care system directly through the better care fund there is an equalising measure to take that into account. That is exactly why, today, the most deprived authorities have a core spending power per household—taking into account all those things, council tax included—that is 23% higher than that of richer authorities. Indeed, that is why areas with larger council tax bases provide more of their area’s resources from council tax; Merseyside provides less than half of the amount those areas do, because the council tax base in Liverpool is that much lower. It is totally wrong to suggest that that is not taken into account.

I think it was alleged that I, or the Government, had removed deprivation from funding formulas. I can categorically say that I have not removed it from any funding formula. We are in a root and branch review of how local government is funded. We are in the midst of various consultations and I would be delighted to have hon. Members’ suggestions.

[Mr Howarth]

If that is the case, will the Minister explain why Knowsley, which is one of the most socially deprived parts of the UK, has had a £100 million cut in its grant? His figures just do not add up.

[Rishi Sunak]

I can tell the right hon. Gentleman that Knowsley’s core spending power per household is about 20-something per cent. higher than the average for a similar metropolitan authority, which takes into account exactly his point. He talked about the fair funding review and, as I said, that is exactly where all the issues will be considered, ensuring that deprivation or, indeed, multiple other factors, are taken into account in the new funding formula.

--- Later in debate ---

[Rishi Sunak]

I will make some progress.

The second vision I outlined, which is undeniably one of the most crucial roles for local government, is to continue to help the most vulnerable in our society. It is local authorities, as we have heard, that support the elderly, the disabled and our children in need, and we owe an enormous debt of gratitude to councils for their incredible work. I am delighted that the Government back local authorities to carry out those vital duties. Last year, the Budget provided an additional £2 billion for social care. Earlier this year, another £240 million was announced for social care winter funding, and in the Budget yesterday the Chancellor announced that a further £650 million will be provided for care services next year.

In contrast to what we have heard, the flexibility to use the funding for things such as children’s services is something that local authorities have specifically asked for. They will have the flexibility in each local area to use the funding for different care services, rather than its use being dictated by central Government. I would have thought that all Members appreciated their local areas having such flexibility to make the best use of the money, in the way they see fit.

I am pleased to say that that increased investment and better working between the NHS and local government is paying dividends on the ground. We have seen social care free up 949 beds a day since the peak two years ago—a 39% reduction in social care delayed transfers of care. In Merseyside, progress has been seen particularly in St Helens, and I commend the local authority on reducing such transfers by 72% since the February 2017 peak.

I have mentioned the troubled families programme, which is making amazing strides to support our society’s most vulnerable families. When I visited the Clubmoor children’s centre in Liverpool, it was a privilege to talk to several of the families participating and to see the life-changing work at first hand. I am proud to say that the Government have invested £1 billion in the programme over this spending cycle, with 130,000 families nationally achieving significant and sustained progress against the goals they have been set. In almost 17,000 of the families, one or more of the adults has moved into work, and the families I spoke to told me that that was central to their ambitions.

Across Merseyside, 10,000 families are being helped with more than £20 million of funding, and I pay tribute to Liverpool City Council in particular for doing a very good job, working with early help assessments. We heard from the hon. Member for Halton (Derek Twigg) about the importance of early intervention. Referrals to children’s services in Liverpool were down 3% in the most recent year—

[Mr Howarth]

On a point of order Mr Hollobone. I want to place it on record that, had he been here, my hon. Friend the Member for Halton (Derek Twigg) would have made a significant contribution, but he is, in fact, not here.

[Mr Philip Hollobone (in the Chair)]

Thank you for that point of clarification. It will be on the record.

Northern Rail Services: Greater Manchester

George Howarth Excerpts

Wednesday 6th June 2018 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to see you in the Chair this afternoon, Mr Howarth. I appreciate that many of your constituents in Knowsley have been frustrated in the past couple of weeks, whether travelling in the region or across the country. We heard about the issue in Monday’s urgent statement, of course. It was unprecedented: for 90 minutes 65 MPs of all parties relayed to the House the pain that passengers throughout the country were experiencing, including anxious students not able to get to college to sit vital exams, children late for school, adults late for work and, as my hon. Friend the Member for Bolton South East (Yasmin Qureshi) has said today, people who have lost their jobs. Family life has been disrupted and childcare made impossible; people do not know when they are going to get home of a night, and businesses struggle when staff do not arrive. In the heart of the tourist season there is the fiasco of trains being cancelled at peak times in the Lake district—we stand with the businesses there.

I was struck by the experiences of my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who talked on Monday—column 63 in Hansard—about people who were fasting during Ramadan standing for five hours in blistering heat. Trains have been cancelled and delayed; they do not stop. People have been failed—“Northern fail” is the expression that comes to mind. The situation is not just in the north, but across the country. I know that passengers in the south-east in particular have also had years of that pain. We have a broken railway system.

I thank my hon. Friend the Member for Bolton North East (Sir David Crausby), who eloquently highlighted the pain of his constituents, particularly the pain caused by Arriva Rail North. Electric trains in his area should have been running from Manchester via Bolton to Preston last year, but it will be lucky if they do so by the end of this year. Northern provides a poor service to passengers and they now have their worst punctuality rating in eight years. As we heard, only 83% of their trains arrived within 10 minutes of the scheduled time. Of course, in the past week things have got worse, with trains often being cancelled altogether at weekends.

The story for passengers in Bolton is one of broken promises, within a completely deficient system, and they are of course dependent on a completely deficient compensation scheme. As we have heard, it is far too complex for passengers to engage with, and it does not work for multimodal transportation, so fewer people claim on it. We have heard that disabled people and parents with prams have no chance of using the railway. At certain points on the line the trains are already packed, as there are too few carriages to meet the need. In the new upgraded rail system there is still a need to install the overhead gantries for the power lines at places such as Chorley, Bolton and Salford. However, because of poor ground conditions due to uncharted shallow mines around those locations, a third of the foundations were unsuccessful at the first attempt. All that work was outsourced to the failed company Carillion.

I thank all hon. Members who have contributed to the debate—the hon. Member for Hazel Grove (Mr Wragg), who put some pertinent questions to the Minister, and my hon. Friends the Members for Stretford and Urmston (Kate Green), for Bolton South-east, and for Oldham East and Saddleworth (Debbie Abrahams)—for sharing the impact of the rail meltdown on their constituents. The upset, anger and frustration that have been heard in the House this week are nothing compared with the actual pain that we have heard about directly from the public. Despite all that, the Secretary of State could not find it in himself to apologise for the part that he played. The only reason he remains in his post this afternoon is that the Prime Minister is too weak to sack him. All that we got was his belief that he was clever in apportioning blame to everyone but himself. Others are to blame—I grant him that; but the person in charge, at the heart of it all, is the Secretary of State. Perhaps the Minister will offer an apology on his behalf for the fact that he has utterly failed the British public.

So what do we know? Network Rail ran into serious trouble during control period 5, not completing many of the planned infrastructure projects, including promised electrification upgrades. Did the Secretary of State know? Yes; he personally intervened, cancelling many electrification projects. Hon. Members will remember that that was the day after the House rose last summer—presumably to avoid questioning of the kind that happened on Monday. The right hon. Gentleman announced that trains that do not even exist would run in the future, and said they would replace the planned new electric rolling stock as on the TransPennine Express route.

It is deeply offensive that new trains that cannot accommodate wheelchair users have been put on that line. We heard how Network Rail failed to complete its timetabling programme and how the Secretary of State, despite initial denial, knew that that was coming over the horizon. He said on Monday that he took calls weeks before the new timetable was due to be introduced, but in his statement he failed to mention that, with regard to a company limited by guarantee, he was the one person in charge—allegedly. Therefore he is fully to blame. If he neglected or negated his responsibilities he should resign.

People in the industry whom I have talked to have told me that the crisis was long predicted. When the company moved the timetabling function to Milton Keynes a significant proportion of the very skilled timetabling staff were lost, so there were not the personnel to do the work required. I have also been told that the process of rescheduling an entire timetable normally takes the best part of a year, and at least nine months. Given that the project commenced in earnest in February, it was not likely to meet its own timetable, to be stress tested and to be sure to work.

The glaring absence is the fact that the Secretary of State did not at any stage intervene and postpone the new timetable—and we learned why. He is, it now appears, the only person on both sides of an apparent Chinese wall dividing his Department. On a wing and a prayer he ordered that the timetable change should go ahead. There was a threat that the operators—the private, fragmented companies that he always defends—would sue him or the Department if the timetable was withdrawn. They had received promises from him on the new timetabling: that in May they would be able to run their new trains, on new infrastructure and at new times. Their financial structures, including how they would afford to pay their levies to the Department and how they would pay their shareholders, could not be delivered unless all the new slots ran on the promised terms in the new timetable, as set out in the franchises.

I think that we can expect law suits to come flooding in now. After all, those private companies’ sole reason for existing is to drive profit out of the state. Those rail companies had hired their new trains for the new electrified lines and expanded timetables. I remind Members that they do not own their rolling stock, but lease it by contract at an exorbitant rate from consortia of investment companies and fund managers. These private profit companies exist to drive profit out of the train operating companies, which in turn drive profit out of the state, taxpayers and passengers. They have disposed of their old rolling stock and moved it on to their next customers, while the new rolling stock cannot operate on the de-electrified lines—you could not make it up, Mr Howarth.

Then there are the train operating companies, and today we have heard much about Northern rail and its failure. It went ahead and signed contracts, demanding that services be run down to the bone. We heard how it cut the number of crucial staff to maximise its financial gain, and it failed to maintain or recruit sufficient staff to run on the new timetable. It knew what was coming over the horizon, and it failed. It is also trying to get rid of train guards, the very people at the heart of looking after the needs of passengers. We have ended up with not enough trains or staff to meet the needs of a rushed and untested timetable, although I must say that the staff have been phenomenal across the rail network, and we salute them for all that they have had to contend with over the past few weeks.

Only the Secretary of State and his Ministers sit at the top table and the interface of track, timetable and train. He knew about these challenges but did nothing. He let this chaos happen, either through sheer incompetence or by hoping that it would be the least worst option. He is the head of every decision, which is why either he must resign or the Prime Minister should sack him.

One subject that was not mentioned on Monday was how much all this will cost the public or passengers through future ticket increases. The money has to come from somewhere. I am sure the TOCs will call for compensation—they always do—and we also have the compensation scheme, and a commitment to a new compensation regime, which fellow MPs are already saying will be insufficient and that more will be required. Will students who were not able to sit their crucial exams, or businesses that could not open their doors because their staff had not arrived, be able to claim compensation? How much will all this chaos cost? I put that point specifically to the Minister, because ultimately taxpayers or passengers will pay, and they need to know how much it will cost.

This story will not end happily ever after. First we get a revised timetable that, as we have heard, has in many places been much worse than the original one. Then we get the mass cancellations across the service. We have heard that whatever timetable is applied, the chaos will run for months and months into the summer. What has the Secretary of State offered? An inquiry that will report at the end of the year. Thank goodness the Transport Committee, chaired by my hon. Friend the Member for Nottingham South (Lilian Greenwood), will provide answers long before then through its own inquiry. The Secretary of State’s inquiry will not report until after the next set of timetable changes have been put in place in December, although I have heard that those changes have fallen behind schedule.

This chaos has forced passengers off trains and into their cars—a modal shift. We talk a lot about a modal shift across our railway system, but we aspire to it going the other way. When rail services do not work and fail the public, people jump back into their cars because they have no other option. That leads to more congestion on our roads, more frustration and more pollution to exacerbate our poor air quality. I am sure that the rail companies will challenge the Government about that fall in patronage.

The great British public have been completely let down by this Government and their failed rail model, and they are right to be furiously angry at the Secretary of State, who blames everybody else—the bosses at Northern rail, for example—while forgetting that he is in charge. That simply could not happen under Labour’s proposals for a new model of public ownership. We will scrap the juggling of multiple private company interests and have one rail service that works together in the interests of passengers. The Secretary of State could make a start by moving towards that model—that would massively satisfy passengers across the north—and he could take the contract away from Northern rail, and use his powers to start providing reparations for this complete disaster on our railways.

[Mr George Howarth (in the Chair)]

Before I call the Minister, I gently remind him that it is customary to leave enough time for the mover of the motion to respond briefly to the debate.