Draft Asylum Seekers (Reception Conditions) (Amendment) Regulations 2026
Draft Immigration and Asylum (Provision of Accommodation to Failed Asylum-Seekers) (Amendment) Regulations 2026
(1 day, 7 hours ago)
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The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 1 - Question accordingly agreed to.
The Chair
Members of the Committee paying close attention will have noticed that we have two draft statutory instruments to consider. The Minister will move the first motion and speak to both instruments. At the end of the debate, I will put the question on the first motion and ask the Minister to move the second motion formally. If we are to be interrupted by votes in the main Chamber, I shall suspend the Committee for 15 minutes for the first vote and 10 minutes for any subsequent vote, so that everyone knows where we stand.
The Minister for Border Security and Asylum (Alex Norris)
I beg to move,
That the Committee has considered the draft Asylum Seekers (Reception Conditions) (Amendment) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Immigration and Asylum (Provision of Accommodation to Failed Asylum-Seekers) (Amendment) Regulations 2026.
Alex Norris
It is a pleasure to serve under your chairship, Sir Jeremy. Both draft statutory instruments were laid before the House on 5 March this year.
Our Government have set out their vision to restore order to and control of our borders, and to deliver a fair but firm system for those who seek asylum in our country. As part of the reforms, we seek to ensure that asylum support—both financial provision and accommodation—is provided to those who need it. The reforms set out in the draft statutory instruments before the Committee will enable the development of a system in which assistance is directed towards those who would otherwise be truly destitute, while strengthening our ability to act in cases where individuals disregard the rules.
The changes form part of a longer-term shift towards a fairer, modern asylum support framework—one that upholds our legal responsibilities while promoting compliance and deterring misuse. For context, it is important for the Committee to understand that in the financial year ’24-25, a total of £4 billion was spent by Government on asylum support in the UK. That figure has reduced by 15%, but it is a significant sum of money to support the 107,003 people in receipt of asylum support as of December. Given the burden on the taxpayer, it is right that we ensure that that money is spent properly, in the best possible way. The instruments serve that purpose.
The first of the draft instruments to consider, the Asylum Seekers (Reception Conditions) (Amendment) Regulations 2026, provides for a key element of our reforms: the shift from a mandatory duty to provide asylum support to a discretionary power, as originally provided for in the Immigration and Asylum Act 1999. It reinforces the fact that state support should be provided to those who genuinely need it. Again, it will be important for the Committee to hear that we will always meet our human rights obligations regarding avoiding destitution, but the flexibility provided by reverting from a duty to a power is essential to ensure that we have an equitable and sustainable system.
The second draft instrument that we are debating, the draft Immigration and Asylum (Provision of Accommodation to Failed Asylum-Seekers) (Amendment) Regulations 2026, will enable the discontinuation of an individual’s support solely on the basis of illegal working. Previously, if illegal working was suspected, the Department had to treat such behaviour as potential fraud before support could be withdrawn. By making illegal working an explicit breach of support conditions under the regulations, we are providing a direct and transparent basis for discontinuing assistance in appropriate cases without the need for extended investigative processes.
Most asylum seekers do not have the right to work in this country, but some choose to do so illegally, while claiming asylum support and accommodation. That, of course, is not right. It undercuts legitimate business and takes genuine work opportunities away from others. We often see very public signs of that in many communities. Allowing illegal working in that way, without consequences, undermines public confidence in the system, where public confidence is already rather low. It also acts as a pull factor—we know from the traffickers’ materials that the ability to work illegally in this country acts as a pull factor. We are changing that reality. The draft immigration and asylum instrument is an important part of that. Under it, illegal working will be a clear and explicit ground for removing section 4 support under the 1999 Act from failed asylum seekers; it will therefore align with the section 98 and 95 provision that was laid alongside these measures and came into force on 27 March.
Taken together, our reforms will rebalance the system so that support aligns with responsibility. The genuinely destitute will continue to receive help, but those who do not meet that threshold, or who breach the rules, will not be able to rely on taxpayer-funded support. The reforms are necessary to ensure that asylum support functions effectively now and is resilient enough to meet future pressures. In delivering them, we will reinforce public trust and maintain a system that is compassionate, is credible and promotes compliance with the rules. The Government’s position is straightforward: fairness for those who need support and follow the rules, firm action where the rules are not followed, and a clear duty to the taxpayer who funds the system.
Katie Lam (Weald of Kent) (Con)
It is, as ever, a pleasure to have you in the Chair, Sir Jeremy. The power given to the Home Secretary by these regulations to suspend or discontinue asylum support in cases where asylum seekers are working illegally is welcome. It is also right to remove the existing duty on the Home Secretary to offer asylum support in all cases. Those are both improvements on the existing system. Clearly, if people come to this country to seek asylum, they should at the very least be expected to abide by the rules that govern that process.
Although the changes are welcome in principle, criticisms raised by the Secondary Legislation Scrutiny Committee highlight a broader problem. The changes that the Government are proposing today will not, without changes to the wider legal regime, change the incentives for people who come to this country illegally or under false pretences to seek asylum. The Committee noted that illegal working cases—the ones we know about, that is—accounted for just 0.3%, or one in every 333, of asylum seekers receiving support. The number of asylum seekers working illegally is likely to be far higher in reality, and it is absolutely right that we deal with those cases, but these regulations alone will not create a meaningful deterrent for people who plan to come here illegally to seek asylum.
Government Ministers say that they are developing a policy to address the problem, yet the indications so far suggest that we can expect to see tweaks at the edges of the system; what we need, and what the British people deserve, is a total overhaul. That would include preventing illegal migrants from ever seeking asylum in this country—a position legislated for by the previous Government but repealed by the current one. It would include being willing to remove people who come here illegally and return them to their home country or a safe third country—a position impossible under the current system, which the Government have committed to maintaining.
We cannot seriously hope to remove people who come here illegally while remaining a signatory of the European convention on human rights and while the broken immigration tribunal system still has the final say on who can stay in our country. Yet the Government have committed to maintaining both.
The changes I have mentioned would create a real deterrent for people who might otherwise be tempted to break into our country and abuse our good will. The measures before us today are positive, but they will not address the broader problem. The Government should focus first and foremost on the greater steps that we can take to secure our borders and end this problem for good.
Mr Will Forster (Woking) (LD)
It is a pleasure to serve under your chairship, Sir Jeremy. The Liberal Democrats continue to be disappointed that the Government have not set out a credible plan to tackle the asylum backlog and end hotel use. The Minister said that the Government have a vision—yes, a vision, but not a plan—to genuinely tackle the problem. The current system costs taxpayers £6 million a day in hotel bills, and the most recent data shows that the appeals backlog now stands at 80,000.
The Government’s plan to remove the duty to support asylum seekers risks creating knock-on effects for already stretched local services provided by councils and charities. That is especially true because it is not accompanied by giving asylum seekers the right to work. This time last year, during Committee debate on the Border Security, Asylum and Immigration Bill, I tabled several amendments to lift the ban. Liberal Democrats in the main Chamber tabled similar amendments but the Government did not listen. We need to lift the ban, to ensure that asylum seekers can contribute to our country.
The Government say that asylum seekers should support themselves and contribute to society, but are not allowing them to do so. In what world can someone support themselves without the chance of getting the right to work? The Government are still banning asylum seekers from working, and that is wrong. It is about time the Government did a U-turn on that, as they have on many other things. People are instead forced to work in black market jobs and may become victims of modern slavery, prostitution or drug dealing.
The Government make no bones about the fact that they are following the Danish model, yet Denmark allows asylum seekers to work after six months. We Liberal Democrats have long campaigned to lift the ban to ensure that asylum seekers work after three months, which would mean that they could support themselves financially and integrate. We have serious concerns that today’s regulations mean that the housing of homeless asylum seekers will fall to local councils when many are already at real risk of homelessness.
Is the Minister not concerned about how a future Government would use their discretionary powers? If he has to hand the keys to his office to a Reform Government, how would our refugees and asylum seekers be supported? He might think that his Government will support refugees, but this is not just about his Government. Additionally, there is no clear definition of what constitutes “deliberate”. Will the Minister please ensure that the Home Office explains and defines that?
I turn to the statutory instrument on the provision of accommodation. Will the Minister please assure me that that will not increase the burden on local councils following the withdrawal of support? My council, Woking borough council, went bankrupt under the Conservatives, and I would hate for more woes to be added to its problems. Finally, I assume that there will be an exemption for victims of human trafficking. If so, can the Minister outline how it will be defined? We do not want to remove support for them.
Chris Law (Dundee Central) (SNP)
It is a pleasure to serve under your chairmanship, Sir Jeremy. Where to begin? The regulations brought by the Government today are a depressing illustration of the Labour party’s failure to challenge an immigration-obsessed far right and are a shameful surrender to the Conservatives and Reform in demonising and scapegoating one of the most vulnerable groups in our society. Asylum seekers deserve protection from the dangers they have fled. They deserve our care and they deserve and are entitled to support.
We should begin by dispelling the myth disgracefully repeated by the Home Office that asylum seekers are somehow abusing British hospitality. Qualifying for asylum support is far from straightforward, with applicants having to prove that they are destitute or will become destitute within 14 days. Assets held and past earnings are considered. Accommodation is provided on a no-choice basis. Financial support is less than £50 a week if they are in self-catered accommodation or less than £10 if they are in catered accommodation. That money is meant to fund essential needs such as toiletries, laundry, non-prescription medicines, clothing, travel and communications over the course of the year. I would like to see if anyone on the Committee could manage with that.
Given that almost all people seeking asylum are not allowed to work, as the hon. Member for Woking mentioned, is it any surprise that most of them live in poverty and experience hunger and poor health? Asylum seekers rely on that support to avoid destitution. A compassionate Government would realise that existing support should be a floor, not a ceiling, when it comes to what is provided to people seeking safety in the UK, yet the Government have decided that their priority is removing the legal duty to provide that meagre, minimal support.
What are the risks of withdrawing the duty to support? The Government do not know, because they have not conducted an impact assessment, although some of the answers should be obvious. Depriving a person of accommodation and the very baseline of financial means to support themselves will only increase the likelihood of their becoming homeless, working illegally or being exploited by criminals and gangs. This is happening on the Government’s watch. It will increase that person’s likelihood of falling ill, being a victim of violence or, tragically, dying prematurely. These are people’s lives, and the Government view them as expendable for what they see as a political win. What a complete disgrace!
In such circumstances, the Government run a serious risk of breaching their international legal commitments under article 3 of the European convention on human rights, on preventing inhuman or degrading treatment. It is worth noting that we were not just a signatory to the refugee convention; we created it. We wrote and drafted it, and now the Government are about to go against it. Indeed, in 2005 a landmark House of Lords ruling established that denying subsistence support to asylum seekers who were forbidden from working breached article 3, as it created
“an imminent prospect of serious suffering”
regardless of statutory discretion.
Does the Minister not recognise that discretionary removal of accommodation and subsistence support to asylum seekers, as proposed by this legislation, would result in serious suffering and could be deemed inhuman or degrading treatment? How can he seriously say that these regulations are compatible with the ECHR, given the suffering they are likely to cause? How can anyone on the Committee vote in favour of forcing already vulnerable people into destitution?
Protection is a right, not a reward; moving from right-based support to a more selective discretionary model fundamentally undermines that. The Government have referenced similar models in countries such as Denmark, the Netherlands and France, although those comparisons have been disputed on the basis that some of those systems still retain statutory duties to prevent destitution. As we have heard, in Denmark they have the right to work after six months.
The Government have instead said that they will operate a system based on “genuine need”, but given that they have not published a full replacement framework, there is no clarity about how the new system will operate—particularly about how genuine need will be defined and assessed. Bizarrely, in what circumstances will an asylum seeker facing destitution not be considered in genuine need? Will the change from a legal entitlement to a discretionary system in which decisions are made case by case not simply add to bureaucracy, increase costs and add delays and frustrations for all those involved? As has already been mentioned, the House of Lords Secondary Legislation Scrutiny Committee pointed out that only
“0.3% of all asylum seekers receiving support”
have been investigated for fraud and that only
“0.05% of those receiving support”
have had support “discontinued, reduced or withdrawn”.
This is a straw man: the Government are bringing forward these regulations to tackle an extremely marginal problem. What are the Government actually seeking to achieve? The explanatory memorandum states that they are bringing forward these regulations to provide
“flexibility to design an asylum support system aligned with domestic priorities”,
but the reality is that they are to provide a system aligned with political priorities.
This can be best described as coming from the ideological handbook of the far right. Cowering at the threat of the Reform party and dog-whistle politics, the Home Secretary has launched a disgusting assault on asylum seekers, refugees and immigrants, which has been lapped up by the very people the Labour party is meant to stand in opposition to. Last month, the Home Office press release announcing these draft regulations proclaimed:
“Asylum handouts and accommodation removed for illegal migrants abusing Britain’s generosity”—
a headline more suited to the right-wing tabloid press or a Reform party election manifesto commitment. These regulations are about jeopardising the lives of vulnerable people for the cheapest, most untrue headline.
To those on the Labour Benches, I say this: before it is too late, realise that you cannot out-reform Reform. Stand in solidarity with asylum seekers and vote against these cruellest-of-the-cruel regulations today.
Mr Andrew Snowden (Fylde) (Con)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I feel slightly sorry for the Minister in this scenario because he is going to be attacked from the left and the right, which is the tightrope that this Government are trying to walk—the fence that they are trying to sit on. They need to decide which way they are going.
It has been announced to fanfare that the Metropole hotel on the Fylde coast is being closed and will no longer be used for asylum seeker accommodation. Lots of people are nervous and are trying to get information on where those people are going. On behalf of the Government, Serco has been buying up properties to house asylum seekers in my Fylde constituency. Fylde borough council has had to engage Serco formally and ask it to stop buying those properties due to the scale of movement, which we believe is in anticipation of the closure of the hotels. The people will still be in the same area, just housed in a different way.
The Minister will be relieved to hear that I do not have a long and lecture-like speech to make. I simply ask him: what change does he feel—or has his Department estimated—these regulations will make to the number of beds required for the housing of asylum seekers? Has that been quantified, and is it quantifiable, or are these regulations just twiddling around the edges? Will communities like mine that are concerned about the issue actually see any change in the beds required by Serco to house people?
Alex Norris
Colleagues have made an interesting range of contributions, and I will try to cover all the points they have made.
I will start with the Opposition spokesperson, the hon. Member for Weald of Kent. The hon. Member for Fylde finished her thoughts regarding tinkering around the edges. We have committed to replacing this regime with a full framework. It is right that we take time to engage with the local government family—the hon. Member for Woking mentioned them—and with wider interested parties to make sure that is right. The hon. Member for Weald of Kent has heard clearly what the Government intend to do, which is to make sure that those housed at significant expense to the British taxpayer carry out their part of the bargain by not committing crimes. I will come on to the remarks of the hon. Member for Dundee Central, but I am quite surprised at his defence of that.
Chris Law
I am not supporting illegality; the question is the scale of the illegality. To go back to the 0.3%, 0.05% are found to be guilty, and the cost to the entire United Kingdom per year—bear in mind that we are talking about £4 billion in asylum costs at the moment—is roughly £277,000. Can the Minister not agree that although there are cases, the Government are not allowing people to work and at the same time they expect everybody to be abiding absolutely within their system? That is already leading to ill health and near destitution. The level of crime that I have—
The Chair
Order. I know that the hon. Gentleman is passionate on this subject, but interventions must be brief.
Alex Norris
The hon. Gentleman has occupied his second position in about three minutes, so perhaps he needs a little more time. But I cannot get with the argument that because the numbers may be small—of course that is a good thing—the situation is in some way tolerable. The numbers who commit crime across the population are, mercifully, small, but we still seek to prosecute; we still seek punishment. I am surprised that the hon. Gentleman thinks that unimportant. If something happened in his constituency—despite that very small number of people, a significant crime could take place or illegal working could have an impact on the local economy—the people of Dundee might feel strongly about that. I think that they would.
The Opposition spokesperson, the hon. Member for Weald of Kent, talked about this measure not being enough to provide discouragement. She also talked about scale and suggested that what we know is only a small part of the issue. Through the Border Security, Asylum and Immigration Act 2025, the extra powers, particularly on the gig economy, to ensure that those substituting their labour are doing so to people who have a genuine right to work, are a step change in the regulatory regime in this country. They will help us to close the gap and make it very hard indeed to work illegally here.
The hon. Member also said that meaningful change is impossible without leaving the ECHR. I always caution colleagues about being quick to discount things that provide a really important underpinning of rights, because they are our rights too. “Restoring Order and Control”, our document published in November, is the biggest reform of our asylum system certainly in my adult lifetime—probably in my whole lifetime, to be fair. That is all doable within our international obligations. The reality is that the alternative to doing those serious things is just ripping up our international obligations and then spending years trying to work out how to get back return agreements with other countries, never mind our own freedoms.
Katie Lam
Could the Minister give us a quantitative way in which we can judge whether that has been a success, so that we can decide whether further steps need to be taken? How many people coming here illegally would he be able to tolerate—would enable him to decide that actually that is okay?
Alex Norris
I gently say that I do not think it is my test. The public are very clear about what they think about the system: the system lacks order and control. The test by which we judge our efforts is whether we bring order and control to the system, and that is what we are doing.
That allows me to segue nicely to what the Liberal Democrat spokesperson, the hon. Member for Woking, said about a credible plan; that is the plan, as he well knows, given that he was part of those deliberations and has been on many occasions. He talked about the appeals backlog—a very important point. I gently say that that is a sign of a system that we are getting to grips with. He will know—indeed, I think I have heard him talk about this before—that the original sin, particularly in relation to hotel capacity, comes from the backlog in initial decision making from when the previous Government just stopped making decisions. As a result, a huge backlog built up. I am very pleased that, as a Government, we have been able to get through that backlog.
The hon. Member has talked about this before, and I listened carefully to what he said about Nightingale-style decision making. I gently say that we do not need to do that, because of the decisions that have been made at a quicker rate, without affecting the grant rate but with better and improving quality. That of course creates pressures on the appeal system while that cohort of people move through it. That is not a forever thing, although I recognise it. He talks about a plan; he will have seen what we have said about appeals reform. I hope that he and his colleagues will feel able to support that in due course.
The hon. Member also talked about knock-on effects on others. I am particularly mindful of local government; he knows my passion for local government. The intention of this measure is not to shift the burden from the Home Office to the Ministry of Housing, Communities and Local Government or to councils. Indeed, he will have seen our plans to reduce homelessness, in respect of which we are a significant stakeholder. Of course we are mindful of those effects. I argue that the article 3 backstop in relation to destitution should give him—I hope it does—a degree of confidence that that is not going to happen.
The point about a right to work is one of principled disagreement between us. My strong view is that, if we know that traffickers are saying, “Come to the UK—you will be housed in a hotel and allowed to work illegally”, simply changing the reality so that the people can work legally would be an intolerable pull factor. However, to help close that gap there is the right to work at 12 months, so the gap is not so big. The hon. Gentleman suggested around six months. I do not know if he would go any further, but he certainly mentioned six in his contribution.
With regards to important questions around slavery, the hon. Member mentioned that he does not quite understand the definition of “deliberate”. I do not think people will be accidentally working illegally, but I accept they could be compelled to. That is why we have modern slavery protections through the Modern Slavery Act 2015. We of course take that exceptionally seriously. That vulnerable group of people will not be affected by these provisions.
The hon. Member gave me a slightly impossible challenge by asking me what I will do to make sure that a future Government who do not currently exist do not do something that he and I would not want. I kind of get that, but, as many people have said in this room over the centuries, one Government cannot bind the hands of a future Government. There is a reality there. That is why we have elections and we seek to continue in Government. However, at least in most cases, we have a backstop—we have an article 3 backstop and a refugee convention backstop—that gives universal protections irrespective of the Government of the day. Those principles are of course contested, although not by us, but I hope the hon. Member is reassured that the backstop exists.
The SNP spokesperson, the hon. Member for Dundee Central, spoke at great length about a world that I did not quite recognise, and which I have to say is not in anything we are preparing here. I say gently to him that there is nothing progressive about defending a status quo where human traffickers have the most agency and people routinely lose their lives in the channel, and that is before any sort of transit effects—never mind the impact on the women and children in that transit. If that was a challenge about where I sit on the political spectrum, there was language in what he said I would not recognise.
This is a hopelessly broken system; there is nothing progressive about defending it, which is why we are seeking to change it. The hon. Member set out quite a dystopian vision, but I gently say that for around six years of our nation’s history, between 1999 and 2005, we relied on the power rather than the duty. I was at school at the time and remember those days only tangentially, but it was not exactly a dystopian past, so I do not recognise what he said.
The hon. Member said that the support we have today should be a floor, not a ceiling. I have not heard from Scottish nationalist colleagues—even, I suspect, as a feature of the current election in Scotland—a suggestion of what services or public investments they would cut in order to top this up, and in what way. I hope that he will be out making the case for that on the doorstep as soon as possible, and at least quantify what we should stop doing, so that we can do more on this.
The hon. Member also mentioned destitution. Again, I would rely on the article 3 backstop on that. He talked about a “straw man”, but that is not in the nature of my politics. I reassure him that this is a genuine attempt to grip a system that does not work. We have had lots of debates in the Chamber on the other things we are doing; this is a serious attempt to grasp a serious problem. It is a good thing that the level of offending is mercifully low, but we want that level to be nil, as that is a fair balance with the taxpayer. That is why we are doing what we are doing.
The hon. Member for Fylde asked what side we are on—left or right? I am on the side of the British people. That is the reason why I am here. It is why I stood for my council. It is why I stood for Parliament and why I wanted to be a Government Minister.
Alex Norris
It is not a cop out, as the hon. Gentleman suggests from his seat. It is about saying that there is nothing progressive about defending a broken status quo or a reality that the British public know does not work—and we do know that. We are all knocking on doors at the moment, right? Instead, we seek to build something rooted in British values. That is the side I am on.
The hon. Member talked about hotel closures. He challenged me by saying that his community is not seeing change, but the closure of a hotel is a significant change, and that is coming to the 180 or so hotels that are still open, down from 400 at the peak.
Mr Snowden
I want to make sure that the Minister does not put words in my mouth. I did not say that this was not a good thing, but that we are waiting with bated breath to find out whether it is a good thing, based on where the people who were being housed in the hotel will be placed.
Alex Norris
People enter and exit the system at various points for various reasons. Our number one principle is that we want to reduce demand. In the last two years, there have been more than 80,000 applications. Between 2011 and 2020, there were a third of that number. The No. 1 way to close hotels is to reduce demand.
Dispersal accommodation is a factor in all our communities. We operate the policy of full dispersal, which we inherited from the previous Government, to make sure that that is done in an equitable way. [Interruption.]
The Chair
Order. I am sorry to interrupt the Minister, but I am afraid that I must suspend the sitting.
Alex Norris
I am grateful to the Committee. I have made my points, so I commend the regulations to the Committee.
Question put.
Draft Provision of Information (Contractual Control) (Registered Land) Regulations 2026
(1 day, 7 hours ago)
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The Minister for Housing and Planning (Matthew Pennycook)
I beg to move,
That the Committee has considered the draft Provision of Information (Contractual Control) (Registered Land) Regulations 2026.
It is a pleasure to serve with you in the Chair, Ms Vaz. The draft regulations were laid before the House on 9 March. Before I proceed further, I draw the Committee’s attention to a minor correction that has been made to the regulations. At regulation 4(3)(c)(i), the words “the right” were printed without a space between them. This was noticed after the statutory instrument had been laid, and was rectified by means of a correction slip. The correction is purely typographical and does not affect the meaning or operation of the regulations.
On the substance of the regulations, the Government’s considered view is that the land market in England and Wales has been too opaque for too long. Developers routinely use contractual control agreements—such as options, conditional contracts, pre-emption rights and promotion agreements—to secure rights over land without any requirement to disclose the details of those arrangements.
In the absence of any obligation to disclose the details of such arrangements, local planning authorities cannot see who controls development land in their area, smaller developers waste time and money pursuing sites already locked up, and communities have no visibility over the development trajectory of land around them. While some agreements may appear on His Majesty’s Land Registry title registers, where a notice or restriction has been entered, there is currently no reliable or comprehensive picture of who controls land, short of ownership, across England and Wales.
We think there is a compelling case for greater transparency. In their wisdom on this point—if not on many others—the previous Government agreed, and provided powers through the Levelling-up and Regeneration Act 2023 to address this issue. If Parliament approves them, the draft regulations will give effect to those powers.
With a view to implementing the powers in question, the previous Government consulted on proposals between January and March 2024, receiving responses from developers, lawyers, local authorities, land agents and members of the public. The final regulations we are considering today reflect that feedback and the consultation with the sector, and they include some changes to narrow their scope, which I will come on to detail.
The regulations create a duty on those who benefit from the agreement, such as developers and land promoters, to provide key information about the given rights to HM Land Registry, which will then publish it in a free-to-access geospatial database from April 2028. The regulations require the disclosure of four types of right: options, conditional contracts, pre-emption rights, and rights to direct or request that landowners enter into a transfer of lease, typically found in promotion agreements. They apply to registered land in England and Wales, and they set out exemptions to ensure that the requirements are targeted and proportionate.
Those who are granted a right must provide the required information within 60 days of a trigger event—that is, the creation, reassignment or amendment of a right. Submissions must be made digitally through a regulated conveyancer. Parties typically already hold the required information. Throughout the development of the regulations, we have considered the burden on the sector and minimised it wherever possible. HMLR may refuse to register a notice or restriction on the register of the title until the requirements have been met. Failure to comply is a criminal offence under section 225 of the 2023 Act.
I want to make it clear that the regulations do not require the disclosure of detailed commercial conditions, such as those relating to price or financial terms. The required information is limited to key information that advances our primary objective, which is transparency. The regulations also do not apply retrospectively. The previous Government consulted on a five-year retrospective window, but we have decided not to pursue that approach. That is a deliberate choice to minimise the burden on developers and land promoters, while still achieving meaningful transparency.
The regulations matter because transparency is essential for a truly competitive land market, and it is particularly important to certain players within the house building system. Committee members will know that small and medium-sized enterprise developers have seen their market share significantly shrink since the 1980s, when they delivered 40% of the country’s homes. SME house builders are essential to meeting the Government’s housing ambitions and supporting local economies, and we need to do more than just simply arrest their decline. We need to put in place the conditions that allow them to thrive.
The Government are acting to support SME house builders by increasing their access to land, providing further financial assistance and easing the burden of regulation, but we need to pull every lever we can. Helping them to identify genuinely available sites will remove another barrier that they face, and will therefore help to diversify the house building sector, so that more SMEs can get back on the pitch and help us to boost housing supply.
The regulations will also mean that local planning authorities will be able to see who controls development land in their area, and it will give communities greater visibility over the development trajectory of the land around them, enabling earlier and more collaborative conversations. On that basis, I hope the Committee will agree that these are sensible, proportionate and, I hope, straightforward regulations that it can support.
Gareth Bacon (Orpington) (Con)
I think it is the first time, Ms Vaz, that I have had the pleasure of serving with you in the Chair; I very much look forward to it. I welcome the opportunity to sit opposite the Minister again, and I appreciate the remarks he just made.
As the Minister said, in 2020 the previous Government began the process of looking into policies to provide a more transparent picture of the control of land through the creation of a freely accessible dataset. This came out of the Levelling-up and Regeneration Act 2023, which provided the framework for greater transparency on contractual control agreements in England and Wales such as—as the Minister also pointed out—option agreements used to control the land short of outright ownership.
The process began with a call for evidence, which was followed by an eight-week consultation in which respondents demonstrated broad support for the increased transparency of contractual arrangements, including for key stakeholders such as developers and local authorities. However, respondents also made it clear that they had some reservations regarding unintended consequences in respect of things such as commercial sensitivity and the potential burdens on small and medium-sized businesses. On that latter point, it is vital that the Government fully and meaningfully engage with small and medium-sized businesses in the sector ahead of implementation, to ensure that this statutory instrument leaves no one concerned about additional costs and red tape to a detrimental effect.
The previous Government hosted targeted engagement sessions before and during the consultation period to ensure that those who were going to be impacted by the regulations were fully aware and given adequate opportunity to put forward their thoughts and views on the matter.
Times are, however, a little different now, and there is an important context for this debate. Small and medium-sized businesses such as developers, land promoters and conveyancers face increasingly higher costs and difficult market conditions. Not the least of their concerns is this morning’s data release regarding the inflation rate, which showed an increase to 3.3% in the year to March and forecasts of a potential high in excess of 4% this year—double the rate the Government are aiming for.
For the construction and development industry, the impact on input costs, supply chains, material and, in particular, fuel could be severe. The data release shows that fuel inflation increased by 8.7% month on month—the highest rate since the beginning of Russia’s unjustified invasion of Ukraine.
Even before the data release, the Building Cost Information Service had forecast that building costs will increase by 14% over the next five years to 2031. That will hit SMEs especially hard and make it harder for them to compete as the major house builders dominate the more expensive land acquisitions, which data from the BCIS showed to happen in 2025. In addition to that are rising staffing costs, driven by increases to the minimum wage and employers’ national insurance contributions, and only compounded by the shortage of skilled workers available to the industry.
All that is alongside the regulatory and fiscal environment, which the industry tells us is stifling house building and development. Well-intentioned regulation is performing an important but far from perfect role in balancing the vital priorities of any Government to deliver a sustainable housing stock and ensure that homes are safe. That issue is much larger than the scope of this statutory instrument, but I know the Minister takes it very seriously and I look forward to further parliamentary time being spent on it.
Ultimately, I highlight all this because, for SMEs, this instrument produces new costs that are predicted to be about £4.2 million per annum. When that is added to the higher up-front capital costs, supply chain delays, increased taxation and the regulatory burden, it is vital that this important step to create better market transparency does not become overshadowed by the costs that come with it.
The instrument is right to promote a fairer and more open land market. Indeed, it is right that almost any market must be open to competition to allow SMEs to compete alongside major players. That is the foundation, of course, of any capitalist system, and I welcome regulation that provides more choice for consumers as well as fairness for small and medium-sized businesses. However, how does the Minister plan to ensure that that is exactly the impact of the regulations?
The regulations come with a real risk of unintended consequences. In particular, there are concerns about how the instrument will impact land values, landowners’ and developers’ behaviour, and community engagement. For landowners and developers, it is vital that the Government monitor the market to ensure that the regulations do not encourage the tying up of capital and shrinking of the land stock available for development by encouraging a wholesale shift to outright land purchases to avoid the regulatory requirements introduced by this instrument.
For landowners especially, the Government must work with the sector to ensure that the public visibility of agreements does not foster an environment in which less land is brought forward for development. Without tackling those issues, the Government may only exacerbate the situation we increasingly find ourselves in—a situation in which the land, especially brownfield land, is preponderant, but where the high costs of construction and development preclude the laying of bricks or concrete.
I finish with a simple but essential ask: will the Minister commit to a regular review of the potential trends and ensure that the regulations work as intended? Without that, efforts to build a transparent and competitive market, which are essential to the success of the housing market, could end up being lost in the shadow of prevailing economic downturn, be it global or national.
The previous Government pursued this policy in 2024 to increase competition and transparency, and the potential of the intended consequences is why the Opposition will not divide the Committee today. However, the Minister must ensure that the regulations help to get Britain building and do not hinder British building, and must work with the industry to see that they work as intended.
Matthew Pennycook
I thank the shadow Minister for his thoughtful remarks in scrutinising these important regulations. I stress again that the regulations have benefits for local planning authorities, for communities and, in particular, for SME developers.
We could have a long and extensive debate on strategic land banks and how the house building system works—although I am sure that the Committee does not want to go there. We very much contend that there are concerns about the use of contractual control agreements and what it does to stifle competition in the house building market. Promoting transparency and competition is at the heart of the objective of the regulations. The database will allow smaller developers in particular to identify genuinely available sites from the outset, rather than them discovering too later that a site is already tied up through an option or promotion agreement. As a result, the regulations will remove that wasted time and cost as a barrier to smaller builders entering the market.
As I mentioned in my opening remarks, in taking forward the regulations and looking at the feedback received in the consultation that the previous Government undertook, we have been at pains to minimise the burden on the sector wherever possible, and we were deliberate in ensuring that the regulations were proportionate when drawing them up. The Government’s assessment is that the overall impact on business will be de minimis. We do not expect any significant impact on the public sector either, as local authorities will benefit from having access to the data at no cost.
I will briefly mention HMLR, which I do not want to overlook. We do not think the contractual control database will add significant burdens. It is a new, separate digital service that does not add to HMLR’s existing registration workload. Contractual control information will be submitted through a dedicated channel and processed separately from title registration applications. HMLR recognised the cost of introducing contractual controls regulation, which will be funded through its financial framework, as part of the 2025 spending review that it agreed.
On commencement and implementation, the regulations come into force on 6 April 2027, and HMLR’s digital submission service will be available from that date. The transitional period gives grantees six months to report agreements that were entered into before commencement and allow time for the system to work through them. As I mentioned, we took the decision not to apply the regulations retrospectively to minimise the burden on the sector. As always, consultation with the sector is ongoing, but the previous Government engaged extensively with the sector through their consultation, and the drafting of the regulations reflects that feedback.
Notwithstanding the shadow Minister’s points, which I hope I have addressed, I draw the Committee back to what the regulations will achieve. They will enable developers to identify available land more quickly and effectively, and local authorities to see who controls the development of land in their area. As I have said, that will give communities greater visibility over the trajectory of land around them. I hope that, for the reasons around transparency and greater competition that I have emphasised, the Committee will approve the regulations.
Question put and agreed to.