Westminster Hall

Thursday 13th July 2023 Westminster Hall

Thursday 13 July 2023

[Sir George Howarth in the Chair]

Backbench Business

Post Office Ltd: Management Culture

Thursday 13th July 2023 Westminster Hall

13:30

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I beg to move,

That this House has considered the management culture at Post Office Ltd.

It is a real pleasure to serve under your chairmanship, Sir George.

Many right hon. and hon. Members past and present continue to work on Post Office issues, especially the Horizon IT scandal—the greatest miscarriage of justice in UK history. Others outside this place who brought that scandal to public notice, including Alan Bates, Nick Wallis, Eleanor Shaikh and the many sub-postmasters past and present who suffered and, in some cases, died because of the management culture of Post Office Ltd, deserve our gratitude.

We should all remember that the statutory inquiry into the Horizon scandal is still ongoing; it has not even reached the stage at which it will forensically examine the management culture of Post Office Ltd past and present. For me, Post Office issues have never been party political. I have focused on the viability of the network. Post offices fulfil a vital role in local communities, and sub-postmasters worked right through the pandemic—that is the kind of people they are.

A local sub-postmaster and his wife came to see me in 2015, just after I was elected. Their sub-post office was being closed down and they were fighting for decent compensation. I was totally unaware that this was going on across the UK as part of the network transformation. A new sub-postmaster took on the post office in his local shop half a mile away. He was assured that that would boost his business’s revenue, although how that was going to happen I do not know—it was the same folk from the old post office that were going to withdraw their benefits at the new shop. A few years later, he told me he made more from his new coffee machine than from the post office.

Many long-serving sub-postmasters have been forced to stay on to try to recoup their investments in their post offices. Post Office Ltd confirmed recently that it will reduce the compensation for sub-postmasters of hard-to-place post offices from 26 months to 12 months. During my time as an MP, there has been a constant battle to ensure that sub-postmasters receive decent compensation when they retire and decent remuneration while they continue to serve their communities. Government funding increases have gone to Post Office management; under former and current management, SPMs have been last in the queue for pay increases. Does the Minister think that is fair? Does he agree that the Government promise that post offices would be the “front office of Government” has never been kept? That would have given much more revenue to sub-postmasters.

The Horizon IT scandal is the result of the culture of Post Office management, and I will show that that culture still exists. In his March 2019 judgment in Bates and Others v. Post Office Ltd, Mr Justice Fraser stated:

“There seems to be a culture of secrecy and excessive confidentiality generally within the Post Office, but particularly focused on Horizon.”

Eventually, in September 2020, a non-statutory inquiry was announced. It was led by Sir Wyn Williams and subsequently became a statutory inquiry. It was to gather information, to consider whether Post Office Ltd had learned the lessons and embedded the cultural change deemed necessary in Mr Justice Fraser’s judgment, and to consider the impact on affected sub-postmasters.

That commitment was echoed by Post Office Ltd chief executive officer Nick Read, who was appointed in September 2019. In a letter to the Business, Energy and Industrial Strategy Committee in June 2021, he stated that he was

“undertaking to drive a culture of genuine commercial partnership between Post Office and postmasters with openness and transparency at its core.”

He said that

“a major programme of improvement has been underway. The goal is to overhaul the culture of”

Post Office Ltd.

There is no doubt from the evidence submitted to Sir Wyn Williams’s inquiry that there is a long history of obfuscation, secrecy, cover-ups and incompetence, for which no one has yet been called to account. We are now at the halfway point of the inquiry, and almost daily revelations have cast doubt on the claim that a cultural change has taken place. I do not intend to go into the details of the historical management culture, as Sir Wyn Williams is yet to cover that, but there is sufficient evidence that the hope of a cultural change at POL has not been realised.

[Mr Kevan Jones (North Durham) (Lab)]

I was shocked that the inquiry was suspended again last week because the Post Office had failed to disclose documentation to it. Does that not show that the secrecy, incompetence or cover-up is continuing?

[Marion Fellows]

I could not agree more with the right hon. Gentleman. I will come on to that point.

Openness, honesty and integrity are guiding principles of public life, but it seems that for decades the management of Post Office Ltd has not adhered to them. Shamefully, the compensation schemes set up to right the wrongs of the deplorable chapter of Horizon have not been immune to Post Office Ltd’s unjust approach. In recent months, tax expert Dan Neidle has written of the unfairness baked into them. He initially wrote about the unfair tax burden imposed on the compensation awards. Thankfully, that opened up an additional £26 million from the Government to “top up” compensation for historical shortfall scheme claimants, but he soon realised that the schemes are designed to ensure that the lowest amount of compensation is paid out. That goes against the assertion of the chair of the inquiry that “normal negotiating tactics” used in “hard-fought litigation” are not appropriate for Horizon compensation.

The application forms for the compensation schemes are so legally complex that Mr Neidle, a legal expert, said that even he would require legal advice when filling them out. However, the provision of legal and tax advice from POL-appointed lawyers has been totally insufficient and, as Mr Neidle says, “token”. Everything that follows the initial application is framed by the lack of legal assistance. The Post Office guidance, and the lack of clarity on the forms from Post Office Ltd that applicants can claim for damage to their reputation, leads many applicants to claim much less compensation than they are entitled to. Furthermore, there is no option to claim punitive damages. Mr Neidle says that a lawyer would spot that, but a layperson would not. Once again, that means that applicants, who are often elderly and in a weak financial position, are likely to miss out on a large portion of their compensation.

Shockingly, the Post Office continued to attempt to suppress the truth by warning sub-postmasters who received an offer under the HSS that they could not mention the compensation terms to anyone, including other applicants, the press, and their family and friends. That is inaccurate, misleading and, most of all, shameful. One applicant described the process of trying to get fair compensation as “soul destroying”. Have these people not suffered enough?

The recent scandal in which Post Office Ltd executives paid themselves tens of thousands of pounds in bonuses for taking part in the ongoing Horizon inquiry, which they were legally obliged to do, has been referred to as “bonusgate”. To make matters worse, one sub-metric that the Post Office remuneration committee deemed to have been fulfilled was required to be signed off by the inquiry chair, Sir Wyn Williams, but he had not done so.

In June, Nick Read, the Post Office Ltd CEO; Henry Staunton, its chair; Amanda Burton, the chair of the remuneration committee; Lisa Harrington, the former chair of that committee, and Tom Cooper, a former director from UK Government Investments, were brought before the Business and Trade Committee. Once again, there was a total lack of openness and clarity. It was claimed that the metric had been changed to require approval from Sir Wyn’s team rather than from Sir Wyn himself. Post Office Ltd still had not received such approval, but it exercised “discretion” to go ahead pay out the bonuses.

The Chair of the Business and Trade Committee, the hon. Member for Bristol North West (Darren Jones), outlined the statutory definition of “false accounting”—ironically, a charge on which many sub-postmasters were wrongly convicted. He said that

“it seems to me that in the annual accounts that Post Office reported to Parliament there was false or misleading information presented that did lead to the financial gain”

of Mr Read and some of his senior colleagues. As the single shareholder in Post Office Ltd, what steps are the Government taking to ensure that this situation never recurs?

The messaging is simply terrible. While sub-postmasters often earn less than the national minimum wage and others fight tooth and nail for compensation, executives pay themselves hundreds of thousands of pounds in bonuses for doing “a reasonable job”, even though the bonus sub-metrics they set themselves have not been properly achieved. That is the management culture of POL: bonuses for doing “a reasonable job”. Mr Read is on the record refusing to pay more than the token amount he has repaid. Compare that with the management bonus culture for sub-postmasters, whose area managers periodically offer them the chance to enter into a draw for a luxury hamper of tea products. It is teabags for sub-postmasters, and tens or hundreds of thousands of pounds in bonuses for executives and managers.

Shockingly, in recent weeks, following a freedom of information request by Eleanor Shaikh, it was revealed that Post Office Ltd had racially categorised the sub-postmasters it was investigating, using what have been described as Victorian-era racist terms. I will not repeat them. Post Office Ltd has since confirmed that the relevant document was in use until 2011. It is incomprehensible that no one in the POL management questioned the language in that document.

The chance discovery of that document raised further concerns about Post Office Ltd’s disclosure of documents at the inquiry. Sir Wyn Williams outlined that the late disclosure of documents

“has the potential to jeopardise the smooth running of the Inquiry”.

He said:

“It wastes public funds, it delays the provision of answers to those who were affected and delays the learning of lessons through the recommendations that I will in due course make.”

Subsequently, the Post Office informed the inquiry that it would not be able even to identify relevant documents by the date set by the chair, which Sir Wyn described as “grossly unsatisfactory”. At disclosure hearings, it was stated that the Post Office had been

“unable to identify the scale of the disclosure, and cannot give a timescale.”

However, Jason Beer KC, representing the inquiry, said that the number of documents that needed to be reviewed could be significant.

Representatives of the core participants lambasted the disclosure issues and their impact on victims—people who have already suffered immeasurably are being retraumatised—and called for an adjournment of the inquiry. Reflecting the views of victims, Mr Henry from Hodge Jones & Allen said in his oral submission:

“If a man deceives me once, shame on him. If a man deceives me twice, shame on me.”

He added that Post Office Ltd had taken for granted the chances that it had been afforded early in the inquiry, noting that there had been previous disclosure issues yet Post Office Ltd had acted vexatiously and done the same again. He said that those he represents will not say, “I told you so,” and that

“they knew the future…for the past they knew.”

Mr Henry spoke of the “mental scars” that victims had suffered for two decades because of the Post Office’s cruelty, culture of deceit, secrecy, cover-ups and lies.

Another representative of victims said:

“Post Office always throws a spanner in the works…They have total disregard for any of us. They’re making fools of everyone”.

Another victim said that having to relive the Post Office’s tactics had made them relive the way they were investigated and treated during Horizon, which had a significant impact on their mental health. The representative of Howe & Co. brought up compensation delays. He quoted a victim who spoke of seeing no light at the end of the tunnel and said that victims have no faith that all claims will be settled by August 2024.

The inquiry has been derailed, having been being suspended until the end of July, but that is under review and it is entirely plausible that it will not sit again until September. This latest in a very long list of Post Office-manufactured scandals is a kick in the teeth for victims, who are once again losing faith, for the inquiry and for the general public. The significant non-disclosure of documents by Post Office Ltd makes it feel like nothing in the toxic management culture has changed and, sadly, raises serious concerns about its future.

Sean Hudson of the Communication Workers Union described the management culture perfectly, saying:

“Every serious management failure results in a culture of offering that failure up for external investigation at significant expense to POL and the taxpayer, without learning from those mistakes.”

When were the Government made aware of disclosure issues, and what discussions have they had about them with POL?

The UK Government are the single shareholder in Post Office Ltd. Traditionally, the small business Minister, whatever title they have or Department they are in—at the moment, it is the Department for Business and Trade —has oversight of POL. UK Government Investments has a director on the board of POL, presumably to protect the Government’s interest in the company. The Post Office Ltd board has responsibility for the operation of the Post Office. Is that tenable, given the cultural issues of the past and present?

UKGI is the Government’s centre of expertise in corporate finance and governance. Until recently, its representative on the POL board was Tom Cooper, a senior civil servant, but he has now resigned as a director. Mr Cooper was heavily criticised for failing to tell Ministers about the error regarding bonuses for five weeks after it was revealed, leaving officials to read about it in a statement on the Post Office’s corporate website. That is not a great look for the Government and it raises real questions about the governance of Post Office Ltd.

Lord Arbuthnot of Edrom, a Government adviser on a compensation scheme for Horizon victims, said that Cooper’s failure to tell Ministers and Parliament about the mistake was

“of a piece with the UK government’s representation on the board throughout this sorry saga.”

While I understand that the Department for Business and Trade has said that Tom Cooper’s resignation was planned before bonusgate, does the Minister accept that Horizon victims may find that hard to believe given the culture of deceit within Post Office Ltd?

The Minister has said that the salaries of the leaders of the Post Office reflect the need to have people with the right experience and expertise. Does he still think that the Government have got value for money from the current leaders of Post Office Ltd? Do the Government think it right that its CEO received £455,000 in bonuses and its chief financial officer received £310,000 while Post Office Ltd oversees scandal after scandal, drags its heels on compensation and offers substandard remuneration packages to hard-working sub-postmasters?

In the same way that the Post Office apologises for each scandal or crisis as it arises, the Government criticise Post Office Ltd and commission a report, yet there does not seem to be much action—I put that more kindly than what I wrote, which was: “and then they do nothing”. Government oversight has not solved any of the issues of the past, including Horizon. It is the hard work and tireless campaigning of SPMs themselves, journalists such as Nick Wallis, and campaigners such as Alan Bates, the Justice For Subpostmasters Alliance, Eleanor Shaikh, Dan Neidle, Tim McCormack, the CWU, the National Federation of SubPostmasters, and many Members in this place, past and present, that has continued to push the Government on the issue. I exclude myself from that, because I just take everybody else’s work and talk about it.

It is about time that the Government offered a different approach, because with the current arrangement they are presiding over disaster after disaster. Sub-postmasters are essentially left to subsidise a Government-owned network at great personal cost, and when things go wrong, they are left to fight for justice themselves. It is about time that we started to see proper support for those at the coalface. Will the Minister outline the Government’s plan for the post office network, and provide assurances that the constant barrage of scandals will come to an end and that the management culture at Post Office Ltd will change forever?

13:52

[Lucy Allan (Telford) (Con)]

It is a pleasure to serve under your chairmanship, Sir George. I put on record my utmost respect for the Minister, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), and his work in this area. When he was a Back Bencher, he was as passionate as I am about seeking justice for the little people who have been trampled in this scandal.

Last Monday, Nick Read, the chief executive of the Post Office, came to Parliament to apologise to my constituent Tracy Felstead. He said he wanted to hear her story and to understand how her wrongful imprisonment had affected her life and that of her children and family. He sounded genuine. He looked genuine. We wanted him to be genuine. We talked about how the Post Office could improve its efforts to provide redress to those it had wronged, and we made clear how important it was that the actions of the Post Office matched its words. He readily agreed.

What Nick Read did not tell us at that meeting was that the next day, the news of the non-disclosure of documents would land and, as an inevitable consequence, the public inquiry would grind to a halt for an indefinite period. Either Nick Read was dissembling and putting a victim—my constituent—through more trauma and distress, or he had no idea at all about the non-disclosure and its implications. I do not know which is worse. Perhaps he was both dissembling and incompetent, but as a fair-minded person, I believe that he did not know about the serious non-disclosure that would halt the inquiry. It speaks to the culture of an organisation when the man at the top does not know what is happening. Why was he not told, and why were the Government not told? I am sure that they were not told. Nothing surprises me now.

When I first read the Fraser judgment in 2019, and I observed the way that the group litigation was conducted, I saw all the same things that I as the local MP had seen in other public organisations that have experienced profound scandals. I refer to the Shrewsbury and Telford Hospital NHS Trust’s baby deaths scandal and its Ockenden inquiry, and to Telford and Wrekin Council, where there was the Telford child sexual exploitation inquiry, led by Mr Crowther KC. There was the same corporate denial; the same secrecy and lack of transparency; the institutional blindness; the instinctive desire to protect the institution and the people at the top above all else; the complete lack of understanding of corporate governance and the proper role of scrutiny and accountability; the desperate desire to dissemble; the poverty of leadership; the complacency and utter disregard for the usual norms of behaviour; the blaming of everyone else but themselves; the failure to comprehend that their organisation serves the public; and a twisted belief that cover-up is better for the public than openness, and that keeping victims quiet is for the greater good.

I am a chartered accountant and a chartered company secretary. I have a master’s degree in law and experience as a non-executive director. In the case of the Post Office, the questions that screamed at me from the pages of the Fraser judgment were: where were the non-executive directors? What questions, if any, did they ask? What information were they given? Did they read it? And then inevitably there was this question, in block capital letters: where was the shareholder of that rogue organisation—an institution that thought it was untouchable, and so well protected that it could act with impunity in the courts, in the inquiry and elsewhere? It was protected; it had the deep pockets of the Government backing it to the hilt. It can behave as it pleases, and it does.

We cannot talk about the culture of the Post Office without talking about the culture of the civil service and its relationship with Government. Over many different Governments, there has been great poverty of oversight, and a casual tolerance of appalling behaviour. Even after the Fraser judgment, junior Minister after junior Minister was wheeled out to read what had been written for them by their civil servants. I do not include in that my hon. Friend the Member for Sutton and Cheam (Paul Scully), who did a fantastic job and is as committed to the cause as I am, as is my hon. Friend the Member for Thirsk and Malton. Over the last year, we have talked about the House being misled over covid rules, but what about misleading the House about the fate of the sub-postmasters who lost their livelihoods and liberty, their good name, and sometimes their life? We do not talk about that.

Not every junior Minister will share my passion for righting wrongs and correcting injustice. Indeed, the Ministers concerned had a right to trust the information that their civil servants gave them. Did those civil servants mislead the House? What were the consequences, and why are we not concerned about that? Alex Chisholm was the permanent secretary at the Department for Business, Energy and Industrial Strategy between 2016 and 2020, and was the accounting officer for the Post Office. He was recently knighted—perhaps that tells us all we need to know. Those in power appear to think that nothing wrong happened, or that if it did, there were perhaps a few unfortunate mistakes that led to a perfect storm, but that it certainly was not down to those in charge. Why would they be accountable? Why would they be responsible? Take the bauble, Sir Alex et al. Move onwards and upwards. There is not a stain on your character.

I quote campaigner Eleanor Shaikh, to whom the hon. Member for Motherwell and Wishaw (Marion Fellows) referred:

“This is a culture that can never be trusted to handle the compensation claims brought by those who long ago lost hope that the post office is capable of transforming itself. With an acquiescent, arm’s length, sugar daddy shareholder, it will never be in its interests to do so.”

Who decided that the taxpayer should fund the multimillion-pound defence against the group litigation brought by sub-postmasters? Who agreed to fund the war of attrition to wear down those who dared to fight for justice? Who consented to public money being used in this way? Was it the permanent secretary at the Department for Business, Energy and Industrial Strategy at the time, or was it the Secretary of State, or did they simply not know? I think we are back to that: too many people simply did not know, when it was their job to know. This is a culture, both in Government and in the Post Office, where no one thinks they are really responsible. This is a culture that has leaders who do not understand leadership, as we would know it in the private sector, and who do not feel responsible or accountable for anything their organisation does. Public relations are their focus, as well as the greater good of the organisation and the careers of those at the top.

That culture led to terrible wrongs being suffered, destroyed the lives of the powerless, and left those in power to walk away entirely unscathed from the wreckage that they created, and let us not pretend otherwise.

14:01

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

It is a pleasure to serve under your chairmanship, Sir George, and I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) and the Backbench Business Committee on securing this debate.

I start by paying tribute to the work that the Under-Secretary of State for Science, Innovation and Technology, the hon. Member for Sutton and Cheam (Paul Scully), did when he was the Minister responsible for this issue, and I am sure that the Minister here, the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), feels as strongly about this subject.

Respect in the workplace should be the bare minimum that every worker receives; it should be a given. People work to make a living, pay their bills, and provide for themselves and their family. The majority of workers are assets to their company, and as a collective, their work makes it possible for companies to turn profits—sometimes huge profits that can pay out huge bonuses for executive shareholders, who are a very select few at the top of an organisation. Workers’ contribution should earn them respect, and inspire appreciation for them from those at the very top of an organisation, who are responsible for fostering an inclusive and welcoming working culture. Unfortunately and unacceptably, in many workplaces, that does not happen. We know that it did not happen at Post Office Ltd.

It is difficult to know where to start with the Post Office scandal. Today, we are focusing on the management culture, which is one of those issues that profoundly impacts every aspect of an organisation, and it undoubtedly played a vital role in what unfolded with the Horizon system.

I pay tribute to all of the postmasters and postmistresses who found themselves a victim of the Horizon scandal—every one of the men and women whose integrity was questioned, and who were accused of dishonesty and fraud; those who lost their job, livelihood and, in many cases, freedom; those who were isolated from their community, because they were under a black cloud of suspicion; and those who suffered the breakdown of their family unit under the strain of this long-running saga.

I pay my respects to those who ended up passing away before justice could be served or before their name was cleared, as well as to their families, including those in my constituency. I also say thank you to every former postmaster and postmistress, and those who worked with them, for their hard campaigning over the years to see this wrong recognised and addressed.

I welcome the fact that in its remaining phases, the inquiry will review some of the issues around the working culture. That is essential to understanding exactly how and why so many people found themselves in the situations that they did. However, it will mean very little if it does not prompt change. Lessons must be learned, and not only by the Post Office; this process must inform the improvement of workers’ rights across the UK.

What happened at the Post Office had devastating effects. Sub-postmasters and sub-postmistresses were left with overwhelming anxiety, depression and other long-term mental health troubles. Their vulnerability was exploited, leading to many pleading guilty to crimes they did not commit. Many were driven to financial ruin when they were expected to make good the shortfall in the accounts from their own money. Some were sadly driven to taking their own life.

We often hear that there is strength in numbers, but for the best part of two decades, that was not the case for these victims, despite so many of them experiencing issues with the Horizon system, and being adamant that these accounting errors were systematic. They were not listened to. The problems were hidden and covered up, and many did not realise that they were not alone in their difficulties until many years later. In fact, between 2000 and 2013, over 700 people were prosecuted on the back of issues with Horizon.

It is absolutely astonishing that no one bar the postmasters affected put the pieces together sooner or, crucially, acted on it. It is now clear that internal investigations by the Post Office meant that the issues were identified much earlier than it had indicated, which is mind-blowing. It means that the chief executive at the time and others were aware that it was very possible that innocent people’s lives had been destroyed for no reason. That is unforgivable. Why were apologies not immediately made? Why was the path to justice not immediately set out upon? Why did these people—human beings with lives and families—not matter enough?

Some of the most disgusting things I have read relate to the racial classifications that the Post Office used for its postmasters. At the height of the Post Office’s pursual of unsafe prosecutions against its postmasters, racial identification codes were used by its security operations team in a compliance document. The Post Office has not been able to confirm when those classifications were removed from its working practices. It is language straight out of another century, and language that we all condemn. It is language that is incredibly racially charged, ignorant and, frankly, unacceptable. It illustrates the culture at play in the Post Office at the time, and it is not an attractive picture. Racism has no place in the workplace or, indeed, our country.

The fact that the former chief executive was able to leave her role voluntarily, having been paid £500,000 a year and awarded an honour for her contribution, is a disgrace. So is the fact that senior executives received bonuses of hundreds of thousands of pounds last year, particularly as one of the metrics used to justify those payments, and judged to have been met, was compliance with the inquiry. Essentially, they got a pat on the back and a huge financial windfall for doing what the Post Office is legally obligated to do. Add that to the fact that the Government will have to pay huge sums of taxpayers’ money to bail out the Post Office as it pays the compensation owed to postmasters and postmistresses. It makes a mockery of the entire fiasco.

I am sure that more will come out of this inquiry that will continue to shock us. I am sure that every Member of this House agrees that postmasters cannot and should not wait any longer to receive the compensation that they are rightfully due. I am not sure that anything can be done to fully right the wrongs that have occurred throughout this scandal. However, we must not hear any more excuses or denials, and above all else, we must not see any repeat of such widespread and utterly avoidable injustice.

14:08

[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Sir George. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing the debate. I declare an interest that I am a member of the Government’s Horizon compensation advisory board. Many will know that I have been involved in addressing what has become known as the Horizon scandal for many years.

I am usually an advocate of the cock-up theory of history—mistakes happen—but my involvement in addressing the Post Office and Horizon scandal started when a constituent of mine, Tom Brown, who was being prosecuted by the Post Office, came forward. The more I looked into the issue over the years, the more I realised that these were not mistakes but deliberate lies, cover-ups and deceits, which, as has been said, led to innocent, upstanding members of the community being prosecuted, bankrupted and, in some cases, sadly taking their own lives. That takes us back to issue raised by the hon. Lady: it is the culture of the Post Office that led to the Horizon scandal.

I have described the culture of the Post Office as rotten to the core. Based on recent evidence, I do not think a great deal has changed. Let us see what that rotten culture led to. The hon. Member for Telford (Lucy Allan) has referred to the vicious prosecution of individuals. The evidence that came out of the inquiry—Lord Arbuthnot and I were aware of this—showed that the board knew in 2011 that the Horizon computer system was flawed. The argument that kept being peddled out—that somehow the system was infallible—was just not true.

In spite of that, the Post Office continued to prosecute individuals, including one horrendous case where it sent a pregnant mother to prison. Some 927 individuals were prosecuted. The numbers went up substantially, so why was nobody at the Post Office saying, “Wait a minute: have we suddenly got a load of kleptomaniacs employed as sub-postmasters?” Alarm bells should have been ringing, and yet the Post Office doubled down on prosecuting people. My constituent Tom Brown went through agony for two years after being arrested for allegedly stealing £84,000, only to get to the Crown court in Newcastle and be told that the case was dismissed. In that time, he had gone bankrupt and had his reputation completely ruined. There are many other stories. I and other Members have met some of these individuals, so we know of the mental strain and cruelty that they have experienced. It would take a heart of stone not to be moved by their situation.

The hon. Member for Telford also raised the issue of the board’s approach of resistance. I have referred in the past to a tsunami of public cash being used to defend the indefensible, as happened in the court case that Alan Bates and the Justice for Subpostmasters Alliance brought against the Post Office. There was also the ridiculous situation in which it challenged Mr Justice Fraser in the court and tried to have him removed. That was a delaying tactic—it was not about getting to the truth, but about trying to outspend the applicants. That all happened at our expense—the nearly £100 million it spent was our money—yet it knew back in 2011 that what it was arguing in court could not be defended.

The hon. Lady also mentioned the role of the board. There were faceless individuals sitting on the board and agreeing all of this. They were quite happy to get remuneration for sitting on the board, but they did not ask basic questions about what was going on. For many years I have not been able to get to the bottom of the role played by the UK Government Investments share- holder. That person was meant to represent the interests of taxpayers on the board, yet they were quite happy to sign off £100 million of legal fees for the Post Office. I shall make an exception for the present Minister, but I have dealt with many Ministers over the years, all of whom, to be frank, trumpeted the same rubbish every week, obviously guided by their shareholder on the board. It would be interesting to see what the shareholder said over the years. These faceless individuals are taking remuneration, and they need to be held to account for their actions. It is no good saying that time has passed. They have ruined people’s lives—that is the important thing.

The ironic one is Paula Vennells, who ran the Post Office from 2012 to 2019. It has already been mentioned that she got a CBE for services to the Post Office. Even in 2019, when she got it, we knew about the scandal that was going to break, yet somebody thought it was great to sign off on the CBE. They not only did that, but made her a non-executive director at the Cabinet Office and the chair of Imperial College Healthcare NHS Trust. What the hon. Member for Telford said is correct: it is a chummy club where we think good people—either good men or good women—can go on to these other things, and no doubt get, for those two roles, quite substantial payments. How was that allowed to happen? How did somebody in Government say, “Wait a minute; this scandal is about to break—we’ll give her a CBE and appoint her to two public bodies”?

Finally, I come to the present board. It has already been said that Nick Read’s salary is £415,000. He had a bonus of £455,000. The chief financial officer, Alisdair Cameron, gets paid £110,000 and got a £316,000 bonus. I ask them: where is their moral compass? How did they think it was right to accept such ludicrous bonuses when we are still fighting over compensation for victims of the Horizon scandal? That is wrong. I do not understand how someone can get nearly £1 million a year for running an organisation that is supposed to provide a public service and think that somehow it is right to get a bonus for doing their own job, while there are people who are broken, who are destitute and, in some cases, who still have the moral shame that came with prosecution. That is a moral issue. I do not know how these people sleep at night. How do they think it ethically possible to accept such a figure?

I think Nick Read has paid something like £7,000 back. Big deal! Let us be honest: that is pocket money in terms of his overall remuneration package. Part of the bonus was actually for their work on the Horizon scandal. It was complete nonsense: they said that Sir Wyn had to sign the thing off, but Sir Wyn did not even know about it. The Post Office made that up. At the end of the day, this is public money, not their money. This is not a private company; this is taxpayers’ money, which is the important point. I would not mind if it was actually good, but as has already been said, the inquiry has now been held up because the Post Office has not disclosed documents. The Post Office cannot argue that somehow it cannot find documents or that there has to be a delay. Somebody should have done a trawl of this. If certain people have kept money for work on the Horizon scandal, the Government should sue them, because frankly they are holding up the inquiry.

There is a lot of anger, quite rightly, among sub-postmasters, sub-postmistresses and their supporters, not only about what has happened in the past. There are some clear governance issues. I think that there is call to sack the board on various social media, and I agree with that: the present board needs to be sacked. We also need a fundamental change in the way the Post Office is structured and operated.

[Lucy Allan]

Does the right hon. Gentleman agree that the lawyers, Herbert Smith Freehills, should be sacked?

[Mr Kevan Jones]

Lawyers are lawyers. The hon. Lady said she was a lawyer, and I mean no disrespect, but let us be honest, if the lawyers are going to get a good living out of it, they will take the money and give the advice. A lawyer will say anything if they are paid enough. The point is that the board is still not performing its scrutiny role. As the hon. Lady rightly said, the role of non-executive directors is to challenge and question things, but they are not doing that.

There needs to be an emergency situation and the current board, including Nick Read, needs to go. We need to put in some interim arrangements, and then in the long term we need to look at how the Post Office is run. It is frankly a farce that it is considered to be a private, stand-alone company. It is not: it is 100% owned by taxpayers. Unless that is done, I fear that these people will keep taking large bonuses and salaries and, as the hon. Member for Motherwell and Wishaw said, our network will get smaller and smaller and the people who do the real hard work every day of the week at the front end will get less and less.

14:20

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to see you in the Chair, Sir George. I congratulate my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) not just on securing this debate but on all the work she has done over a number of years campaigning on Post Office issues—particularly for sub-postmasters affected by the Horizon scandal. At various points, I have assisted her work; I will talk about that a little later.

My hon. Friend’s speech covered the bases very well. She spoke of the suffering of sub-postmasters, including those who have sadly died. She also spoke of the absolutely vital role that the Post Office plays in our communities. That has always been the case, but it is particularly so now that the banks have abandoned our high streets. She did not miss when she spoke of the horrendous management practices at Post Office Ltd. Moreover, there is no evidence that that management culture has changed. That sharp practice continues into the Post Office’s handling of the compensation scheme. I respect the Minster and I am looking forward to his answers to our questions.

The hon. Member for Telford (Lucy Allan) spoke about the experience of her constituent Tracy Felstead, and the somewhat tainted apology that she received from Nick Read. The hon. Lady rightly compared the Horizon scandal with other shameful episodes in which there have similarly been secrecy, incompetence, institutional blindness—I thought that was a good phrase—and an overwhelming desire to protect the organisation at any cost.

The hon. Lady also mentioned the role of the civil service and the fact that Ministers—in fact, all elected representatives from local councils right up to Holyrood and Westminster—rely on information given to them by civil servants or our member on the Post Office board. We know about that all too well in my constituency, because a local school that has been built is two or three times too small, despite officers being told that information years ago.

The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) made the very good point that all businesses, including the Post Office, are built on their workforce, which should at the very least be treated with respect. She praised and thanked the sub-postmasters and their families for their campaigning and their extraordinary patience over the years, and I wholeheartedly second that thanks. She also made the very good point that many sub-postmasters thought they were alone when they faced these accusations and charges.

The right hon. Member for North Durham (Mr Jones) said that the Post Office board was rotten to the core, and that not a great deal has changed in that regard. He said that the board knew in 2011 that the Horizon system was flawed, and yet it pursued the prosecutions, one of which resulted in the imprisonment of a pregnant mother. He made the very obvious point—at least it should have been very obvious to the Post Office—that when the system was introduced, the instances and the value of missing money increased significantly, and yet the Post Office did nothing and pursued these prosecutions.

I mentioned my work with my hon. Friend the Member for Motherwell and Wishaw, which was to do with the definition of community post offices, and about banking transactions. Sub-postmasters were paid 24p for every £1,000 of banks’ money that they handled. However, there was no distinction between notes and coins, so if someone was processing—this is not likely; it is the extreme—£1,000-worth of pennies, they would be able to keep 24 of those 100,000 pennies as payment for that work. I am glad that that was increased threefold after a lot of campaigning by many of us in this House and, more importantly, sub-postmasters themselves, but the levels that they are paid today are still, particularly in the light of the inflation that we have seen in the last while, not enough.

It has been said in this debate that not a single senior manager at Post Office Ltd has lost their job as a result of this shameful episode. Not a single highly paid executive has yet faced criminal charges for their role in this conspiracy. Many have quietly departed with golden handshake payments and their gold-plated pensions intact. When counterclaims were being lodged by the Post Office in court—at the behest of its senior execs—it knew full well that its own systems were dodgy and that those who were seeking redress for the ordeal that they had suffered were completely correct, yet still it went ahead with its counterclaims, seeking to drive the claimants off the case.

Virtually every Member will have experience of their constituents being victims of the conspiracy at the top of the Post Office, and I am no different. My constituent was accused of the theft of tens of thousands of pounds during her time as a sub-postmaster at a rural sub-post office. She was advised that going to court and defending her innocence would be futile and might result in a longer sentence if she was found guilty, because the Post Office had evidence of her “theft” in black and white—evidence taken from the flawed Horizon system. She took that advice: she pled guilty, despite knowing that the charges were utterly untrue. She ended up being sentenced to more than a year in prison and had her life ruined. Her name was plastered over the local newspapers as a common thief. Her house was repossessed as the Post Office moved on from its abuse of the criminal justice system to abuse the civil legal system and sought to recover the money that had been “stolen”. She lost everything—her family, her friends and her freedom. Thankfully, she has been able to move on somewhat and settle in my constituency, but she will never get back the years of being marked as a crook by a collection of spivs at the Post Office.

That is in marked contrast to those involved at the heart of this conspiracy, who have been able to move on with ease to new roles and positions with other organisations—all of them generously paid and secure. That is to say nothing of those still with the Post Office, who continue the appalling track record of their predecessors and obstruct the work that Sir Wyn Williams and others are doing to lay bare exactly what happened at POL and Fujitsu over decades. Even this week, we have heard that the inquiry will be further delayed while the Post Office fails yet again to disclose documents that it has been ordered to provide. You would think, Sir George, that given the revelations and scandals of the past few years surrounding the Post Office and its responsibility for destroying the lives of thousands of people on the basis of a lie, it might be a little less cavalier with the facts. It saw fit to pay bonuses to senior management and executives and to boast in its annual accounts that it had supplied the inquiry with all the documentation that it required, but we all know that to be a complete lie—another pack of falsehoods that it thought it could get away with, but which fortunately has been stopped in its tracks. How many more lies will Sir Wyn’s inquiry uncover in the end? That is what Post Office management are afraid of and why they should not be allowed to delay or obfuscate for a single minute longer.

This scandal should also bring into sharp focus the idea that major IT projects should be automatically awarded to the private sector. Throughout this saga, Fujitsu has behaved deplorably, to say the very least, with some instances of behaviour potentially being criminal. Why is Post Office Ltd extending its contract? It makes no sense; it beggars belief that it is extending its contract, unless they are in cahoots. Horizon was manifestly unfit for purpose from the very start and continued to produce fundamental and systemic errors. Those errors should have been properly investigated and changes made. Instead, hundreds of innocent men and women paid the price for both organisations’ arrogant intransigence.

Why has Fujitsu escaped paying a single penny back to the Post Office for a contract that it clearly was incapable of fulfilling properly? Given its key role in this scandal from start to finish, why is Fujitsu still allowed to involve itself in contracts from the public sector when it is manifestly unsuitable, practically and morally, for that task? The accountability quite rightly has been focused on Post Office Ltd, but responsibility also lies with those it engaged, using public funds to commission the deeply flawed Horizon programme. They cannot and should not be allowed to escape their responsibility in this affair.

While all this was going on, Post Office Ltd was engaged in a programme of stripping our country of large parts of our post office network. Only 200 Crown post offices are left, out of about 11,000 offices. Most of the rest of the network has been contracted out to sub-postmasters and sub-postmistresses, which makes the company’s behaviour toward the very people who have ensured that we still have a post office network all the more appalling.

I want the inquiry to go through all the facts and events that led to such despicable behaviour. I want to see each of the former executives and managers brought in front of Sir Wyn and made to explain in detail their actions and the actions of those around them that led to these miscarriages of justice. Finally, those involved in the catastrophic errors made by the Post Office and Fujitsu, and more pertinently those who organised the cover-up, must be held accountable for their actions. That is the only way forward to restore public trust in the Post Office, an organisation that we expect to be proud of, but that is currently a byword for corruption, cover-ups and chicanery.

14:30

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Sir George. I start by thanking the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing the debate. Her tireless work on this scandal is well recognised across the House and is greatly appreciated. Indeed, all Members who have spoken have been powerful advocates during their time in the House. They gave many powerful examples of how the management culture in the Post Office has had an impact on individual people’s lives.

The hon. Member for Motherwell and Wishaw talked about obfuscation, secrecy and cover-ups, saying that nobody has truly been held to account for this. She made it clear that the victims she has spoken to have little faith that justice will be done. That really has to change. She raised several important questions that the Minister will hopefully be able to address, and I will refer to a number of the issues she mentioned.

The hon. Member for Telford (Lucy Allan) spoke very powerfully. Her point about her constituent meeting the chief executive earlier this week really got to the nub of the problem: words need to be matched by action. That is the challenge that Post Office’s management need to step up to. She raised questions, as all Members did, about culture and governance. My right hon. Friend the Member for North Durham (Mr Jones) raised similar issues in a passionate speech. It is clear that there are serious questions about what the board is doing.

Litigation has been ongoing for several years. The fact that the inquiry does not have the documents because they cannot be found raises questions about what on earth has been going on. Documents would normally be prepared for litigation, so my right hon. Friend the Member for North Durham was right when he said that questions must be asked about what the board is doing. He talked about lies, cover-ups and deceit being the culture—a culture that is rotten to the core. He also talked about a tsunami of public cash being used to defend the indefensible. Those comments really sum up why this is something that has to change.

As the hon. Member for Motherwell and Wishaw said, it is very clear that this is one of the greatest—if not the greatest—miscarriages of justice in this country. We have heard many poignant examples about how the lives of hundreds of innocent post office workers have been ruined by the Post Office aggressively pursuing them on the basis of a fundamentally dodgy IT system about which worries had been flagged up.

Concerns about culture have been repeatedly raised in the debate. As Members have mentioned, the High Court in the case of Bates v. Post Office Ltd stated:

“There seems to be a culture of secrecy and excessive confidentiality generally within the Post Office, but particularly focused on Horizon.”

This is not someone down the Dog and Duck talking about the Post Office. It is a member of the judiciary, so we have to take those words very seriously.

Those sentiments are reflected by the Communication Workers Union, which identified a

“serious and longstanding cultural and governance problem”

rooted—a word we keep coming back to—in a fundamental lack of accountability. In its view, this led to the abuse of power, corporate complacency, denials, cover-ups and false evidence that have been the hallmark of the Horizon scandal. These comments are rightfully damming. The complete overhaul of Post Office management and culture that one would have expected on the back of such claims has been lacking. From the stories we have heard, the Post Office seems largely unreformed.

Despite assertions to the contrary, we know that, as the hon. Member for Motherwell and Wishaw detailed, years have been spent fighting compensation claims against honest sub-postmasters. Every trick in the book has been used to draw things out for as long as possible. That includes making low compensation offers, only for them to be raised once legal action is taken, and using technical and misleading language in letters to dissuade victims from seeking expert advice. Those are not the behaviours of an organisation that has a true insight into its failings. Those are not the behaviours of an organisation that is contrite. Those are not the behaviours of an organisation that recognises that it needs to change. Sixty former sub-postmasters have died without payouts and most victims are still waiting to receive their full and fair compensation. That is outrageous. Victims have been failed time and again by the Post Office’s toxic management culture. What are the Government going to do to protect those victims and to ensure that justice will be fairly and swiftly delivered?

As we heard from the hon. Member for Motherwell and Wishaw, executives have been receiving substantial bonuses while this has all been going on. We heard about chief executive Nick Read receiving £455,000 in bonuses on top of his £415,000 salary in ’21-22. As we know, part of those substantial bonuses was falsely reported to have been agreed by Sir Wyn Williams, who led the Horizon inquiry. That bonus was paid due to Read’s co-operation in the handing over of documents. We now know that to be false on two counts. First, it was reported in May that Sir Wyn did not sign it off; that was a complete fabrication. Last week, it was found that the documents for that day of evidence in the inquiry had not actually been disclosed at all. As the hon. Member for Telford said, there must be questions when the chief executive does not know the facts on something so important to the Post Office and to the victims.

This is not just a casual misunderstanding; the Post Office annual report and accounts for 2021-22 published the metrics on which bonuses for senior leaders were based. One metric, which was marked as achieved, read:

“All required evidence and information supplied on time, with confirmation from Sir Wyn Williams and team that Post Office’s performance supported and enabled the Inquiry to finish in line with expectations.”

We now know that to be completely false; Sir Wyn Williams actually said:

“I am dissatisfied by the approach that has been taken by the Post Office; in my view, their approach demonstrates a lack of clear thinking about the disclosure obligations owed to the Inquiry with which the Post Office must comply and the means by which their obligations can be fulfilled.”

The Post Office has issued a clarification to the report and an apology, stating:

“We recognise that by setting this particular sub-metric, and marking it as achieved, we implied that Sir Wyn and his team had agreed to this sub-metric and had commented on the outcome. We wish to clarify that we did not ask for Sir Wyn’s agreement to the wording of this sub-metric and Sir Wyn and his team did not give any input into assessing whether it had been met.”

This is an annual report; basic things like that ought to be checked before they appear in black and white.

If we put aside the argument of whether executives should be paying themselves handsome sums for complying with things that they ought to be doing by law anyway, and if we also try to overlook the vast irony of the Post Office being caught doing what it pursued sub-postmasters for supposedly doing, as my right hon. Friend the Member for North Durham said, that is a moral issue. There are questions about that.

There is also the question of whether people making such statements are fit to be running any business. I know the Minister is looking into the governance arrangements, but has he commissioned any investigation into whether section 1112 of the Companies Act 2006 was breached in this episode? I would be grateful if he would address that specific point in his response. If he is unable to do so today, can he respond in writing?

Understandably, the focus has been on the Horizon scandal—there are so many things that need to be addressed—but, as other Members have referred to, the creeping withdrawal of post office services affects all our communities. We have been reminded today of the important functions they perform, particularly for older and disabled people, carers and those who simply cannot access the internet. The post office is a vital lifeline, especially when other vital in-person services such as banks are closing at an alarming rate. There is a serious question about whether the management have the ability to meet those challenges.

I was struck by the comments from a constituent of the hon. Member for Motherwell and Wishaw who said that they make more money from the coffee machine than from post office services. That might explain why there is a silent withdrawal of the post office from our communities. Of the 11,500 post offices in operation, only 4,000 are open seven days a week. There has been a proliferation in the number of outreach branches. In 2000 there were just 52, representing 1% of the total network. As of March last year, that had gone up to 1,901, comprising 16% of the network.

I would be interested in whether the Post Office meets any of its six accessibility criteria if part-time or partial service branches are included. Have the Government conducted any analysis into that? How many people are reliant solely on outreach services? Constituents have told me that they have to go on a magical mystery tour of the constituency to find a post office that is actually open, and that is not because they go out at unsociable hours; it is often in the middle of the day. Many people now struggle to find somewhere open because the advertised hours are not adhered to. I do not know why that is happening, but it points to something badly wrong in the whole system. What can be done about it? Has the Minister made an assessment of the anticipated profits of an average post office operating on a full-time basis? Is the system sustainable or is there a problem with the way it is being run?

Another difficulty is when one of the many sub-postmasters decides to close up shop, and we see time and again a failure to address that issue. It has happened many times in my constituency; I am sure it has happened in other Members’ constituencies. Every time the Post Office tells us that it will look for another partner to open up. We wait and we wait and sometimes—months or even years later—we get a new post office, but sometimes it does not appear at all. I have said repeatedly, every time there is a closure, that the Post Office’s laissez-faire attitude to another one reopening is not good enough. It does not work, and it is allowing services to wither on the vine. I can give examples of each outcome in my constituency.

In Elton in 2016, we waited a year for the post office to reopen after it had closed. Neston lost its branch almost two years ago, and it is now open in a car park for two hours on two days a week. Great Sutton post office closed last year, and there is no sign of it reopening. It all feels like management either do not care or do not have the capability to address this structural challenge. We know they have not been able to do the job in the past. Can they do it in the future?

I raised that issue primarily because there is a pattern here. The failure to handle post office closures has parallels with the failure to deal with the Horizon scandal, which have both shown an unwillingness to change or to accept that things need to be improved.

Does the Minister have confidence in the management of the Post Office? Does he think the management culture has changed sufficiently since Horizon first emerged? What are the Government doing to ensure that victims receive the compensation that they rightly deserve? Does he consider that they have a sufficient grip of public access to post offices and a proper strategy to maintain services?

14:43

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to speak with you in the Chair, Sir George. I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing today’s important debate and for her constant work in this area on the all-party parliamentary group on post offices. It is always a delight to work with her in these areas. We share her passion for the post office network and the services that it provides to communities up and down the country.

A positive management culture is paramount for the health of any organisation, so I welcome today’s debate on the culture of the Post Office. As raised by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), culture is critical to any organisation. As Emerson once said,

“An institution is the lengthened shadow”

of a single person, so leadership is hugely important in this context.

The Horizon scandal has had a devastating impact on those affected and on Post Office itself. It has now rightly accepted that it got things very badly wrong. I thank all right hon. and hon. Members for all the work they have done in campaigning over many years, including the hon. Member for Motherwell and Wishaw, my hon. Friend the Member for Telford (Lucy Allan) and the right hon. Member for North Durham (Mr Jones). I also thank the noble Lord Arbuthnot, who is in the Gallery, and the many other people associated with this work, including the barrister Paul Marshall, the journalists Tom Witherow and Nick Wallis, Dan Neidle and, of course, Alan Bates and the 555 people who took the matter to court. We would not be here without them, and we are at least starting to put these matters right.

When the current chief executive of Post Office, Nick Read, started his job in September 2019, he made it clear that Post Office needed to apologise for the events of the past, fully address them and, of course, compensate those who suffered detriment. A key part of that will clearly be the restoration of trust between Post Office and postmasters. That is so important, because, as I said previously in other debates, there is no post office network without postmasters.

In December 2019, the parties to the group litigation order in Bates v. Post Office Ltd took part in a mediation session and issued a joint statement confirming Post Office’s commitment to resetting its relationship with postmasters. Since then, Post Office has appointed two non-executive director postmasters, who were elected by other postmasters, to the Post Office board. This ensures that postmasters’ voices are being heard at the highest level—something that I witnessed yesterday when I attended the board meeting at the company’s offices. It is crucial that senior management is cognisant of the impact that its strategies and changes will have on those who are on the frontline of delivering services. Post Office has also appointed a current postmaster to a new director role, who leads the day-to-day relationship with postmasters.

Alongside those appointments, Post Office has looked into operational matters to improve culture and trust between senior management, staff and postmasters. Improved training packages, and the hiring of more than 100 new area managers to provide dedicated local support, are examples of positive changes. On the Government’s part, I enjoy chairing our regular working-group meetings with Post Office and the National Federation of SubPostmasters, as I did yesterday, and I find them to be a useful forum to discuss the high-level issues affecting postmasters.

On compensation, it is right to say that in order to look to the future, Post Office must first address and learn from its past mistakes so that it can rebuild trust in the business. We are determined that postmasters affected by the Horizon scandal receive the compensation they deserve, and the Government are supporting Post Office with funding to deliver that.

The shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), challenged me on what the Government are doing to make sure that justice is delivered to those affected, and I am determined to make sure that we do everything possible in that regard. I am grateful to the right hon. Member for North Durham for his work on the advisory board, to which he referred. The board initially looked after just the GLO part of the scheme, but that was extended to all three schemes on the request of him and his colleagues on the board. I am delighted to see the work it is doing, and I am determined to give it what it needs to make sure that the schemes are fit for purpose and delivering outcomes as expected. Indeed, we expanded membership of the board to include, for example, Professor Moorhead, who has been a leading advocate in this area.

Although there is still work to do, good progress has been made across the different compensation schemes. For postmasters who were wrongfully convicted due to Horizon shortfalls, Post Office has to date paid out over £20.4 million in compensation. That includes initial interim payments to 81 individuals and, additionally, 65 partial settlements, top-up payments or hardship payments. Post Office has reached full and final settlement with four claimants, and will continue to process claims that are lodged as quickly as possible. The Horizon shortfall scheme, which was set up as part of the settlement in the 2019 group litigation case against Post Office, provides redress for postmasters who repaid shortfalls but were not convicted or part of the court case. Over 99% of the original claimants to the HSS have now received an offer, and the value of the offers is more than £100 million. A further £2.1 million has been offered to the 91 late claims that have been processed so far.

The hon. Member for Motherwell and Wishaw says she believes the claims have been settled at the lowest possible level. I do not accept that. The advisory board, including the right hon. Member for North Durham and the noble Lord Arbuthnot, and I attended a session with the HSS panel and the lawyers connected to that panel. It was clear to me, and I hope to other Members who attended that call, that the panel works on an inquisitorial basis, trying to identify any detriment, financial or otherwise, and to ensure compensation in full on those matters.

The group litigation order scheme is being delivered by my Department—the Department for Business and Trade—rather than the Post Office. It is always tragic to hear the many cases that relate to these issues. I have a constituent—Sam Harrison of Nawton, near Helmsley—who sadly passed away while waiting for her claim to be paid from the GLO. That is unacceptable, and we need to accelerate outstanding payments through all schemes. To date, the Department has paid out over £21 million in compensation, including through interim payments. We have received 18 claims. Across those areas, our priority is providing fair and swift compensation to those affected, so that postmasters achieve the justice they deserve. Indeed, we have made some adjustments to the scheme and to previous schemes, in terms of the tax treatment of the HSS. When the board has come to me on any matter, we have delivered on its suggestions.

[Mr Kevan Jones]

I would like to put on the record my thanks to the Minister and his predecessor, the hon. Member for Sutton and Cheam (Paul Scully), for the way in which they have approached the Horizon compensation scheme scandal. The board made some recommendations to the Minister at the last meeting. When will he be in a position to respond to those recommendations?

[Kevin Hollinrake]

I am keen to respond, as the right hon. Member knows, on a potential appeals process. I am looking at this carefully, and we will continue to engage on that, but we want to ensure that everything is fair and that people are confident in the process for getting the compensation they deserve. We want to ensure that the compensation is delivered on time. We have an August 2024 deadline, as the hon. Member for Motherwell and Wishaw mentioned. We are keen to deliver on that deadline and are looking again at further ways to expedite payments to all those still waiting.

On governance, Post Office Ltd is a public corporation, and as such its board retains responsibility for the strategic direction of the company.

[Lucy Allan]

This debate is about the culture of the Post Office, and we have raised issues around the bonus arrangement, non-disclosure of documents, and racism and the use of categories. Will my hon. Friend move on to discuss the points raised by hon. Members?

[Kevin Hollinrake]

I certainly will. This is all context to the issues that many people have raised around compensation, but I will certainly come on to those points.

Through the shareholder’s representative on the board, the Government oversee the Post Office’s corporate governance, strategy, performance and stewardship of its financial and other resources. The Post Office reports to the Government on key issues at the regular shareholder meeting. The hon. Members for Motherwell and Wishaw and for Paisley and Renfrewshire North (Gavin Newlands) asked about the future of the Post Office and our plan for it. We all recognise that post offices are a valuable social and economic asset for communities. They deliver essential services and play a key role on our high streets.

The hon. Member for Motherwell and Wishaw spoke about post offices being the front office of Government. We very much see them as the front office of Government, but we do not dictate to consumers how they access vital services. Many consumers look to acquire services in different ways. Many people renew their passports and driving licences online these days rather than at the post office, and we want to give them the convenience of doing that. That creates challenges for the sustainability of the Post Office and of individual branches. We have to acknowledge that. The Post Office is putting together its future plan, and we are working with it on things such as banking services and access to cash, which we have now legislated for. We are looking at whether the Post Office network is getting a fair share of the savings that the banks are making by closing branches and making the Post Office the first point of call for access to cash, for example.

[Marion Fellows]

I recognise what the Minister has done, and I acknowledge that more and more people are going digital, but post offices serve their communities. In communities with high levels of deprivation such as mine and others represented by hon. Members in this Chamber, we need post offices. The Government have to stop withdrawing contracts from them, as that prevents people from accessing those services.

[Kevin Hollinrake]

I am not aware of any withdrawal of services. There is a Driver and Vehicle Licensing Agency issue, and there is a negotiation between the Post Office and DVLA. It is absolutely right that postmasters get fair remuneration for those kinds of services; we agree on that.

On senior pay and bonuses, what happened with the setting of the metric, and the awarding of the bonus around it, was unacceptable. The Post Office’s internal investigation has reported, and the Government have commissioned a separate review of the governance around Post Office decisions. We have not sat on that; it has not reported back yet. One thing we all agree on is that we need to follow due process in our oversight of the Post Office. Our review is being led by Simmons & Simmons, and we expect it to report to me by the end of the month, and of course I will wait for that before taking action.

My hon. Friend the Member for Telford talked about the inquiry and disclosure. The Post Office apologised and has taken urgent steps to put things right. Its disclosure to the inquiry was clearly unacceptable. I am not aware of any breach of the Companies Act, but we will certainly look into that.

My hon. Friend and the hon. Members for Rutherglen and Hamilton West and for Paisley and Renfrewshire North all asked about matters pertaining to the inquiry— what happened, why it happened and who is responsible. When the inquiry reports and assigns blame, we should be able to take action against those responsible.

The Government are very supportive of the Post Office’s efforts to improve its culture and its relationship with postmasters, and to right the wrongdoings of the past. Despite the positive progress since 2019, there clearly are still many improvements to be made, and the Government will be watching closely to ensure they are properly implemented.

14:57

[Marion Fellows]

I thank all right hon. and hon. Members who are here. This was the most difficult debate to prepare for in my time in this place, because I had so much information and so many facts that I wanted to get over, and I had to put aside a large amount. It is really important to many communities—in fact, it is important to everyone—that sub-postmasters receive proper justice and recompense for what they and their families have gone through. It is really important to communities such as mine in Motherwell and Wishaw that the Post Office network continues.

I pay tribute to the Minister and his predecessor, the hon. Member for Sutton and Cheam (Paul Scully). In the eight years that I have been here, we have had a variety of small business Ministers and Ministers with responsibility for post offices, and none of them got it until the last two. However, that does not excuse the failures, and it will not stop us pushing and keeping at the Minister and the chief executive of Post Office Ltd. Post offices are important and need to continue. People who work in them need to be properly remunerated, and people who need them have to be able to go to them and get what they need.

Question put and agreed to.

Resolved,

That this House has considered the management culture at Post Office Ltd.

Freehold Estate Management Fees

Thursday 13th July 2023 Westminster Hall

[Dr Rupa Huq in the Chair]

15:00

[Helen Morgan (North Shropshire) (LD)]

I beg to move,

That this House has considered freehold estate management fees.

It is a great pleasure to serve with you in the Chair this afternoon, Dr Huq. I am grateful to the Backbench Business Committee for granting this debate and also to the 14 MPs from across the House who enthusiastically wrote to me to support it. I suspect that the fact that they are, unfortunately, not all here is a function of its taking place on a Thursday afternoon. Like me, they have been contacted by constituents whose lives have been blighted by the often scandalous reality of unfair, unregulated estate management fees, and feel obliged to call on the Government to legislate robustly to correct this.

I will begin by outlining the crux of the problem for many freeholders in the UK who are trapped by such arrangements. It is becoming increasingly common in new housing developments for the shared areas that are built to remain unadopted by the local council. Instead, a management company takes responsibility for the shared areas outside the bricks and mortar of the owners’ homes, and the freeholders are required by law to pay annual charges for the upkeep of those areas. That could include anything, from the maintenance of garden areas to roads and footpaths. As I will come on to later in my speech, it can even include the sewerage connections of the properties in the development. Sometimes, the freeholders will also be the joint owners of the shared areas.

The commercial substance of these arrangements is that the freeholders sign up to a leasehold agreement, even if the legal form gives it a different name. It is in the nature of these agreements that the problems begin. A common practice, I found, is for brochures and contracts, or sales staff to refer to estate management charges as

“a small annual charge for grass-cutting or for the upkeep of the play area.”

In some cases, that description of the charges could not be further from the truth.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I have been pursuing this matter for some time. Indeed, I have described it as the new payment protection insurance, or PPI, because there are so many people who have been signed up to things that they did not know about. The similarities between that and the leasehold scandal are all too familiar. Does the hon. Member feel that there needs to be far greater candour and transparency from developers when they sell their properties?

[Helen Morgan]

I thank the hon. Member for his intervention and I agree with him; that is one part of the solution to this problem.

From day one, homebuyers are being fleeced by the developer, given the reality of the charges they will face, and unfortunately, because they are often first-time buyers, they do not have the experience or knowledge to delve deeper into the charges during the conveyancing process.

These charges are usually uncapped and unregulated, with no means of redress for the buyer, which can be the beginning of a spiral of problems that freeholders in this position face. A common arrangement is that the management company is a zero-profit company that simply passes the cost of maintenance work to the freeholders. However, this work is subcontracted to a profit-making company; and I am sure it will come as no surprise to hear that, in these arrangements, the subcontractor is often connected to the original developer and makes exorbitant profits. The subcontractor does that by ensuring that the cost of the maintenance work is extortionate. To add insult to injury, although the freeholders are paying for the upkeep of the communal area, or the public area, or the roads, or the street lights, they do not receive a reduction in their council tax.

A stakeholder from the Cambridge Centre for Housing And Planning Research said in an interview that the reason why the number of freehold estates with estate rent charge requirements is increasing is that local authorities are not keen to adopt all communal areas and roads on estates. But in actual fact, local authorities are being incentivised to encourage these arrangements, because they raise council tax revenue without incurring any maintenance costs.

I will provide a few examples from my constituency to demonstrate the harm that these arrangements can cause when they have not been established in good faith. I have spoken on many occasions about the Brambles development in Whitchurch in my constituency, and I will mention it again today, because the circumstances are so appalling, and I believe they could and should have been avoided. The Brambles is a development of 14 houses built in 2016 by the developer Sherwood Homes Ltd, on land for which Shropshire Council had already granted planning permission for development. It was a condition of the planning permission that the road, footpath and drainage would all be complete before the houses were occupied. Unfortunately, despite that agreement, these elements were never fully completed, but building completion certificates were issued for the properties and they were subsequently sold and inhabited.

Once a number of the houses had been occupied, the drainage system failed, which led on some days to raw sewage backing up in residents’ gardens. Sherwood Homes Ltd had not taken out the section 104 agreement required in the planning permission, and not only was the arrangement dysfunctional, but the connection to the Welsh Water sewage network was illegal. In addition, neither the road lighting nor footpath was completed.

In December 2019, Sherwood Homes Ltd went bust, and Shropshire Council could not take planning enforcement action against the company. The residents of the Brambles, who were the successors in title to the private company that was established to manage the development, had been the subject of the enforcement process. The truly shocking reality is that they have been required to accept five-figure charges on their properties to rectify the £1 million issue of connecting the drainage to Welsh Water’s network. It is also worth noting that the saga has cost the rest of Shropshire’s taxpayers a considerable amount, because council officers have expended time and effort in attempting to rectify the situation.

Had the residents not been the owners of the shared areas, they would not have been liable. Perhaps if Shropshire Council had been expecting to bear the full costs of the clear-up, it would have taken out an injunction to prevent the final homes from being sold and occupied until the drainage was rectified, or indeed ensured that, in the first place, financial bonds had been in place under the section 104 agreements and the section 106 agreement for the drainage in the road.

That is the worst example, but it is not the only one that has come to my attention. Other cases from my constituency include a developer that is charging residents extortionate fees for the maintenance of a shared ground source heat pump, but has kept the Government’s renewable heat incentive by putting it in a private company. The developer runs the management company and has failed to hold an annual general meeting or provide detailed accounts for the residents.

In another example, there appears to be a total disregard of the Companies Act 2006. In this instance, once again the drainage and road are not at an acceptable standard, and the developer claims the management company is dormant, despite having contracted limited maintenance work to a third party. It has not held an AGM, and there is no opportunity for the homeowners to challenge the arrangement. The developer ignores all correspondence, and the homeowners do not have the resources to take him to court.

The problem is not unique to North Shropshire but impacts people across the UK. Indeed, since being granted this debate, I have been contacted by freeholders from across the country who have explained that they are being fleeced by management companies, having initially been told that they would simply have to pay for the upkeep of the grass. These people find themselves in an inescapable position. For many, there is no use turning to their original conveyancing solicitor for assistance, because that solicitor was recommended to them by the developer, which offered a discount if they used that solicitor. In addition, as I have mentioned, many homeowners are first-time buyers, and starting legal proceedings retrospectively is simply out of the question on a cost basis. As a result, freeholders are left with nowhere to turn, paying extortionate fees and with their dreams of a new home shattered.

It is important to note that the cost to the resident is not only financial. A support group called HorNet has explained to me that, on top of the burden of paying the fees, homeowners often come into dispute with other members of the public, who may abuse or damage the very infrastructure, such as the play equipment, that the homeowners are paying such huge annual fees to upkeep.

[Justin Madders]

The hon. Lady raises an interesting point. Constituents have told me that people who walk their dogs on the land for which they are paying an estate management charge should not be allowed to do so, because those people have come from another estate, where they are not paying the charge. This whole model is set up to be divisive and turn communities against each other, is it not?

[Helen Morgan]

The hon. Gentleman is exactly right, and that also raises questions of liability. HorNet describes one example in which it asked the local authority to comment on whether the local authority or the freeholders would be liable if a member of the public was injured on land maintained by the freeholders—for example, by falling off the play equipment used by the public. The council responded that it did not know. There is therefore an additional level of stress for these freeholders, as well as the potentially divisive elements that the hon. Gentleman raises.

As they stand, the agreements are a bit of a legislative desert, and they are a source of incredible stress and risk for residents. Frankly, they are a bit of a money-printing machine for unscrupulous developers that seek to exploit homebuyers. What is frustrating is that the Government have on numerous occasions considered that this area of legislation desperately needs reform, yet we have made no progress to protect freeholders from the situation.

In 2017, the Government launched a consultation to tackle unfair practices in the leasehold market and promised to legislate to ensure that freeholders would be able to access rights equivalent to leaseholders’ to challenge the reasonableness of such charges. In 2018 they launched another consultation, “Implementing reforms to the leasehold system in England”, which promised that the consultation requirements and obligations of the provider of services must be provided also to freeholders and that freeholders would have the ability to challenge the reasonableness of the payments at a first-tier tribunal.

In 2019 came the Government’s second report, “Implementing reforms to the leasehold system in England”, promising equal rights for leaseholders and freeholders when it came to challenging management fees. Those consultations and reports have been encouraging. Some 76% of those asked in 2019 agreed that freeholders should have the right to challenge such fees, but we have seen no progress at all in the legislation.

It is the responsibility of the Government to honour their promises made in 2017, 2018 and 2019. In March this year, when responding to a parliamentary question from the right hon. Member for Elmet and Rothwell (Alec Shelbrooke), the Secretary of State promised to legislate on this issue “when parliamentary time allows”.

I do not think I need to make it any clearer to the Minister that the delay in legislating is directly affecting people stuck in freehold arrangements. It is unnerving to think about how much money they have been forced to pay to scandalous management companies because of those delays. From where we are today there is no end in sight for them. They are chained to these agreements. They cannot dispute the payments legally, nor sell their homes. They are truly trapped.

We have been promised by the Secretary of State that the leasehold reform Bill will be introduced after the King’s Speech. There remains an opportunity to ease the situation, as the Levelling-up and Regeneration Bill passes through the other place. Could local authorities be encouraged to ensure that there is a plan for the adoption of roads, street lights and play areas, and that either section 106 or community infrastructure levy moneys are obtained from developers to ensure that they can be upkept in the future?

Could local authorities be given clear guidance to outline where a shared management company may not be a suitable solution; how planning conditions can be used to ensure that suitable financial bonds are in place for the adoption of drainage and roads and pavements; and how injunctions should be used where a significant failure emerges on a development, such as in the case of the Brambles, which I have outlined? Will the Government bring pressure to bear on the legal sector to ensure that there is no conflict of interest when a homeowner buys a house, and outlaw sweeteners promoting the use of a connected conveyancer?

When the leasehold reform Bill is introduced, will cost-effective legal remedies be made available to homeowners already trapped in these arrangements? For example, can they be released from their obligations if annual general meetings are not held, detailed accounts not laid or competitive quotes not obtained for maintenance work? Or could those arrangements be outlawed altogether?

I know the Government are keen to resolve the issue, so I look forward to hearing the Minister’s response. I very much hope she will commit to working with MPs from across the House to ensure that our concerns are fully addressed in the leasehold reform Bill.

15:12

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this debate and on highlighting her residents’ concerns about estate management charges. She knows that her and her residents’ concerns are not unique to Shropshire—indeed, they are nationwide. It is perhaps a sign of the momentum that this is about the third debate in recent months that we have had on this issue directly or tangentially.

It is a pleasure to see the Minister in her place. I want to put on the record that I have had a number of interactions with her on this issue over past few months. She has been extraordinarily helpful and understanding about the issues and has kept abreast of everything that is needed.

So here we are again. As the hon. Member for North Shropshire said in her opening, the issue has been around for some time. Whether one is a member of the Liberal Democrats—we will wait to hear what the Labour party has to say—or the Government, everyone has a sense that now is the time. We all understand that the power to bring the measures into law does not reside just in the Minister’s Department. It is a matter for the whole of Government to decide. I hope that those who are considering the legislative agenda for the next parliamentary Session take heed of this debate and others, because a large and growing number of people are affected by estate management charges, and homeowners recognise that they have few rights, no rights or inferior rights to challenge the charges placed on them.

Many of my constituents find that they do not understand where the charges come from. Why were they charged a particular amount for the maintenance of lamp posts? Why is it correct that they are being charged for the maintenance of a pond? Why is an estate of 1,500 houses carved into little subsections, each with their own management company? People scratch their heads and then get angry, because they see the charges mounting up but they get no response from the companies and have no forms of challenge. I re-encourage the Minister to engage with the three Rs: rights, reasonableness and redress.

First, it is important that the Government come forward with measures that place the rights of freeholders on at least the same level as those of leaseholders. That means rights to manage or self-manage, rights to complain and other rights as well. Secondly, we need to find a way to ensure that the reasonableness of the charges levied on homeowners is understood. That is difficult to undertake in practice, but measures could be introduced. There could be a code of practice between property management companies that requires a certain amount of transparency.

As I have mentioned to the Minister before, I hope that she will consider the possibility of having a national register of the charges imposed, so that people in one area of the country can see what other residents are being charged for their communal spaces. Transparency is extraordinarily helpful in any market, and I point the Minister to a recent move by the Government on pricing transparency for fuel prices. If it is good to make sure people understand that they are not being ripped off on fuel prices, surely it is also good for homeowners to know that they are not being ripped off on estate management charges.

Since the last debate on this topic, I have been contacted by even more constituents who have had estate management companies speak to their mortgage provider in an attempt to put some restriction on the rights of the homeowner to sell their home. Regardless of whether that is legitimate—maybe it is; I do not know the details of each case—it is clearly a potentially tremendous impediment to somebody seeking to sell their home if they have to go through a process of investigating whether the charges placed on them were legitimate, or if they are not able to complete their transaction in time. We really need to look at the limits on what estate management companies can challenge. If an estate management company has legitimate, unpaid fees, they should be paid—no one is questioning that—but why is it appropriate to go to the mortgage holder and not to pursue the unpaid bills through the civil courts? It seems to me to be perfectly reasonable to separate the two and not combine them into one action.

While I am on the issue of the sale and purchase of homes, will the Minister please look at the role of solicitors in advising on the sale of new homes? Often, estate management charges are for new estates. People often come and talk to the housebuilder selling the houses, and the housebuilder recommends a solicitor to them. What responsibilities does the solicitor have to advise the purchaser about the charges for which they will be liable and what their rights might be if they wish to sell their house? Some clarity and transparency on that would be helpful.

The Minister has indicated previously that she is alert to the issue of redress and understands people’s frustration at the fact that they are not able to find an efficient route to get it. I would be grateful if she could advise us on whether providing adequate redress can be achieved through non-statutory means. Is that feasible or not, and is it preferable or not? My answer is that it is not, but I would be interested in what the Minister has to say on that.

Another issue in my constituency has been the willingness of certainly one of the two local authorities in the past to slough off their responsibilities for what would normally be public services, covered by council tax, on to these new schemes of estate management charges. It really is not on for local authorities to set up a two-tier charging system, where some people in the local authority area pay once for their public services—communal areas, lamp posts, parking facilities, ponds, grass verges being mown—while another group of residents in the same local authority pay their council tax in exactly the same way as everyone else and then is stiffed with another bill for services that other people are getting covered by council tax. This two-tier system is a growing anomaly in local authority areas. We need investigation by the national Government to see what limitations might be prudent for that.

We have heard in past debates—I fear I may hear it again—the phrase “when parliamentary time allows”. Well, I’m up for it. I think other political parties are up for it. I hesitate to put words in the Minister’s mouth, but I think she is up for it as well. Parliament clearly wants to look at this issue. We want progress to be made, so it is important that we should look at it.

I do not often like to talk about specific companies, but in this instance I will. I wonder whether the Minister has had a chance to look at the tribunal decision in May 2023 between FirstPort and the residents of St David’s Square. It is an interesting judgment that was obviously conducted by someone with tremendous legal knowledge, who was able to get through the whole morass of issues and have an effective case. If the news reports are right, £479,000 in overpaid service charges were required to be paid back to the homeowners at St David’s Square, and £55,000 of the money the Government had provided in energy subsidies that had not been passed on had to be paid for. I would like to applaud the decision in that case. I do not know the details, but it seems to me to be on the right track.

It is important that we understand that if we make changes to estate management charges, we should not let companies off the hook for charges that have been imposed unfairly and excessively before the point when the legislation changes. I ask the Minister to ensure not that we pass retrospective legislation, but that legislation that changes the facility with which people can seek redress is open to people, so that they can make claims on historical excessive charges—not just charges subsequent to any legislative change. If the Government are not prepared to put that in legislation, then I would certainly table an amendment to enable my residents, who right now are being charged excessively by estate management companies, to claim that money back.

This is an important debate. It bears repeating that residents across the country, including many in my constituency, are looking to the Government to bring forward the necessary legislative change to make effective what has been promised now for six years. It is time for the Government to take the action required.

15:23

[Greg Smith (Buckingham) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this debate. It is also a pleasure to follow my hon. Friend the Member for North East Bedfordshire (Richard Fuller). There is almost a temptation to leave it at just, “What he said”, but there are a number of points I wish to make.

Across the 335 square miles of my Buckingham constituency, new estates have been relentlessly built over recent years. My views on the need to build on brownfield land only and to protect agricultural land and our national food security are well known, but where houses have already been built or are being built at the moment, it is crucial that we try to rectify the mistakes of the past, and the issue of service charges and local authority adoption of those housing estates simply must be addressed.

Traditionally, when someone purchased a freehold property, ongoing costs were relating to maintaining their property and paying, rightfully, council tax bills to contribute towards local public services and the maintenance of the public realm—as my hon. Friend the Member for North East Bedfordshire said, the lamp posts, streets, pavements and playgrounds and ensuring that the verges are mown. It is those sorts of things. However, in recent decades, as hon. Members have said, developments have been sold as freehold but now come with often punishing service charges to cover land and facilities that are not passed to local council control and remain in private hands—sometimes that is the developer; sometimes they are sold to a third party.

The concept of a service charge is well established. Service charges were traditionally for flatted developments, which need to share the responsibility for communal spaces within and around those buildings. The properties are normally—traditionally—leasehold properties, and the concept of the service charge is closely linked to services that would never be undertaken by a public body.

To go back into history a little and give some context, the Georgian development of London squares did extend the role of the private developer. Service charges included access to those private squares, those private gardens, and some shared communal spaces in lieu of front gardens. However, a growing trend has been to sell freehold houses with freehold gardens but also with shared, communal external spaces and facilities—car parks and the like—that attract these new service charges. Unlike flats, with tightly defined communal space, or indeed those London squares, which are private and used only by adjoining residents, these recent developments have had the appearance of normal modern housing estates, with open access, and yet the communal assets are paid for by a select number of residents. We are talking about the roads, pavements, verges, play areas, balancing ponds and often, as the hon. Member for North Shropshire said, the sewerage and water supply. No one ever conceived in the past that those would be anything other than local authority managed or water company managed.

It is not obvious what is driving the cause of freeholder service charges. Is it driven by councils simply not being willing to adopt assets that they see a very high cost base in maintaining into the future—I would suggest that that is certainly part of it—or by developers keen to create a specific style or ambience that creates in its own right a unified development that just happens to be open to the general public: is it a sales pitch? Or is it driven by developers pushing to lower standards in the public realm where councils do not want to be landed with the liabilities.

Since before being elected in 2019, I have been contacted by countless residents living on such new build developments and estates. They are exasperated by the developers that have failed to complete what we would believe to be the fundamentals, the basics, of a development. I am referring to roads not completed—the final layer of tarmac not laid—footpaths yet to be laid, landscaping that has been forgotten and, in many cases, mounds of soil fenced off and awaiting redistribution.

We must ask what is causing these issues and what changes we can drive to deliver reform. Often, the problems that I just outlined have been deliberated designed to prevent transfer to another management company. They have been deliberately done to ensure that residents cannot get control themselves and that it remains in the hands of these management companies. The recent, growing concerns about freehold service charges are a result of many of those management companies being sold off to the third parties I mentioned earlier, which see the opportunity to increase charges way beyond the initial nominal amounts, further adding to the problems of freeholders, who, as hon. Members said before me, must still bear 100%—the full amount—of their council tax bill, with not even the slightest hint of a fair discount.

One could say that freeholders might expect service charges if they bought into one of the high-end, exclusive gated developments sold in some parts of the country, which aim at exclusivity and have additional features that standard council tax would never normally pay for. We are talking about things that very few in the country are able to have: private clubhouses, tennis courts, gyms, private leisure facilities, extravagant landscaping and the like. However, we are rarely talking about those developments, as section 106 and community infrastructure levy taxes developers to provide facilities to the council—facilities that are rightly used by the wider community.

That leads me to a philosophical question about the right to retain as private assets that are actually public, and that should be adopted and maintained by council tax payers—and, potentially, other taxpayers, through Government grants. We have not recently had a debate on where the line should be drawn—on encouraging new communities to take responsibility for their new assets, versus new assets being paid for by a new development, but being open to all.

Lace Hill in my constituency sits on the edge of Buckingham. It is a development of just over 700 homes. It comprises freehold houses with their own gardens, but residents must pay a service charge for playgrounds, landscaping, a balancing pond, the roads, the pavements and the verges. A casual visitor would imagine that they were regular roads, play areas, pavements and community facilities that the local council looks after, but it simply does not. The estate is also home to a primary school, a secondary school, play equipment and a multi-use games area that the whole town of Buckingham comes to enjoy, but they are wholly paid for—except for the core educational funding, clearly—by the freehold service charges placed on the residents of that relatively new estate.

Worse than that, Lace Hill faces the very issues that I described: there has been a failure by the developer to finish a lot of the features, not least the balancing pond. The area is very close to the Great Ouse river, which regularly floods; that brings a whole new dimension to the debate, which I will not go into now. That failure means that residents are unable to take control of the issue in the way that they should be able to. Also, the management company has sold and resold itself—and sold itself to itself in a different guise—which has led to mass confusion among residents about who they are paying the service charges to, and whom they can hold accountable for services that, for the most part, they have not actually had. I could give countless other examples, but I will not take up the time of the House by doing so; I will just briefly mention another particularly egregious example of this in my constituency: the Kingsbrook development, which sits just to the east of Aylesbury.

It is very hard to distinguish what counts as a facility that new homeowners may consider it worth paying more than the standard council tax for, because it is over and above the standard communal facility. However, from the way that homes are sold, it would appear that developers and the conveyancing profession have not been open and up front about the risks of some new estates being owned by third parties, and the service charge that would be made. That needs to be drawn more rigorously to the attention of home buyers, so that they are fully aware of what they are entering into, and of the risks of additional costs, increasing in perpetuity. In some circumstances, it would be reasonable for a development to wish to hold some assets privately, as they are over and above what is required by the national planning policy framework—maybe private sports facilities, such as the ones that I mentioned; or a concierge for security, key holding and parcel delivery. However, I suggest that those would be few and far between in the real world.

Some developers set up a residents’ management company, of which freeholders are members, so that they can have a say in the scale and quality of communal works needed or desired, and can influence the service charge fee, but in my experience, and from research in my constituency, that is all too rare. Sadly, freeholders have few controls if the developer retains the management, or sells it to a third party. It appears to too many developers that they can sell the management company as an investment, for it to be run by an uninterested third party. Ironically, as my hon. Friend the Member for North East Bedfordshire mentioned, though leaseholders have access to the first-tier tribunal, the right of freeholders to challenge the reasonableness of the service charge is still not defined in law.

I come on to some of the recent debates, and the delays in solving the problems over the past six years. The Government and the Minister are aware of the issue, and I am grateful for the time that she has taken to talk privately to concerned colleagues. The July 2017 consultation paper, “Tackling unfair practices in the leasehold market”, highlighted the discrepancies and issues for freeholders in section 6, but that is some years ago. The Government rightly announced their intention to legislate in this area. In October 2018, they published a further consultation, and the Government response to it was published in June 2019, but we are still waiting for the legislation; they had committed to equal rights for freeholders and the right to manage for freeholders.

I believe that my hon. Friend the Minister wants to move forward, but there is impatience in the country, and impatience and frustration among my constituents and those of other right hon. and hon. Members. People living in freehold properties are caught up in service charges. We need to move much faster. It is imperative that the issue be resolved.

To summarise my main asks of the Minister, first, freeholders must have the same right as leaseholders to challenge service charge fees. Secondly, freeholders should have the same rights as leaseholders to set up resident management companies. Thirdly, and more fundamentally, should traditional housing estates have service charges? Should they not be better designed and integrated into existing settlements, with ongoing maintenance of communal playgrounds, roads, parks, verges and so on being at council tax payers’ expense? There should almost be a requirement for councils to adopt new developments. Fourthly, we should ensure better management of critical infrastructure, such as access roads and surface water drainage. They should be designed to meet the standards of the local flood authority, be constructed and warranted by the developer, and in time become part of the public drainage system, to ensure that they are managed in perpetuity. Fifthly, in order to avoid there being site-wide service charges, a limited number of properties should be allowed to share responsibility for some areas, such as shared driveways and off-street parking areas.

To conclude, it is simply an absurdity that the majority of developments granted planning permission in the public domain are not automatically adopted by local authorities. Ultimately, we could solve all the problems by making that a requirement.

15:39

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Dr Huq. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this important debate, and on the well argued remarks with which she opened it. I thank the hon. Members for North East Bedfordshire (Richard Fuller), and for Buckingham (Greg Smith), for participating. In their compelling and thoughtful contributions, they highlighted, among other points, how widespread across the country problems associated with estate charges and fees are.

As in the debate last week on freehold and leasehold reform, hon. Members usefully brought the issue to life by detailing the impact of estate charges on homeowners living in developments in their constituencies. The accounts we have heard today, and many others I have heard from colleagues over recent years, illustrate vividly the abundance of problems associated with new build estate charges and fees; they are well known and well understood. They include excessive or inappropriate charges levied for minimal or even non-existent services; charges imposed for services that should, by right, be covered by council tax; charges that include costly arbitrary administration fees; charges hiked without adequate justification; and charges levied when residential freeholders are in the process of selling their property.

There is often a startling lack of transparency about what services are covered by service charges, estate charges and fees charged to long leaseholders in blocks of flats, but residential freeholders on privately owned and managed estates clearly suffer from inadequate transparency in other unique respects. As was said at the start of the debate, it appears to be fairly common for residential freeholders not to be notified of their future liability for charges early in the house buying process, and many learn of their exposure only at the point of completion. I listened with great interest to the suggestions about solicitors and conveyancers. As the Minister noted in the debate last week, even where notification of future liability is given in good time, many contracts do not specify limits or caps on charges and fees.

As the hon. Member for North East Bedfordshire said, there also appears to be a particular issue with fragmentation on privately owned and managed estates, which further exacerbates the general lack of transparency and potential for abuse in respect of charges and fees. It is not uncommon in blocks of flats, particularly older ones, for ownership and management to become fragmented over time, but on privately owned and managed estates, even relatively new ones, residential freeholders frequently have to navigate scores of management companies, each levying fees for services.

Underpinning all those issues of concern is a fundamental absence of adequate regulation or oversight of the practices of estate management companies. They are deficient in many important respects, which is one reason why fundamental and comprehensive leasehold reform is urgently required. Leaseholders have at least some protections and rights that enable them to challenge the charges and the standard of service they receive, but residential freeholders have no equivalent statutory rights.

No hon. Member in this debate has claimed that the present arrangement is not inequitable, or suggested that there is anything other than a pressing need to give residential freeholders on new build estates greater rights and protections. Indeed, I would go so far as to submit that the House appears to be of one mind on the matter.

[Richard Fuller]

The shadow Minister is making some very good points, but in the spirit of evolving the debate, I want to ask him a question. My hon. Friend the Member for Buckingham (Greg Smith) talked about council tax, and mentioned, as I did, that people are being doubled charge. If there are reforms to be made, would the hon. Gentleman favour giving residents of estates that levy estate management charges the opportunity to hand back responsibility to the local authority in any circumstances?

[Matthew Pennycook]

The hon. Gentleman pre-empts a point that I will come to later. There is an issue with local authority adoption, but if he is not satisfied with my comments, he is more than welcome to intervene on me again.

The question is not, “Should we do anything?” but “Why have no concrete steps been taken over recent years to give residential freeholders the rights and protections they clearly need?” The Government have recognised publicly for at least six years that there is a problem, and that they need to act to address it. As has been said, and as the Minister clearly understands, in their December 2017 response to the “Tackling unfair practices in the leasehold market” consultation, the Government made it clear that they intended to

“legislate to ensure that freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed use estate can access equivalent rights as leaseholders to challenge the reasonableness of service charges.”

That commitment was repeated in the Government’s June 2019 response to the “Implementing reforms to the leasehold system in England” consultation, and successive Ministers have echoed it numerous times since then in the House.

Indeed, the Minister, who has responsibility for housing and planning, has been clear in several debates this year that the Government intend to create an entirely new statutory regime for residential freeholders based on the rights that leaseholders have. That would ensure that estate management charges must be reasonably incurred, that services provided must be of an acceptable standard, and that there is a right to challenge the reasonableness of charges at the property tribunal.

Given that there are almost certainly over a million residential freeholders across the country whose lives are being blighted because the practices of estate management companies are not adequately regulated, the Opposition urge the Government to find the time, in what remains of this Parliament, to legislate for freeholders’ protection. At a minimum, that legislation should ensure equivalence between the regulation of estate charges and the regulation of leasehold service charges.

This criticism is not directed particularly at the Minister, but it is incredibly frustrating for hon. Members from across the House, and for members of the public who have a stake in a given outcome, to hear Ministers assure us time and again that long overdue legislation will be taken forward “when parliamentary time allows”, especially as the House has frequently risen early in recent months because the Government’s legislative agenda is so light. There is a strong cross-party consensus on the need for urgent legislation to tackle the problem, so let us get on and progress that legislation.

Before I conclude, I will draw three important issues to the Minister’s attention, and I ask her to address them when she responds to the debate. First, on the Opposition Benches we take the view that we need to ensure that residential freeholders can more easily take control of their estate management company or companies. To be clear, that is conceptually distinct from the reform proposals made by the Law Commission in its 2020 report on exercising the right to manage.

There are a number of ways in which residential freeholders could be empowered to take over estate management functions on any given estate, but what is important at this stage is the principle. Could the Minister assure the House that when the Government legislate, it is their intention to provide residential freeholders on privately owned estates with a statutory right to manage?

Secondly, we believe that specific measures are required to protect residential freeholders from being evicted from their home due to a failure to pay estate charges and fees—or rent charges, as they were historically known. The Government committed in 2020 to repealing section 121 of the Law of Property Act 1925, which enables this practice to continue. Can the Minister confirm that the Government remain committed to doing so when they legislate?

Thirdly—this point has been raised by several hon. Members in the debate, and the hon. Member for North East Bedfordshire challenged me on it—we feel strongly that residential freeholders deserve far more certainty about the circumstances in which communal areas and amenities on privately owned estates should be adopted by local authorities, and by water companies in the case of sewage infrastructure, and the timescales within which such adoption should take place.

Let me be clear that we sympathise with local authorities that are reluctant to adopt roads and common services of poor quality. However, some authorities refuse to adopt areas and amenities, most commonly roads, that are built to an acceptable standard unless an excessive fee is paid by the developer. There is a general need to drive up built environment standards across new build estates, so that councils do not have to pick up the long-term cost of repairing and maintaining them. However, we also need further clarity from the Government on if and when local authorities are required to take forward adoption, thereby saving residential freeholders from the type of fees that the hon. Member for North East Bedfordshire referred to in his intervention. Does the Minister agree with us on that point, and if so, can she at least give us a sense of the Government’s thinking about what steps might be taken in that regard? I very much look forward to hearing the Minister’s response to those questions, and to the debate as a whole.

15:44

[The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)]

It is a great pleasure to respond to this debate and to serve under your chairmanship, Dr Huq.

I start by thanking the hon. Member for North Shropshire (Helen Morgan) for securing this debate on an issue that she feels passionately about. Indeed, many of us feel passionately about it, and it is a testament to the persistence and determination of many colleagues in the House that we are again debating this vital issue.

As the hon. Member did during the recent Opposition day debate, she brought to the House’s attention powerful examples from her area; I think that it is particularly on the Brambles estate in Whitchurch where the current system is not working for homeowners. I am hugely frustrated at the situation that those homeowners find themselves in.

I thank my hon. Friends the Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for the discussions we have had about this issue and for the attention to detail they have brought to our process of scrutinising and preparing the legislation that we very much hope to introduce soon. I will come on to that shortly.

The Opposition Front-Bench spokesperson, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), correctly highlighted the cross-party support on this issue. He has been supportive and constructive in his tone, both today and other occasions. I welcome that, because it makes the case for all of us to pursue the legislation and to ensure that it is brought to the House swiftly.

There was a broad consensus on the need for change. Let me use this opportunity to assure Members that fairness remains at the heart of our ambition for the housing market. We all know that we need to drive up housing supply so that we have the homes that the country needs, but while doing that, we need to ensure that buyers are getting high-quality and safe housing on modern, beautiful estates—if that is what is being built—that they can enjoy for years to come. Unfortunately, too many homeowners who bought their properties in good faith have not had their expectations met.

In the past, as Members have highlighted, it was typical for councils to adopt local infrastructure and shared spaces, but the system has changed in recent years. I recognise that on more and more estates, it is common for the shared spaces to be owned and managed by another party. The ownership of the land varies between developments. On some estates, it is owned and managed by a resident-led management company, often with the support of a managing agent, which provides expertise and services to the residents in the running of the estate. On other estates, the land is owned and managed by private management companies. Some have connections to the original developers; others are third-party companies.

It is often not down to the homeowners themselves to decide which type of management arrangement is in place on the estate. Commonly, that is set by the developer before any of the houses are sold. Either way, as has been pointed out, homeowners on these estates must pay a charge to cover the upkeep of open green spaces, roads, sewerage, drainage and other shared infrastructure, such as balancing ponds and play areas, which have been highlighted. In such circumstances, we must ensure that homeowners get a fair deal and do not end up in a vulnerable position as a result of these arrangements.

My hon. Friend the Member for Buckingham and the hon. Member for North Shropshire called for local authorities to be compelled to adopt all communal facilities on a new estate. It is worth pausing to consider why that does not happen at the moment. Our current planning arrangements exist to support new developments. When a new development is granted planning permission, the local authority can obtain section 106 planning obligations to secure a commitment from the developer. That means that the local authority does not have to adopt and maintain the land at its own expense. Local authorities no doubt take such financial considerations into account when they make these decisions, but it is up to developers and the local planning authority to agree on specific issues such as timescales for development and appropriate funding arrangements, and it is clear to me that, in a lot of cases that have been brought to our attention, that process is breaking down.

The local authority has powers to ensure that the developer builds and maintains communal facilities to the standards and quality set out in the planning permission. It is worth noting that the maintenance of communal areas, and of roads in particular, can be a significant financial burden. This is why it is right that the decision about adoption should rest with the local authority. The Department for Transport has recently issued guidance on the circumstances in which local authorities should be adopting roads. Again, I note that this can be a fraught area in some situations; I have seen that from my correspondence.

We need transparency. We need a system that consistently delivers clarity to potential purchasers and arms them with information about the arrangements for the maintenance of shared spaces on private estates. That information should be set out as part of the conveyancing process. Many already use the freehold management enquiries form, the FME1, published by the Law Society. I know that the form is used widely across the sector, but I have heard that for some buyers the information was not provided, or perhaps not drawn to their attention, at the point of purchase. That may have been the experience of some of the constituents my hon. Friends and colleagues have spoken about.

If a homeowner is unhappy with the service that they received from their conveyancer or solicitor, and the internal complaints process cannot resolve the issue, the legal ombudsman may be able to help. That needs to happen within six months of the homeowner’s final response from their conveyancer or solicitor. My hon. Friend the Member for North East Bedfordshire highlighted the issues with buying and selling homes, the process for which in England and Wales can be expensive, time-consuming and stressful. For that reason, we committed to improving the process in the levelling-up White Paper.

We have committed to work with industry to ensure that potential buyers have access to the critical information that they need in an accurate and timely format. That will help them to make an informed decision about whether to purchase a property, reducing the likelihood of the sale falling through. Some of that work is already taking place, but the Government are committed to continuing to create a fair and just housing system for everybody.

Too often, once a homeowner has moved into their home, they are asked to pay charges without an effective breakdown of what they cover. This is a matter of basic fairness and justice. Homeowners deserve to know what they are paying for on their estate. As with leaseholders, a lack of transparency, both at the homebuying stage and when people are settled in their property, leaves homeowners in an unfair and often vulnerable position.

[Helen Morgan]

That is the crux of the matter. If rogue management companies acting in bad faith do not provide that information and do not have an AGM, there is no remedy for homeowners to challenge what they are up to, or to take control of the situation. If those basic Companies Act requirements are not being fulfilled, could there be some legislative remedy for homeowners that does not involve them incurring the enormous expense of going to court? For example, could they take on the management of the company if basic Companies Act requirements are not complied with?

[Rachel Maclean]

I thank the hon. Member again for reminding us of this issue. I hope that she will bear with me, as I am coming on to our intended legislative remedy, through which we intend to drive up transparency for homeowners. Better transparency will help people to be better informed about buying a home on a managed estate and empower them to question or challenge the charges when they are billed. Alongside that, they must have better rights to challenge, as the hon. Member just said.

Freeholders on managed estates are currently at a disadvantage compared even with leaseholders, for whom the system is not perfect by a long way, regarding their ability to challenge costs and poor service. Leaseholders already have certain protections and rights that enable them to hold landlords and management companies to account, yet freehold homeowners have no such equivalent, although they may be paying for very similar services. The situation is clearly unfair, and we are committed to introducing legislation to plug the gap.

Let me come on to what we intend to do, which I am sure Members are keen to hear. We intend to create a new statutory regime for freehold homeowners based on the rights that leaseholders have. We will give homeowners the right to challenge the reasonableness of the estate management charges at the first-tier tribunal, and the right to change the provider of management services by applying to the tribunal to appoint a new manager. That will be an important power when a homeowner is unhappy with the service that they are receiving and there is a significant failure by the estate management provider in meeting its obligations.

The hon. Member for North Shropshire mentioned existing homeowner rights, which will depend on the ownership of the land and the terms of the transfer. People should seek independent advice on the options available to them. For example, if a management company is not complying with its obligations, homeowners may be able to use contract law and make an application to the county court for an injunction for specific performance. That will require the management company to comply with its obligations.

Resident-led management companies are independent companies to which residents are appointed as directors. Sometimes the articles of association, which set out how the company will run, will specify that homeowners are automatically part of the company and so can vote at the AGM. Homeowners may also be able to call extraordinary general meetings, and they can apply for an injunction for specific performance if the company is not complying with the articles of association of any management agreement. But we know we must do more, which is why we will consider introducing a right to manage for freehold homeowners. That will follow from our consideration of the Law Commission’s report and recommendations on changes to the right to manage for leaseholders.

It is not only estate management charges that need to be reasonable. As I mentioned in last week’s Westminster Hall debate, the principle must also apply to the administration fees that individual homeowners may face in their dealings with estate management companies. Therefore, we will legislate to require that all administration charges must be reasonable, which will mean that they may be challenged at the first-tier tribunal.

I want briefly to mention the Competition and Markets Authority’s house building market study.

[Richard Fuller]

Before the Minister moves on from charges, I wish to make the point that I made earlier, although she may not wish to comment now. If those changes are made, is it the Government’s intention that people who have been charged excessively, or can make the case that they have been, prior to that legislative change will be provided with access to those tribunal options?

[Rachel Maclean]

My hon. Friend’s point is very much in my mind. He is right to make it—he has made it to me multiple times—because it is a very important point. While the legislation is being prepared, I cannot comment specifically on the individual measures that will be in it, but I have no doubt that when we bring it forward, he will probe and challenge every part of it. I very much hope that we can achieve a successful situation at the end of that process.

In February, the Competition and Markets Authority launched a market study on house building, as part of which it will examine the fairness of estate management fees charged for unadopted roads and amenities. It will make recommendations about policy and regulatory changes. My hon. Friend the Member for North East Bedfordshire may be interested to find out about those.

There is also an issue of redress in relation to the fit and finish of residents’ homes on new estates. Invariably, the problems are the result of inadequate quality control. People have encountered unfinished roads, half-built playgrounds and a lack of recourse to resolve those issues, all of which are unacceptable. We have been clear that new housing developments should be finished on time and to a high standard. If things go wrong, homebuyers must be treated promptly and fairly.

There are existing routes to redress, which we are strengthening through the Building Safety Act 2022. We have included a provision for a statutory new homes ombudsman, which will make developers more accountable and make it easier and simpler for new home buyers to seek redress when things go wrong. We are considering the arrangements for the statutory scheme and are working on the next steps, which we will set out in due course. In the meantime, the independent New Homes Quality Board has established the voluntary new homes ombudsman service, which launched last autumn. It can handle complaints from homebuyers about new homes built by developers that have registered, and it is 100% free for homebuyers to use.

Let me turn finally to the most important matter for hon. Members: the timing of these changes. Unfortunately, I do not have much to add to what I have already said, which is that legislation for the next Session will be set out in the King’s Speech. Everybody in the Chamber will have heard the Secretary of State and I say that it is our intention that the King’s Speech will contain a Bill that will address the issues that have rightly been raised. That remains our priority.

Fairness needs to be at the heart of the housing system. The arrangements for the upkeep of open spaces and roads on freehold estates should always be clear to potential homebuyers, and costs charged must be transparent and reasonable. Homeowners need to have access to redress when things go wrong and be empowered to hold their estate management companies to account. That is why we remain committed to legislating as soon as we can. I thank all colleagues for their consistent advocacy and campaigning on this vital issue, which, as has been said, affects a million people around the country.

16:05

[Helen Morgan]

I thank the Minister and the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), for their comments, and I thank the hon. Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for coming along for the graveyard shift on a Thursday afternoon. I also thank you, Dr Huq, for chairing the debate.

The Minister’s comments are welcome. I am particularly pleased to hear that freeholders will be given equivalent rights to leaseholders to go to the first-tier tribunal. She has heard today, as I am sure she has in other debates on the subject, that for the people who are trapped in these situations, what should have been their dream purchase—a new build home that comes ready-made, without the need for renovation or extensive work—and something they hoped would be simple has turned into a nightmare. We really cannot have legislation soon enough.

The hon. Member for Buckingham made a really good point about what should be considered standard shared areas that should be adopted by the council, and what might be considered over and above and normally subject to the arrangements we have been discussing. I agree with him and urge the Minister to consider making it mandatory for councils to adopt the things we consider to be standard—the roads, pavements and streetlights, for example. The hon. Member for North East Bedfordshire made some good, practical comments on transparency, which I certainly support. I urge the Minister to take those on board too, and to bring legislation forward as soon as possible.

Question put and agreed to.

Resolved,

That this House has considered freehold estate management fees.

16:07

Sitting adjourned.