Leasehold Reform

Justin Madders Excerpts

Thursday 11th July 2019 Commons Chamber

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

I am delighted to take part in today’s debate on an issue close to my heart, having first been contacted by constituents back in March 2016 and having campaigned with the APPG of which I am proud to be the vice-chair under the wise stewardship of the hon. Member for Worthing West (Sir Peter Bottomley) and my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick). With the Leasehold Knowledge Partnership and the National Leasehold Campaign we have shone a light on these issues over the last three years. It has been a long journey. We have had some successes, but the further we have travelled the more deceptions, scams and greed we have uncovered, and the more it has become crystal clear that this has been nothing short of a national scandal.

As my hon. Friend the Member for Leigh (Jo Platt) mentioned, first there is the serious impact on mental health. A survey carried out by the National Leasehold Campaign found that 90% of leaseholders thought about their leasehold problems every single day and about a fifth thought of self-harm. We must never forget the human cost of all this.

It saddens me to say that while the Select Committee inquiry brought a sense of vindication and indeed hope among all those who campaigned on this issue, the Government response feels tepid in comparison. An example of that is the response to the Committee’s conclusion that leaseholders were treated as a source of steady profit, because it is not good enough just to say that the Government have noted the conclusions of the Committee. One campaigner said to me, “How do they think that makes us feel?” Having waited four months for a response, I agree.

We have had voluntary codes, which are doing some good, but that is not enough, and an example that has come to light recently in a new Redrow development just down the road from where I live shows why we need to do more to enforce these changes. The first phase of the development was sold on a leasehold basis—goodness knows why—but following some pressure locally, Redrow agreed that subsequent phases would be freehold and all those who had purchased leasehold properties would be able to purchase the freehold at 26 times the ground rent after two years; that was still too high, but at least Redrow was prepared to sell it back rather than send it to an offshore investor.

Several constituents have now contacted me because after the offer was made they inquired of Redrow whether they would still need to pay the ground rent during that two-year period and were told they would not need to, but now Redrow is sending out bills and denying ever having said that. That is rubbing salt into the wounds, because it has also asked for a legal contribution to its costs, and is refusing to disclose any information about other covenants that might go with the land should it purchase. That, along with the fact that Taylor Wimpey has got rid of doubling ground rents but has still left itself in control of advantageous leases, shows me why we need legislation. We cannot have confidence that the developers, who, after all, are the authors of this racket, can put right the wrongs they have created.

I look forward to hearing the outcome of the Competition and Markets Authority investigation. There is plenty of evidence out there for it to conclude that this was a deliberately constructed income-stream effort. I have seen many documents talking about leases being optimised. It does seem to me that there was a deliberate strategy.

[Jim Fitzpatrick]

Does my hon. Friend agree that one of the difficulties now is that though the CMA intervention is very welcome, it is going to take time, and its consultations and engagement just put everything back? It kicks the can down the road in a Parliament where we are not doing an awful lot of legislating.

[Justin Madders]

My hon. Friend is absolutely right. I do not see that we need to wait for the Competition and Markets Authority investigation to conclude before we come up with tangible legislation to help leaseholders now. It is important that that investigation is carried out, however, because I think it will shine a light on wholesale practices. I have seen evidence such as the CBRE market review of 2013 saying that “leases had been optimised” in terms of rent review clauses, notice fees and other provisions to maximise freehold sale receipts for developers. It talked about soft income being generated from insurance premiums, commission, service charges and enfranchisement premiums. There is clearly an industrial-scale racket going on, and it is important for the future of the industry that we get to the bottom of it and find out who is responsible and make sure that they never get the chance to do it again.

Perhaps what is most concerning in this respect is that evidence has emerged of what are described as forward purchase agreements. These are contracts between an investor and a house builder to acquire a scheme before the individual units have been sold off on long leases. These agreements can often be in place as construction is ongoing, or even before commencement. It would be interesting to know which developers had forward purchase agreements in place before completion of their developments, because if they did they surely had a responsibility to inform the prospective leaseholder prior to their making their purchase that such an agreement was in place.

Instead, what we have heard from constituents is that they were told the exact opposite: they were told freeholds would be available to purchase after two years. Was this a deliberate deception? What did the sales staff know? Just how deep does this scandal run? For those reasons and more, we need a fully independent inquiry into the whole scandal so that those responsible are held to account for their actions and we get a house building sector that works for everyone, not just itself.

[Bob Blackman]

I thank the hon. Gentleman for his contribution thus far. One aspect that has not come out during this debate, however, is the excuse used by developers about the use of common areas that need to be built on or utilised for the common purposes of all the houses in the development. Does the hon. Gentleman agree that that scandal needs to be exposed as well?

[Justin Madders]

The hon. Gentleman is absolutely right to say that that is used as an excuse. When I was growing up, the common areas were usually run by a body called the local council, and rates or council tax would be paid to cover the costs. We need to look at the way that has been developed in recent years. Now, it is all about maximising profit.

I appreciate that we are pressed for time, so I will conclude by making a direct plea to the Minister. If the Government are serious about ending the abuses in the leasehold sector, they should adopt my party’s proposals to allow leaseholders individually or collectively to buy their freeholds under a fixed formula paid to the landlord. This is similar but not identical to my 2017 private Member’s Bill. The Government could also cap existing ground rents at £250 a year or 0.1% of capital value, whichever is lower, and cap the cost of buying the freehold at 1% of the capital value. Alternatively, they could just do a multiple of the ground rent. I am not precious about my private Member’s Bill; I just want to see something done—anything that gets us to a place where existing leaseholders can find a way out of this.

There are many things that can be done—there are many things that need to be done—and there is no reason why we cannot get on with them now. Parliament has been stuck in a rut for months because the Government have lost control of the Chamber, but if they came forward with a proposal along the lines we have been talking about today, there is no doubt that they would find more than enough support on both sides of the House for getting real tangible laws on the statute book as soon as possible to offer help and hope to the many thousands of people still stuck with toxic leases. I say to those on the Government Front Bench: work with us now; let us end this scandal once and for all.

EU Structural Funds: Least Developed Regions

Justin Madders Excerpts

Wednesday 26th June 2019 Westminster Hall

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

It is good to see you in the Chair, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate. If we have learned anything from the past few years, it is that people feel ignored by politicians and powerless to influence decisions about the most important things in their lives, such as whether a local hospital is kept open, whether their child’s education is properly funded, whether bus services continue so that they can get to work, or even whether they can afford to buy or rent a decent home to live in. They are told that the economy is growing, but everywhere they look services are being cut. Nowhere is that more true than in the north of England. The north has a population of 15 million people, which is roughly twice that of London. It has five major cities, 265 towns—including mine—and more than 1,000 villages and small communities. Our economy is more than twice the size of Scotland’s, and if the north were a country it would be the ninth largest in the EU. We have eight major ports, 29 universities and four national parks. We produce a third of the UK’s renewable energy and are leaders in the manufacturing, scientific and high-tech sectors. That is a pretty impressive CV.

Despite that, however, and despite the introduction of the northern powerhouse five years ago, regional inequality has grown since 2010. The north has borne the brunt of the Government’s austerity drive with a £3.6 billion cut in public spending, whereas the south-east and the south-west had £4.7 billion extra in real terms. There are now 200,000 more children living in poverty in the north than there were five years ago. That is a scandal. The economy has been growing consistently throughout those five years. If such a huge number of additional children have been growing up in poverty during that period, it is ample evidence that the economy does not now work for everyone.

Why, in 2019, does London still hold all the power and the resources? The sooner we realise that business as usual is not going to cut it and that further Westminster handouts on Westminster terms will not be enough, the better. We do not need more crumbs from the table. It has been clear for a long time that people are fed up to their back teeth with the current approach. Is it any wonder, when the system clearly does not work for them, that they feel ignored, isolated and held back?

Our country will be undergoing massive changes in the next 10 or 20 years. People feel they need to see a change. The central aim of the shared prosperity fund is to reduce inequality and enable all our communities to share in the country’s economic growth. So let us really enable our communities to do that. Let us give them the responsibility, power and resources to shape their future, in line with local priorities and local need, using a bottom-up model in which decision making and accountability are at local government level, and which delivers real change whose benefits they can see.

I hope the Minister will be able to provide more detail about how the fund will be designed, and how it will work and be administered. I hope that he will also provide the guarantee that we all seek, that communities will be left no worse off. Finally, I urge him to get on and publish the consultation, so that we can address the systemic inequalities between our regions and ensure that all our communities share in the prosperity of one of the most prosperous nations in the world.

Social Housing

Justin Madders Excerpts

Thursday 13th June 2019 Commons Chamber

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

First, let me congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on securing this debate and on his excellent introduction. He is right that social housing is absolutely central to what we, as politicians, are here to do. It is damning to see the empty Benches opposite—it really does send out a very poor message to the rest of the country about where our priorities are at the moment.

As most Members have already said, week in, week out, housing problems are a No.1 issue in my constituency surgeries—whether it is to do with a lack of affordable housing, poor living conditions, homelessness, or landlords simply not rectifying problems in properties. We can talk about house numbers in the hundreds of thousands, but we should not forget that at the heart of this matter are real people facing real difficulties because we have had nine years of failure. Sadly, it is no exaggeration to say that this Government have failed across the board when it comes to housing. They have failed buyers and renters alike. They have allowed the leasehold scandal to emerge, and they have failed to tackle the root cause of the problems that the sector is facing.

I am pleased that today’s debate is focusing on social housing. It is no coincidence that the steep decline that we have seen in social house building has coincided with an increase in homelessness and soaring private rents. Since this Government came to power, rents have become increasingly unaffordable, with private renters spending, on average, 41% of their household income on rent. In those circumstances, it is no wonder that more than half of private renters say that they struggle to meet their housing costs. Worse still, Shelter reports that a third of low-income renters are struggling to the extent that they have to borrow money just to keep a roof over their head. That means that putting money aside to save for a deposit so that they can eventually own their own home is completely unrealistic. A lack of social housing has put enormous pressure on the private sector, which means that a quarter of private renters, equating to more than 1 million households, rely on some element of housing benefit or universal credit to keep a roof over their head.

We have already discussed the Supreme Court judgment yesterday on the local housing allowance, which demonstrates the current injustices in the system. I know that in Neston, in my constituency, rental costs for a property are at least £150 a month more than the local housing allowance provides for. That is a totally indefensible and unsustainable situation, but what choice do people have? The decline in social housing stock has left more than 1.1 million people trapped waiting for social housing, with many of those families facing greater instability with rising rents in the private sector. At the same time, the number of homeless families living in temporary accommodation has increased to 74% since 2010. Let us just think about that. These are young people who may be forced to move out of area, potentially affecting their schools, their family connections and their jobs. Temporary accommodation really does strike at the heart of what we are trying to build with families in this country.

Welfare reforms have made private sector landlords increasingly reluctant to let to tenants who rely on housing benefit. As we know, many landlords simply refuse to accept any tenants who are in receipt of benefits. This is a discriminatory practice, and I pay tribute to Shelter for its campaign on that. Sadly, though, it is a fact that someone who is facing homelessness is not going to look to bring a court case for discrimination; they will simply look elsewhere—if there is anywhere else to look. The reality is that landlords’ behaviour will carry on in this way, while local authorities, in an ineffective attempt to discharge their statutory duties, will continue to hand out lists of private sector landlords to those facing homelessness, but those landlords will never actually rent their properties to those people because they are in receipt of benefits.

[Siobhain McDonagh]

Both of my parents came to Britain from Ireland at the end of the 1940s, when there were postcards in the windows that said, “No Irish, no blacks, no dogs”. Does my hon. Friend agree that if there were such postcards today, they would just say, “No benefits”?

[Justin Madders]

I thank my hon. Friend for her intervention. Yes, we were familiar with the sign, “No DSS”—the one that used to apply. Letting agents, lenders and landlords all need to get the message that they are operating a potentially discriminatory policy. This really does go to the root of the difficulties we have when people are making homelessness applications. If they get a section 21 notice, that does not seem to have much effect on priority. It is almost as though there is a waiting game. Court costs, eviction notices, stress and uncertainty all have to come before any real priority is applied to people who are facing homelessness. The system is not working; it is under tremendous pressure and supply is nowhere near meeting demand.

Why do we still have the bedroom tax? Six years on, the same injustices carry on. I regularly see constituents who are still paying it and have been paying it for six years now. It is absolutely causing havoc with their finances. They are getting into debt and struggling to pay their day-to-day costs—and for what? To pay this unfair tax with money they do not have. If we have a new Prime Minister who genuinely wants to show that they are different from what has gone before, the first thing they should do is abolish the bedroom tax.

Of course, it is no coincidence that at the same time as we are facing this crisis in social housing, home ownership is also declining. Just a quarter of people born in the late 1980s own their own home by the age of 27, compared with 33% of those who were born five years earlier, and 43% of those born earlier than that, in the late 1970s. There is a clear trend here. There is a danger that an entire generation will be locked out of home ownership, because there is no sign of the situation improving. A major part of the reason for this collapse is that house prices have grown far faster than incomes, leaving young people struggling to meet the affordability tests set by lenders. Even if they are able to save the tens of thousands of pounds needed for a deposit in the first place, it is still a struggle, because the average home in England now costs eight times more to buy than the average pay packet. There are 900,000 fewer homeowners under the age of 45 than there were in 2010. The trend is going backwards, and that is why there is so much need for more social housing.

We must build new social homes and affordable homes, both to rent and to buy, for all those who need them—yes, for the most vulnerable, but also for those in work and on ordinary incomes, for young people, for families locked out of home ownership, and for older people reaching retirement who are facing old age in insecure, unaffordable, unsuitable properties. All those people are being failed by current housing policy. We are facing a situation where, for the first time, children can expect to earn less than their parents. After decades of the number of houses being built failing to keep up with demand, we are at a crunch point where home ownership looks out of reach to an entire generation.

I am pleased to say that my local authority is taking the lead on this. Cheshire West and Chester Council has now built in Ellesmere Port the first council housing we have seen in 40 years, as part of a mixed development. I was absolutely delighted to welcome the shadow Secretary of State, my right hon. Friend the Member for Wentworth and Dearne (John Healey), to this new development only last month. I am very proud that after 40 years, we are starting that development, but due to the huge increase in right-to-buy applications, we are not even standing still. Of course I support people’s aspiration to own their own home, but the right-to-buy policy is incredibly short-sighted, because the reality is that far from there being one-for-one replacement, there is probably about one property being replaced for every four sold. I agree with the Local Government Association that this situation is completely unsustainable. The loss of social rented housing pushes more families into the private rented sector, further pushing up rents and exacerbating the housing crisis. In addition, as we have heard, some of these houses end up in the private rented sector, which again pushes up rents.

It is a gargantuan task to replenish this country’s depleted housing stock. I am pleased that after many years of stagnation, we are seeing quite a lot of house building going on in my constituency, particularly on brownfield sites, but very few of these developments have any affordable housing. That is because the permissions were all granted some time ago, and the developers used rules brought in under the coalition Government to plead poverty and tell us that they could not build affordable houses because they could not maintain their 20% profit margins. As a result, all these new houses are being built, but on just about every private development in our constituencies hardly any affordable housing is being built. Most developers sought release from those obligations four or five years ago but have only started building in the past couple of years. It is therefore quite clear that the affordable housing was not the problem; it was about what they wanted to do to maximise their profits—it was greed. If we are going to build ourselves out of this housing crisis, we cannot continue to rely on the same avaricious developers who have got us into this mess in the first place. A cursory look at the leasehold scandal tells us everything we need to know about the priorities of some developers.

There is a massive job ahead of us, and things need to change. Enough is enough. My Front-Bench colleagues have set out a very ambitious plan about how we can achieve this. Yes, we need to build 1 million more genuinely affordable homes; yes, we need to target Help to Buy on first-time buyers on ordinary incomes; and, yes, we need to give councils the freedom to build and retain council homes for local people. But we need to get on with it now. This Parliament is broken. We look around and absolutely nothing is happening. The Government are incapable of making decisions. Every day they spend arguing among themselves is another day further away from tackling this urgent and very real crisis. This country deserves so much better.

Shared Prosperity Fund

Justin Madders Excerpts

Tuesday 14th May 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this debate, which is, I hope, an important opportunity for us to influence the way billions of pounds will be spent.

I think the point about maintaining minimum levels of expenditure is absolutely right, but if we simply adopt a carbon copy of the old EU scheme, we will have failed. What is the point of replacing a bureaucratic, unaccountable system with another bureaucratic, unaccountable system? That means that we must move away from the current regional format. It most definitely should not be run by and from Whitehall. It needs to be embedded in local communities and run by people from and accountable to the communities, and that means the local councils.

Let us take one example of what is wrong now. My town centre in Ellesmere Port has been struggling for a long time. Like many other northern towns, the rise of the internet and changes in shopping habits have led to shops closing down on a weekly basis. We need a new approach that regenerates the town centre, restores civic pride and gives people a positive reason to visit their high street and spend their money there. I am pleased that my local authority has bid for funding from the future high streets fund, but, realistically, if every town centre that bids gets a slice of the pie, there will never be enough to go round. The sums that we need for a truly transformative approach will not come from one pot alone. When a lot of the town centre is in private ownership, as mine is, there is a limit to what the public sector can physically do, but if the shared prosperity pot was operated in tandem with other funding pots, as the LGA suggests, there would be an opportunity for an integrated and creative approach that could lead to better outcomes for both funds.

We have spent a lot of time in here talking about what people meant when they voted leave, but not nearly enough about why they voted leave. We talk to ourselves, but not to the communities who voted leave. When will they be asked for their opinion and what their priorities are? When will they truly be given the opportunity to shape their own destinies? When will they be able to take back control? People already feel as though they do not have the power to make decisions about the most important things in their lives—whether a local hospital should stay open, where a new school might go or even how often the buses run—and the consequences are there for us all to see.

We need to think big and empower local communities. We do not need more crumbs from the table. Can we not see that people are fed up to the teeth with the patronising approach, not least because it clearly does not work for the vast majority? Power flows towards London. Wealth flows upwards into the hands of the elite. A Westminster handout on Westminster terms will not change that, and the sooner we realise that business as usual is not going to cut it, the better.

Our country is undergoing massive changes now, but with future automation the changes will accelerate and impact even more on those who can least afford it. We need to find a way to give communities responsibility and the power to shape their own futures.

Housing

Justin Madders Excerpts

Tuesday 9th April 2019 Commons Chamber

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

I am sure we all welcome debating a subject other than Brexit. If I was to use the issues that constituents come to see me about in my surgery as a guide to what else we should be talking about, housing would come at the top of the list every time. From the parent facing eviction from their private tenancy with no permanent housing options on the table, to the tenant coming back to me for the fifth time because the damp still has not been fixed, to the young couple whose kids have to share a box room totally unsuitable for them, it is very clear that we do not have enough housing at the right prices or of the right tenure.

On a positive note, my local council, Chester West and Cheshire Council, is now building council housing, the first for nearly 40 years. I am delighted about that, but we still have less council housing than we had a couple of years ago, due to a huge increase in right-to-buy applications. Who can blame people for wanting to take advantage of 70% discounts? The policy, however, is short-term in the extreme. It is, of course, the Government’s stated aim that every council property sold under the right to buy should be replaced, but the reality is that, rather than one-for-one replacements, it is more like one new property for every four sold. The situation is clearly unsustainable.

There needs to be a wholesale change in the culture of and approach taken by developers. There seems to be general agreement across the political spectrum that we need to build more homes, but those good intentions are at risk of failing because there is an over-reliance on the market to deliver those aims. To date, the private sector has shown itself incapable of working in a way that chimes with the needs of the country. To put it mildly, I remain to be persuaded about the altruism of the house building industry; one need only look at the £100 million Persimmon bonus to see where its priorities lie. Plc house builders that help themselves to more than £8 billion of taxpayers’ money through the Help to Buy scheme show their true colours when they rip off their own customers through “fleecehold”. They have a lot to answer for.

The reliance on a small group of developers has been a very poor deal for the taxpayer, and that is the backdrop against which the leasehold scandal emerged. I look forward to the Government’s response to the excellent report by the Select Committee on Housing, Communities and Local Government. I hope concrete action will be taken soon.

Many in the industry have signed a pledge to move away from onerous leases, but to be frank I think that has happened only because there has been so much bad publicity against the people guilty of this wholesale scam over the years. The pledge also seems hollow to those of my constituents who have been notified in the past couple of weeks that their freehold has changed hands again, from one opaque company based in Guernsey to another opaque company based in Guernsey. The industry pledge intends to make the whole process

“cheaper, easier and more transparent”,

but actions such as those in my constituency will make it more expensive, more difficult and less transparent for people to buy out their freehold. The only way these rapacious people will be brought to order is through changes to the law, and the sooner the Government get on to that, the better.

The biggest developers in the country have not just ripped off millions of homeowners; they have ripped off all of us. We should not rely on them to solve the crisis we face. The housing market is broken and needs radical intervention, and it certainly needs a Labour Government.

Oral Answers to Questions

Justin Madders Excerpts

Monday 8th April 2019 Commons Chamber

[Mrs Wheeler]

My hon. Friend will have to excuse me for turning my back—there are not too many daggers in it today. We have been asking councils to nominate a senior councillor in every single council to be a veterans’ champion. I will audit that and ensure that it happens. The Veterans Board—the inter-ministerial Government board—meets regularly; in fact, we have our next meeting in only about three weeks’ time.[Official Report, 14 May 2019, Vol. 660, c. 2MC.]

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

Do the Government consider it fair and reasonable for devolved local authority areas to charge people living outside those areas more for exactly the same services?

[Jake Berry]

No, and if the hon. Gentleman writes and gives me details I will look into that.

Permitted Development and Shale Gas Exploration

Justin Madders Excerpts

Thursday 28th March 2019 Commons Chamber

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

There is no doubt that shale gas exploration, or fracking, has caused great concern up and down the country, but what is also of concern is the feeling that this Government are trying to move the goalposts and lock people out of being able to express their concerns. People from many different communities and, indeed, with many different political perspectives have been united against this heavy-handed and undemocratic approach, including people in my own area. On 18 October last year, Labour, Conservative and independent Cheshire West and Chester councillors voted unanimously to oppose the Government’s approach, and that cross-party consensus is building in communities throughout down the country. It is high time the Government stopped this dash for gas and listened to what communities are saying.

[Neil Gray]

Will the hon. Gentleman give way?

[Justin Madders]

I am sorry, but I do not have time.

By transferring responsibility for these decisions to a permitted development or centralised system, the Government are, in essence, making it easier to apply for permission to carry out fracking than to apply for a two-storey side extension to a semi-detached house. Friends of the Earth has warned that the plans

“pervert the planning process and could make England’s landscape a Wild West for whatever cowboy wants to start drilling and digging up our countryside.”

The Campaign to Protect Rural England calls it

“an outright assault on local communities’ ability to exercise their democratic rights in influencing fracking applications”

and adds that it

“reads like a wish list from the fracking companies themselves.”

If we are truly going to take back control, we should have a genuine democratic procedure, not a stitch-up that benefits a few private interests.

The Prime Minister has said that our climate is the most precious thing that we can pass on to the next generation, and we would all agree with that, but how can those fine words possibly be consistent with these proposed changes? The Committee on Climate Change has stated categorically that supporting unconventional gas or oil extraction is incompatible with meeting our binding targets under the Climate Change Act 2008. We have spent months in here trapped in a Brexit mess of our own making, and all the while the impact of climate change both at home and abroad is happening around us. Are we so wrapped up in our own squabbles that we fail to fully appreciate the enormity of this?

Last month, February, was so hot I was walking around for several days in a T-shirt, which was very nice at the time, but actually the Februarys I remember growing up in were pretty inhospitable. So while I was warmed by the rays of the sun I was haunted by the thought that once again we were experiencing unseasonably warm weather, and then I thought about the constituent who told me their daffodils had arrived in December, the recent reports that the world’s insect population is declining rapidly and the fact that places as nearby as Spain have lost 1 million hectares to the desert in recent years.

I fear that when we put all that together it is clear that we are sleepwalking into a climate catastrophe, and that unless we really begin to face up to the fact that we need to shift away from carbon-producing energy sources and we need to do it now, we will be the last generation to enjoy the benefits of industrialisation and it will it be the next generation who suffer the consequences of our selfish inaction.

Stronger Towns Fund

Justin Madders Excerpts

Monday 4th March 2019 Commons Chamber

[James Brokenshire]

I recognise my hon. Friend’s ambition for his constituents. We share that ambition. We want towns in Wales, Scotland and Northern Ireland to benefit. We want to get this right. We can build on the success of what we have seen from the city and growth deal initiatives in the past, and we want to strengthen that so that people throughout our United Kingdom can benefit, and can realise their passion for their towns and the potential of those towns.

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

The Secretary of State has linked this fund to Brexit. My constituency voted leave. As its name suggests, it consists of two towns, both of which contain significant pockets of deprivation. I should have thought that they were exactly the communities for which the fund was designed, but under the rules there is no guarantee that they will see a penny of it. If that comes to pass, will the Secretary of State be saying that he has learned nothing about the reasons why people voted leave, and about the idea that some areas deserve more opportunities than others?

Rough Sleeping

Justin Madders Excerpts

Thursday 7th February 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Sharma. There were a lot of thanks in the opening remarks from my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle), but I would like to thank him for securing the debate and for the excellent work that he does, alongside the hon. Member for Colchester (Will Quince), in chairing the APPG on ending homelessness. My hon. Friend gave a passionate and well informed introduction to the subject.

Sleeping out on the streets happens all year round, but it is at times such as this, when the temperature is very low and any night could be someone’s last, that the issue comes into focus. I commend those organisations that have taken extra steps in recent weeks, when the weather has been particularly cold, but we must recognise —as I think hon. Members do—that, welcome as those interventions are, they deal only with the issue as it presents itself. We need to look at the underlying causes of what I consider to be a national scandal.

Rough sleeping is a national crisis. As we have heard, the figure has risen by 165% since 2010. No doubt we will hear—indeed, we have heard already—that there has been a 2% fall in the number of people sleeping rough across England as a whole in the last year, but what I see with my own eyes tells me that we have a crisis right here and now. I have been a Member of this House for just under four years and I have noticed a significant increase in the number of people sleeping in doorways on the walk back to my flat. This morning, while walking in, I saw lots of sleeping bags and cardboard boxes—evidence of people sleeping rough. I notice, whenever I go out in a big city, that there are more and more people sleeping on the streets; there are more than there used to be. I have also noticed an increase in the number of people coming to my surgery who are sleeping rough or facing homelessness. Every night when I leave this place, I see the people sheltering in the subways under the Palace of Westminster and I feel ashamed—ashamed that right by the corridors of power, in one of the richest countries in the world, we have people sleeping rough. I am sure that I am not the only person who, looking at that, thinks: how can we let this happen?

As we have heard, there is a huge crisis. There were 4,677 people sleeping rough on any given night last year, compared with 1,768 in a similar survey in 2010. Nearly 5,000 people sleep rough every night. Saying the number does not really do the issue justice. Imagine filling a stand at a lower-league football ground and saying that every single person in it will be out on the streets that night. Think about exactly where those people will go, how they will feel and how that could be happening to a similar number of people not just that night, but every night throughout the year. That gives us a sense of the scale of the challenge that we face.

In the context of these surveys, those who are seen sleeping rough are, as my hon. Friend the Member for Bermondsey and Old Southwark said, only the tip of the iceberg. Rough sleeping is the most visible form of homelessness, but of course many people are in temporary accommodation; there are people relying on friends and family for a place to live; and there are people sheltering in alcoves or other places away from the worst excesses of the weather.

It has not always been like this. As we know, in 2010, after 20 years of concerted Government effort across the parties, rough sleeping appeared to be almost at an end. Because homelessness is not inevitable, it can be prevented. It is clear that the Government accept that it can be prevented, because they aim to eradicate it by 2027. That seems an awful long time away for such a national scandal. We need to act more firmly now.

We have heard about the connections between health and rough sleeping. The British Medical Association tells us that being homeless can have a devastating effect on people’s mental and physical health. That is borne out by the Office for National Statistics figures, which show that a staggering 597 people died while sleeping rough or in emergency accommodation in 2017. That means that every night, at least one homeless person died. The average age of the people dying is 44 for men and 42 for women. Those deaths are premature and entirely preventable. It is a stain on this country that we did not prevent those deaths.

The interventions and funding in the Government’s new rough sleeping strategy are welcome, but they are only a first step. If the Government are to reach their own targets of halving rough sleeping by 2022 and ending it by 2027, they must address the key drivers, which we have heard a bit about in the debate: spiralling housing costs, lack of social housing, insecurity for private renters and cuts to homelessness services. Only by addressing those issues can we have long-lasting change.

Since the Government came to power, rents have become increasingly unaffordable. Between 2011 and 2017, rents grew 60% faster than wages. In those circumstances, it is no wonder that people struggle to keep a roof over their heads. At the same time, welfare reforms have made private sector landlords increasingly reluctant to rent to tenants who rely on housing benefit. As we have heard, many landlords now refuse to accept tenants in receipt of benefit at all.

A quarter of private renters, equating to over 1 million households, rely on housing benefit or a housing element of universal credit to keep a roof over their head. Because of the decline in social housing stock, with nearly 1.2 million people trapped waiting for social housing, many of those families face greater and further instability with rising rents in the private rented sector. Housing benefit, as we have heard, is only paid up to the rate determined by the local housing allowance. The decision to freeze that in 2016 is causing real problems now. There is no requirement for landlords to let their properties at that level. It is a perfect recipe for people to fall further and further into debt.

If the Government were serious about tackling these issues and meeting the goals they have set, they would tackle the causes of homelessness. We need to make more homes available to people with a history of rough sleeping, and to continue to improve security for private renters. Three-year tenancies should be a minimum. We need to look at rent controls. We need to build thousands more homes for affordable rent.

Those are some of the causes, but I also question whether the system does enough to help those who become homeless. The new duties on local housing authorities to assess, prevent and relieve homelessness under the Homelessness Reduction Act 2017 are welcome. However, I have seen that amount to little more than handing out a list of private landlords for people to contact. Shelter tells us that the leading cause of homelessness is the loss of a private rented home, so I find it incredible that some local authorities see their duty to prevent homelessness as being fulfilled by nothing more than pointing people back in the direction of the sector that was responsible for their situation in the first place.

We know that, once evicted, many more people now struggle to find a new property due to the cost of securing a new tenancy, with deposits and other fees coming on top of the unaffordable rents that I have already referred to. I also have concerns that people who are given notice to quit by their private landlord are not really helped by the local authority. They are given no special priority until they are very close to the eviction date, which causes unnecessary stress and anxiety, and encourages—if not forces—landlords to go to court to get the eviction order they need. Who picks up the tab for those legal costs? Of course, it is the tenant. That approach does not help anyone.

Telling people who go into the council with a notice to quit that it might not be a lawful notice and they should seek legal advice is not actually helping people to get rehoused. The landlord will get them out eventually. It might take them a bit longer or cost them a bit more, but the council is not discharging its duties.

In response to the draft homelessness code of guidance, Shelter also identified a problem with the system for local connection referrals. Even when referrals are made in the proper way, people are often left in a period of limbo, during which they may not get any help with the relief of homelessness. This is even more of a problem when the referral is actually disputed. People in that situation are at risk of becoming citizens of nowhere, so it is hardly surprising that we see the consequences of that every night.

I am conscious that many hon. Members want to speak, so I will conclude. I believe that rough sleeping is a damning indictment of our society. The lack of priority and support we give to those who have fallen on hard times should shame us all. We have to do much better than we currently do.

[Mr Virendra Sharma (in the Chair)]

I will not impose a time limit on speeches at this stage, but I urge hon. Members to keep to seven or eight minutes. I would appreciate that. Otherwise, I might set a time limit later.

Freehold Estate Fees

Justin Madders Excerpts

Tuesday 22nd January 2019 Westminster Hall

[Helen Goodman]

Yes, of course. There needs to be more transparency and a system of redress, as my hon. Friend says. There also need to be some rules of the game about the standard to which the estates are built in the first instance. The management companies charge residents an inflated annual fee—in exchange, apparently, for tending to grassy areas, shrubs and other facilities on the estate. That is on top of their council tax.

This is a scandal. There has clearly been mis-selling. The public perception of freehold is deliberately exploited by the property companies in their sales materials. Many homebuyers are not made aware of the arrangements for the management of open spaces until the completion of the sale. One of my constituents reported that the first they had heard of their management company, which was Greenbelt, was a threatening late payment letter. They had not received a bill, let alone a welcome pack.

There is no room in the glossy brochure for an outline of the legal arrangements, but there always seems to be plenty of space for images of parks, playgrounds and woodland areas, backed up by verbal assurances from the sales rep that they are planned for the estate. Those promises are then broken and the land is passed or sold on to the maintenance company.

For example, at DurhamGate, a large housing development in Spennymoor in my constituency, the plans promised a “green spine” running through the centre of the site. Several years in, and with the site still under construction, residents are being hit with a full-price fee of £120 a year. Another of my constituents reported receiving a maintenance bill for a parking area that did not exist. The fees charged to residents for the maintenance of their estates are high, rising, uncapped and completely unregulated.

In Bishop Auckland, the annual fee for each household is somewhere between £100 and £200 a year, depending on the site. At first that does not sound too onerous, but when we consider that 278 neighbours on the estate are also paying the fee, it is obviously a grossly excessive £30,000 just for mowing some grass. In other parts of the country, in line with higher house prices, fees can be up to £400 or £600; I have even heard of fees of £800 a year. There is no limit to price increases and residents frequently report an annual leap in the fee. As my hon. Friends have said, there is no transparency and little accountability.

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

I thank my hon. Friend for securing the debate. I draw a comparison between the fees that councils ordinarily charge for communal services and the kind of fees she is talking about. Does she agree that if councils were so opaque and unreasonable, they would rightly be held to task by their electorate?

[Helen Goodman]

My hon. Friend makes a very good point. We need more transparency and greater accountability, and I will come on to how we might secure those things. One of the things that homeowners have noted is their frustration that they do not have any control over who the managing agent is. The relationship between the big builders and their favourite management companies and the processes for acquiring these communal spaces are shrouded in mystery. The fees appear to be plucked from thin air. In some cases, a vague “administration” category accounts for up to 70% of the total bill.

What do homeowners get in exchange for their fee? Of the 200 people who completed my survey, only one indicated a very good standard of maintenance. That was perhaps an optimistic assessment. The person went on to explain that

“the grass is cut regularly, but…we were promised a play park and village green with a pond. None have materialised.”

Others complained of dead or dying trees, poorly maintained shrubberies, wastelands, fly-tipping, broken or absent street lighting, playgrounds awaiting repair and a general absence of the management company, aside from requests for payment. Specific complaints included how Greenbelt was using a strimmer within a dedicated nature park set up to protect newts; in another case, a community hedgerow project was destroyed.

Homeowners in freehold properties currently have no way to challenge unfair fees or poor service; the power is almost entirely in the hands of the management company. My constituents have faced threats to block the on-sale of their properties, and they have been threatened with bailiffs and court action if they do not adhere to the demands of the management company.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship once again, Mr Hollobone. I am delighted to follow my constituency neighbour, my hon. Friend the Member for Alyn and Deeside (Mark Tami). We may be on separate sides of national boundaries, but our constituents clearly have many issues in common, not least the terrible way that exploitation has seeped into what should be a well-regulated and secure investment.

I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing the debate and on her work to address these issues through her private Member’s Bill. Hon. Members will be aware that I have also introduced my own Bill, to usher in a fairer, more streamlined and transparent system to enable the purchase of freeholds by leaseholders. On many occasions, both in this Chamber and the main Chamber, I have listed the abuses perpetrated by freeholders in the current feudal system. My hon. Friend the Member for Bishop Auckland gave an excellent explanation of the issues in the management of such properties, and after listening to it, I believe that there are many parallels between the two measures.

Regulation is long overdue. Homeowners have been subjected to unjustified extra costs and there is a distinct lack of transparency. It is clearly another example of homeowners falling foul of greedy developers and the more insidious practices that they have adopted in recent years. We have seen that happen with ground rents and consent fees for leasehold properties, whether flats or houses, where developers have become ever more adept at squeezing cash out of homeowners for the provision of grounds maintenance and other communal services.

As my hon. Friend the Member for Bishop Auckland highlighted, we now see “fleecehold” estate fees. Freeholders and residents on private housing developments find themselves facing escalating costs when the developers from which they purchased their homes in good faith sell off the grounds maintenance to private providers. In blocks of flats, the practice of spurious service charges has developed. In my constituency, a management company that managed only four flats in a block suddenly increased the service charge from around £50 a year to £911 a year. Many of those charges were questionable and the insurance charge in particular stood out, because the insurer seemed to be very well connected and had the same name as the management company. That would simply not be allowed for any other consumer purchase, so why it is allowed in this instance?

As hon. Members have said, the idea of the developer paying the local authority a commuted sum to cut the grass and maintain the common parts has had its day. I am unclear whether the blame for that lies with cash-strapped local authorities asking for too much or with developers being unprepared to cough up more funds in advance. The net effect of that is that more and more homeowners are being asked to pay twice for the maintenance of open spaces: once through a management fee and once through their council tax.

Council tax pays for lots of things, but something as visible and obvious as grounds maintenance leads people to ask a pertinent question: why are they facing a double whammy? My suspicion is that developers will always be tempted to save themselves the expense of paying an up-front sum to the local authority by instead letting their customers pay further down the line, long after they have fled the scene. Of course, someone buying their first home—probably with Help to Buy—will, in reality, have nowhere else to go and will have to accept those arrangements whether or not they genuinely consent to them.

What is wrong with just building and selling family homes? Why are buyers being subjected to covert efforts to squirrel in extra income? Is the sector so avaricious that it has to squeeze every last penny out of young families who have to scrimp and save just to get on the housing ladder? As with ground rent, consent fees and leaseholds, our plc house builders have had £8 billion of help through the Help to Buy scheme. They have trousered that assistance to rip off customers in their own schemes. Developers simply cannot be trusted to play fair with their customers, or with us, as wider taxpayers.

We have a huge shortage of housing. There are significant barriers to buyers getting on to the housing ladder, and a handful of huge companies are responsible for the vast majority of housing delivery. That reliance on a small group of developers has been a very poor deal for the taxpayer, and was the backdrop against which the leasehold scandal emerged.

It cannot be right that the companies that are guilty of the industrial-scale rip-offs that we have heard about regarding both leaseholds and the issue being discussed today are the same ones that we end up relying on to get out of our very real and damaging housing crisis. There is an over-reliance on the market—a market that, to me, is broken—to deliver the new homes that we desperately need.

The net effect is that there is little protection for homeowners. People deserve far more protection than they currently get. Sadly, I have seen very little evidence to suggest that developers will act responsibly and adopt fair and reasonable practices on a voluntary basis. The whole system needs a shake-up, and it needs it now.